Smith v. Patton, 12 W. Va. 541

Green, President,

delivered the opinion of the Court:

The principal question presented by the record is, did the plaintiff, Nicholas Smith, have a lien on any of the *552real estate of Robert Patton, and if so, on what real estate, what was the nature and character of this lien, and what debts did it include. The plaintiffs in their bill, claim this lien on two distinct grounds. One because the transactions alleged, gave rise to a resulting trust upon the Capehart farm in favor of N. Smith; and the other, that under the contract of April 23, 1870, an implied lien arose in favor of Mrs. E. P. Smith. The bill alleges that the Capehart tract of land was purchased by N. Smith and R. Patton jointly, and for their joint use, but Syllabus 6 for convenience of making titles to portions of this land, and for other reasons not stated, it was agreed between the parties that the written contract for the purchase of this land should be made in the name of R. Patton alone, which was accordingly done. That subsequently the plaintiff, N. Smith, sold his moiety of this tract of land to the defendant, R. Patton, for an amount embraced in the $4,500.00, which was never paid. If these facts had been proven, there can be no question that a resulting trust would have ariseniin favor of N. Smith, to one-half of this land, and on the sale being made to N. Patton, that an implied equitable lien would have arisen for the purchase money. These facts too, might have been proven by parol evidence, for such resulting trusts remain as they were before the statute of frauds, but the evidence to establish such resulting trust must be clear; Bank of United States v. Carrington et al., 7 Leigh 566. In this case these facts are alleged in the bill, but positively denied by R. Patton’s answer, and are unsus-tained by any evidence, unless they are to be inferred from admitted facts and from the contract of April 23, 1870. These admitted facts from which we are asked to draw such conclusions, are that Smith and Patton with their families, resided together in the mansion house on the land, bearing equally the expenses of the household, cultivating the farm together and sharing equally the crops, and Smith! afterwards paid to Capehart $1,000.00 of the purchase money of this land. And under the con*553tract of April 23, 1870, tbis joint occupation of the land was continued. But Patton in his answer, explains tbis joint occupation of the land, by alleging there was a contract made by him and Smith after Patton had purchased this land for his own use only, whereby Smith was permitted for a valuable consideration, to live upon it and cultivate it jointly with him. And its occupation in this manner after April 23, 1870, is accounted for by the terms of the contract of that date, it being agreed upon as a mode of either paying the debt found due to Smith on settlement, or of compelling its payment. Nor does this contract show, that this debt of $4,500.00 was made up in any part of a sale of a moiety of this land by Smith to Patton, nor is there anything on the face of this contract, to indicate that Smith had ever owned any part of this land. The consideration recited is, for money expended by Smith for Patton and love and affection. It is true that the body of the contract does show that Smith sold to Patton some property which entered into the consideration, but it does not appear that a moiety of this farm was a part of the property so sold. On the contrary, the failure to so state in connection with the fact, that “a mower, cider-mill, cow and hogs” are mentioned, would rather justify the conclusion, that the property so sold consisted of personal property on the farm. I think the clear evidence required to establish such resulting trust is wanting in this case, and none such can be regarded as having existed.

The next question is, whether under the contract of April 23, 1870, an implied equitable lien arose. A court

Syllabus 1 of equity frequently implies a trust from the contracts parties, though no words of trust be used. Thus an order to pay a debt out of a particular fund, gives to the creditor a lien on this fund, but this is distinguished from a covenant by a debtor to pay a debt out of a certain fund, such a covenant not creating a lien on the fund, but creating merely a personal obligation. Anderson, &c. v. De Sore, and Same v. Galligoe’s adm’r, 6 Gratt. 363; Rogers v. *554Hosac‘s ex’ors, 28 Wend. 319. See also Feamster v. Withrow, 9 W. Va. 310, 313. It is however well settled, that a covenant or written contract to set apart and pay the rents and profits of particular specified lands or the proceeds of their sale to the payment of a debt, is in equity a lien on the land against the owner, and all persons claiming under him with notice. See Legard v. Hedges, 1 Ves. Jr. 477; 3 Bro. Ch. 441; 4Bro. Ch. 310; Freemont v. Dedire, 1 P. Wms. 429; Pinch v. Anthony, &c., 8 Allen 536. A controversy has existed whether a covenant to charge land generally, to be thereafter acquired, with the payment of a debt, would, when such lands were acquired, be held to be an equitable lien on them; but however this may be, it seems to be admitted that if there be such a covenant, and land has been afterwards acquired with an intention to perfor.m or satisfy such covenant, a court would hold such a covenant to create an equitable lien on such land. See Morrington v. Keane, 2 De Gex & Jones, 318, 59 Eng. Ch.; Deacon v. Smith, 3 Ath. 323; Wellesley v. Wellesley, 4 Myl. & Cr. 579; Gardner v. Marquis, 7 Townsend Cooper’s Ch. 301. If the covenant or contract be to charge with the payment of a debt a particular specified tract of land, which the covenantor was thereafter to purchase, it would seem to be a fair deduction from these authorities, that when purchased a court of equity would regard it as held subject to an equitable lien, created by such covenant. See Metcalf v. Archbishop of York, 1 Mylne & Craig, 547, 13 Eng. Ch. 514. In the case of Watson v. Sadlier, 1 Malloy’s R. 585, 12 Eng. Ch. 383, Sadlier granted Watson an annuity for life, the deed not containing the usual power of distress to enforce the annuity, and naming no lands, either specifically or by the general name of “ lands.” But it did contain a covenant that Watson might recover and receive from Sad-lier and his heirs, executors, &c., and from his and their estate, real and personal, such annuity. When this deed was about to be prepared, Sadlier wrote to Watson and *555named certain land which was to be charged with this annuity. The master of the rolls considered that from’ this letter an agreement should be implied, that the lands named in it were to be’ charged with the annuity, and that Watson had a lien therefor on them. The Lord Chancellor, Sir A. Hart, approved this view of the master of the rolls, and in so doing, said: “I agree in the view of the master of the rolls, that the letter reduced ‘the general covenant to a specific lien; and I am further of opinion, that if by means of undisclosed incumbrance the annuitant was ousted of those specified lands, the court would lay its hands on any other lands, the property of the grantor,” but he rendered no decision in the case, taking time to consider it. This language of the chancellor must therefore be regarded as an obi-ter dictum. The basis of it, I suppose, was that he regarded the deed itself by the covenant in it, that-the annuity might be made out of Sadlier’s real estate, as creating a lien on all the lands then owned by him. For if the deed had only charged a portion or tract of land, and it had turned out no security by reason of undiscov-ed .encumbrances, lean hardly suppose the chancellor “ would have laid his hands on any other lands of the grantor.” For I cannot see how a breach of good faith on the part of the grantor, in the deed, could justify the court in regarding the annuity as a lien on lands which could not possibly be held to have been intended by the agreement of the parties to have been charged. In applying these principles of a court of equity to the case before us, we meet with not much difficulty. In the first place, the first part of the contract of April 23, 1870, though badly worded, shows clearly that R. Patton thereby agreed to procure from Bowyer a deed for the forty and one-half acres of land, and then to execute a mortgage on it to secure on it $3,000.00, part of the $4,500.00, for the use of Mrs. Eliza P. Smith. This deed from Bowyer, was afterwards obtained by Patton, and as soon as he obtained it, an equitable lien arose by *556virtue of this contract, upon this Bowyer land for the ” payment of this $3,000.00. This being only an equitable lien, was however substantially destroyed by the giving on said land by R. Patton of legal liens to parties having no notice of this equitable lien, and the bill admitting this, does not seek to charge this Bowyer land with this $3,000.00. The latter part of the contract of April 23, 1870, is drawn still more obscurely. It does not mention by name the Capehart tract of land. But it seems to be obvious enough that the property which R. Patton agreed to sell as fast as he could, and pay over one-half of the receipts of sale on the debt of $4,500.00, meant this Capehart farm, for the contract says that this half of the receipts are not to be paid over till “ Patton satisfies a debt he owes to S. P. Capehart, under a decree for $7,000.00,” and Capehart then had such a decree to satisfy this $7,000.00 debt by sale of this farm. This part of the contract then being a contract to pay one-half of the proceeds of this Capehart farm, that remained after satisfying Capehart’s decree on this $4,500.00, as soon as it could be sold, and in the meantime to let half Syllabus 2 of the proceeds of the rents and profits of said land be paid to the holder of this $4,500.00 debt, amounts to the creation of an equitable lien on one-half of the Cape-hart farm, after satisfying the Capehart decree, to secure the payment of this debt of $4,500.00. The fact that the equitable lien on the Bowyer land had been defeated or rendered unavailable by Patton’s act, would not justify the charging of this debt of $4,500.00 as a lien on the whole of the Capehart farm. The contract on its face showing clearly that it was not the intention of R. Patton to create’ a lien on more than one-half of Patton’s interest in the Capehart farm; leaving the other half subject to his own disposal. It is also obvious from the words of -the contract, that the whole extent of the equitable lien created by this contract, was a lien to secure this debt of $4,500.00 then due; and that it was not intended by the parties to *557create any lien on said land for tbe security of any other indebtedness which might be thereafter incurred in the support and maintenance of Patton’s family, by any ad-vanees Smith might -make in the expenditures for the families ot Patton and Smith, who were to continue to live, together. Nor was it the intention of the parties to create a lien to secure any future indebtedness of R. Patton to Smith of any sort, such as that which afterwards arose by the sale of Smith’s property to pay Patton’s debts, or which might arise from the appropriation by Patton of the proceeds of crops raised on the Capehart farm by Patton alone, which ought to have been paid over to Smith, if the contract can be construed to give N. Smith any claim on these crops, which he did not help to cultivate, except as a credit on this $4,500.00 debt. On this point, it is unnecessary to express any opinion now. It is claimed however that as the bill sought to set aside the sale, or more properly, mortgage of this Capehart farm to Pendleton, the plaintiffs were therefore entitled by this suit in equity to have this conveyance to Pendleton declared fraudulent, and this farm sold to pay all their demands, but the answer of Patton positively denies that this conveyance was executed to delay, hinder or defraud his creditors. And no proof was introduced in the case, except simply the fact that Pendleton after the institution of this suit, released all claim to or on this land. That the conveyance was fraudulent, cannot be inferred from this release, as Pen-dleton may well have thought that his interest in this deed, even though perfectly fair, would not justify him in engaging in litigation. Though the provisions of this deed to Pendleton are certainly unusual, and such as perhaps would justly give rise to the suspicion that the deed was intended to delay, hinder and defraud the creditors of R. Patton, yet they are not such as would justify this court in declaring the deed void as fraudulent on its tace, when such fraud was positively denied in the answer, and no evidence was produced to *558sustain it. But even in the absence of any allegations of in this conveyance, the seeking to enforce other demands than this $4,500.00, though these demands were mere legal claims, would not render the bill multifarious. See Smith v. McLain, 11 W. Va. p. 654. The bill alleged and the contract of April 23, 1870, on its face shows that the demand against B. Patton for this $4,500.00, arose upon a final settlement of all claims and demands of every description of the parties to this contract and although the answers claim, that this settlement was made in ignorance on the part of both Patton and his wife, that N. Smith was largely indebted on account of certain matters specified in the answers, and which occurred prior to such final settlement, yet this ignorance is denied in the replication, which alleges that they were taken into consideration, included in and adjusted by the settlement which was the basis of this contract of April 23, 1870. No proof was taken to prove these facts assailing the fairness of this settlement, and of course it would have been improper for the court to open this settlement and direct an account of transactions prior to its date, to be taken by a commissioner, and it would have been equally improper for the court to have made any enquiry as asked for by the plaintiff, Smith, in his replication as to the debts on which Smith was security, which Patton, by this contract of April 23, 1870 contracted to pay, but which it is alleged he failed to pay. For Smith’s only redress for such failure was an action at common law. It remains to consider whether a rehearing ought to have been granted to E. Patton on his petition. It is based on the allegation, that he was advised by his counsel SyiMms 6 that it was unnecessary before the hearing of the cause to take any evidence to support his answer, and that the court without any evidence of the truth of the allegations in the answer, which were denied, would open the accounts between the parties aud refer their claims to a commissioner for settlement. And this petition *559further alleges the insolvency of Smith as an additional reason why the cause should be reheard. It certainly requires the citation of no authority to show that if a cause is submitted to the court for decision by counsel, with full knowledge of all the facts, and the court decides the cause against him, the simple fact that it has so decided, is no ground for granting him a rehearing in order that he may make a different case by proof; and the insolvency of Smith is equally unavailing as a ground for a rehearing, as on the case as made out by the pleadings, and no evidence has been produced, they have no claim against the plaintiffs, all the claims set up by them, having been included in the general settlement made on April 23, 1870.

The only remaining question is, did the court err in ordering a sale of the Capehart farm. The bill states that about half of this farm had been sold under a decree of the court for $9,811.00, of which upwards of $7,000.00 went to pay the unpaid purchase money due Capehart, and the balance was to be applied to certain judgments against Patton. What were the amounts of these judgments, and to whom due, does not appear. It was obviously improper as this Court has frequently decided to sell land to satisfy such a lien till all prior liens and tlieir priorities had been ascertained. This may have been done in the suit of Capehart v. R. Patton, indefinitely referred to in the bill, but if so, it does not appear in this cause, and unless and until it does, no sale of this land, or of any part of it in this cause could properly be decreed. The record in its present condition does not show satisfactorily whether this debt of $4,500.00 belongs really to N. Smith or to his wife Mrs. Eliza P. Smith, and no issue having been made in reference to this point, I deem it improper at this time to express any opinion on this question. The cause must be remanded to the circuit court of ICanawha county, to be further proceeded with, and the decree for this $4,500.00. debt should be made in favor of one or the other as may *560appear proper when the decree is rendered. By the “terms of the contract of April 23, 1870, Patton agreed to pay one-half of his receipts of sales of portions of the Capehart farm as fast as they were received after the payment of the Capehart debt for purchase money. That is as I understand the contract, that out of the sales of the Capehart farm this purchase money debt was to be paid, and then one-half of the sales of the residue of the farm, left after paying out of the sales this purchase money debt, was to be applied to the payment of this $4,500.00 debt.

The decree therefore of the circuit court of Kanawha county, rendered on May 17, 1875, must be reversed and annulled, and the appellants must recover of the appel-lee, Nicholas Smith, their costs about their appeal in this Court expended, and this Court proceeding to render such decree as the court below ought to have done, is of opinion, that the debt of $4,500.00 named in the contract of April 23, 1870, filed with the bill, was the balance found due on a settlement of all accounts up to that date, between the plaintiffs and the defendants, B. Patton and wife, and that no accounts or demands of B. Patton or his wife against the plaintiffs, or either of them, prior to that date, can be offset against the said debt and that the same is an equitable lien on one moiety of so much of the land purchased of S. P. Capehart in the bill named, or of the proceeds of sale thereof as may remain after satisfying the amount decreed to be paid to S. P. Capehart in the chancery cause of S. P. Capehart v. Patton and others named in the bill, and that none of the other demands of the plaintiffs or either of them named in the bill, is a lien on any of the lands of the defendants, or any of them, and the court doth therefore adjudge, order and decree, that the said debt of $4,500.00 is a lien on that portion above described, of the said land bought of Cape-hart; and that the bill, so far as it seeks to enforce any claim other than this, be dismissed without prejudice to *561any other suit which the plaintiffs may be advised to institute to enforce them. But the court being further of’ opinion that the proper parties are not before the court so as to justify a sale of any portion of the said lands to satisfy this equitable lien, doth further adjudge, order and decree, that this cause be remanded to the. circuit court of Kanawha county, with directions to give leave to the plaintiffs to amend their bill, and bring before the court all the necessary parties, in order to the enforcement of said equitable lien, by a sale of said portion of said land, after all proper preliminary proceedings have been had ; and that such other and further proceedings shall be had as are in accordance with the principles laid down in this opinion, and the rules governing courts of equity.

The other Judges concurred.

Cause Remanded.

Case Details

Case Name: Smith v. Patton

Court Name: West Virginia Supreme Court

Date Published: Mar 30, 1878

Citations: 12 W. Va. 541; 1878 W. Va. LEXIS 38

Court Abbreviation: W. Va.