24 F. 437 | U.S. Cir. Ct. | 1885
The defendant insists that no promise to pay for the land has been proved by any memorandum thereof in writing, signed by the party' sought to be charged, and that tho statute of frauds, therefore, is a complete protection. Codo Tenn. (T. & S.) § 1758. Counsel argues that, Williams not having signed the deed, the plaintiff’s only remedy is against the land itself, in the absence of some separate note, bond, covenant, or other like security containing a, promise, signed by him, to pay the purchase money; that, although a vendor may proceed to enforce a technical vendor’s lien, some mortgage that lias been given, or a reserved lien like that contained in this deed, as the case may be, be can thus subject the land only because there lias been attached to the grant a limitation or condition, which the grantee has accepted or created, that he shall not hold the land without paying the consideration for the grant; but that, whether he gives a mortgage, a lien is implied by the law, or is reserved by the grantor, this does not operate to bind him further than the land goes; and, to hold otherwise, is to violate the statute of frauds. There certainly seems to be some rule like this as to a mortgage, for the mortgagor, although lie signs the mortgage deed, is not bound beyond tho land, unless there is an express stipulation or covenant in the deed to that effect, or some separate bond or other promise to pay the money. And so much favored is the doctrine that no such promise shall be implied from tbe mortgage, that some states have enacted statutes forbidding the implication. 4 Kent, (12th Ed.) 145, and notes; 1 Jones, Mortg. §§ 677, 678; Scott v. Fields, 7 Watts, 360. But this rule does not arise out of the statute of frauds at all, but from the peculiar nature of a mortgage, which was the conveyance of .an estate upon condition, which not being performed, tho estate be-.
It is difficult to determine or define the precise character of a lien reserved in the face of a deed, like that we have here, but it seems in Tennessee to be settled that it is substantially a mortgage; that is to say, it stands as if the vendee had executed a mortgage to the vendor for the purchase money, and “creates an express lien by contract or agreement of the parties.” Lincoln v. Purcell, 2 Head, 142; Thompson v. Pyland, 3 Head, 537; Hines v. Perkins, 2 Heisk. 395; Chitwood v. Trimble, 2 Baxt. 78; Miskelley v. Pitts, 1 Tenn. Leg. Rep. 207; Gudger v. Barnes, 4 Heisk. 570. In this last case the court was considering the position of a purchase under a title bond, the vendor reserving the legal title as a security for the purchase money, and this too was likened to a mortgage. Because of the confusion that, has grown up on the question, the court takes the pains to review the relation of vendor and vendee, in such cases, for the very purpose of refuting the notion that the vendee holds the land on any condition upon a breach of which the vendor’s rights attach, and decides that it .is solely by the contract of the parties that the lien exists; the vendee being in possession under its stipulations, one of which is that he agrees to the lien for the purchase money as if upon his own contract. If this be so where the legal title is reserved to the vendor a fortiori, must it be so where that passes to the vendee, and only a lien is reserved on the face of the deed, as in the other cases cited ?
Of course, it must be observed that while the court assimilates all these l'iens to that of a mortgage, it does not mean the old common-law mortgage, in its technical sense, but the modern signification of that term, as one applied to any lien created by express contract of the parties as a security for a debt. These cases, therefore, seem to militate against the argument of the defendant construing this deed, particularly since, within itself, there is a recital that the $10,000 is, “by express agreement, to constitute a lien upon said property.” The circumstance of giving a note for the purchase money cannot be material, because that is a wholly independent contract, and the agreement of the vendee that the vendor shall have the lien provided for —whatever be its characteristics — rests alone on an implication from his acceptance of the deed reserving the lien, for he has never signed it. And in one of the above cases the court even held the lien efficacious to secure the notes of strangers to the original contract, which were substituted for the notes of the vendee. Hines v. Perkins, supra. This agreement for a lien is as much within the statute of frauds as a promise to pay the purchase money could be, and if one can be implied from a bare acceptance of the deed, without a violation of that statute, it is difficult to conceive why the other may not be. True, the defense was not suggested in these cases, but so important a matter could scarcely have been overlooked by counsel and the court. Our court seems to treat a transaction like this as &■ contract by the vendee
Whether this applies as well to that implied mortgage arising on .a lien reserved in a deed not signed by the debtor, it is unnecessary to determine, but it is difficult to see why it should not be so applied, and it may be mentioned here that, while the cases cited speak of separate bonds or notes as necessary, this is somewhat misleading, for the reason that, outside of those cases governed by the statute of frauds, a debt may rest in parol, and a mortgage or like security may be given for it, it being none tlie less a debt for which an action would lie; as if, for example, a deed of trust or mortgage should be given to secure an open account. It will be found, I think, that the real inquiry is whether, under the circumstances, there was a debt due which is secured, or only a transaction from which no more can be implied than that the security given should be the full extent of the liability; and this inquiry may arise on a proceeding to foreclose the lien, for, in modem practice, either by statute or rule of court, it is competent for the foreclosing court to give judgment for that part of the debt which remains after the lien is exhausted, or it may arise on an independent action for that balance. It is, after all, an inquiry for the intention of the parties, and that intention should prevail when it is reached by that which is competent proof of it. The defendant files, in support of his argument, an unreported opinion of the supreme court of Mississippi, of date March 17, 1884, in the case of Vicksburg R. Co. v. Oates, and a printed brief upon an application for rehearing, in. which the whole doctrine of the effect of the acceptance of a deed-poll by the grantee is considered in relation to the covenants thereof as against him. It was the case of a grant to a railroad company, imposing certain obligations upon the grantee as to the keeping up of stations, use of cars, etc. The bill alleged non-compliance with the
’ This seems to me to sustain the idea that on a proper proceeding, where there is no violation of a positive rule of law, like the statute of frauds, the court will enforce the actual intention in spite of the technical attitude of the estate as conveyed by the deed; so that, if the defendant should be right in his contention here as to the construction of this deed, it would not aid him as against his actual intention to pay for the land, if that can be proven by a parol promise to do so. This opinion and brief are full of authorities that might be useful in determining the question so much argued as to the remedies at law and in equity which a grantor has to compel compliance with the stipulations of his deed made for his own benefit, and imposed on the grantee solely by his acceptance thereof; but I do not see that any of them deal with the obligation to pay the purchase money, but only with those stipulations that concern the use of the land and the like, providing for easements, etc. The court says :
“ The doctrine that, by accepting an estate conveyed by deed-poll, the grantee binds himself to the performance of the covenants contained therein as fully as though he had signed and sealed the instrument, though recognized in many cases, was never satisfactory to some of the most learned judges, and, without regard to the statute of frauds, has been repudiated by many courts.” Platt, Cov. 16; Lock v. Wright, 1 Strange, 571; (Sutherland, v. Lishnan, 3 Esp. 42; Kimpton v. Eve, 2 Ves. & B. 353; Maule v. Weaver, 7 Pa. St. 829.
I am informed by the clerk of the court that, since this case was submitted, the opinion was, on reargument, withdrawn, and the court contented itself with overruling the demurrer, and reserving these questions until a final hearing of the case. I cite it merely to show the force of defendant’s position, and to say that an examination of many of the cases cited by the court and in the brief leads me to the conclusion that the apparent conflict of eases may be reconciled by attention to the distinction between using the deed as a foundation
The case of Cooper v. Louanstein is a very recent and elaborate consideration of the subject, and in one of the opinions the very distinction above adverted to was taken, namely, that while the covenant might not establish an casement, and be binding as such on the grantee, yet “the statement in the deed, it being accepted by Lou-anstein, was a circumstance of evidence, more or less strong, as the ease may be, tending to show a parol agreement for such easement.” And as there had been a part performance it could be enforced, notwithstanding the statute of frauds. The dissenting opinion maintains with force that even at common law the deed became, by its acceptance, ipso facto, the deed of the grantee, and he might be sued in covenant upon it.
Now, this suit is not an action on the deed, but on a promise to pay the consideration for the land. It is true, the declaration makes pro-ferí of the deed, and is susceptible of that construction, but under our peculiar mode of pleading in Tennessee, where all forms are abolished, and the pleader may sue upon “the facts of the case,” it must be treated as a statement of the facts and maintained as a good pleading, if, on the facts, it contains a sufficient cause of action in any view of them. The construction placed on the declaration by plaintiff’s counsel, that the deed is sta ted merely as an inducement, and as one of the facts of the case, must therefore prevail, if he is, on that construction, entitled to a cause of action, whether he would be entitled to sue on the deed itself as a foundation for the action or not. Whittenton Manuf’g Co. v. Memphis & Ohio River Packet Co. 21 Fed. Rep. 896. So treating it, the question is whether the statute of frauds requires the promise to pay for lands, for which the grantee lias accepted a deed, to be in Writing; and if not, what effect the deed and its acceptance may have as evidence of the promise, and what effect the other writings relied on in this case may have as evidence of that promise, and not whether the deed may be a foundation for the action, or whether it and the other writings are sufficient in themselves to answer the statute of frauds. If the statute of frauds requires that promise to be in writing, in view of the conflict of authorities already noticed, while I am inclined to think the deed itself might, in Tennessee, be a foundation of the action, I am not prepared to say that our court hay so, precisely, decided; nor am I satisfied that the unsigned paper written wholly by Williams would answer the statute of frauds as a memorandum of that promise. It seems to be a kind of chronological or historical statement of the facts, in which his name appears,
But, however the law may be elsewhere, it is established in Tennessee that the promise to pay the consideration need not be in writing; that the execution of the deed by the grantor satisfies the statute of frauds, and an action will lie for the purchase money, which may be sustained by parol proof. Davis v. Tisdale, 4 Yerg. 172; Whitby v. Whitby, 4 Sneed, 472; Perry v. Central S. R. Co. 5 Cold. 138; White v. Blakemore, 8 Lea, 49, 59; Mowry v. Davenport, 6 Lea, 80, 93; Taylor v. Ross, 3 Yerg. 330; Gilman v. Kibler, 5 Humph. 19. Here, then, the action may be maintained, and the alleged promise to pay for the land is proved by the execution of the deed, its acceptance by defendant, his possession under it, the unsigned paper written by himself taken as his admission of facts implying the debt, by the admissions contained in his letter of May 28, 1877, and by his payment of the quarterly interest for all the years before his death; for, as was said in Howel v. Price, 1 P. Wms. 291, 294, “the running on of interest, and its-carrying interest, was proof of its being a debt.” And these facts prove the promise averred in the declaration, whether the documents would be, in themselves, sufficient to answer the statute of frauds or not, if that statute required it to be in writing. No reasonable mind can doubt that there was an express promise to pay, and that it is reasonably proved by such facts; but certainly the law would conclusively imply from them a promise in support of the averment in the declaration.
Somewhat similar reasoning has led me to the conclusion that the statute of limitations cannot avail the defendant. We have no statute requiring the new promise to save the bar to be in writing, nor, indeed, any rule of law requiring an express promise at all, but only an express acknowledgment of a subsisting debt. The supreme court of Tennessee, recognizing the intensity of a temptation to evade the statute by fraud and perjury, has, in the absence of that wise legislation which prevails in some states requiring a new promise in writing, held very rigidly to the rule that there shall be no implication of a waiver of the statute from partial payments, either of principal or interest, and requiring a distinct acknowledgment on the part of the debtor of a continuing liability to pay. Mr. Chief Justice TaNey has stated the rule as to the character of acknowledgment that will save the bar in terms that fully meet the requirements of the Tennessee eases, as I understand them. He says:
“In order to remove the bar of the statute it is necessary that there should either be an express promise to pay, or an admission of the debt in such terms as would imply that the party was liable and willing to pay it.” Georgia Ins. Co. v. Ellicott, Taney, Dec. 131; Bell v. Morrison, 1 Pet. 362; Moore v.*447 Bank of Columbia, 6 Pet. 86; Fort Scott v. Hickman, 112 U. S. 150; S. C. 5 Sup. Ct. Rep. 56.
And Mr. Justice Davis likewise enunciates a rule, as to tlie effect of partial payments, that is the same as we have it in Tennessee. U. S. v. Wilder, 13 Wall. 254. So, if the ruling in Palmer v. Andrews, McAll. 491, that this is a commercial question which tlie United States courts will decide independently for themselves, be correct-— which 1 doubt — the two jurisdictions in this state quite agree on the subject, Russell v. Gass, Mart. & Y. 270; Belote’s Ex’rs v. Wynne, 7 Yerg. 533; Thompson v. French, 10 Yerg. 453 ; Hale v. Hale, 4 Humph. 183; Hunter v. Starkes, 8 Humph. 656; Butler v. Winters, 2 Swan, 91 ; Proddie v. Johnson, 1 Sneed, 463; Rogers v. Southern, 4 Baxt. 67; Steel v. Matthews, 7 Yerg. 313; Locke v. Wilson, 9 Heisk. 784; S. C. 10 Heisk. 441; Folk v. Russell, 7 Baxt. 591.
1 do not understand that either the supreme court of the United States, or the supreme court of the state, excludes tlie circumstance of a partial payment from the consideration of the triers of the fact whether there has been a new promise or an acknowledgment of the debt or not, but only to limit its probative value so that of itself it shall constitute neither a promise nor acknowledgment. Elsewhere, even when there has been a statute, as in England and some of our states, requiring the new promise or acknowledgment to be in writing, the statute usually makes an exception in favor of the implication of an acknowledgment from partial payments, which show's the potential character of that circumstance where that rule has prevailed. But with us, standing alone, part payment implies nothing as an acknowledgment of the balance of the debt, for that which he pays may be all the debtor wishes to admit to be due; but if there be other circumstances attending the payment, showing that it could be made-only on a distinct acknowledgment of the whole debt, those circumstances, taken with the payment, are a sufficient basis for the implication of a promise to pay that will save the bar. This was always the correct rule, even where partial payments -were fully recognized as saving the bar, and is yet, under the exception in their favor, contained in tlie above-mentioned statutes. Any departure from it was a misunderstanding of the rule. In Morgan v. Rowlands, L. R. 7 Q. B. 493, it is stated that part payment is not sufficient “unless it be such that a jury might fairly infer a promise to pay the remainder. No doubt, very slight circumstances might be sufficient to support such an inference where there is a legal duty to pay.” And the circumstances surrounding payment were scrutinized, perhaps not always with the best judgment, before the fact of payment could be treated as an acknowledgment, and often it was unavailing. 1'lius the fact that the payment was that of interest on the debt was often, though not always, a controlling circumstance in favor of the acknowledgment. If the debt was payable “on demand,” the fact that interest was paid was quite conclusive of an acknowledgment to save tlie bar; if not so
“If there be a distinct acknowledgment, it is not necessary there should be a promise in explicit terms; but from the acknowledgment a promise may be inferred, unless it be accompanied by a refusal to pay, or any other circumstance which excludes that inference. ”
And in Re River Steamer Co. L. R. 6 Ch. App. 822, Lord Justice Mellish says:
“Now, it is perfectly settled law what is the description of letters which will take the case out of the statute. * * * Before this statute, not only a verbal promise to pay a debt more than six years old, but a bare, unconditional acknowledgment of its substance made within six years before action brought had been held sufficient to take the ease out of the statute. But now, in order to revive the liability of the debtor, after the expiration of the six years, by subsequent acknowledgment or promise, there must be proof of some writing, signed by himself, either containing an express promise to pay tiie debt, or being in terms from which an unconditional promise to pay it is necessarily implied. If, therefore, the writer, although he admits the debt, refuses to pay it, or reserves the matter for further consideration, or refers the creditor to some third person for payment, or the like, this will not be sufficient to prevent the operation of the statute. That being the rule, there must be one of these three things to take the case out of the statute: , Either there must be an acknowledgment of the debt from which a promise to pay is to be inferred; or, secondly, there must be an unconditional promise to pay the debt; or, thirdly, there must be a conditional promise to pay the debt, and evidence that the condition has been performed.” —
The mere writing of the name and date on a past-due note was held sufficient. Bourdin v. Greenwood, L. R. 13 Eq. 281; Quincey v. Sharpe, 1 Exch. Div. 72; Skeet v. Lindsay, 2 Exch. Div. 314. And these cases,
I have gone over these authorities and many others that convince me that our Tennessee rulings on this subject are consistent with the better rulings everywhere, and that the only difficulty arises from misunderstanding or misapplying them in giving effect to the testimony in a particular ease. Ño explicit promise, either verbal or written, is required, as in Wisconsin, both before and after their act requiring a written memorandum; there may be an acknowledgment of the debt sufficient to save the bar, but that acknowledgment must be of a character that from it a promise may be fairly and necessarily implied, and it may be proved in parol by any circumstances tending to show it, or by any writing sufficient to establish it. Partial payments, either of principal or interest, in themselves are not sufficient to establish such an acknowledgment, but, in connection with other circumstances tending to show an intention to admit a subsisting liability to pay the debt, they are as potential here as elsewhere. It is the implication from the bare payment that is prohibited to us, nothing more.
Now, I concede that if we had the Wisconsin requirement of an explicit promise to pay the debt, it would be difficult to find it in any of the writings relied on here, and that it is not otherwise proved. But, apart from that, the requirement of an acknowledgment from which a promise is necessarily implied is abundantly met by this proof. In the first place, I think no, one can read the deed in the light of Williams’ subsequent conduct towards these parties, and certainly when that is supplemented by his admissions in the unsigned paper and in his letter of May 28, 1877, and not conclude that, although Williams carefully provided for himself the privilege of paying the debt at the end of two years or before, it was really intended by the parties from the beginning as a permanent investment for the benefit of this trust, to run indefinitely. So, if we had nothing more than the recitals of this deed, the fact that Williams went into possession under it; that he withheld it from the record to protect beneficiaries, and was so long permitted to do so without complaint; that the interest was payable quarterly, and was in fact promptly paid in advance before and after the six years expired, — it would be a necessary implication from these payments, under the circumstances, that having so acknowledged a subsisting liability after the bar, he promised to pay the debt. But add the
The plea of plene administravit must, on the agreed statement of facts, be found in favor of the defendant, but otherwise there must be the usual judgment against him for the balance of the debt and interest. So ordered.
