Clark v. Wright
| Decision Date | 20 April 1886 |
| Citation | 24 S.C. 526 |
| Parties | CLARK v. WRIGHT. |
| Court | South Carolina Supreme Court |
1. Where a vendee receives a title deed to land, and undertakes in part payment, to discharge a judgment against his vendor then constituting a lien upon this land, the administrator of such vendor cannot afterwards require the judgment creditor to proceed against the land itself by levy and sale, to the relief of the vendor's estate, where such a proceeding would be beset with difficulties and would involve litigation.
2. Nor did this agreement between vendor and vendee create a trust enforcible by the vendor against the land itself, but only a simple contract debt in vendor's favor.
3. And this vendee having made a voluntary conveyance of this land to trustees for the benefit of his wife and children, and the trustees having sold the land and received the purchase money, the court declined to order them to apply it to the judgment debt.
4. This court cannot decide by anticipation questions that may hereafter arise.
5. Petition for rehearing refused.
Before WALLACE, J., Chester, March, 1885.
This was an action by W. A. Clark, as administrator of the estate of C. D. Melton, deceased, against Ann E. Wright, executrix J. J. McLure and C. H. Alexander, trustees for the widow and children of G. W. Melton, deceased, the said widow and children, and W. H. Hardin and J. C. Hardin. The complaint prayed the following relief:
1. That the money realized by the said trustees, and now in the hands of the said John J. McLure and Charles H. Alexander, from the sale of the said Chester property, be ordered to be brought into this court and held subject to the decree herein.
2. That the said defendant, Ann E. Wright, should be required by the use of her judgment to assist plaintiff in subjecting the Chester property to her claim, before demanding payment from plaintiff out of the estate of the said Cyrus D. Melton, she having two funds from which she may be paid in full, while the other creditors can at best only have a pro rata share of an insolvent estate.
3. That to this end the said Ann E. Wright may be restrained from enforcing payment from this plaintiff, except under the direction and decree of this court.
To the statement of facts made in the opinion it will be necessary to add only this, that the funds realized from the sale of the Melton house and land to W. H. Hardin were in the hands of the trustees, J. J. McLure and C. H. Alexander.
The Circuit decree, omitting its statement, was as follows:
This demand of the complaint is rested upon two grounds First . That Mrs. Wright has two sources to which she can resort for payment-one the Chester property and the other the general assets-her judgment being a lien upon both, while the other unsatisfied judgment creditors have a lien only upon the general assets, their judgments being junior to the conveyance to George W. Melton. Second . That all the transactions in reference to this Chester property between C. D. and G. W. Melton resulted in imposing an express trust upon G. W. Melton to pay the Wright judgment, and that that trust binds the land to that end and to that extent.
It is a well settled doctrine in this State that when a judgment debtor sells a part of his property upon which there is an existing general lien, the judgment creditor is remitted in the collection of his debt by process to the available property remaining unsold in the hands of his debtor, and only when that is exhausted and his execution unsatisfied can he resort to the property previously conveyed by his debtor, and then only in the inverse order of the sales. Bank of Hamburg v. Howard and Garmany , 1 Strob. Eq. , 173. As this principle was not controverted at the hearing, it is supposed to be conceded.
Then, as to the first ground of the demand of the complaint, that the Wright judgment must first be levied upon the Chester property, because a lien on that as well as the general assets, and the other judgment creditors hold liens only upon the general assets in the hands of the administrator. The rule here invoked is a familiar doctrine of equity, and founded upon fairness and justice. When, however, its application would defeat a subsisting and otherwise valid right of third parties, then equities come into play and prevent the application of the rule, because fairness and justice forbids the destruction of one rightful equity to promote another. If here Mrs. Wright be required to go upon the Chester property for the satisfaction of her demand, the rights of the beneficiaries under the trust deed are destroyed. 3 Pom. Eq. Jur. , § 1414.
Second. Did the transactions between C. D. Melton and Geo. W. Melton create and impose upon G. W. Melton an express trust which bound this property and which this court will enforce, and hold the property bound to respond? There can be no question that the rights of the holders of the Wright judgment, as against C. Davis Melton, were unaffected by these transactions. C. D. Melton surrendered his security for the purchase money of the property upon the promise of Geo. W. Melton to him to pay the judgment set out in the statement supra . It was a contract upon valuable consideration. Geo. W. Melton did not perform, and unquestionably a right of action at law accrued to C. D. Melton to recover damages for his failure to perform his contract. Estes v. Stokes , 2 Rich. , 133. And if an action at law will lie for breach of the agreement, that is a conclusive reason that an express trust was not created. Lever v. Lever , 2 Hill Ch. , 162; Stroman v. O'Cain , 13 S.C. 103.
Other defences are set out in the answers which need not be considered here, as the foregoing principles are fatal to the complaint.
It is adjudged and ordered, that the complaint be dismissed.
From this decree the plaintiff appealed upon the following grounds:
1. Because the case shows certain transactions touching the transfer of the Chester property, between C. D. Melton and G. W. Melton in their life-time, which, as between them, gave rise to certain well established equities which his honor in his decree has overlooked and entirely disregarded.
2. Because the transactions, all in writing, evince such a state of facts that a court must hold that G. W. Melton became, not a mere debtor, but a trustee of an express trust, which relation created rights and obligations enforcible in a court of equity; and to hold otherwise, as his honor has done in his decree, is error.
3. Because, when G. W. Melton assumed to lift certain debts in judgment and otherwise (among these the Wright judgment) then pressing upon the shoulders of C. D. Melton, and when in consideration thereof C. D. Melton on his part released the legal lien (the mortgage) that was good against G. W. Melton for twenty years, and when G. W. Melton on his part assumed the legal lien (the Wright judgment) which was good against C. D. Melton for twenty years, the equity of the latter party and the obligation of the former party were concomitant, and until the obligation assumed was discharged, the attending equity continued to exist, and a court of equity will compel the observance of good faith in the whole transaction.
4. Because, to permit G. W. Melton to keep the Chester property discharged from all liability in his hands, and at the same time to permit G. W. Melton to disregard what he assumed as a concomitant binding obligation, would be to permit G. W. Melton to take advantage of his own wrong, and aid him in perpetrating a fraud, which a court will never for a moment sanction; on the contrary, were it necessary to the justice of the cause, a court would wipe out the " satisfaction" of the mortgage and remit C. D. Melton or his representatives to his original rights under it.
5. Because, whether the Wright judgment were a valid judgment or not, it was not in G. W. Melton's mouth to dispute its validity, and as to him and all volunteers, or purchasers, with notice under him, equity will deal with it as a judgment which he and they will not be permitted to dispute.
6. Because the Wright judgment is and was a valid judgment, binding upon the said C. D. Melton at the time of the transaction between him and the said G. W. Melton, and ever has been and now is a valid lien upon the Chester property in the hands of the said G. W. Melton and those holding under him; and while the owners of the Wright judgment cannot be prevented from claiming payment from the estate of C. D. Melton, still in equity the estate of C. D. Melton should be allowed the benefit of that payment out of the fund from the sale of the Chester property, which fund is now in the hands of those who paid nothing for the property, can lose nothing, and are in fact mere volunteers.
7. Because, while it is admitted that the Wright judgment was a legal claim against C. D. Melton in his life-time, and as a legal claim has been enforced against his estate, his honor has entirely overlooked the equity of C. D. Melton not to have that judgment " satisfied," but to be permitted in equity to have it enforced in the name of Ann E. Wright against the Chester property for his benefit, or the benefit of his estate.
8. Because the trustees, McLure and Alexander, under the trust deed to them and the beneficiaries under that trust deed, are volunteers merely, and as such are affected with all the equities that affected their grantor, G. W. Melton.
9. Because W. Holmes Hardin and J. C. Hardin, who became purchasers of the Chester property (the latter of whom is now in possession), purchased the same with full knowledge of the Wright judgment, and in no sense are purchasers for value without notice; and after their purchase, when notified by the plaintiff not to pay the purchase money...
To continue reading
Request your trial