Bradford v. Union Bank of Tennessee

THIS was an appeal from the District Court of the United States for the Northern District of Mississippi, sitting as a court of equity.

The facts are sufficiently stated in the opinion of the court.

It was argued by Mr. Volney E. Howard, for the appellants, and by Mr. Carlisle and Mr. Coxe, for the appellees.

The counsel for the appellees made the following points, namely:--

1. The defence could not have been made at law in this case, because a court of law has no power to rescind a contract for part failure of consideration, especially on the ground that the inducement to the whole purchase had been defeated by such part failure of title. Greenleaf v. Cook, 2 Wheat. 13; 2 Kent, 476; Parham v. Randolph, 4 How. Miss. Rep. 435.

2. Although judgment had been obtained at law, the complainant had a right to a good and valid title when he paid the money, and to ask the aid of a court of chancery for that purpose, especially against a foreign corporation seeking to enforce the judgment, after a tender of the money, demand, and refusal of title. The bill should not, therefore, have been dismissed He was not compelled to take part of the estate, if a main inducement to the purchase had failed. 2 Story, Eq. § 778.

3. The bank does not even tender a deed or title for that portion of the land of which they are seized, or a quitclaim for that which was sold for taxes. It does not admit of doubt, that the court erred in not decreeing some sort of conveyance by the bank, on the payment of the purchase-money. Bradford could not be put in a worse position than Brown, if he ought to suffer for Brown's neglect in not paying the taxes.

4. Whether the title-bond to Bradford is to be viewed as a distinct independent contract, or a mere novation of that of 1841, the court cannot look beyond the bond for its terms, nor vary them by parol. It is a covenant, that the bank was seized of the legal title in 1845, and would make a good and valid title when the notes were paid by Bradford. It was the consideration of the new notes, and the substitution of John D. and B. M. Bradford for the former and Brown. It was a contract of the bank's own election, and by which it obtained a new and additional security. 1 Greenl. § 276-277.

It is not competent to show a consideration essentially different from that recited in the deed. Greenl. § 26; 4 Greenl. Cruise, 254, note 1; Id. p. 24, note; 4 Cow. 431.

Parol additions to a deed are rejected. 1 Sugd. 179, (153.)

5. The tax-sales appear to have been regular, and in conformity to the laws of Mississippi; and, if so, vested in the purchasers the title to one half the land. By the laws of that State, the assessment is a lien upon the land. Hutch. Code, p. 176-177.

The defendants admit they cannot make a good title to one section, if the tax-title is valid. The vendee cannot be compelled to take a title thus incumbered as a good and valid title. It is selling him a lawsuit with an adverse possession.

Equity has jurisdiction to decree specific performance of a bond to convey lands, 4 Pick. 1; Mills v. Metcalf, 1 A. K. Marsh. 477. and the prayer may be for specific performance or recession. Id. Woodstock v. Bennett, 1 Cow. 711; vide also Stevenson v. Maxwell, 2 Comst. 408. As to part performance and damages, and decree against parties residing out of the State. Sutphen v. Fowler, 9 Paige, 280; 11 Id. 277.

The vendee ought not to be compelled to take a title with such a cloud over it; neither should he be left to a suit on his bond against a corporation resident in another State. 7 Blackf. 31; 5 Mon. 189. It is a clear case for equitable relief, either by a total recession of the contract, or specific performance with damages. Certainly, the court should have decree a conveyance upon the payment of the money.

Mr. Coxe, for the appellees. The questions arising upon the record present no great difficulty. It is a case of clear and undisguised fraud on the part of complainants. The court below ordered the bill to be dismissed, and such it is confidently believed will be the result in this court.

The first question which arises was presented in the court below on the demurrer, and is again set up in the answer. It is that, if the allegations of complainants be true, as made in the bill, the facts, as averred, would have constituted a perfect defence in the action at law in which the judgment was obtained, which the bill seeks to enjoin; and that complainants, who were defendants in that action, having omitted to take such defence at law, or, if they did, having failed to sustain it, equity will not now interpose in their behalf.

In cases of fraud it is perfectly well settled, that the jurisdiction of the courts of law and of equity is concurrent. It becomes exclusive only when the case is brought before the one or the other. Gregg v. Lessee of Sayre et al. 8 Pet. 244; Lessee of Swayze v. Burke, 12 Pet. 11; Russell v. Clark's Executors, 7 Cranch, 69; Lessee of Rhoades v. Selin, 4 Wash. C. C. R. 715; 9 Wheat. 403, 532.

In the present case the fraud which is in proof, is one committed by complainants, none such as is alleged being sustained even by a shadow of proof against defendants. If fraud, a good defence at law. Gilpin v. Smith, 11 Sm. & Marsh. 129; and cases cited.

In the bill claiming relief, complainants aver that an actual sale and purchase of certain real estate was made, and that at the time this contract was concluded, the property which he purchased was in part held in possession under an adverse claim with color of title, and has ever since been thus held, so that the purchaser has never been able to obtain possession or enjoy the benefit of his purchase. If this allegation is true, Bradford had a complete defence at law in the action upon his bonds, for such an adversary holding places him in precisely the same predicament as if he had gone into possession under his purchase and then been ousted by a paramount title. In Duvall v. Craig, 2 Wheat. 46, 61, it was held by this court, that if grantee be unable to obtain possession, in consequence of an existing possession or seizin by a person claiming and holding under an older title, this would be equivalent to an eviction. The local law is in accordance. Dennis v. Heath, 11 Sm. & Marsh. 206.

Again, he alleges that the bank cannot make him a good title to the property for which he contracted. Admitting that, under the circumstances, this would furnish a valid defence, yet it was equally available at law; 7 Sm. & Marsh. 340. Had he tendered the purchase-money, and demanded such deed as he claims under the bond, and it was then made to appear that the bank was unable to make good title, his defence at law would have been complete; Liddell v. Sims, 9 Sm. & Marsh. 596. Nor was it necessary for him to have proceeded thus far, for the simple fact that the bank did not demand payment and tender a deed, would have furnished a complete defence. Washington v. Hill, 10 Smedes & Marsh. 560.

Having thus, upon the facts which the bills alleges, a full, complete, and adequate remedy at law, and having omitted or neglected to avail himself at law of the defence to which those facts, if proved, would have entitled him, he is without remedy in equity; Graves v. Boston, &c. Inc. Co. 2 Cranch, 419; 2 Story, Eq. sect. 179 and 887; 1 John. C. R. 49-468; 6 How. (Mis.) 569; 5 Id, 80; 7 Id. 172; 3 Sm. & M. 453; 4 Id. 358; 8 Id. 131; 9 Id. 98; 10 Id. 112; and clearly in Truly v. Wanzer, 5 How. s. c. 141; Id. 192; Creath v. Sims, 9 Wheat. 552; Marine Ins. Co. v. Hodgson, 7 Cranch, 332.

If we examine the merits of the case, as disclosed in the pleadings and evidence, the entire want of even a semblance of equity will be obvious. The evidence shows, beyond all possibility of doubt, that, in October, 1841, the bank sold the lands in question to Brown, gave him a title-bond, conditioned to make to him a good title upon the payment of the purchase-money, and received from him an obligation to pay this purchase-money as therein specified. In this obligation complainant, John D. Bradford, joined as surety. Payments not being made as stipulated, the bank brought suit on the paper against Bradford, recovered judgment against him, and either, as the answer alleges, issued execution, or, as the bill avers, threatened so to do.

There is no allegation, proof, or pretence, that, in October, 1841, when this purchase and sale were consummated, the title of the bank to the entire property which it contracted to sell was not absolute and perfect; that the contract of sale was not perfectly honorable, just, and lawful; that the consideration-money was not reasonable and proper. Up to this period no allegation or imputation of impropriety, or unfairness, or want of capacity to carry out the contract, is alleged.

Under the circumstances which have thus been stated, Benjamin M. Bradford made, on behalf of his brother, an application to the bank, in September, 1844, in the form of a letter, addressed to George W. Foster. In this letter it is stated that John M. Bradford had been prevailed upon to become security for Brown; that Brown held the title-bond, and if the purchase-money is paid the land must be conveyed to him, and become liable to old judgments, which will absorb it and leave his brother remediless. It is then proposed that Brown shall surrender his title-bond, and that a new one shall be given to Bradford, who, on his part, will then give security for the payment of the purchase-money on an extended credit.

That this letter was written by John M. Bradford, or by his authority, and with his knowledge, is clearly shown in the record. In his letter of 2d December, 1844, to G. W. Foster, he says: 'My friend, J. L. Brown, informs me that the Union Bank has acceded to our proposition made through you,' &c. No other proposition appears to have been made in the letter of the brother, for both Foster and Bass say, the proposal contained in this letter was that which we submitted to the bank, and on which alone it acted. It may also be inferred from the testimony of Cholson, and his letter of March 20, 1848, that the Bradfords, when they made their proposition to the bank, knew of the tax-sale made in 1843, and then entertained the design now attempted to be accomplished, of using that sale as a means of defeating the bank in the recovery of the debt.

The complainants' bill exhibits a strong case of the suppressio veri, for no allusion, however distant, is made to the position occupied by the parties at the date of the letter, in September, 1844. It certainly cannot be doubted that, had the entire case been presented to the court, no injunction would have been awarded.

The ground assumed, that it was incumbent on the bank to pay the taxes assessed upon the lands subsequent to the contract to purchase and sale with Brown, has no foundation in principle or in authority. From the instant the contract for the purchase and sale of real estate is consummated, the party who has bought and obligated himself to pay the price stipulated, is the owner. Even if an absolute conveyance has been made the vendor retains a lien for the purchase-money, and this tacit mortgage may be enforced in equity. If, however, the vendor retains the legal title, which has become the modern practice, and which close the door against any attempt to perpetrate fraud upon third parties, the case is not essentially changed; the vendor retains the position of a mortgagee. Such is the settled law in Mississippi. 4 Sm. & M. 300; 6 Id. 149; 10 Id. 184.

If the lands in this predicament should be sold for taxes, the vendor may be deprived of that security for the payment of the purchase-money, but it by no means follows that the debt is extinguished. In truth, he may continue that security by paying these taxes; in which case he is entitled, as against his vendee, to add the amount thus paid to the original debt, and enforce reimbursement of the aggregate sum. This is, however, optional with him, and not obligatory.

Mr. Justice NELSON delivered the opinion of the court.