Hempfield Railroad v. Thornburg

1. A debtor paying money to a creditor is entitled to have it placed to the credit of a particular claim ; but if he makes no selection the creditor can apply it where he chooses. If neither debtor nor creditor has made an application, the court will apply it to the claim for which the security is most precarious. 2. T. sold a parcel of land to the H. R. R. Co., for 300 dollars, and the right of way through his land for 200 dollars per acre, amounting to 1,225 dollars; he also agreed with the company to remove certain buildings in the line of theproposed railroad for a compensation of 2,275 dollars; thecompany paid only 2,012 dollars and 50 cents and completed its road through the land, and T. brought suit to enforce his vendor’s lien. Held : That the decree of the court below, applying the amount paid by the company to the liquidation of the amount agreed to be given for the removal of the buildings, and declaring that T. had a lien on the lot sold, and on the right of way, for the payment of the sums due thereon respectively, must be affirmed; but before any sale should take place under the decree, T. should be required to execute a good and sufficient deed to the company.

This was an appeal from tbe decree oí tbe circuit court of Ohio county. Tbe facts are substantially stated in tbe opinion of tbe judge deciding it. Tbe deed referred to, tbe incompleteness of wbicb be states to be sufficient ground for reversing tbe decree, was dated November 16tb, 1869, and purported to be “between Thomas Thornburg of tbe first part and tbe Hempjield Railroad Company of tbe second part.” It was signed tbus, “Witness tbe following signature and seal. Thomas Thornburg,[_seal,] Amanda Ihcn'riburg, [seal.]” It was acknowledged by both Thornburg and wife in tbe usual mode, but tbe acknowledgement of tbe latter purported to be of a deed dated February 28rd, 1816. argued the following points: That the circuit court erred in applying the credit of 2,012 dollars and 50 cents, exclusively to the liquidated damages. Lomax’s Dig., vol 1, page 216. That the decree in the court below did not ascertain and determine the title or estate of the Hempfield Railroad Company in and to the parcels of land therein mentioned, but simply directed their sale in the mode prescribed: when the company in fact acquired nothing more under the contract with Thornburg, than the right of way over the lands in question; the title still being in Thornburg subject to the easement granted by him. Code of Va., chaps. 56 and 61; Amer. Law Rep., Oct., 1855. That the deed from Thornburg filed with the papers was defective, his wife not being a party to it, nor havingproperly acknowledged it. To show that said 2,012 dollars and 50 cents was correctly applied, it is sufficient to refer to 2 G-reenl. on Evidence, sections 529, 531, 532 and 533. That a vendor of real estate, (as well where the title is retained as where it has been conveyed,) has a lien upon the same for the amount of the purchase money, is laid down by all the elementary writers, and is too well settled in this State to be again drawn in question. Judge Story in his Equity Jurisprudence, vol. 2, page 444, sec. 1218, says: “The lien of the vendor of real estate for the purchase money is wholly independent of any possession on his part, and it attaches to the estate as a trust, equally, whether it be actually conveyed, or only contracted to be conveyed.” Again he says, in section 1219, same vol. and page: “The principal upon which courts of equity have proceeded, in establishing this lien, in the nature of a trust, is, that a person who has got’ten the estate of another, ought not, in conscience, as between them, to be allowed to keep it, and not pay the full consideration — money.” Again he says, in sec. 1217, same vol., page 240: “The usual course of enforcing such a lien, is by a sale of the property to which it is attached. 1 "Washburn on Real Property, 533, sec. 1, says: “The vendor’s lien is a security for the payment of the purchase money, and. treated in the light of an equitable mortgage”— and at page 536, sec. 7, of same vol., "Washburn says: “This equitable mortgage, which equity raises by way of lien, in favor of a vendor, for the payment of the purchase money, rests upon the ground, that the purchaser in such case is trustee of the premises for the vendor, until the purchase money is paid.” The decisions in this State, as well in cases where the property has been actually conveyed, as where it has only .been contracted to be conveyed, fully sustain the doctrine laid down by elementary writers, but inasmuch, as by a statute of this State, passed before the execution of the contract in this suit, (see Code, chap. 119, sec. 1,) the equitable lien of the vendor was abolished, we confine our citations to such decisions only as recognize the vendor’s lien, in cases where, as in this case, the vendee has retained the title as a security for the payment of the purchase money. Before doing this, however, (in view of the statute just referred to,) we note the distinction between the implied lien, where the legal title has been parted with, and the right of the vendor who has retained the title, to enforce a specific execution of the contract. This distinction is very clearly laid down in the case of Adams vs. Stillwell, 14 Ohio, 20. “ The lien of the vendor results from the fact that equity holds the vendor clothed with, the legal title, a trustee of the vendee for the payment of the purchase money. Before the legal title passes from the vendor, his remedy is on the contract, to enforce a specific performance of the contract, or, in an action at law. The vendee cannot compel a relinquishment of the legal title, until he clothes himself with equity by t]ie payment of the purchase money.” The first case in Virginia, in which it was expressly decided that the vendor of land, sold and in possession of the vendee, but not conveyed, had a lien on it, so as to secure the payment of the purchase money, was that of Cole against Scott, % Wash. Rep., 141. To the same effect are all of the following cases: Hanna ys. Wilson, 3 Graft., 243; Knisely vs. Williams et als., 3 Graft-., 265; Lewis el als vs. Caperten’s ex’or et als, 8 Graft., 168; Sleivart’s ex’ors vs. Abbott et al, 9 Graft. 252; Young vs. Mauelc et als., 15 Graft., 300. In the case of Laois et als. vs. Qvperton’s ex’or et. als., judge Allen in delivering the opinion of the court, decides that a vendor who retains the title until the purchase money is paid, “ stands on higher ground than a vendor who, having . parted with the legal title, is seeking a court of equity to set up and give effect to the implied lien for the purchase money. Hoi ding the legal title, he is not claiming an equity, and he cannot be required to surrender the legal title until the purchase money is paid, and that his lien for the purchase money is paramount to all other incumbrances, and must be first paid out of the proceeds arising from a sale of the land.” In the late case of Young vs. Maude et als., cited above, the eourt says: “As between the vendor and vendee, the latter (where the title is retained,) occupies the position of a mere tenant at sufferance to the former. If the vendor, where the legal title is retained, elect to go into chancery, the correct proceeding is a bill for the specific execution of the contract, by requiring the vendee to complete his purchase by paying the price, or otherwise have the land sold -at his risk, to pay the purchase money.” In view of these decisions, it is clear, that the appellee has a lien upon said lot for the payment of said purchase money. Has he a lien also upon said right of way ? It is respectfully submitted that he has. Judge Story tells us, that the origin of the doctrine of the vendor’s lien may be ascribed to the Homan law, from which it was imported into the equity jurisprudence of England; that by the Homan law it was applied to the sale of both movable and immovable property: 2 Story, Eq. Ju., page 443, sec. 1221. Again he says: “The lien created upon an estate by the deposit of the title deeds as security for money, is very similar to a vendor’s lien. So, liens may be created on the purchase money due on the sale of an estate, in favor of a vendee, if it is agreed that the money shall be deposited in the hands of a third person, to be applied in discharge of prior incum-brances, to the extent of such incumbrances; that there is indeed no difficulty in equity in establishing a lien, not only on real estate, but on personal property, or on money in the hands of a third person, wherever that is a matter ox agreement, for the reason, that such an agreement raises a trust. Thus, if a tenant for life of real estate should agree to set apai't, and pay the whole or a portion of the annual profits of that estate, to trustees for certain objects, it would create a lien in the nature of a trust on those profits against him, and all persons claiming under him.” 2 Story’s Eq. Ju., sections 1230 and 1231. "Why, then, may not a vendor of a right of way or easement, have a vendor’s lien thereon, as well as the vendor of real estate or mere personal property, for the payment of the purchase money? The right of way, is an incorporal hereditament, and passes originally only by grant. Wash-burne, in his 2nd volume, page 27, says, “An easement is an interest in land, (being the right to use the same for a special purpose,) of another, and can be created only by grant, implied grant, and prescription.” Pierce, on American Railroad law, lays it down, that the right of a railroad company to use its road as a common carrier of goods and persons, is valuable as a source of revenue, and has the incidents of property. It is the private property of the company, which the legislature would have no power, in the exercise of the right of eminent domain, to appropriate to other public uses, without making compensation to the company. This right of the company, being then in its nature property, would seem to be liable to be subjected to the payment of its debts, either by a voluntary disposition, or a compulsory process of law.” Surely, then, it is liable for the consideration — money, which is the price of its very existence. That the enforcement of the vendor’s lien against the right of way of a railroad company, is not against the public policy of the State, is manifest from the fact that the legislature, in authorizing proceedings by a company, to take land without the owner’s consent (see Code, chap, 56, page 325, sections 6 to 15, inclusive,) expressly provides, that the company shall have no right to possession of the land until the report or judgment, ascertaining a just compensation for the land is satisfied.