Opinion
(June Term, 1841.)
The plaintiff filed his bill, alleging that in a deed he had given to the defendant for a tract of land he had, through mistake, surprise and ignorance, and without consideration, inserted a release for all the purchase money, when he had only received a part, and that the defendant had pleaded this release at law, and the plaintiff prayed for a discovery and for relief on the grounds stated. To this bill the defendant pleaded in bar the release itself. Held, that this plea was not good, because neither the plea nor an answer accompanying it denied the grounds on which the plaintiff sought to be relieved from the release.
It is yet doubtful, in this State, whether a vendor of land has any, and if any, what lien, as against the vendee, for the purchase money.
THIS was an appeal from the decree of his Honor, Pearson. J., at the Spring Term, 1841, of CASWELL Court of Equity. The defendant pleaded to the plaintiff's bill, the plaintiff demurred to the plea and the presiding judge overruled the demurrer, sustained the plea and directed the bill to be dismissed. From this decree the plaintiff appealed to the Supreme Court. The nature of the pleadings, involving the points decided by this Court, is sufficiently disclosed in the opinion delivered by the Court.
James T. Morehead for the plaintiff.
William A. Graham for the defendant.
On 11 November, 1835, the plaintiff and defendant entered into articles whereby the plaintiff agreed to sell to the other party a tract of land lying in Caswell County and containing 160 acres, at and for the price of $1,700, which the defendant agreed to pay on or before 25 December, 1836; upon which payment being made the plaintiff obliged himself to convey to the defendant in fee and let him into possession.
Before and during February, 1837, the defendant made payments on the contract amounting altogether to the (347) sum of $1,133; and then the plaintiff executed and delivered a deed in fee to the defendant, who thereupon took possession of the land and has been ever since in the enjoyment of it.
The bill states that the deed was prepared beforehand by a person who expected that the whole purchase-money would be paid, and who also believed it to be proper and necessary to the operation of the deed that the whole consideration and its satisfaction should be stated in the instrument, and that for those reasons he inserted therein a clause acknowledging the receipt of the whole purchase-money by the plaintiff; and also that the plaintiff, not knowing the legal effect of such a clause, executed and delivered the deed to the defendant without receiving any more of the purchase-money than $1,133 as aforesaid, and believing that the defendant was liable and would pay him the balance thereof and interest thereon. But the defendant has refused to make any further payment, and to an action at law for the balance pleaded the said deed as a release, which caused the plaintiff to be nonsuited and defeated of the recovery of the money still justly due in respect of the said land and the sale to the defendant.
The prayer of the bill is that the defendant may set forth and discover what payments he made in discharge of the purchase-money; and whether a balance and what remains due on that account to the plaintiff; and whether the plaintiff intended to give up such balance or any part thereof without receiving payment; and whether it was at the time of its execution believed by the parties that the deed in its present form would extinguish the plaintiff's demand or was so intended to do; and whether, if such be its effect, the plaintiff did not, in the belief of the defendant, execute the said deed in ignorance of such effect and by mistake; and that the plaintiff may have an account and a decree for the balance that may be found due to him in the premises, to be paid by the defendant or raised out of the land, and for general relief.
The defendant by plea set forth the deed made by the plaintiff (as the same is stated in the bill) and insisted (348) on the acknowledgment of the receipt of the purchase money contained therein as a release. And on the argument of the plea it was held by the court that equity could not give relief against the acquittance and release contained in the deed; and therefore the plea was allowed and the bill dismissed. From the decree the plaintiff appealed.
If this cause were before an English chancellor there would be no hesitation in overruling the plea upon the ground of the vendor's lien, which is familiar doctrine in that country. It is founded on the principle of justice that upon a sale and conveyance the purchase-money not being paid the vendor is a trustee for the other party, and he must of course answer as to the matter which converts him into a trustee. As long ago as Copping v. Copping, 2 Pr. Wms., 291, it was held that a receipt for the purchase-money made no difference if the money was not actually paid; and as there was no proof nor allegation there of the payment of the purchase-money the court, notwithstanding the receipt, would not send the point to a master for an inquiry.
The same opinion was entertained by Lord Redesdale in Hughes v. Kearney, 1 Sch. Lef., 132, in which a promissory note payable to a trustee was taken for a balance of the purchase-money and an acquittance for the whole inserted in the deed, and yet the land was held bound for that balance. Thus the estate is deemed a security for the purchase-money, whatever form the transaction may assume, and it so remains except in those cases in which the vendor is supposed to have given up this by taking another and a distinct security.
If this equity is to be recognized here, even as between vendor and vendee, a point that perhaps cannot be said to be entirely settled, it disposes of the case for the plaintiff, for every plea admits the bill and interposes other and particular matter in bar. We do not however find it necessary to consider of this equity further in this case, for if an equitable lien does (349) not hold with us to any purpose, the plea is nevertheless bad for other reasons.
It may be taken that the scope of the bill is the limited one merely of getting rid of the release as having been inserted ignorantly in the deed and its execution obtained from the plaintiff by surprise, inasmuch as it was not founded on the consideration imported in it, namely, the payment of the purchase-money, nor any other valuable or meritorious consideration, and there does not appear to have been any intention in the plaintiff to abandon or extinguish his demand thus obviously just. To a bill stating such a case and seeking to have a release, a release thus obtained, put out of the plaintiff's way, the question is whether the defendant can by way of plea oppose that very release as a bar; that is to say, the release nakedly? We think very clearly not.
It is true that to a bill which seeks relief against a release, a plea of the same release may be good. It is so if upon the bill there appears matter upon which it is fit the release should be supported in equity as well as at law, as in Griffith v. Mauser, Hardr., 168, where the bill itself stated a valuable consideration for the impeached release, and therefore a plea of the release per se was allowed. But the bill gives no such color or support to this release, and, on the contrary, states as grounds for impeaching it that it was obtained without consideration and without due information and deliberation on the part of the plaintiff and in ignorance of its operation, and for those reasons the plaintiff claims to be relieved. A plea of the release nakedly in such a case, and not noticing at all those circumstances and defects imputed by the bill to the release, manifestly evades the charges of the bill and leaves the gist of the equity untouched. It is perhaps not entirely settled in what way as the most proper those circumstances of fraud or surprise, when alleged in the bill, are to be met by the defendant. As the nature of a plea, generally speaking, is to admit the bill and allege some short point upon which if issue be joined and found for the defendant the cause is at an end, it has been doubted whether a plea should be extended to the particular circumstances stated in avoidance in the bill, and whether those matters be not the proper subjects of an answer. Bayley v. Adams, 6 Ves., 586. (350) Yet by some it seems to have been thought that every plea must be perfect in itself so as to contain a complete bar to the bill, and therefore ought to contain a full negative averment touching the particular circumstances on which the claim for relief against the instrument rests. It seems, however, at least necessary, according to Lord Eldon's opinion in Bayley v. Adams, that those charges must be met by general averments in the plea and that supported by particular denials in an answer, so that in some way all the equitable grounds for impeaching the release shall be denied. Here there is no answer, and the plea has no averment, either particular or general, as to any one of the facts stated as the grounds of the plaintiff's equity. A court of equity does not sustain these shorthand bars such as a release, a stated account and the like, unless they be pleaded as not only existing instruments, but also as being fair and true and proper to be equitably enforced. In a plea on an account stated, if error or fraud be charged, they must be denied, as also in an answer; and if error or fraud be not charged, yet the defendant must by the plea aver that the account is just and true to the best of his knowledge. Mitf. Pl. (Jeremy's Ed.), 260. So if an award be pleaded to a bill to set aside the award and open the accounts, charges of fraud or partiality must be denied in the plea and that supported by an answer showing the arbitrators not to have been partial or corrupt. So, with respect to this particular subject of a release now before us, Lord Redesdale states, id., 263, that the plea of release must set out the consideration upon which it was made if it be impeached in that point; and this for the very sufficient reason that the release, if founded on a bad consideration or not on a sufficient one, ought not to protect the party from discovering such consideration or want of consideration. In other words, the release, unless fairly obtained and on a proper consideration, ought not to preclude the court from going into the case and dealing out justice to the parties according to its real facts. Roche v. Morgell, 2 Sch. Lef., 721.
Here, as respects the unpaid balance of the purchase-money, (351) the release is without any consideration and appears to be founded on mistake and surprise, as alleged in the bill. Whether those allegations be true or not the defendant must admit or deny, and as his plea takes no notice of them he must answer and make a discovery on those points. The decree made below must therefore be reversed with costs in the Court, and the plea overruled with costs in the court below, and the case remanded to be further proceeded in according to what may be just and right.
PER CURIAM. Decree accordingly.
Cited: Waddell v. Hewitt, 37 N.C. 253; Womble v. Battle, 38 N.C. 199; Melvin v. Robinson, 42 N.C. 83; Mendenhall v. Parish, 53 N.C. 106; Hudson v. Critcher, ib., 486; Collett v. Frazier, 56 N.C. 82.