Madden v. Barnes

| Wis. | Aug 15, 1878

OetoN, J.

On or about the 12th day of May, 1876, Clarence L. Steele and William Q. Barñes, appellant, purchased of James Madden, the respondent, certain lands and lots in the city of Janesville, for the sum of §2,700, and received a conveyance of the same. The consideration was paid, or agreed to be paid, as^follows: A mortgage upon the premises to one John Conway for §1,337.70 assumed, and a mortgage given upon tbe premises to secure tbe payment of $400, and a secured note for $600, and a cash payment for tbe balance of $362.30. As or for this cash payment, Steele gave tbe respondent bis check for said sum of $362.30, drawn on tbe First National Bank of Janesville, dated May 15, 1876. At this time, Steele bad funds in said bank more than sufficient to meet and pay said check; but on and after the 31st day of tbe same month, be drew out of said bank all of bis funds, leaving none to be applied to tbe payment of tbe check; and when, on tbe 13th day of June thereafter, tbe respondent presented tbe check at tbe bank, tbe payment thereof was refused for that reason.

Tbe respondent at once notified Steele and Barnes of tbe nonpayment, and demanded tbe mÓney, which was refused.

This suit is brought to enforce an equitable lien upon tbe premises for, as it is claimed, this unpaid part of tbe purchase money.

Tbe law which must govern this case is tersely and comprehensively expressed by Mr. Justice Cole, in. Willard v. Reas, 26 Wis., 540" court="Wis." date_filed="1870-06-15" href="https://app.midpage.ai/document/willard-v-reas-6600534?utm_source=webapp" opinion_id="6600534">26 Wis., 540: “ Tbe vendor has an equitable lien upon tbe estate sold, for tbe unpaid purchase money, as between [himself] and tbe [purchaser], unless there is either an express or implied agreement to waive such lien.”

Tbe only real question in this case, and unembarrassed by other questions discussed most ably by the appellant’s counsel, which we do not deem material, is, Was there a waiver of the equitable lien of the respondent upon the premises for this part of the purchase money, by this transaction of the check? We are cleai'ly of the opinion that there was no waiver of the lien, and no intention on the part of the respondent to waive such lien, nor any anticipation or expectation, at the time, that any contingency might occur by which this unpaid part of the purchase money would continue the liability of Steele and Barnes beyond the time of the presentation of the check to the bank, and therefore no waiver of such lien could have been contemplated or considered by the respondent. In this respect the case would seem to come within the principle of De Forest v. Holum, 38 Wis., 516" court="Wis." date_filed="1875-08-15" href="https://app.midpage.ai/document/de-forest-v-holum-6601900?utm_source=webapp" opinion_id="6601900">38 Wis., 516. Applying the language of the opinion in that case, by tbe learned chief justice, to the facts in this, the principle may be stated: “Failing the contingency, the whole purchase money was satisfied [by the notes and mortgage given, and the mortgage of Conway assumed, and the giving of this check]; happening the contingency, another sum would then become the purchase moneyetc, The contingency in this case, by which this part of the purchase money remained unpaid, and a continuing liability of Steele and Barnes to the respondent therefor, was the unexpected act of Steele in withdrawing the fund from the bank upon which the check was drawn; and such a contingency, so unexpected by the respondent and so unlikely to occur, repels the idea, or even the presumption, that the respondent intended by taking the check to waive his lien.

A check upon a bank purports to be drawn upon a deposit in the bank by the drawer (2 Daniel on N. I., § 1569); and if there was no such deposit in the bank, it would be a fraudulent check; and though a check, nevertheless it would certainly be no payment in itself. The check presupposes a fund in the bank at the time; and does it not also presuppose that such fund shall so remain in bank to meet the check when presented, or at least that the drawer of the check will not commit the fraud of withdrawing the fund from the bank?

When such a fraud is committed, the vendor will not lose his lien on the estate sold, for such part of the purchase money as remains unpaid, by reason of the fraud. Tobey v. McAllister, 9 Wis., 463" court="Wis." date_filed="1859-11-09" href="https://app.midpage.ai/document/tobey-v-mcallister-6597889?utm_source=webapp" opinion_id="6597889">9 Wis., 463. Such withdrawal of his funds from bank by the drawer of the check before its presentation, is a fraud upon the vendor to whom the check is given in the place of the payment of money. 2 Daniel on N. I., § 1596, and cases cited in note. These principles are so obvious and elementary that it would be a waste of time, and imply a doubt where there is absolute certainty, to elaborate or pursue the subject further.

By the Oourb. — The j udgment of the circuit court is affirmed, with costs.

EyaN, C. J., took no part.