1 Hughes v. Kearney, 1 Sch. & Lef. 135. 2 Capper v. Spottiswoode, Taml. 21. Topham v. Constantine, Taml. 135. "principle" observes Lord Eldon, in commenting on this decision, has been carried so far, that the lien exists, unless an intention, and a manifest intention, that it shall not exist, appears." It is, in short, a mere matter of contract, and it lies on the purchaser to shew that the vendor, by accepting a note, a bond, or a collateral security, meant thereby to abandon his equitable lien on the estate,-on the ground that this equitable lien results from a principle of law, the benefit of which can only be waived by an agreement for that purpose, it being for the purchaser, in the absence of any written stipulation, to educe from the circumstances clear demonstration that there was such an agreement1. That conclusion may, however, be established by reference to external considerations, or it may, independently of these, arise on the nature of the transaction. Thus, if part of the purchase-money be paid2, and the residue secured by the bond of the purchaser and a re-conveyance of part of the estate, the nature of this transaction certainly leads very strongly to the inference, that the vendor meant to rely upon the bond and the mortgage for the unpaid part of the purchase-money; and, in this case, the presumption may be considered so strong that it ought not to be rebutted by anything short of direct evidence; and Sir J. Leach accordingly held, that the vendor, under such circumstances, was not entitled to a lien on the whole estate. Where a purchaser dies before the completion of the contract and before the whole of the purchase-money has been paid, the court will not decree that he has a lien on the estate for the purchase-money unpaid, but will direct a reference to take an account of the personal estate of the purchaser, and to ascertain the clear residue of it applicable for the payment of the purchase-money, with a declaration, that, if it be insufficient, the vendor shall be entitled to a lien to the extent of this deficiency 3. The practical conclusion to be drawn from these cases is, therefore, this: that if the whole or part of the purchase-money remain unpaid, and the vendor agree to accept a mortgage on another estate, or a bond, note, or other security for the same, the conveyance should contain an express declaration that there is to be no lien on the land for the unpaid purchase-money, if that be the intention of the parties. 5. Vendor's Lien arises only in the case of a simple Sale for Money. It is material, in considering cases of lien, to see whether the transaction is a naked case of vendor and pur Cood v. Pollard, 10 Price, 3 Sim. 499. 109. 3 chaser, or be in the nature of an arrangement between the parties; because in the latter case the transaction is complete as against the vendor on the execution of the deed, and no lien arises in respect of any unpaid purchase-money1. Thus, in Clarke v. Royle2, A. conveyed certain estates to B. in consideration of B. entering into the covenants thereinafter contained; these covenants being first to pay A. an annuity for his life, and if B. should marry, then to pay 3,000l. to three persons designated, in such proportions as A. should appoint. It was held that there was no lien for the 3,000l. In this case the deed, as justly observed by the Vice-Chancellor, "clearly marked out that the consideration on one side was the conveyance of the estate, and on the other the entering into the covenants." As soon as the purchaser had executed the conveyance his part of the contract was fulfilled. So in Parrott v. Sweetland3, the conveyance 3 My. & Kee. was from a daughter to her father" in consideration of his cove- 655. nant thereinafter contained for indemnifying her, in respect of a mortgage on the estate, and also in consideration of the sum of 3,000l., advanced or agreed to be advanced or secured to her upon the terms expressed in a bond of even date." On the conveyance was indorsed a receipt for "a bond for the sum of 3,000, being the full consideration within expressed to be given." The bond recited the intended marriage of the daughter, and was conditioned for payment by the purchaser of an annuity to his daughter and her intended husband during their joint lives, and the life of the survivor, and of the sum of 3,0007. upon contingencies. A clearer case against the existence of any lien could hardly be imagined, and it was accordingly held on appeal before the Lords Commissioners, affirming the judgment below, that there was no lien for the 3,0007. observed Lord Commissioner Shadwell, "We are of opinion," that the lady has got the face of the instruments themselves, 6. Vendor's Lien does not arise in Favour of a mere Agent.]— Where the vendor is dealing with an agent, and part of the purchase-money is kept back by the agent, it becomes his private debt, for to hold otherwise would be to enable the agent to commit a fraud upon his principal. Conformably with this principle 1 White v. Wakefield, 7 Sim. 401. 2 Davies v. Thomas, 2 You. & Coll. 235. Elliot v. Edwards, 3 Bos. & Pull. 181. • Mackreth v. Symmons, 15 Ves. 349. Selby v. Selby, 4 Russ. 336. it was held on a recent occasion1, that if a vendor, knowing the purchase-money to be trust-money, suffer part of it to be retained by one of the trustees, without the knowledge of his co-trustees, or of the parties beneficially entitled, he has no lien on the estate for the part so retained. 7. Effect of the Clause enabling Trustees to give Receipts.]— In a recent case in the Exchequer, it was held by Baron Alderson2, that the common clause authorizing trustees to give a valid receipt to the purchaser, does not, as against subsequent purchasers with notice of the trust, exclude the original vendor's lien, where, in point of fact, the money has not been paid. This clause certainly, as ordinarily framed, merely discharges the purchaser from seeing to the application of the purchase-money, assuming that in point of fact it has been paid. 8. Against whom the Lien prevails.]-The vendor's lien extends to the purchaser and all persons claiming under him with notice that the money was not paid3. Lord Eldon, after stating this point to be clearly settled 4, proceeds thus:-" I do not hesitate to say, that if I had found no authority that the lien would attach upon a third person having notice, I should have had no difficulty in deciding that upon principle, as I cannot perceive the difference between this species of lien, and other equities, by which third persons having notice are bound. B., the money being paid by A., B. is a trustee, and C. taking from him, and having notice of the payment by A., would also be a trustee." In the case of a conveyance to 9. Creditors and Legatees are entitled to the Benefit of the Lien.]-Whether the vendor's lien shall prevail for the benefit of third persons, in other words, whether it shall be marshalled for the benefit of creditors or legatees for instance, has been a question much discussed*. It was at length decided by Sir John Leach5, *A concise statement of the leading cases on the point may not be altogether useless. The first leading authority on the subject of marshalling, is Coppin v. Coppin, (2 P. W. 291). There the purchased estate was not devised by the purchaser, but descended to his heir, and the question was between the heir and legatees; and the court refused to marshal the assets in their favour,- a decision with respect to which Lord Eldon (Mackreth v. Symmons, 15 Ves. 344) has said, that in it "the doctrine of Pollexfen v. Moore, as to marshalling, was practically, though I doubt whether it ought to have been, admitted." In Pollexfen v. Moore, (3 Atk. 272), Lord Hardwicke is reported to have ster a very clear examination of the authorities, that the vendor's equity ought to be marshalled in favour of the creditors: "I con stated, that the lien of a vendor does not prevail for the benefit of a third person; yet his decree was, that a legatee in that case was entitled to the benefit of such lien. Ingenious attempts have been made to reconcile his dictum with the decree, but with little success. (Vend. & Purch. iii. p. 206). In reference to this case, Sir W. Grant, in Trimmer v. Bayne, (9 Ves. 211), says, "That is a very obscure report, and it has perplexed me very much formerly." In Mackreth v. Symmons, (15 Ves. 345), Lord Eldon observes, "thatif Lord Hardwicke's meaning be, that he should follow the case of Coppin v. Coppin, and that if the vendor exhaust the personal assets, the legatee of the purchaser should not come upon the estate, there is great difficulty in applying the principle, as it would then be in the power of the vendor to administer the assets as he pleases, having a lien upon the real estate, to exhaust the personal assets and disappoint the creditors, who, if he had resorted to his lien, would have been satisfied; and in that respect with reference to the principle, the case is anomalous." In the last case, Selby v. Selby, (9 Russ. 338), Sir J. Leach says, "Many observations have in subsequent cases been made, with a view to reconcile the dictum and decree of Lord Hardwicke, but I must admit without success." And in a recent case, (Sproule v. Prior, 8 Sim. 193), the Vice-Chancellor, after observing that his decision was contrary to the decision in Coppin v. Coppin, and the dictum of Lord Hardwicke, in Pollexfen v. Moore, added, "but I must say of them," as Lord Eldon said on a similar occasion, (8 Ves. 397), "they are not reconcilable with the general class of cases;" and besides that, they have been positively overruled. In the case of Trimmer v. Bayne, (9 Ves. 209), Sir W. Grant, after referring to the dictum of Lord Hardwicke, and stating that he had been much perplexed by that case, comes to a conclusion directly opposed to it, and expressly states that the lien of a purchaser is within the common principle of marshalling assets; that a person having power to resort to two funds, shall not by his election disappoint another, having one fund only. The purchased estate in that case had descended to the heir, and the contest was between him and the legatees. (4 Russ. 339, n.) The case of Headley v. Redhead, (Coop. 50) is very imperfectly reported; it was, however, the case of a devise of the purchased estate; and it appears that Sir William Grant meant to confirm the general principle as to marshalling, which he had stated in Trimmer v. Bayne. In Austen v. Halsey, (6 Ves. 475), an estate contracted to be purchased was devised, and a question was made whether the legatees would, to the extent of the vendor's lien, be paid out of the purchased estate. Lord Eldon is reported to have stated "that the cases of marshalling seem to have gone this length, that where there is a charge upon an estate descended, a legatee shall stand in the place of a person having that charge, and resorting to the personal estate; but that there was a difference in marshalling between an estate descended, and an estate devised, and that it might be found difficult for fess," said his Honor, "I am unable to discover upon what prin1Ante, p. 61, n. ciple Lord Hardwicke's dictum1, that the lien of a vendor is not to prevail for the benefit of a third person, is to be supported,why, in this case alone, an exception is to be made to the equitable rule, that he who has power to resort to two funds shall not, by his election, altogether disappoint another person who has power to resort to one fund only? Here the question is between devisees of the purchased estate and simple contract creditors, and the established rule being that simple contract creditors are, as against a devisee, to stand in the place of specialty creditors who have exhausted the personal assets, because the specialty creditors had the two funds of real and personal estate to resort to,-so the simple contract creditors here are entitled to stand in the place of the vendor against the devisees, because the vendor has equally a charge upon the double fund of real and personal estate." The question was still considered to be unsettled as to legatees; but it has been since decided, that the vendor's lien will be marshalled in favour even of legatees against real estate descended, but not as against real estate devised; "it being considered that the devisee is not to be deprived of any part of the real estate which the testator has given him, because it happens that the testator's intention of bounty towards the pecuniary legatee fails for want of that fund which ought legally to supply the legacy 2." • Wythe v. • Harrison v. 1 Russ. & My. 71; Taml. 273. 10. Charity not entitled to the Benefit of the Lien.]—It is a settled principle that assets shall not be marshalled in favour of charity. It follows, therefore, that the vendor's lien will not be marshalled for this purpose 3. Vol. i. p. 17. SECT. 5.-OPERATIVE WORDS. We have already4, in the former volume, adverted to the operative words which are most appropriate to the various modes of assurance. It may be here shortly observed, that the words "demise and lease" are the proper words for the creation of a term of years; on the conveyance of such an interest after its creation, the legatees to work out their pay- sonal fund for payment of the legacy, and Lord Eldon expressly disclaimed giving his opinion upon the point. |