Johnson v. Johnson

| Md. | May 14, 1874

Alvey, J.,

delivered the opinion of the Court.

The late William Cost Johnson, by deed of the 14th of June, 1859, conveyed all his real and personal estate in Frederick County to the defendant in this cause, Thomas Johnson ; the real estate consisting of a farm called “Harmony Grove.' ’ William Cost Johnson died in 1860 ; and for several years prior to his death, and up to April, 1868, the plaintiff, Edwin M. Johnson, occupied the farm; and after the death of his uncle, William Cost Johnson, he set up claim to the right of possession of the farm in respect of some pecuniary claims against his uncle, and also against his father, the defendant, who demanded possession of the farm by virtue of his title under the deed of the 14th of June, 1859. The defendant had advertised the farm for sale on the 21st of March, 1868, and the plaintiff filed his bill in equity in the Circuit Court for Frederick County, for an injunction to restrain suck sale, and for a decree that the land be sold under the direction of tbe Court for the satisfaction of his claims. Tn this state of contention in regard to the farm, the plaintiff and defendant entered into the agreement of the 6th of April, 1868, under their respective bands and seals. By this agreement the defendant promised and obligated himself to pay to the plaintiff the sum of two thousand five hundred dollars, in full satisfaction of all claims or demands whatever against him, the defendant; such sum to he paid in a specified manner, namely: Five hundred dollars on or before the expiration

of thirty days from the date of the agreement; one thousand dollars out of the first payment made on the sale of the farm, “Harmony Grove;” and the other thousand dollars out of the second payment on said farm. The plaintiff, on his part, promised to give up and surrender to the defendant the immediate possession of the farm, and also all the personal property held l>y him which had belonged to the late William Cost Johnson, with certain specified exceptions. This covenant on the part of the plaintiff lias been performed, but the defendant has only paid the first instalment of five hundred dollars, of the sum agreed to be paid by him, and has wholly neglected or failed to pay the other two thousand dollars, and has neglected or refused to sell the farm to raise the fund with which to discharge his obligation. It is on these facts that the plaintiff has filed his hill in this case, asking an enforcement of the defendant’s covenant as a charge or lien on the land, and, in that view, praying that the farm he decreed to bo sold to raise the fund to pay off the amount due from the defendant on his covenant. The Court below decreed in favor of the plaintiff; and the first and most material question on this appeal is, whether the covenant creates a charge or lien, in the sense of a Court of! Equity, that can he enforced in the manner contemplated by the plaintiff's bill?

It is objected that the covenant creates only a personal obligation on tbe defendant, and that, consequently, there is no jurisdiction in a Court of Equity to take cognizance of the case. If this were a mere personal covenant, and nothing more, the objection just stated would certainly be ■ well founded. But that is not our conclusion as to the nature of the covenant. That the covenant does create a personal obligation on the defendant is doubtless true, and one that could be sued on at law; but it does not necessarily follow from that being so, that there may not be also an equitable lien or charge created at the same time. The covenant does not, as may be observed, stipulate in express terms that the land shall be sold and the proceeds of sale applied to the discharge of this particular debt. But we think that is the fair and reasonable implication from the ■terms employed. In a case like the present, the question whether there has been a charge created depends in a great measure upon the intention of the contracting parties; and here we think it manifest, as well from the language of the covenant itself as from the circumstances leading to it and under which it was made, that the parties contemplated the sale of the farm, and the proceeds of sale as the fund from which the debt was to be paid. In other words, the farm was to be sold, and a sufficient amount of the purchase money specifically~apprtrprxate3_to the payment of the debt due the plaintiff. If such be the fair construction of the agreement, it created a charge on the land as a security to the plaintiff; for, as was said by Chancellor Sugden, in Rolleston vs. Morton, 1 Dr. & W., 195, if a man has power to charge his lands, and agrees to charge them, in equity he has actually charged them; and a Court of Equity will execute the charge. Here, as we have seen, there are no express words creating the lien or charge upon the land; but there is no doubt of the proposition, that a charge may be created by fair and reasonable implication as well as where express words of trust or charge are employed in the covenant or agreement of the parties. Perry on Trusts, sec. 122, and authorities there cited; and 2 Story's Eq. Jur., see. 1246.

This case in principle does not differ from that of Legard vs. Hodges, 1 Ves., Jr., 477, and same case on rehearing, 4 Bro. C. C., 421. There, a party having obligated himself to pay a certain sum for a particular purpose, as means of raising that sum, covenanted with trustees that he would set apart and pay to such trustees one-tliird part of the annual profits of his particular estates; and failing to make the application of the profits according to the covenant, and having appropriated them to other purposes, the trustees filed their hill to have a trust declared as to the third of the profits of the land; and although it was there contended, as it has been contended hc-re, that there.was no lien upon the land, hut a mere personal covenant only, It was held, that the covenant created in equity a lien on the land against the covenantor, and those claiming under him with notice. And, in deciding the case, the Lord Chancellor said that there was a maxim which he took to he universal, and that was, wherever persons agreed concerning any particular subject, that in a Court of Equity, as against the party himself, and any claiming under him voluntarily or with notice, raised a trust. To the same effect is the doctrine fully stated by Mr. Justice Story, Eq. Juris., sec. 1231. He there says: “ Indeed, there is generally no difficulty in equity in establishing a lien, not only on real estate but on personal property, or on money in the hands of a third person, wherever that is matter of agreement, at least against the party himself, and third persons, who are volunteers, or have notice. For it is a general principle in equity, that, as against the party himself, and any claiming under him, voluntarily, or with notice, such an agreement raises a trust.” See also Power vs. Bailey, 1 Ball & Beat., 52. And such being the well established principle upon the subject, the agreement in this case must be taken as having created a charge upon the land, and raised a trust in respect thereto, as security for the payment of the plaintiff's debt; and hence it is the right of the latter, upon failure of the defendant to perform the trust, to have that trust specifically executed by a decree of a Court of Equity.

The case of Berrington vs. Evans, 3 Y. & Coll., 384, relied on by the defendant, is not an authority to affect this case. There the covenant was that if the covenantor did not pay certain debts by a given day, he engaged to sell so much of his estates as might be necessary for that purpose. The learned Baron of the Exchequer, wdio decided the case, said that it did not appear to him that the'covenant was anything more than a personal undertaking ; hut if it were, the case of Williams vs. Lucas, 1 P. Wms., 430, n., shewed that-the words of it -were too general to create a specific lien upon the lands of the covenantor. This latter reason was all-sufficient for the case, for it was expressly decided in the case referred to in P. Wms., and also in the case of Freemoult vs. Dedire, 1 P. Wms., 429, that a covenant to mortgage or settle lands to secure sums of money, without mentioning or referring to any certain lands, was not sufficient to create any specific lien; and as the covenant in the case of Berrington vs. Evans, according to the construction of the learned Judge, referred to no particular lands or estates, it created no specific lien, and hence it could be nothing more than a mere personal undertaking. That case, therefore, can have no application to this, even conceding it to have been well decided; a proposition in regard to which we express no opinion, in view of -what was held in the case of Wellesley vs. Wellesley, 4 My. & Cr., 561. See Mornington vs. Keane, 2 De G. & J., 293.

It is thought that, as the covenant fails to fix any definite time for the payment of the money, or to designate any time within which the farm should be sold, or how to be sold, the defendant was left free to exercise his discretion as to the time and mode of sale, and that a Court of Equity cannot enforce the sale to "be made, as by so doing tbe defendant would be deprived of a discretionary right of which he was not deprived by tlie agreement.

But, in reply to this suggestion, it is sufficient to say, that there is no such want of certainty and definiteness in the agreement as to prevent its execution by tbe Court; and as it is alleged and proved that tbe defendant, although repeatedly requested, has utterly neglected and refused to sell the farm, hut retains it for his own profit, and as a reasonable time had elapsed before filing the bill, a Court of Equity, under such circumstances, will not permit him, under the pretence of exercising a discretion as to the time and manner of sale, to evade the performance of his contract. Wellesley vs. Wellesley, 4 My. & Cr., 579.

The money agreed to he paid the plaintiff out of the proceeds of sale of the farm became due and payable after the lapse of a reasonable time, within which the farm could have heen fairly sold, and tlie proceeds of sale realized by the defendant on tlie usual and ordinary terms of sale; Farrell vs. Bean, 10 Md., 233; Triebert vs. Burgess, 11 Md., 452 ; and this time having expired, and the defendant failing to show any good reason why he has not performed his contract, the laud has become liable to be proceeded against for the enforcement of the charge on it.

Another objection to the decree of the Court below is, that, instead of appointing a trustee to make the sale, it should have required the defendant, himself, to make the sale in execution of the contract. This objection we do not regard as well founded. The defendant, by his own neglect or refusal to perform his contract, has occasioned the present application for relief, and as the Court proceeds with the matter upon the footing of a trust, it is quite competent to it, in order to make its relief effectual, to appoint an office)' of its own to execute its decree. The defendant lias heen allowed ampio timo for the sale of the farm or the payment of the money due the plaintiff; and if he does not desire the farm to he sold, he may still avoid that alternative hy payment of the money without further delay.

(Decided 14th May, 1874.)

The decree appealed from will he affirmed, and the cause remanded that the decree may he executed.

Decree affirmed, and cause remanded.