Appeal from the First Judicial District Court, Douglas County; Frank P. Langan, Judge.
Alfred Chartz, for Appellants.
Mack, Green & Heer, for Respondents.
By the Court, McCarran, J.:
In this action the plaintiffs, Mathias Jensen and Anna Jensen, his wife, seek to recover judgment against Peter P. Wilslef and Niels P. Wilslef for the sum of $1,400, with interest, and for a decree of the court declaring a vendor's lien against certain premises conveyed and for a decree foreclosing said lien in favor of the plaintiffs and against the defendants. The facts disclose that on the 6th day of June, 1907, Peter P. Wilslef and wife visited the home of Mathias Jensen and wife, and there negotiated for the purchase of a 40-acre tract of land, the home of the Jensens. The agreed purchase price was $4,500. On the occasion of negotiating the purchase Mr. Wilslef paid $50 to bind the bargain, and exhibited to Mr. Jensen certain certificates of deposit and other collateral, the aggregate of which amounted to approximately $4,500. On the 12th day of June, 1907, the parties met at the courthouse at Genoa, Douglas County, for the purpose of closing the transaction. It was the understanding that the deed should be made to Niels P. Wilslef, son of Peter P. Wilslef, but by mistake it was made to Peter P. Wilslef. At the time of making the delivery of the deed Peter P. Wilslef turned over to Jensen certificates of deposit on the Gardnerville Bank, a personal note drawn by a private party, and the certificate of deposit on the State Bank and Trust Company of Carson City, the latter for the sum of $1,400. This certificate was payable to Niels P. Wilslef, and the date of maturity was March 8, 1908, and was endorsed by Niels P. Wilslef in blank. Together with these certificates Peter P. Wilslef paid over approximately the sum of $300 in cash. Some months subsequent to the transaction the State Bank and Trust Company suspended, and on the 9th day of March, 1908, the respondents presented the certificate of deposit to the State Bank and Trust Company at its office in Carson City, and, payment being refused, the certificate was protested, and notice of refusal and protest was served upon appellants. The
case was tried in the district court of the First judicial district in and for Douglas County, and judgment rendered for plaintiffs, respondents herein, decreeing a vendor's lien in favor of the plaintiffs and rendering a personal judgment against the defendants for the sum of $1,400, with interest at 7 per cent. A motion for a new trial was made and denied, and from the order denying defendant's motion for a new trial and from the judgment an appeal is taken to this court.
It is the contention of the respondents that they took over the certificate of deposit solely as security for a part of the purchase money, while the appellants contend that the certificate was received in full payment for that portion of the purchase money represented by its face.
By the pleadings in the case two questions are presented to this court: First, are plaintiffs, respondents herein, entitled to an equitable lien against the premises conveyed for a part of the purchase money; and, second, are respondents entitled to personal judgment against appellants?
1. The right of a vendor's lien against an estate conveyed was recognized at common law, and we find that many of the early English decisions have dealt exhaustively upon the vexing problem.
The Lord Chancellor Eldon, in a very early English case, speaking upon the subject, said: It has always struck me considering this subject that it would have been better at once to have held that the lien should exist in no case, and the vendor should suffer the consequences of his want of caution, or to have laid down the rule the other way so distinctly that a purchaser might be able to know, without the judgment of a court, in what cases it would and in what it would not exist. (Mackreth v. Symmons, 15 Vesey Jr.'s Reps. 339.) In that case the chancellor set forth what was then and has since been the generally accepted doctrine relative to vendor's lien, in that there may be security which will have the effect
of waiving the lien, and that is especially true if the security be totally distinct and independent. Where a distinct and independent security is taken by the vendor, it becomes a substitution for the lien, instead of a credit given on account of the lien. The intention of a vendor to waive an equitable lien may be manifest from the very nature of the security taken by him at the time of the transaction, and hence a court of equity must determine largely from the facts and circumstances surrounding the transaction as to whether or not the vendor in fact intended to reserve his equitable lien against the premises conveyed.
No other single topic, says Mr. Pomeroy in his work on Equity Jurisprudence, belonging to the equity jurisprudence has occasioned such a diversity and even discord of opinion among the American courts as this of the grantor's lien. Upon nearly every question that has arisen as to its operation, its waiver or discharge, the parties against whom it avails, and the parties in whose favor it exists, the decisions in different states, and sometimes even in the same state, are directly conflicting. (3 Pomeroy, Eq. Jurisp. 1251.)
From a careful reading of the ancient authorities dwelling upon the application of a vendor's lien at common law, it will be observed that the right of a lien in favor of the vendor upon real estate sold to the vendee is not based upon contract. It is not an equitable mortgage; it cannot be regarded as accruing to the vendor by reason of the vendee holding the estate with the purchase money unpaid. The whole thing resolves itself down to be a simple equity raised and administered by courts of chancery. No fixed rules have even been made that measure it, and it does not depend upon any particular set of facts. Each case rests upon its own particular conditions, and courts of equity passing upon the applicability of vendors' liens have given or denied the lien according to its rightfulness and equity growing out of the facts developed in each particular case. Courts of
equity in many of the states of the Union have either ignored or refused to recognize a vendor's lien. In Connecticut, Delaware, Georgia, Kansas, Maine, Massachusetts, Nebraska, New Hampshire, North Carolina, South Carolina, Oregon, Pennsylvania, Vermont, Virginia, Washington and West Virginia, the doctrine of a vendor's lien has been either condemned by the courts or enacted against by the legislature. Mr. Pomeroy, in discussing the subject under American Jurisprudence, says: The original grounds and reasons for admitting the grantor's lien do not exist here, and the lien itself is not in harmony with our general real property law. The tendency both of our legislation and of our social customs is to make land a subject of commerce and its transmission as free as possible, while the rights of grantors can be fully protected by mortgages which under nearly all the states are widely different from the instrument bearing the same name in England.
Chief Justice Marshall, speaking for the Supreme Court of the United States, in the case of Bayley v. Greenleaf, 7 Wheat. 46, 5 L. Ed. 393, says: It is a secret invisible trust, known only to the vendor and vendee and to those to whom it may be communicated in fact. To the world, the vendee appears to hold the estate divested of any trust whatever; and credit is given him in the confidence that the property is his own, in equity as well as law. A vendor relying upon this lien ought to reduce it to a mortgage, so as to give notice of it to the world. If he does not, he is in some degree accessory to the fraud committed on the public by an act which exhibits the vendee as the complete owner of an estate on which he claims a secret lien. The right of a vendor to hold and maintain a lien against an estate conveyed is one that must be determined from the nature of the transaction, the circumstances surrounding the conveyance, and the intention of the parties at the time of entering into the transaction. The right of a vendor to maintain an equitable lien against an estate, which he may have conveyed, cannot in justice be determined either from the subsequent acts
of the vendee or the subsequent acts of the vendor, but must be determined from the facts immediately ...