U.S. Supreme Court
Bayley v. Greenleaf, 20 U.S. 7 Wheat. 46 46 (1822)
Bayley v. Greenleaf
20 U.S. (7 Wheat.) 46
The vendor of real property who has not taken a separate security for the purchase money has a lien for it on the land as against the vendee and his heirs.
This lien is defeated by an alienation to a bona fide purchaser without notice.
Nor can it be asserted against creditors holding under a bona fide conveyance from the vendee.
The lien of a vendor, if in the nature of a trust, is a secret trust, and although to be preferred to any other subsequent equal equity unconnected with a legal advantage or equitable advantage which gives a superior claim to the legal estate, will be postponed to a subsequent equal equity connected with such advantage.
Quaere whether the lien can be asserted against the assignees of a bankrupt or other creditors coming in under the purchaser by act of law?
The dictum of Sugden in his Law of Vendors 364 examined and questioned.
This suit was brought by the appellant in the circuit court for the County of Washington for the purpose of subjecting a tract of land lying within that county, which was sold by the plaintiff, Bayley, to the defendant, Greenleaf to the payment of so much of the purchase money as still remains due. It appeared by the proceedings in the cause that in the year 1792, William Bayley, purchased from William B. Worman, chanrobles.com-red
the land which is the subject of this suit, which he afterwards sold to James Greenleaf to whom the title was made by Worman. A bond was given by Greenleaf to Bayley for the purchase money, which, in March, 1796, was surrendered to Greenleaf on his accepting bills drawn in favor of Clement Biddle, for its amount. Some of these bills were alleged to be unpaid, and were produced by the plaintiffs.
On 30 September, 1796, James Greenleaf, being then greatly indebted, conveyed sundry estates, and among others, the land in controversy, to George Simson, in trust for the security of Edward Fox, who had entered into engagements for the said Greenleaf to a very large amount. The deed was also made to secure the said Fox for any further advances he might make to or engagements he might enter into on account of the said Greenleaf.
On 23 March, 1797, George Simpson conveyed this land to the defendants, Pratt, Francis and others, as trustees for the uses and purposes mentioned in the deed from Greenleaf to Simpson. On 26 June 1797, a general deed was made to the same persons by Robert Morris, John Nicholson, and the said James Greenleaf conveying to them the property mentioned in the deeds of 30 September, 1796, and of 23 March, 1797, with an immense mass of other property, for the payment of debts to a very great amount due from the said M.N. and G. which were enumerated in the said deed.
Some doubts having been entertained respecting the recording of these deeds, an attachment was sued chanrobles.com-red
out by the trustees against the said Greenleaf in the county in which the said lands then lay, on which judgment was obtained on 8 February, 1798, and on the 28th day of the same month the land was sold under the judgment, purchased in for the trustees, and afterwards conveyed to them to the same uses and trusts as had been expressed in the original conveyance by deed dated in 1803.
In March, 1798, James Greenleaf took the benefit of the insolvent law of the State of Pennsylvania, and in November of the same year, he was also discharged under the insolvent law of the State of Maryland. In November 1803, he was declared a bankrupt under the laws of the United States. The plaintiff, William Bayley, also became a bankrupt under the laws of the United States in July, 1802.
The trustees alleged they had contracted to sell the land in controversy to James Greenleaf, but that he had not paid the purchase money, in consequence of which they retained the legal title.
This suit was brought in the year 1812 by William Bayley, and by James S. Morrell, as trustee for the creditors of the said Bayley, and executor of the original assignee of the bankrupt, who is dead. chanrobles.com-red