#### Samuel Dyer v. John H. Martin et al.

Appeal from Fulton.

i, Witness — competency of party. In a court of chancery á witness is not necessarily incompetent because he is a party to the record. The enquiry is not so much whether the name of the witness appears upon the record, as whether he is in fact swearing to promote his own interest, (a)

*1532. Same — jurisdiction of chancery. The sources resorted to in a court of equity, for the purpose of ascertaining the truth, are much more numerous [*147] than in a court of law. In chancery a defendant may be compelled, upon his oath, to disclose, in his answer, all he knows of the subject matter of the controversy, no matter how much it may prejudice his pecuniary interest; and by such disclosure he shall be bound, although his answer shall not be allowed to affect his co-defendant. To effect his co-defendant, he must be called upon by the adverse party, in the same way as any other witness, (usually under a rule of the court,) and then the enquiry arises, whether he has any interest adverse to the party against whom he is called. If he has, he is incompetent. If he has not, he is as competent as if his name did not appear on the record. Nor is it a fatal objection that he has an interest in the event of the suit, unless his interest be against the party whose interest is sought to be prejudiced by his testimony; and even where the witness has an interest in favor of the party calling him, he may still be competent, if it appear that he has an equal interest on the other side.

3. Same — incompetent. A had purchased a tract of land of B, upon which there was due, of the purchase money, $575, and had sold the same land to C, but could not make a title to the same, because B would not convey the same before he was p.aid in full for the land. The land was worth $1,500: Held, that in a suit in chancery by C against A and B, for a conveyance of the premises, B was not a competent witness for the complainant.

4. Statute of Frauds — must be pleaded. A parol agreement to sell a tract of land is as binding, in chancery, as a written contract, unless the statute of frauds be set up to defeat the agreement, (b)

5. Vendor and Vendee — vendor's lien. It is a general rule in equity, and it requires a very strong caseto make an exception, that no man shall be compelled to part with his title until he receives the consideration agreed to be paid for the same ; and so vigilant are courts of equity to protect the seller, that although an absolute conveyance be made, and no mortgage or other security taken, still in the hands of the vendee, or a subsequent purchaser with notice, the vendor has a lien on the land for his money, (c)

6. Possession — notice of claim. The posression of a person residing upon a tract of land is notice to all the world that he has some interest in the land ; and whoever purchases the same while that possession is continued, takes the premises subject to that interest, whatever it may be. (d)

7. Same — same. A agreed by parol to sell to B a tract of land for $750, of which B paid $150, and the balance was suffered to remain on interest at twelve per centum per annum. B afterwards agreed to sell to C several tracts of land, and among others, the tract of land purchased of A, and executed to C a bond for the conveyance, upon' payment of the purchase money. Afterwards A promised to convey the land to C, and A, as clerk of B, received from C the balance of the purchase money agreed tobe paid by C to B, but without knowing on what account it was paid. A knew of the sale to C, and pointed out a part of the land sold to C, at the request of B, and in so doing passed over the land sold by A to B. A was then residing upon and in possession of the premises, and no questions were asked byC, or explanations made by A, as to the interest of the latter m the premises. Subsequently C took possession of the land, and made improvements thereon to the value of $100 and the same spring A rented a part of the premises from C. The next year A and B had a settlement, and B being indebted to Ain $575, and being insolvent, made an assignment for the benefit of his creditors, and preferred A for $500. The premises were worth about $1,500: Held, that A’s possession was notice to C of A’s lien upon the land for the purchase money, and that he did not release that lien by surrendering the possession, and renting a portion of the land of C. Held, also, that it was not the duty of A to disclose to *154C, his lien upon the premises, when not interrogated; and that he could not be compelled to part with his title, till he received payment in full of the purchase money: Held, also, in a suit in chancery by C, for a conveyance, that the decree should provide, that in case C should pay to A, within the proper time, the $575 and interest, A should not only.convey the land to C, but also his claim, to that amount, against B, and also whatever he might be entitled to under the assignment of B ; and in case C should fail to pay the money, within the time limited, the land should be sold, and after paying A out of the proceeds, the balance should be paid to C.

8. Estoppel — ■concealment. Semble, That where it appears that an owner of a tract of land, knowing that another person, to whom he had agreed to convey the same, had exhibited to a purchaser an apparently clear title to it, silently stood by, and saw him purchase it under the Impression that he was getting a good title, a court of equity would not permit the owner subsequently to set up a title which he had fraudulently concealed, (e)

This cause was heard in the Fulton circuit court, at the [*148] August term, 1842, before the Hon. Stephen A. Douglass.

C. Walker and Jesse B. Thomas, for the plaintiff in error:

A person having the legal title, who acquiesces in the sale of land by another, claiming, or having color of title to it, is estop-ped from afterwards asserting this title against a purchaser, especially if he has advised and encouraged such sale. Storrs et al. v. Bowker, 6 Johns. Oh. R. 166; Roberts on Frauds 130, 131, 132, 185.

Where an administratrix sold real estate of her decedant, under a surrogate’s order, in which she was entitled to dower, and in the terms of sale it was stated that a clear and satisfactory-title would be given, and the purchaser paid the full value of the premises, under the belief that he was obtaining a good title: Held, that the silence of the administratrix as to her claim of dower was such a fraud on the purchaser, as to preclude her from afterwards setting up such claim against him or his assigns. Dougrey v: Topping, 4 Paige 94.

A person who, having a conveyance of land, keeps it secret for several years, and suffers third persons to purchase and improve it, etc., is not permitted afterwards to assert his legal title against such purchaser. Wendell v. Van Rensselaer, Johns. Ch. R. 344.

A person having title to land stands by while another is making a bargain for the purchase of it, without disclosing his claim : he cannot afterwards set it up against the purchaser. Riven v. Belknap, 2 Johns. 573.

Where the owner of real estate suffers another to purchase the estate for a third person, and to erect valuable buildings thereon, under the erroneous belief that he has a good title, and intentionally conceals from the purchaser his claim to the *155property, such owner will not afterwards be permitted to enforce his claim against such purchaser. Town v. Needham, 3 Paige 546.

A. T.- Bledsoe, for the defendant in error.

(a)

Cases Citing Text. Held in 1865, that witness was competent where his interests were balanced. Smalley v. Ellet, 36 Ill. 500, 503.

Interest to disqualify witness must be certain, legal and immediate (1865). Smith v. Newton, 38 Ill. 230, 234.

Defendant interested in event of suit held competent witness against co-defendant (1866). Walker v. Dement, 42 Ill. 272, 276.

R. S. 1874. Evidence Ch. 51 § 1, first enacted in 1867, removes interest as general disqualification.

If witness is called to testify in his own behalf and in behalf of another, and under statute, he is incompetent to testify in his own behalf, his evidence should not be admitted at all (1879). Bragg v. Geddes, 93 in. 39. 52.

(b)

Rule, stated in head note, enforced. Tarleton v. Vietes, I Gilm. 470, 473; Esmay v. Groton, 18 Ill. 483, 486.

(c)

r) Vendor of real estate has equitable lien for purchase money against vendee and purchaser from him with notice, although absolute conveyance is made and no security taken. Wilson v. Lyon, 51 Ill. 166, 169.

(d)

Rule stated in head note enforced. Rupert v. Mark, 15 Ill. 540, 542 ; Prettyman v. Wilkey, 19 Ill. 235, 241; Metropolitan Bank v. Godfrey 23 Ill. 579, 607; Flint v. Lewis, 61 III. 299, 306 ; Coari v. Olsen, 91 III. 273, 230.

(e)

Wife may redeem from foreclosure sale her equitable estate in property conveyed by husband and herself to secure loan to husband, where husband and wife are in occupation of land as homestead, Whitcomb v. Sutherland, 18 Ill. 578, 579,

Catón, Justice,

delivered the opinion of the court: .The complainant filed his bill in chancery, against Martin & Evans, in the Fulton circuit court, praying the conveyance to him of a certain lot of land. The bill states that on the 26th of August, 1886, he purchased of Evans 320 acres of land, including the premises in question, for the sum of $2,000, of which he paid down $1,400, and gave his note for the balance, payable in December following, and took a bond for warrantee deed of the premises; and that he supposed, at the time, that Evans could make a good title to the land. That after the complainant had paid all but $40 of the purchase money, Evans informed him that he had no title to the land, but that he had [* 149] purchased it of Martin by a parol agreement, for $750, of which -he had paid $150, and the balance was converted into a loan at twelve per cent, interest, and considered as a payment for the land. That afterwards Martin promised to convey the land to the complainant, without claiming any lien for the purchase money. That afterwards, Martin, as the clerk of Evans, received the balance of $50 due on the purchase from Evans, and again promised to convey. That Evans made the deed for the land mentioned in the bond, except the lot in controversy. That Martin knew of the sale by Evans to the complainant, and by Evans’ directions, pointed out the land to him, and at that time Martin set up no claim to the land in controversy. That in the spring of 1837, the complainant took possession of the land in controversy, and made improvements thereon to the value of $100 and in the same spring Martin rented a part of the land of the complainant. That in February 1838, Martin and Evans made a settlement, and Evans was found indebted to Martin in the sum of $575; and Evans, being insolvent, made an assignment for the benefit of his creditors, and preferred Martin for $500. That after Evans failed, Martin refused to convey; and the land in controversy is worth $1500.

The answer of Martin admits the complainant’s purchase, as stated in the bill; but says he does not know whether the complainant knew of his claim on the land or not. That at the time of the purchase, Martin was in possession of the land in question, and the complainant made no enquiries. He admits the verbal agreement to sell to Evans, substantially as stated in-the bill, but says he was to hold the land as security. He admits the payment of the $150, and denies the payment of the balance. Admits that he told the complainant that he would convey to him whén he was paid; admits that he knew of the purchase, and pointed out *156the other lots mentioned in the bond, but not the one in controversy, although they passed over this in going to see the others. Admits he received the $50 of the complainant, as clerk of Evans, but did not know- on what particular account. Martin left the land in July, 1837, and the next fall the complainant took possession, and the defendant acquiesced, supposing he would soon receive his pay. He admits that he rented of the complainant a part of the land, and that the complainant made improvements. He admits the settlement with Evans, as stated in the bill, and that there was $575 of the purchase money found due. He also admits Evans’ assignment as stated in the bill, and that he is a preferred creditor to the amount of $500. He also admits that he executed a bond to the complainant to convey the land, and that he is willing to convey when he receives the purchase money.

Evans 'filed no answer. A replicatibn was filed to [* 150] Martin’s answer, and proofs taken. The deposition of the defendant Evans was taken on the part of the complainant, by agreement subject to objection. Before the hearing, Martin filed exceptions to the deposition of Evans, and the exceptions were sustained, and the deposition rejected; and this is one of the errors assigned.

In a court of chancery a witness is not necessarily incompetent because he is party to the record. Here the enquiry is not so mu.ch whether the name of the witness appears upon the record, as whether he is in fact swearing to promote his own interest. The sources resorted to for the purpose of ascertaining the truth are much more numerous in courts of chancery than in courts of law. Here a defendant may be' compelled upon his oath, to disclose, in his answer, to all he knows of the subject matter of the controversy, no matter how much it may prejudice his pecuniary interest; and by such disclosures he shall be bound, although his answer shall not be allowed to affect his co-defendant. To affect bis co-defendant he must be called upon by the adverse party,Tn the same way as any other witness, (usually under a rule of the court,) and then the enquiry arises whether he has any interest adverse to the party against whom he is called. If he has, he is incompetent. If he has not, he is as competent as if his name did not appear on the record. Noris it a fatal objection that he has an interest in the event of the suit; but his interest must be against the party whose interests are sought to be prejudiced by his testimony ; and even when the witness has an interest in favor of the party calling him, he may still be competent, if it appear that he has an equal interest on the other side. Then his interests are equally balanced, and his mind is in a state of equipoise, which leaves him as indifferent as to the result, as if he had no interest in the event. The enquiry then is, whe*157ther this is the situation of this witness Evans, because it is not, and cannot be denied, that he has important interests involved in this controversy. He is interested that the decision should be that the complainant could only get the land by paying the balance of $575 still due Martin, for in that way that debt at least would be discharged. Should Martin be decreed to convey the land to the complainant, then Evans would be discharged from his obligation on the bond by which he has bound himself to convey this land to the complainant; so that his interest in favor of the party calling him is to the amount of the value of the land which he states in his bill is worth $1500; while his interest, as before stated, is at most but $575, with Martin. The interest which he has in the event of this suit, preponderating in favor of the complainant, he was an incompetent witness for him, as was properly decided by the court below.

The next and principal question is, whether it appears by [* 151] the other depositions, that Martin’s conduct was such as to forfeit his lien on the land for the purchase money unpaid ? Although the agreement to sell, from Martin to Evans, was by parol, still as Martin has not set up the statute of frauds in his answer, or relied upon it in any way in his defence, he must be bound by his’ agreement, to the same extent that he would have been had the agreement been reduced to writing. On looking through the depositions, I can find no evidence to even raise a plausible pretext for the conclusion that the land was ever paid for by Evans, nor indeed was it seriously contended at the bar that such was the case; so as between Evans and Martin, the latter could resist the conveyance till he had received his money. In fact, it is a general rule in equity, and it requires a very strong case to make an exception, that no man shall be compelled to part with his title till he receives the consideration; and so vigilant are the courts of equity to protect the seller, that although an absolute conveyance be made, and no mortgage or other security taken, still in the hands of the vendee, or a subsequent purchaser with notice, the vendor has a lien on the land for his money.

Here Dyer, by his purchase, succeeded to all of the right which Evans had against Martin, and no more, unless Martin was guilty of fraud in suppressing the knowledge of his interest in the land from Dyer, or unless he has subsequently released his lien, either expressly or impliedly. The facts on this point are, that Martin had a general knowledge, at the time, of the sale from Evans to Dyer, and that he went and pointed out a part of the land sold, and in doing so, passed over the land in dispute. At this time Martin was residing upon and in possession of the land in controversy, and no questions were asked by Dyer or explanations made by Martin, as to his interest in the premises. *158That some time after, Martin gave up the possession to Dyer, and subsequently rented a portion of the land of him. There is considerable evidence of subsequent attempts at negotiation, and of loose, incidental, and ex-parte conversations of all the parties, but-nothing further that is entitled to any weight in the present enquiry. Martin’s possession was notice to all the world, that • he had some interest in the land ; and whoever bought the land, while that possession continued, took it subject to that interest, whatever it might be. 1 Story’s Eq. 388-9; 2 Yesey 437; 13 Yesey 118; 2 Paige 300; 3 Paige 421; 16 Vesey 249; 5 Johns. Ch. R.. 29. But this was not all in this case. Everything seemed to conspire to put a prudent man on inquiry to see what he was buying. The records of the county showed that his vendor had no title; he could show nothing on paper as evidence of his title, and another man was in possession; and now, with great simplicity, he complains that Martin never told him what right [* 152] he had to the land, although he never asked him the question. Surely, if Dyer, who had so much interest to know, would not take the trouble to make the inquiry, by no principle of law or common courtesy, did it become Martin’s duty to volunteer an explanation of a matter which he might well suppose was already understood by Dyer. If he would hot make the enquiry, he shall not now complain that he was ignorant. Instead of his ignorance being the result of the fraud of Martin, it was chargeable to his own folly or negligence.

And now did Martin lose his lien by delivering up the possession to Dyer, and subsequently treating him as the owner, by renting a portion of the land of him ? I think the only reasonable conclusion from these acts is-, that Martin considered the parol agreement with Evans, as obligatory, and that he intended to carry it out in good faith. Had that agreement been in writing, and recorded, I think it could not reasonably be claimed that the delivery of possession would destroy or indicate an intention to abandon his lien; and certainly his rights and claims are no weaker here than they would have been in that ease. I do not think that fraud is properly imputable to Martin. His case is widely different from one who stands by and sees and encourages a sale of his land by another, and fraudulently suppresses the knowledge of the existence of his title. Here there appears nothing to have induced the belief or supposition in Martin, that Dyer was ignorant of the true situation of the title, while everything combined_ to admonish the purchaser that Martin had an interest there. Did it appear that Martin knew that Evans had exhibited to Dyer an apparently clear title • to the land, and silently stood by, and saw Dyer buy it, under the impression that he was getting a good title, this court would not now allow him to set up a claim which he had thus fraudulently concealed. Then, *159indeed, it might be said that he had kept silent when equity required him to speak, and now he should not speak, when conscience commanded silence.

I am of opinion that the court was correct in determining that Martin should not be compelled to part with his title until he should receive his money; but as it appears that Evans was insolvent, and had made an assignment for the benefit of his creditors, in which Martin was preferred, I think the decree should have provided, that in case Dyer, within the proper time, should pay the $575 and interest, Martin should not only transfer the land to Dyer, but also his claim to that amount against Evans, and also whatever he might be entitled to under the assignment of Evans. I also think the decree should have further provided that in case Dyer should fail to pay the money, within the time limited, that then the land should be sold, and after paying Martin out of the proceeds, the balance should be paid to the complainant. The decree of the court below is reversed, [* 153] and the cause remanded, with directions to enter a decree in conformity with this opinion; the costs of the appeal to be divided between the appellant and the defendant Martin.

Decree reversed.