Johnson v. Douglass, 60 Ark. 39

Johnson v. Douglass

60 Ark. 39 | Ark. | 1894

Riddick, J.,

1. Failure of title as defense to suit to foreclose vendor’s lien. (after stating the facts). The question in this case is whether the court erred in sustaining a demurrer to the answer and cross-complaint filed by Johnson & Wiley. The appellees, Zuleika and Thomas Douglass, had given their bond to the appellants, Johnson & Wiley, for a warranty deed ; but no deed had been delivered, and the contract was to that extent executory.

A different rule prevails where the contract remains executory from that which applies when the purchaser has accepted a deed for land, given his notes for the price, and entered into possession. A purchaser in possession under a deed cannot, as a general rule, in the absence of fraud, resist the payment of the purchase money, unless he has been evicted by a paramount title. Having accepted the deed and taken possession, he is supposed to have examined and approved the title, and must rely for his protection upon the covenants contained in his deed. “But where a purchase is made under a bond or contract which provides for a conveyance of the title to the land upon payment of the notes given for the price, the true consideration for such notes is, not the deed to be made, but the title to the land with which the purchaser is to be invested. If the title fails or cannot be given, the consideration fails, and the non-fulfillment of the conditions of the bond or agreement to make title will be a sufficient defense to a suit on the notes given for the purchase money.” 2 Warvelle on Vendors, 922; Yeates v. Pryor, 11 Ark. 58; Lewis v. Davis, 21 Ark. 239; Rudd v. Savelli, 44 Ark. 145; Atkinson v. Hudson, 44 Ark. 197; Bryan v. Lofftus, 39 Am. Dec. 242; McConnell v. Little, 51 Ark. 333.

The fact that the vendee, having a bond for title, is in possession of the land will not prevent him from resisting the payment of the purchase money when the title of the vendor has failed ; but he must, in order to avail himself of this defense, offer to rescind and restore the premises to the vendor. Yeates v. Pryor, 11 Ark. 58; Lewis v. Davis, 21 Ark. 239; Harvey v. Morris, 63 Mo. 475.

% -wReii ned ^rescind, When, as in this case, land is sold to be paid for in installments, with a bond for title upon the payment of all the purchase money, the vendor has until the last payment to obtain the title. As a general rule, the defense that he has no title is not available until the last installment is due; but we think there is an exception when the vendor is insolvent, and the vendee purchased the land upon the representation of the vendor that he had title. In such a case equity will not compel a vendee to pay an insolvent vendor, who has no title, the install-, ments falling due before the deed is to be executed; for to do so would expose him to irreparable injury. Booth v. Saffold, 46 Ga. 280. But the court will endeavor to administer justice between the parties. If the vendee has been induced to enter into the contract through fraudulent misrepresentations on the part of the vendor, the court may rescind the contract without waiting for the last installment to become due. Munro v. Long, 28 Am., State Rep. 854 and note. If there was no fraud, but the vendor is insolvent, and without title to the land he has claimed to own and' contracted to convey, and it appears probable that if the vendee is compelled to pay, he will lose his money, the court will restrain the collection of the purchase money until the vendor procures the title and executes a deed; and if the vendor fails, within a reasonable time after the last installment becomes due, to procure the title and execute a deed, the contract will be rescinded. When necessary, an account will be stated between the parties. If any balance be found in favor of the vendee, he is entitled to a lien to that extent on any interest that the vendor may have in the premises in question. Bryan v. Lofftus, 39 Am. Dec. 242; Griffith v. Depew, 13 Am. Dec. 141.

During the progress of the litigation, when the vendee is insolvent, the court will, if necessary to protect the interests of the vendor, place the property in the hands of a receiver.

3. Sufficiency of answer and cross-complaint. We have not been favored with a brief on the part of appellees, but, looking at the answer and cross-complaint in the light of the rules of law above announced, we believe that it presents a good defense. It alleges that appellants are ready and willing to perform the contract on their part; that the appellees, Zuleika and Thomas Douglass, are insolvent, and without title, and unable to perform their contract; and that appellants were induced to make the contract by the fraudulent representations on the part of appellees that they own the land in question, and could convey a good title. While it does not expressly offer to restore the premises, it asks “that appellees be compelled to remove all incumbrances from said lands,” so that they can convey a clear title, and if they fail to do so, that the contract be rescinded ; and this, in effect, includes the offer to restore.

4. Remedy for indefiniteness m plead-If there was any defect in this answer and cross-complaint, it was one of form, and not of substance, and should be reached by a motion to make more definite and certain. Bliss on Code Pleading (3 ed.), sec. 425a.

We conclude that the court erred in sustaining the demurrer, and dismissing the answer and cross-complaint filed by appellants. The decree is therefore reversed, and the cause remanded, with an order to overrule the demurrer and for further proceedings.