197 Ky. 54 | Ky. Ct. App. | 1922
Opinion op the Court by
Reversing.
In June, 1919, appellee Shaffer sold certain lands in Graves connty to A. J. Harris for $3,000.00, of ■which snm Harris paid Shaffer $1,500.00 cash and gave him three promissory notes, secured by lien on land, which had been assigned to Harris. Shaffer made Harris a deed showing the consideration $3,000.00 paid, and reciting “cash in hand paid, the receipt of which is hereby acknowledged.” Very shortly after Harris purchased the land he sold it to Floyd Lovelace, a boy under the age of twenty-one years, for $8,000.00, taking from Lovelace five lien notes of $1,600.00 each. Shortly after obtaining these notes Harris borrowed from the Ohio Valley Trust Company $2,691.02, for which he executed his
Shaffer, who brought this suit to enforce a vendor’s lien against the land which he sold to Harris and which was afterwards sold by Harris to Lovelace, claims that his lien on the land for $1,500.00 was retained by reason of the fact that in the printed form deed by which he purchased the land there was contained near the bottom the following: “A lien is hereby retained on the property herein conveyed to secure the deferred payments.” But as the deed in its granting clause recited that the sale was for $3,000.00 “cash in hand paid the receipt of which is hereby acknowledged, ’ ’ there appeared to be no unpaid purchase money, and therefore no lien could exist. By section 2358, Kentucky Statutes, it is provided: “When any real estate shall be conveyed and a consideration, or any part thereof, remains unpaid, the grantor shall not have a lien for the same against bona
Be that as it may, as between Shaffer who made it possible for Harris to wrongfully obtain the money from Thompson and the two banks' on the worthless notes of Lovelace, the equities are all in favor of the three last named and against Shaffer. Had he retained his lien in the deed showing the amount of the purchase money yet unpaid, if any, and that deed had been recorded, as should have been done, he Would have been fully protected, for an examination of the deed on record would have clearly shown to inquirers that the full purchase price of $3,000.00 had been paid by Harris to Shaffer. This misled, we may presume, these defendants who accepted the $1,600.00 lien notes made by Lovelace and induced them to purchase the same or to take them as collateral, which is the same thing. As the land reverts to Harris, who owes this money, he will not be allowed to take it and leave his creditors to hold the bag. He represented .to each of the banks and to the assignees of the other note that the Lovelace notes were valid lien notes upon the land, and he gave his own note for the amount borrowed. The land is therefore in lien to the banks and to Thompson for the actual amount which Harris obtained by reason of said Lovelace notes and this lien may be enforced against the land and a sale had to pay the debts. After this is done it will be a question of fact as to whether Shaffer, the seller, accepted the three real estate notes from Harris in payment and full satisfaction of the $1,500.00 which Harris was unable to pay in cash at the time he purchased the land in controversy. If Shaffer so accepted them in payment and satisfaction then he is bound by his agreement. In discussing this subject the text of 21 R. C. L., p. 72, says: “If there is an express agreement by the creditor to receive a note as absolute payment and to run the risk of its being paid, it will be held to' be an extinguishment or payment of the 'precedent debt, whether the note is afterwards paid or not.” But if he did not so accept them and only agreed to hold them for ten days and until Harris should pay him $1,500.00 in cash and take up the notes, then Shaffer is entitled to be adjudged a lien upon
Judgment reversed for proceedings not inconsistent with this opinion.
Judgment reversed.