Hammond v. Peyton

• Decision Date: 23 February 1886
• Citation: 27 N.W. 72,34 Minn. 529
• Parties: HAMMOND v PEYTON, ASSIGNEE, ETC., AND ANOTHER.
• Court: Minnesota Supreme Court

34 Minn. 529

27 N.W. 72

HAMMONDvPEYTON, ASSIGNEE, ETC., AND ANOTHER.

Supreme Court of Minnesota.

Filed February 23, 1886.

Appeal from an order of the district court, St. Louis county.

Wm. W. Billson, for appellant, Alfred T. Hammond.

Ensign & Cash, for respondents, Hamilton M. Peyton, Assignee, etc., and another.

BERRY, J.

The equitable lien of a grantor for the price of real estate has been recognized by this court in Selby v. Stanley, 4 Minn. 65, (Gil. 34;)Daughaday v. Paine, 6 Minn. 443, (Gil. 304;)Duke v. Balme, 16 Minn. 306, (Gil. 270;) and Walter v. Hanson, 24 N. W. Rep. 186. But whether the lien is assignable, or whether if assignable it passes upon the transfer of the debt which it secures as an incident thereof, and without any express or formal assignment, has not been here determined. It is to be regretted that the idea of a grantor's lien was ever admitted, especially in this country, where registration of transactions affecting real estate is so generally provided for and practiced. It is, however, recognized in England, and in a majority of the states of the Union, though it is utterly repudiated by several, and in others has been abolished by statute. See 3 Pom. Eq. Jur. § 1249; Bisp. Eq. § 353; Tiedm. Real Prop. § 292, and notes.

In Mackreth v. Symmons, 15 Ves. 329, (the leading case,) Lord ELDON appears to look upon the doctrine of lien with disfavor, (and see in the same direction Kettlewell v. Watson, 21 Ch. Div. 702;) and in this country we find still more emphatic protests against it, and regrets that it should have ever been allowed to gain a footing. Bayley v. Greenleaf, 7 Wheat. 46, MARSHALL, C. J.; Briggs v. Hill, 6 How. (Miss.) 362; 3 Pom. Eq. Jur. 256, note 1; Simpson v. Mundee, 3 Kan. 172; Philbrook v. Delano, 29 Me. 410, SCHEPLEY, C. J.; Ahrend v. Odiorne, 118 Mass. 261, GRAY, C. J.; Kauffelt v. Bower, 7 Serg. & R. 64, GIBSON, J.; Wellborn v. Bonner, 9 Ga. 82. Perhaps one of the strongest indorsements of the doctrine is found in Manly v. Slason, 21 Vt. 271, by REDFIELD, C. J., in 1849; but in 1851 it was utterly wiped out by the legislature of that state. As to its origin and rationale, says Mr. Pomeroy, (3 Eq. Jur. § 1252,) citing many authorities, “there has been a great diversity of opinion. It has been accounted for as a trust, as an equitable mortgage, as arising from a natural equity, and as a contrivance of the chancellors to evade the unjust rule of the early common law by which land was free from the claims of simple contract creditors;” and this author, rejecting all these theories himself, accounts for it as an instance of the “higher importance, consideration, and value given to real than to personal property.” And in section 1251 of the same work it is well said that, “no other single topic belonging to equity jurisprudence has occasioned such a diversity, and even discord, of opinion among the American courts as this of the grantor's lien. Upon nearly every question that has arisen as to its operation, its waiver, or discharge, the parties against whom it avails, and the parties in whose favor it exists, the decisions in different states, and sometimes even in the same state, are directly conflicting. It is practically impossibleto formulate any general rule representing the doctrine as established throughout the whole country.” See cases cited. See, also, 1 Perry, Trusts, § 234.

We have referred to these matters for the purpose of showing the standing of the doctrine of a grantor's lien, and the disposition and tendency of the courts and of legislation towards it, and contenting ourselves with a reference to the authorities already cited, without here entering into a detailed presentation of them, we feel warranted in saying that this disposition and tendency is at least not to extend the doctrine beyond what may be regarded as the comparatively well-settled and established rules of equity in reference to liens of this kind. In other words, the doctrine is not one to be fostered or encouraged, or allowed to spread, but rather to be kept strictly within limits; and this upon the grounds that it is unnecessary for the protection of a grantor, who may readily, cheaply, and conveniently secure himself by a mortgage which can be put upon record; that the lien is in the nature of a secret and invisible trust, and therefore opposed to the policy and spirit of our registration system; that a sale subject to it is calculated to give a false appearance of credit; and that it is contrary to the spirit and policy of our laws, which favor the free transmission of real estate...