Champlin v. McLeod

Campbell, J.,

delivered the opinion of the court.

The appellees, who are husband and wife, jointly owned a tract of land in Panola County, and bargained it to W. D. and D. A. Champlin, giving them a bond for title, and taking their notes for the purchase-money. These notes were put by the husband, McLeod, into a mercantile concern of which he was a partner, as his contribution to the capital stock, and subsequently, by agreement of all parties interested, the bond for title was surrendered to the appellees, who made a deed conveying the land to D. A. Champlin, and Annie Champlin, wife of said W. D. Champlin ; and a note was given for the purchase-money, payable to McLeod & Jones, the mercantile partnership above mentioned; and a deed of trust was given by all of said Champlins on said land to secure said note for the purchase-money remaining due. Perkins was made trustee in said deed of trust, with power to sell, and in due time did sell the land under the deed of trust, when it was bid off *489by one Harris, as the friend of the firm of Jones & Perkins, and was conveyed without payment of any money by Perkins, trustee, to Harris, and by Harris in like manner, at the request of McLeod & Jones, conveyed to Jones & Perkins, who paid nothing, but were to satisfy the bid of Harris by a credit on the note of the Champlins, according to some understanding between the firms of Jones & Perkins and McLeod & Jones. No settlement was made, however, because it was soon discovered that there was a fatal defect in the deed of trust, by reason of a want of proper acknowledgment of its execution by Annie Champlin, a married woman, as aforesaid. When this discovery was made, the partner of McLeod, of the firm McLeod & Jones, was no longer willing for McLeod to have credit for the note as his contribution to the capital of said partnership; and the note of the Champlins was transferred by its holders to McLeod and wife, who exhibited their bill to subject the land in the hands of the Champlins to the payment of the note. Demurrer to the bill was overruled and the decree appealed from.

The theory of the complainants’ equity is that they had retained the title of the land as security for the payment of the purchase-money, and the notes were secured by the land; and whefi, by agreement of all parties in interest, the bond was exchanged for a deed of convej'-anee, and a new note was taken for the purchase-money, payable to McLeod & Jones, a part of the transaction was that this note was to be secured by the land, and to that end a valid security was to be made, whereby the land would stand pledged for the payment of the note; and as the scheme failed of execution, according to the purpose of all the contracting parties, and the title of half of the land is in Annie Champlin, by reason of the defective acknowledgment of the deed of trust, and the complainants have acquired the note which represents the unpaid purchase-money of the land, a court of equity, as against the Champlins or volunteers under them, should fasten a charge upon the land, and not permit it to be held, without being paid for. The theory is correct; and it is not perceived that to effectuate the purpose of the contracting parties, when the deed of trust was given, will violate any principle of sound law or morals.

*490This case differs widely in principle from Patterson v. Edwards, 29 Miss. 67. It would be strange if the Champlins could hold the land, without paying for it. The failure of so essential a part of the transaction attempted to be effected as the non-execution by Annie Champlin of the deed of trust, had the effect to remit the complainants 'to their original position as vendors of the land by title-bond, and as such entitled to make the title they had been induced to convey to D. A. Champlin and Annie Champlin, subservient to their claim for purchase-money, which, though intended to be paid by an obligation to third persons secured by the land, was not so paid, because, though an- obligation was given, it was not secured by a valid deed of trust, as intended.

The bill shows that the legal title to an undivided half interest in the land is, by virtue of the deed of trust and subsequent conveyances, outstanding in persons who are not made parties to the suit. For this defect the demurrer ought to have been sustained.

The decree overruling the 'demurrer will be reversed, and the demurrer sustained, and the cause remanded with leave to the complainants below to amend their bill as they may be advised.

Chalmers, J., having been of counsel, took no part in the decision.