Moale v. Buchanan

E. (carrying on business under the name of W. Factory,) being indebted, pro. posed to his creditors in writing, signed by his agent, as follows: “A deed of trust of all the property to be executed for the payment of such notes already given by said Factory,” &c., as may be renewed for twelve months, payable afterwards, in monthly payments. This proposal was accompanied by another paper, headed, State of Warren Factory, and included in its recitals among other property, “Factory Pratt Street.’’ It was accepted by some of his creditors, and a deed of trust executed. It appeared that the Factory Pratt Street, was situated on two lots of ground, which belonged as well to E, as his brothers and sisters; but the deed of trust in which the brothers and sisters united, by mistake omitted one of those lots, contrary to the expectation and intention of the grantors, trustees, and creditors. Before the discovery of this mistake, two creditors of the grantors obtained judgments at law against them, one before, and one after, the date at which the trustees took possession of the Factory Pratt Street — upon a bill filed to reform the deed of trust, add the omitted lot, and enjoin the judgment creditors from proceeding at law against that lot. It was held, that the judgment creditor who had obtained a lien at law before the trustees took possession, and without notice of the original contract, might proceed at law to enforce such lien ; but that as the other judgment crediitor had received a dividend from the trustees, he thereby became an equitable party to the deed, and could not, under any aspect, enforce his judgment in opposition to the agreement on which the deed was founded. Upon these principles, the deed was decreed to be reformed, in conformity with the original contract. A paper signed by a party proposing to convey all the property, cannot be connected by parol with another paper not signed, for the purpose of designating the property designed to be conveyed, and thus escape the prohibitions of the statute of frauds. An agreement to be within the statute of frauds, cannot be partly in writing and partly in parol. It must be entirely in writing, and signed by the parties or their authorised agents. Parol evidence may however so connect two papers, as to be evidence, that they both related to and formed parts of one contract. An agreement entirely by parol and in part performed, may be specifically executed; part performance taking the case out of the statute of frauds. So where there was an agreement to convey two lots to trustees for creditors, in consideration of indulgence and extension of credit, void under the statute of frauds, takingpossession of the property under the contract, and granting the indulgence, is such a part performance of the agreement, as will induce equity to executo it specifically. Trustees who hold property under a deed for the benefit of c. q. t., have such an interest, as will enable them to enforce the agroemont on which the deed was founded. It is no objection to the execution of a contract, on the ground of part per. formance, that it is partly in writing, and partly by parol. The opinion of Sir William Grant, 7 Vesey Jr. 217, controverted and denied. There arc many cases, in which parol evidence at the instance of a complainant, may bo received to rectify a contract, and execute ^specifically as rectified. A contract which creates a specific lien on real property, has a superior equity to the general lien of a subsequent judgment. An infant is not bound by his deed.

Appeal from Chancery. The bill in this case was filed on the 8th day of June 1831, by Samuel Moale and Reverdy Johnson trustees, and Robert Lemmon fy Co. and others, creditors on their own behalf, as also on behalf of other creditors of, &c.; and alleged that E. S. Buchanan, being the ostensible proprietor of Warren Factory, and carrying on trade and commerce under the name of The Warren Factory, and being largely indebted unto R. L. £f Co., to wit, in the sum, &c., and also to, &c. — for the purpose of gaining indulgence for payment of said claims, and an extension of time for payment thereof, did propose to grant and convey to trustees, all the property hereinafter mentioned, as a security for the payment thereof, and the said proprietors of the said Warren Factory, and the persons composing the said trading establishment, made said proposals in writing, dated the 14th day of July 1829, signed by their solicitors and agents, accompanied by a statement in writing, comprising and showing, to the said creditors and your complainants, all the property and effects, which they propose so to grant and convey to the trustees for the said creditors and your complainants as aforesaid, among which said property, are all those two lots and parcels of ground, and the Factory and buildings thereon situate in Pratt street in the city of Baltimore, which proposition, and property mentioned in the said statement which accompanied said proposition, and which proposition, was accepted by your complainant’s creditors as aforesaid, and by the other creditors of Warren Factory in writing, and the extended credit on the said debts, on the faith thereof actually granted; but for greater certainty your complainants herewith file a true copy of the said proposition and statement, which they pray may be deemed a part of this their bill of complaint, the original whereof, now in the possession of your complainants, and ready to be produced, &c. Your complainants further state, that E. S. Buchanan, R. S. Buchanan and others, for the purpose of inducing the creditors of the Warren Factory, to accept the said proposition, and to grant time and indulgence to the said proprietors, and partners of Warren Factory according to the terms of the proposition of the 14th July 1829, did agree to grant and convey to trustees aforesaid, certain property which belonged to them individually, and which is mentioned in said statement, and among which are the said lots and factory on Pra.tt street aforesaid, as a further security for the payment of the claims of your complainant’s creditors as aforesaid, and the others, creditors of Warren Factory, which security your complainant’s creditors and others as aforesaid, creditors of Warren Factory, agreed to and did accept in writing. Your complainants further state, that the said E. S. Buchanan and others, with the true intent of fulfilling the terms of the said proposition and statement of the 14th July 1829, did by a certain deed of trust, bearing date the 17th day of July 1829, grant and convey to the said Samuel Moale and Reverdy Johnson, all those tracts of land, lots, &c., described in the deed of trust, for the use and trust therein mentioned, &c.; that the Pratt Street Factory mentioned in said statement, was built and erected on the following described two pieces or parcels of ground, to wit, all that lot, &c., covered with the buildings and improvements, called the Pratt Street Factory, and had been before, and at the time of the said proposition of the 14th July, was used as a Factory; that said Moale and Johnson, the trustees, had actual and entire possession of the said .Pratt Street Factory, and the lots of ground upon which it was built, on or about the 1st day of October 1830, and on or about the 8th day of October, in the year last aforesaid, had the same insured as property belonging to the trust mentioned in the agreement and deed of trust aforesaid; that from the date of the said deed of trust, they and the other creditors of Warren Factory, were under the impresssion, that hath the said pieces or parcels of ground on which the said Pratt Street Factory was erected, had been conveyed by the said deed of trust of 17th July 1829, to the said Moale and Johnson, according to the terms of the said agreement of the 14th July 1829, and under that impression, the said Moale and Johnson took the possession of it as aforesaid, with the consent of the said grantors of the said deed, (except Samuel S. Buchanan, who objected to the said deed by reason of his minority when he executed the same, and only on that account,) and held the possession thereof until some time on or about the 1st day of December 1830, when the same was sold under a decree of Baltimore county court to II. W. Evans, and which said sale was afterwards rescinded by said court on account of an outstanding life estate, and the mistake in the said deed as hereinafter mentioned; that by omission, mistake and accident, one of the said pieces or parcels of ground upon which the said Pratt Street Factory was so erected, to wit, the piece of ground conveyed, &c., was not included by the said deed of trust of the 17th July 1829, as was intended by said grantors, and grantees, but from mistake, accident or omission, was left out of the same, contrary to said agreement of the 14th July 1829, and the contract of the said creditors as aforesaid. Your complainants further state, that Edmund Bidier, and the president and directors of the Marine Bank of Baltimore, creditors of the said Warren Factory, have each of them obtained judgments against the said E. S. Buchanan, Er. S. Buchanan and R. S. Buchanan, in Baltimore county court, and have caused four writs of fi.fa., dated on or about the 11th May 1831, to issue on said judgments, and have delivered said writs of fi.fa. to the sheriff of Baltimore county, to be levied upon all that piece or parcel of ground conveyed as aforesaid, by, &c., No. 756, and the said sheriff on the 31st May 1831, levied said writs of fi.fa. on the said piece or parcel of ground, and by virtue thereof, hath actually advertised the said piece or parcel of ground'for sale on the 22nd June 1831, and intends to sell the same to satisfy said judgment; that E. S. B. is dead, and E. S. B. and others, are her heirs at law; that S. S. B. is a minor, and said deed not effective as to him. Prayer for a conveyance for the ground omitted in the deed of trust, and for further relief — for an injunction against the Marine Banh and Edmund Bidder, enjoining further proceedings at law, and for subpoenas. With the bill of complaint were exhibited the deeds for the lots 691 and 756, to Elizabeth Buchanan, and also exhibit No. 4, as follows: R. Proposition on the part of James A. Buchanan, as agent of the Warren Factory, a deed of trust of all the property to. be executed for the payment of such of the notes already given by said Factory, and two borrowed and endorsed by them as may be renewed for twelve months, payable afterwards in. monthly payments, with a provision, that the present agent is. to have the management of the property, until there be a default in this agreement, and that such of the creditors as agree to a trust, are to be first paid, subject of course to the existing mortgages. Signed S. Moale, R. Johnson, for proprietors of Warren Factory — 14th July 1829. The proposition is accepted, signed by the complainants and various creditors. Another exhibit filed with the bill was as follows, viz: S. State of Warren Factory in July 1829; 8208 spindles in two cotton mills with, &c., and after enumerating various articles of personal property, debts, &c., with a valuation of each, and a statement of annual profits, then dwelling house $25,000 — warehouses in Light street $70,000 — Factory Pratt street $35,000, &c. &c. Exhibit No. 5, was a copy of the levy under thefi.fa* on-lot No. 756, on Pratt street in the city of Baltimore, at the suits of Edmund Bidder, and the Marine Bank. On the 8th June 1831, the Chancellor, (Bland,) ordered subpoena and injunction as prayed by the bill. The answer of E. S. Buchanan, Robert S. Buchanan, WilHam B. Buchanan and wife, admitted that E. S. Buchanan, deceased, was the proprietor of the Warren Factory, carrying on trade under that name; was indebted to the complainants and •others; that J.A. Buchanan was the general agent of said Factory; that the Warren Factory, being unable to meet its engagements for the purpose of obtaining indulgence for payment of the said debts, and an extension of time for payment, •did propose to grant and convey to trustees, all the property thereinafter mentioned, as a security for the payment of said claims, and the said proprietor of Warren Factory made said proposal in writing, dated on the 14th July 1829, signed by the said Samuel Moale and Reverdy Johnson, their solicitors and attorneys, acting for them, and which said written proposals was accompanied by a statement in writing, comprising and showing to the said creditors and complainants, all the property and effects which they proposed to convey to trustees, for your said complainants, and the other creditors of the Warren Factory; and these defendants admit, that the said proposal and statement of property were accepted by the said creditors; and the extended credit on the said debts actually given; that the proposal, statement and acceptance, filed with the bill are true copies; they admit, that the lots of ground, and factory and buildings thereon situate on Pratt street, were proposed to be given to said trustees, and were included in the statement accompanying the written proposals as an inducement to the said creditors to accept said proposal, and grant the indulgence asked for by the Warren Factory; that these defendants for the purpose of inducing the said eomplainants’s creditors aforesaid, and the other creditors of the Warren Factory, to accept the said proposal of the 14th July 1829, and to grant time and indulgence to said proprietors of Warren Factory, did agree to grant and convey to trustees, certain property which belonged to them individually, and which is mentioned in said statement, and among other property the said lots of ground, buildings and Factory on Pratt street aforesaid, mentioned in the said bill of complaint, as a further additional security for the payment of said debts or elaims, and which was accepted as aforesaid; that for the purpose of complying with their said agreement, and in- fulfilment of the terms of the said proposal and statement of the property therein mentioned, did by their certain deed of trust of the I7th July 1829, grant and convey to the said Samuel Moale and Reverdy Johnson, all the land therein mentioned; that the Pratt street Factory mentioned in said statement, was built and erected on the said two lots or parcels of ground mentioned in said bill, to wit, &c.; that before the 14th July 1829, th'e said two lots were so built upon and used, and that said trustees took possession on or about the 1st October 1830; that these defendants were under the impression and always believed, that the said Pratt street Factory, and the said lots of ground on which the same is erected, had been conveyed by the deed of trust of 17th July 1829, to said Moale and Johnson, according to the terms of said proposal, and the said complainant’s creditors and other creditors, were under the like' impression and did so believe, and that the omission to include it arose from accident and mistake upon the part of the grantors of said deed of trust. The answer saved throughout, the interest of S. S. Buchanan, arising from his infancy and dis ■ sent, and also admitted the judgments of E. Didier and the Marine Bank of Baltimore. The answer of the Marine Bank, denied the making of the proposition on behalf of the Warren Factory to its creditors, or that it was accompanied by any statement in writing, as set forth in the bill; or that the said two lots were included, or that said proposition was accepted by all the creditors of said Factory. ( That answer admitted the deed of trust, but denied, that E. S. B. and others, intended to do more than execute said deed, and that the Factory did not cover the said two lots. The defendants do not know, and cannot admit, that the said Moale and Johnson had possession of said •property, and denied the alleged accident or mistake. The answer also admitted the minority of S. S. B., and their judgment against the grantors of the deed of trust; the levy under fi. fa. and design to sell; that said deed as to them is void, and will not be enforced in equity. That as creditors subsequent to that deed without notice, they have a vested right in said property, and claim to enforce their judgment, &c. The answer of Edmund Didier, set up various objections to said deed, but as those defences were not considered by the Court of Appeals, it is not deemed necessary to insert them further than as disclosed above in the answer of the Marine Bank. This defendant claimed as a judgment creditor. The answer of S. Smith Buchanan, admitted the intention to convey both lots by his co-grantors, but relied on his infancy as a bar to any recovery against him. On the 23rd February 1833, upon the petition of the complainants, the Chancellor (Bland,) authorised the examination as witnesses for the complainants of E. S. Buchanan, R. S. Buchanan and W. B. Buchanan, subject to all legal exceptions. A commission was issued, under which a variety of proof was returned. The complainants proved their deed of trust, and offered evidence of the omission and mistake. The judgment of the Marine Bank was rendered the 7th October 1830, and was against R. S. Buchanan and E. S. Buchanan. That of Didier was dated 1st April 1831, and against the same parties. It was admitted, that E. Didier had received from the trustees, Moale and Johnson, the dividend on his claim equally with the other creditors of the trust fund — 19th May 1834, $1,321.37, 13th June 1834, $333.46. At March 1839, the Chancellor (Bland,) dissolved the injunction and dismissed the bill, being of opinion, that the alleged mistake as set forth in the bill, was not sustained by proof sufficiently strong and clear; that the deed of 17th July 1829, cannot be corrected to the prejudice of the defendant creditors, who were not shown to have had notice of its having been executed under any mistake, and that if it were corrected as prayed, so as to embrace an additional amount of property, it could not be deemed valid and available against the defendant creditors, who are not shown to have assented to, or become parties to it. The complainants appealed to this court.