Opinion
No. 29444.
May 12, 1931.
1. FRAUDULENT CONVEYANCES. Statute giving creditor right to attack fraudulent conveyances does not give chancery court jurisdiction of suit for damages for breach of contract to convey ( Code 1930, section 407).
Code 1930, section 407, Code 1906, section 553, in substance gives creditor right to attack fraudulent conveyances and to have a lien on the property fraudulently conveyed. Instant suit was brought by vendee in contract to convey standing timber at agreed price. Vendor conveyed timber to third person and vendee brought suit in the chancery court for damages and sought to impress a lien on the remaining timber to pay damages.
2. ACTION.
Chancery court, having assumed jurisdiction of law action, is nevertheless empowered to do all circuit court could properly do (Constitution 1890, section 147).
3. ACTION. Chancery court, on assuming jurisdiction of action at law, follows ordinary procedure appertaining to chancery court ( Constitution 1890, section 147).
The foregoing rule, however, goes no further than the matter of procedure and does not enable chancery court to enlarge upon any of the substantive rights which would have been available to the successful party had the case been actually tried at law as it should have been.
4. ACTION. Chancery court, having assumed jurisdiction of vendee's action at law for damages for breach of contract to convey timber, held without jurisdiction, after awarding damages, to decree lien on timber ( Constitution 1890, section 147).
Vendee, under contract for sale and conveyance of merchantable timber, brought action against vendor in chancery court for breach of contract, and to impress lien on remaining timber to pay damages. The chancery court assumed jurisdiction notwithstanding action was purely for damages for tortious interference with and deprivation of complainant's rights under contract and for a personal decree for damages resulting therefrom. Judgment, in addition to awarding damages, gave vendee a lien to secure payment thereof.
APPEAL from chancery court of Marion county; HON. T.P. DALE, Chancellor.
Ford McGehee, of Columbia, for appellants.
A defendant in a bill in equity which states no cause of action, who answers such bill without testing its legal sufficiency by demurrer, may nevertheless, on appeal, for the first time raise the question of its legal sufficiency.
Pease Dwyer Company v. Somers Planting Company, 130 Miss. 147, 93 So. 673.
No lien arose against the timber by reason of the alleged breach of the option to purchase.
Liens can exist only by contracts either expressed or implied, or by the operation of some positive rule of law, such as by statute. The only lien existing at common law arose out of the right to retain the possession of personal property until some debt due on, or secured by, such property is paid or satisfied.
37 C.J., 312.
In the case of National Cash Register Company v. Hude, 119 Miss. 36, 80 So. 378, 7 A.L.R. 990, wherein there was an adjudicated breach of the contract involving the sale of a cash register, the purchaser in whose favor the adjudication was made, was denied the right to enforce a lien against the cash register for the amounts paid by him on the purchase price thereof.
Courts of equity have repeatedly refused to declare a lien upon real estate on the ground that the person seeking the lien advanced funds on the purchase price at the instance of the buyer, and especially so in the absence of an express agreement on the part of the purchaser to give a lien in favor of the lender of the money and as an inducement thereto.
Under all the authorities an option conveys no title to property, and does not even constitute an agreement to convey property, but merely conveys the right to the proposed purchaser to elect at his option to purchase the same.
27 R.C.L., page 334.
We know of no rule of law which holds that the right to elect to purchase land or timber conveys with it the right to impress a lien against the property for damages that may result from the breach of offer to sell and where no claim is made that a debt is due against the property for money paid on the purchase price thereof, or on a transaction in connection therewith.
Hart et al. v. Livermore Foundry Machine Company, 72 Miss. 809, 17 So. 769; Strong v. Krebs et al., 63 Miss. 338.
There existed between the parties in the case at bar no fiduciary relation or other relationship that would give rise to a trust or lien against the timber involved in the alleged option; and in fact, there was no ground of equitable jurisdiction involved in the case, the claim being one merely for damages for an alleged breach of contract, which were recoverable in a common-law action. However, inasmuch as the chancery court exercised jurisdiction and tried the case, we are not unmindful of the fact that no error can be predicated thereon in this court. But we respectfully submit that there was no power or authority in law or in equity for the action of the court below in seeking to impress a lien against the timber in question, and to order it sold for the satisfaction of the demand of the appellees.
The court below was without authority to decree a lien in favor of the appellee on the timber involved, since no lien arose by the alleged contract, either expressed or implied, or by operation of law. Counsel for the appellee undertake to answer this contention by citing section 407 of the Code of 1930, which gives the chancery court jurisdiction of bills exhibited by creditors who have not obtained judgments at law, to set aside fraudulent conveyances of property, etc.; and to subject the property to the satisfaction of the demands of such creditors as if they had obtained judgments at law and execution had been returned "no property found." But we respectfully submit that the bill of complaint in this cause does not seek the cancellation of an alleged fraudulent conveyance, but that the appellee elected to sue for damages for an alleged breach of contract between himself and the appellants and the court below did not decree the setting aside of any fraudulent conveyances in order that the alleged contract might be specifically performed, but granted the appellee a decree awarding him damages for the alleged breach of the option sued on as prayed for in the bill of complaint. The above statute referred to has no application in the case at bar.
T.B. Davis and Hall Hall, all of Columbia, for appellee.
The option in this case is not void for want of mutuality. Mutuality is not necessary where the option is supported by a valid consideration.
27 R.C.L., pages 334-335; 13 C.J., page 336.
The option was supported by a valid consideration and is not void for insufficiency of consideration.
Byrne v. Cummings, 41 Miss. 196; Ross et al. v. Parks, 8 So. 368; Marsh v. Lott, 97 P. 163; Adams v. Peabody Coal Co., 82 N.E. 645; Seyferth v. Groves, etc., 75 N.E. 522; George v. Schuman, 168 N.W. 486; Land Co. v. Beeman, 178 N.W. 696; Guyer v. Warren, 51 N.E. 580.
It is immaterial that the consideration for the option was to be applied on the purchase price in the event of sale under the option.
Kingsley v. Kressly, Ann. Cas. 1913E, 746; Ide v. Leiser, 24 A.S.R. 19.
Appellee was entitled to a lien on the timber to satisfy his claim for damages for breach of the option.
Section 407, Code of 1930; Griffith's Chancery Prac., section 500; Ins. Co. v. Ligon, 59 Miss. 316; Grenada Bank v. Waring, 99 So. 684.
In view of the fact that the bill of complaint alleged that the deed to John and Ira Calvin was a fraudulent conveyance and further asked for damages for breach of the option, and further asked that a lien be impressed upon the timber in question to satisfy the claim for damages, we submit that this case comes squarely within the provisions of the Mississippi statute, and that the chancellor committed no error in impressing a lien upon the timber to satisfy the decree.
Argued orally by Harvey McGehee for appellant.
Appellee filed his bill in the chancery court of Marion county, and alleged that on August 19, 1920, appellant Mary Calvin Rankin was the owner of the merchantable timber on certain lands described in the bill; that on the date aforesaid for a valuable consideration then paid by appellee to said appellant Mary Calvin Rankin, she contracted in writing, signed and acknowledged by her, to convey said merchantable timber to appellee at any time within thirty days from said date upon tender by him of payment therefor in cash at the rate of three dollars per thousand feet as per an estimate thereof to be made by a competent estimator. That such an estimate was made, and it having been found that there was one hundred thousand feet of said timber, appellee within said thirty days tendered to said appellant the sum of three hundred dollars in cash and demanded a deed, which appellant thereupon refused. That not only did said appellant, Mary Calvin Rankin, refuse to execute said deed and deliver the said timber, but that she, within a few days after the execution of the contract aforesaid, in wrongful confederation with three others, residents of the county and of an adjoining county, had conspired to cheat and defraud appellee of his said timber contract and of his rights thereunder, by which wrongful scheme, and in pursuance thereof, appellant had pretended to convey said property to the said other defendants, who thereupon had taken possession of said timber, and had cut down and carried away the choice portion thereof, thereby leaving the remainder of said timber in such condition as to be of no value to appellee so far as any profitable use or resale thereof was concerned. That except for the said wrongs and trespasses by said defendants, appellee could have used or resold said timber at a profit to himself of six hundred dollars, for which profits he demanded decree or judgment by way of damages against all four of said conspirators and trespassers, and that a lien be impressed on said timber to pay said damages and for a decree over for any balance due after the sale of said timber under the decree.
The court took jurisdiction of said action, and on a hearing on the merits entered a decree by which it was held and adjudged "that the complainant has been damaged in the sum of three hundred fifty dollars and is entitled to recover this amount of and from the defendants, and is further entitled to a lien upon the timber in question to satisfy said damage." The decree thereupon proceeded further to appoint the clerk as a special commissioner to make sale of said timber and to report the sale. The sale was made and the clerk reported that the timber had brought at the sale the sum of fifty-seven dollars, appellee being the purchaser, which amount was approximately the aggregate of the costs of the case to that date. Exceptions were filed to the report of the commissioner, which on being heard were overruled by the court, and the purchase price at the sale having been absorbed by costs, a decree over for the original sum of three hundred fifty dollars damages was entered against all of the defendants, and three of them have appealed.
It will be observed from the statement of facts that the suit was one essentially for damages for a tortious interference with, and deprivation of, complainant's rights under said contract and for a personal decree for the damages thereby caused; but the pleader seemed to have the idea that although the bill was one for damages in tort, nevertheless because filed in chancery, that court could, for the enforcement of the award of damages, impress a lien on the property out of which the damages arose; and when that portion of the decree which attempts to affix a lien and to order the timber sold is challenged here, appellee by his brief plants himself squarely upon the proposition that the bill was brought under section 407, Code 1930, section 553, Code 1906, which is the section which gives a creditor the right to attack fraudulent conveyances and to have a lien on the fraudulently conveyed property. In taking this position appellee stands directly in the path of Jones v. Jones, 79 Miss. 261, 265, 30 So. 651, wherein it was held that it was never within the contemplation of the said statute "to authorize chancery courts to take cognizance of a suit for unliquidated damages arising out of a tort before there has been any judgment at law ascertaining the damages, the defendant being within the jurisdiction of the court."
Under the cited section, the chancery court had no jurisdiction whatever of this case; there is nothing here but an action at law, and the decrees would have to be reversed and the case dismissed, for entire want of jurisdiction, except for section 147, Constitution 1890. Thus the question is presented as to what is the effect of the fact that the chancery court took jurisdiction of this action at law. In taking jurisdiction of a common-law action, the chancery court is empowered to do all in the matter of relief that the circuit court could have done had the action been filed therein or had been transferred thereto — as should have been done here. But when the chancery court, assuming said law jurisdiction and having done all that the circuit court could have done — namely, has determined the issue of the damages sought, given a personal decree, and ordered execution to issue — can the said chancery court, having done all this, then go forward further and do what a law court could not do with such a case, namely, may it go further and affix a lien, when no such lien could have been impressed in a court of law? We answer that question in the negative.
It is true that when a chancery court takes jurisdiction of what is in reality an action at law, the said chancery court acts under and follows the ordinary and usual procedure appertaining to the chancery court; but this goes no further than the matter of procedure and does not enable said chancery court to enlarge upon any of the substantive rights which would have been available to the successful party had the law case been tried at law, as this case should have been. The fixation of a lien upon property is a matter of substance, although interconnected with the remedy; wherefore, the chancery court while, on the one hand, taking to itself the functions of a law court and having done all the law court could do, cannot then, on the other hand, convert itself, in respect to further or substantive matters, into a true chancery court and extend further relief, which of its own independent jurisdiction it had no power to give. And that is the case here, for of this case the chancery court had none at all of any independent jurisdiction. All the jurisdiction that the chancery court had here was that which passed to it from that of the circuit court through the door of section 147, Constitution 1890, and it had thus no jurisdiction in any matter of substance or of any substantive relief beyond that so derived. It would be remarkable if a prosecuting litigant could profit through wrong recourse to a wrong court and thereby emerge with greater substantial rights than if he had proceeded rightly in the right court. In our opinion the accomplishment of such an ultimate result is not within the purpose of section 147, Constitution, and it cannot be used to that end.
It follows therefore that all that part of the principal decree which attempts to fix a lien upon the timber and to order a sale thereof is void — is mere surplusage without force or effect — as are the further decrees on that subject. That part of the decree, however, which adjudges the damages and awards execution, not being shown to be erroneous, must be allowed to stand; and under the authority of Grenada Gro. Co. v. Tatum, 113 Miss. 388, 74 So. 286, the decrees will be reversed, and a decree entered here for that which would have been proper as a law judgment, but vacating all those features of the decrees which go beyond that and have to do with the lien mentioned, with costs against appellee as to all the proceedings subsequent to December 17, 1929, including this appeal.
Reversed and decree here.