McClaugherty v. Croft.

• Decision Date: 07 April 1897
• Court: West Virginia Supreme Court
• Parties: McClaugherty v. Croft.

43 W.Va. 270

McClaugherty

v.Croft.

Supreme Court of Appeals of West Virginia.

Submitted January 25, 1897

Decided April 7, 1897

Vendor's Lien Enforcemcut of Lien Prior Liens Parties.

In a suit to enforce; a purchase-money Lien reserved in a deed conveying legal title, with only covenant of general warranty, it is not necessary to make prior lienors, holding liens against the property, parties, nor to refer tin; case to ascertain such liens, unless it appear that the vendor is insolvent. Hut it the plaintiff in his bill shows such liens, and proposes to have the purchase money go to discharge! them, tin; owners of such prior liens must be parties, (p. 272.) Vendor's.Lien Enforcement of Lien Prior Liens Reference.

In a suit to enforce a-purchase-money lien reserved in a conveyance containing a covenant for further assurance, and one of general warranty, where prior liens appear, flu; plaintiff cannot have a decree for his debt until such liens be removed. If such liens appear of record unreleased, and he not shown discharged or barred, the vendor is entitled, if he asks it, to a reference to ascertain whether they yet exist, (p. 274.)

3. Vendor's Lien Enforcement of Lien Deed of Trust De-

cree Parties.

Though, when suit was brought to enforce a vendor's Lien, the land was under a prior lien by deed of trust, making the trustee and creditor necessary parties, yet where, pending if, the trust lias been released by release, revesting legal title in the owner, decree may be made, without making such trustee and creditor parties, (p. 275.)

4. decree Defective Title Prior Liens.

If, at the date of a decree selling property for purchase money, the title, though defective, because of* prior lien or otherwise, has become clear of Lien and good to the purchaser, the court may go on to decree to enforce the contract, (p. 275.)

5. Statute of Limitations.

Plea of the statute of limitations is generally personal to tin; party, and not available to strangers; but privies in estate, as heirs, devisees, vendees, or mortgagees of the property, may use it to defend their property, (p. 275.)

0. Statute of Limitations Judgment Creditor Living Debtor.

Question: Can one judgment creditor of a living debtor plead the statute of limitations against another? (p. 27(5.)

Appeal from Circuit Court, Mercer County. Bill by D. W. McClaugherty against D. N. Croft, Decree for plaintiff, and defendant appeals.

Reversed.

W. W. McClaugherty and D. K. Johnston, for appellant. 8. L. Flourkoy, for appellee. Brannon, Judge:

McClaugherty brought a suit in chancery against Croft to sell one undivided fourth in a town lot, to pay a balance of purchase money, for which a liei: was reserved upon the property in tin deed conveying it. Croft answered, setting up a deed of trust and numerous judgments against McClaugherty, as prior liens, as defense to the suit, and asking that the lienors be made parties, and that the money ln his hands be applied to discharge them, particularly a judment of Straley & Co. against McClaugherty. The court refused to require the lienors to be made parties, or to ascertain liens by reference, and decreed the debt to McClaugherty without making provision for its application on any lien, and directed the property to be sold. Croft appeals.

This is not a case to sell land for purchase money under an executory contract not carried into execution by conveyance of the legal title, but is a suit to sell land for purchase money, under a lien reserved in a conveyance, and different principles apply in the latter case. In the former a court will not compel an unwilling purchaser to accept a title, unless it is clear, reasonably free from adverse claim or incumbrance; but in the latter the contract has been executed by the parties, the purchaser has agreed to take the land with the covenant of general warranty, thus agreeing to pay unpaid purchase money, and to risk the solvency of the warrantor in case he shall lose his land. Our cases have relaxed this rule of English equity, our rule being that a vendor cannot compel payment of the purchase money if the title be shown to be defective, or a suit to recover or subject it to a lien be pending, or a suit be threatened, or there be an actual incumbrance, and the vendor be insolvent. I understand that the vendor's insolvency is an indispensable element to enable the vendee to resist payment. It seems unreasonable to compel the purchaser to pay out the money, and run the hazard of the vendor's future insolvency, where actual liens are shown; but if the purchaser took a covenant of general warranty, and no covenant against incumbrances or other covenant, it is so. Wamsley v. Stalnaker, 24 W. Va. 214; Neely v. Ruleys, 26W. Va. 08(3; Kinports v. Rawson, 29 W. Va. 487 (2 S. E. 85); Heavner v. Morgan, 30 W. Va. 845 (4 8. E. 400); Faulkner v. Davis, 18 Grat. 660. Hut I do not think this case is governed by principles announced in those cases. In the Wamsley-Stain a her Case it would appear from Judge Greene's language "that there was no showing at all towards the insolvency of the vendor, or that any suit was brought or threatened to subject the land to the payment of the judgments set up by the defendant, nor in any single fact stated in the bill that tended in any degree to show that there was the least probability that any suit would be brought to subject the land to any of the judgments; and the evidence shows that there was not the least probability of it, and it shews, indeed, that it was impossible that the land could ever be subjected to the payment of any of the judgments, there being lands liable to be first subjected, greatly exceeding the value of the judgments." How different this present case! The defendant alleged that his purchased land was in danger to answer a large judgment greater than the money in Croft's hands, which the plaintiff's bill admitted to be unpaid. Plaintiff's bill admitted this large judgment, and stated that the plaintiff himself desired the purchase money due from Croft to be paid for the very purpose of satisfying the large judgment which the bill specified as existing as a lien thereon, thereby virtually saying that the plaintiff had no other lands, or indeed any property or estate to discharge that very considerable judgment. Otherwise, why the necessity of calling upon the defendant for its payment? There was no affirmative charge of insolvency, it is true, in the bill; but we may say, by strong implication, that the defendant was not unquestionably, as in the Wamsley Case, aide otherwise than through this debt to discharge that judgment. And, as the bill itself asked the payment of this debt by Croft to go 01 that judgment, it showed an interest in the judgment creditor, calling upon the plaintiff to bring him before the court, in order that the proper amount due might be judicially fixed, to the safety of the defendant, and in order that the money might be paid into his hands. Without his presence, how could the court do this? How could the proposition of the bill to pay this judgment be carried out without his presence? Instead of bringing him before the court, and decreeing the proper amount into his pocket in discharge of that judgment, the court decreed it into the pocket of the plaintiff, without provision for its discharge; and we think that the court ought to have made him a party. We think, under the covenant of general warranty, that should have been done, under the particular circumstances shown by the bill in this case. We do not intend to impugn the cases cited above at all. We only say that we think this present case, on the showing made by the bill, called for the presence of this creditor.

But there is another important feature in this case. The deed contains a covenant for further assurance, and it hound the vendor to a conveyance free of incumbrance, and he cannot enforce payment of purchase money without clearing up incumbrances. Code 1891, c. 72, s. 18; Rawle, Cov. §§ 104, 105; 19 Am. & Eng. Enc. Law, 984; 2 Minor, Inst. 721. it requires the removal of judgments. 2 Lomax, Dig. 272. Certainly, the removal of incumbrance is a thing necessary to assure and make good the property sold. Rawle, Cov. § 98, says that the importance of this covenant to the purchaser can hardly be over-stated. The remedy, indeed, by action at law for damages, is one seldom sought, and the reported cases are few; but, whatever may be the doubt of a purchaser's right to the specific enforcement by a court of equity of the other covenants for title, there is little or none with respect to that for further assurance. And equity will entertain a suit to specifically enforce this covenant. Nelson v. Harwood, 3 Call, 342. Rawle (in section 62) says: "As to the covenant for further assurance, the rule is somewhat different. It is not a mere allegation that the title is good; that there is no incumbrance; not a mere promise to respond in damages. It is a specific undertaking to execute such particular deed or deeds as may be necessary for the better and further assurance of title to the purchaser. If performed, it may make a doubtful title marketable. If unperformed, who can measure the damages to be recovered at law? Who can measure by money the difference between the value of a good title to keep, and yet not good to sell? Hence, it will be found that, from an early day, courts of equity have enforced the specific performance of covenants for further assurance." This covenant ought to be given as much force as the special provision in the bond for pur-. chase money, in addition to general warranty, was given by Judge Allen in Peers v. Barnett, 12 Graf. 417. Here it is in tin deed itself.

I do not concede the idea that it is consistent with proper practice to provide for the application of the money to liens by later decree. If the creditor ought to be a party, or a reference is necessary, it ought to be before decree, because the decree ought to fix the amount due him...