Justice v. Carroll, 57 N.C. 429, 4 Jones Eq. 429 (1859)

Aug. 1859 · Supreme Court of North Carolina

57 N.C. 429, 4 Jones Eq. 429

DAVID JUSTICE against JOSEPH CARROLL and others.

Where the interest of one, holding a bond for title to land, was sold at execution sale, and the obligee induced one to purchase it, who afterwards sold it to another at an advance on his bid, and this last sold it to the original vendor, (all parlies believing the sale to be jalid) it was Held, that neither the obligee in the title-bond, nor his assignee, who was the person that bid off the interest at sheriffs sale, could call on the obligor for a specific performance, he having parted with the legal title to one who paid a full price, and had no notice of an adverse equity.

Cause removed from the Court of Equity of Cleaveland County-

Joseph Carroll, being the owner of a lot in the town of Shelby, sold it to Lewis Justice, and executed to him a title-bond for the same, dated 2nd of February, 1852. Some four years thereafter, Lewis Justice assigned his interest in such title-bond to the plaintiff, David Justice, as he alleges in his bill, for a valuable consideration, and the suit is instituted by the latter, as assignee, to compel Carroll to the specific performance of his contract, by making a title to the lot in question. The bill alleges that most of the purchase money was paid to Carroll, but that the plaintiff was able and ready to pay the remainder, and had offered do so, but that the defendant Carroll, had refused. The bill states, that “before the purchase money had been paid therefor, several justices’ executions were levied on the said lot, as the property of the said Lewis Justice, duly returned to the County Court of the said county, orders of sale duly and regularly obtained, and writs of vmMbioni exponas, issued, under which the interest of the said Lewis was sold, when your orator became the purchaser. At the time, he supposed he would, by the said sale, acquire a good title thereto, and, on the payment of the purchase money due upon the preceding contract, be entitled to call for, and enforce a conveyance of said land, from the defendant, Carroll, to himself, but being informed otherwise, and, inasmuch as he had been induced to make the purchase at the instance and request of the said Lewis Justice, in pursuance of which he had advanced money for his benefit, he, the defendant, Lewis, agreed by parol, to assign to your orator all the interest which he had in, and to the said premises, and in pursuance of this contract, he did, on the 12th of June, 1856, assign and deliver to your orator the bond which he so held on Joseph Carroll.”

The bill further alleges, that subsequently to the plaintiff’s purchase at execution sale, the defendant, Joseph Carroll, sold the premises to the defendant Dellinger, who has entered into the possession thereof, and refused to recognise the equity of the plaintiff, although both he and Carroll had full knowledge of the same at the time they contracted in relation to the said lot.

The answer of John Dellinger states, that in 1853, he contracted for the lot in question with Carroll, and, the same being vacant, he entered thereon, and commenced building and making other improvements; that, on the 19th of January, 1854, Carroll conveyed it to him by deed, he having paid a full price for the same; that he continued to improve the lot until he had expended some seven hundred dollars thereon, without having the slightest knowledge that either of the Justices had any equitable claim thereto. He alleges that these improvements proceeded under the eyes of both David and Lewis Justice, and they neither of them gave him any notice of their claim, until the land became suddenly enhanced in value, by the prospect of a rail-road’s being made near to it; immediately after which time, this suit was brought.

Joseph Carroll, in his answer, says that at the execution sale spoken of in the bill, David Justice bid off the lot in question, and shortly thereafter, assigned his bid to one Benjamin Justice, who took possession of the bond which he, Carroll, had given, and the sheriff’s receipt which David Justice had taken on the sale made under the executions; that shortly after this, he bought Benjamin Justice’s interest in the lot, and paid him a large advance on his outlay; that he took no written memorial of this sale, but took up from the said Benjamin the title bond, which he had given to Lewis Justice for the lot; that after this, he sold and conveyed the property to Del-linger, who went on to improve it, as stated in his answer.

The proofs establish, that David Justice sold the interest which he acquired by the purchase at the sheriff’s sale, to Benjamin Justice, for a profit of two dollars.

Shipp and JBymtm, for the plaintiff.

Lander, for the defendants.

Pearson, C. J.

Where the purchase money of land is not paid in full, and the title remains in the vendor as a security, it is settled that the vendee, or his assignee, has not such an equitable estate as is liable to be sold under an execution by force of the statute, because it is a mixed trust, and the vendor holds the legal estate in trust to secure himself, and then, in trust for the vendee, so that the purchaser at execution sale could not have the legal estate consistently with the right of the vendor to hold it as a security- If, therefore, Lewis J ustice had been passive in respect to the execution sale, his equity to have a title upon the payment of the balance of the purchase money, would not have been affected by it, and the plaintiff, as his assignee would have been entitled to the relief which the bill seeks to enforce.

But, he was not passive in respect to it; on the contrary, in order to show how it happened that after the plaintiff had assigned his bid at the sheriff’s sale to Benjamin Justice, Lewis Justice was induced to assign his interest in the land to the plaintiff, he alleges in his bill, that “inasmuch as he had been induced to make the purchase at the instance and request of the said Lewis Justice, in pursuance of which he advanced money for his benefit, he, the defendant Lewis agreed by parol to assign to your orator, all the interest which he had in the premises, and, in pursuance thereof, afterwards assigned the bonds for title,” &c.

So, the question is, can the plaintiff, who stands in the shoes of Lewis Justice, on any principle of “justice" and fair dealing, call for a specific performance of the original contract, made by the defendant Carroll? We have this case: Lewis Justice induces the plaintiff to buy his interest in the land which was exposed to sale under an execution, the plaintiff, for valuable consideration, assigns his bid to Benjamin Justice, who sells to Carroll, the original owner, and he sells to Del-linger for a full price, and executes to him a deed, all the parties being then under the impression that the sale by the sheriff to the plaintiff, and the transfer of his bid to Benjamin Justice, and the assignment by him to Carroll had extinguished 'the equity of Lewis Justice, and put it in the power of Carroll to make a title discharged from all equities growing out of the prior dealings in respect to the land. But it is discovered that the interest of Lewis Justice was not liable to execution sale, and, thereupon, he assigns his interest to the plaintiff.

Now, although, according to the moral perception of Dmid Justice, the plaintiff, he may snpose that he is at liberty to call for a specific performance of the original contract, and to compel Dellinger, who is an innocent purchaser, at a fair price, to convey the title to him, yet, it is manifest, from the bare statement, that common justice and good conscience, alike forbid, either Lewis Justice, whose debts were paid, by reason of his inducing David Justice to become the purchaser at execution sale, or David Justice, who transferred his bid at an advance of two dollars to Benjamin Justice, to take advantage of the fact that the interest of Lewis was not the subject of sale, under execution. The request of Lewis, that David should buy his interest, and the fact, that by reason thereof, his debts, to the amount of the value of the interest to which he was entitled in the land, were discharged, makes it iniquitous that he or David, who got clear of his bid at a small advance, should, afterwards, combine and confederate in order to deprive a Iona ficlc purchaser of the title. So, according to the plaintiff’s own showing, he has no standing-place in a Court of Equity.

Pee Cueiam, The bill dismissed with costs.