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Brown v. Blankenship, &c.

court passed on said objection. The appellee Blankenship was permitted to file an amended answer, in which, after withdrawing the statement that he sold said land to Haden Allen for $375, he then stated that he sold the two Allens his farm for $1,775, and then said Allens divided said land, and Haden Allen took the land in controversy, and Woodson Allen the balance, and for same they paid him $669 in hand, and for their accommodation he delivered to said Haden Allen the bond filed in this suit, and executed to Woodson Allen the title bond for the balance of the farm, and, by Allen's request, took a note executed by Woodson Allen for $900, and Haden Allen's note for $206 for the balance purchase money on said farm, and delivered back to them the two notes of $900 and $206, and that the said Allens then executed the note of $1,110. He says that said Allens paid to W. T. Prather, August 24. 1894, $900. It is further alleged that plaintiff knew these facts before he purchased the land, and that said Allens owed the balance of $210 purchase price of said farm sold to said Allens. He also tendered a deed which, of course, retained a lien for the money claimed to be due. The defendant Prater was also permitted to amend his answer and cross petition, in which he substantially makes the same allegations as to the transaction made by Blankenship in his amended answer. The reply of Brown pleads the transaction had between Blankenship and the Allens as an extinguishment of his lien, if ever he had any, on the land in controversy. The reply also traverses the averment that he had any notice of the transaction set up by Blankenship; denies that Allen owed the balance of $210 of the purchase price; denies Prater's lien, that, at the time he bought the land of Haden Allen, Allen represented to him that he had

Brown v. Blankenship, &c.

paid or extinguished the note for purchase money on the land by giving his father as security, or having him sign a note jointly, payable in bank, and that there was no purchase-money lien against the land; that Haden Allen presented and delivered to this plaintiff the note he had given for the land for $206 as purchase money, saying at the time that he had satisfied the lien by the negotiable note signed by himself and father; that plaintiff is therefore a purchaser of said land without notice of defendant's lien or any lien. The reply to the answer of Prater may be taken as a traverse of all the averments therein which show any right to recover in behalf of Prater. The rejoinder of Prater and of Blankenship may be considered a traverse of the affirmative matter contained in the reply. The appellees were afterwards permitted to file an amended answer, in which it was substantially alleged that appellant had notice of the lien claimed by Prater, and agreed to pay the same, which was denied by reply. The plaintiff also, by amended reply, denied that the said Allens, or either of them, signed or delivered the note sued on by Prater, and that neither of them ever authorized any one to sign the note for $1,110, or that the same is their act or deed. The court, upon final hearing, rendered a judg ment against the Allens in favor of Prater for $210, with interest from October 1, 1894, until paid, and further adjudged that Prater has a vendor's lien on the land described in the petition. And from that judgment, appellant prosecutes this appeal.

It is insisted, among other things, for appellant, that taking security for the payment of the Haden Allen note extinguished the vendor's lien, if any he had, on the land. It is also insisted that the pleadings of Prater are insufficient; but it seems to us that the issues were finally made

Brown v. Blankenship, &c.

up. The testimony as to what occurred between appel. lant and Haden Allen at the time of the assignment of the title bond in question is conflicting. There is no evidence to sustain the plea of appellees that appellant undertook or promised to pay the note in question. The circumstances surrounding this case tend very strongly to sustain the contention of appellant that the lien, if any ever existed, was extinguished by the execution of the note in suit. It is certain that Blankenship at one time held the $206 note on Haden Allen as balance purchase money on the land in question, and that he surrendered that note, and, according to his own showing, took a new note, in which was included the $900 due from Woodson Allen, changed the time of payment, and made the note negotiable in bank, and calling for 10 per cent. interest.

In Gaines v. Casey, 10 Bush, 92, we quote fom the syllabus: "Where the holder of a note, secured by a lien on land, accepted in its stead another note executed by the debtor with personal security, the lien was thereby released, even though it was agreed verbally that it should be retained. Ducker v. Gray, 3 J. J. Marsh. 163." In the case supra it appeared that E. N. Casey and Mary Judy made a joint purchase of a house and lot in the town of Walton for the sum of $2,000, all of which was paid in hand, except the sum of $523, and for this amount Casey executed to the vendor, Edwards, his individual note, the deed made for the property retaining a lien to secure its payment. The note was sold by Edwards to Hind, and the latter afterwards surrendered the note to Casey, and took in lieu thereof Casey's note, with Mary Judy as surety. The court, in discussing the question, said: "It is clear that Hind's acceptance of the note of Casey with surety released the lien on the land, although there might have

Brown v. Blankenship, &c.

been a verbal agreement at the time by which this lien was to be retained. The lien, by the express provisions of the statute, must be retained in the deed, and no verbal agreement or writing evidencing its existence can operate to the prejudice or affect the rights of third parties." This court, in Taylor v, Ford, 1 Bush, 44, quoting from the syllabus, said: "In the sale of land and the assignment and delivery of the bond of a third party for the conveyance thereof, no lien exists or is created upon the land for unpaid purchase money, unless the amount remaining unpaid is set forth in express terms in the assignment of the bond, or a lien is therein expressly retained." The court, in discussing the question, said: "In Anderson's Adm'r v. Wells, 6 B. Mon. 540, this court said: 'Conceding that a lien for the construction exists in favor of the assignor of a bond for a title against a remote assignee with notice, as was settled by a majority of this court in the case of Ligon v. Alexander, 7 J. J. Marsh. 289, the lien is sustained only in analogy to the lien which exists in favor of the vendor, who has conveyed by absolute deed, and can be carried no further.' It seems to us that the decision in Gaines v. Casey substantially settles the law to be that Blankenship by the transaction with Haden Allen lost any right to assert a lien upon the land in controversy to the prejudice of third parties. It is, however, insisted for appellee that this court in Bradley v. Curtis, 79 Ky. 327, has, in effect, settled the rule to be that tak ing personal or property security for the payment of a purchase-money note does not release the vendor's lien, unless such was the intention of the holder of the note. It will be seen from the opinion in the case supra that the purchaser of the land was seeking to hold the land so purchased as a homestead; and his contention was that his

Brown v. Blankenship, &c.

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vendor, Ashcraft, had assigned the note to Bradley, and that Bradley had accepted three notes for the principal and interest, at the rate of 10 per cent., with Ashcraft as surety for Curtis, and took from them a mortgage on the twenty acres bought by Curtis from Ashcraft, and also on nine and one-half acres belonging to Ashcraft, to secure the payment of the renewal notes. The wife of Curtis did not unite in the mortgage, and the twenty acres not being worth over $1,000, Curtis sought to hold the same as a homestead. This court adjudged that this transaction did not operate to release the vendor's lien on the twenty acres,-it being a well-settled rule of law that the assignment of a note carries with it whatever lien exists to secure its payment. It is true that this court has repeatedly held that, as long as the purchase money can be traced in the renewal notes, the lien is not extinguished simply by the renewal of the evidence of the debt. But this doctrine applies only to debts for which legal and valid lien existed. Section 2358, Kentucky Statutes, reads as follows: "When any real estate shall be conveyed, and the consideration or any part thereof remains unpaid, the grantor shall not have a lien for the same against the bona fide creditors and purchasers, unless it is stated in the deed what part of the consideration remains unpaid." It will be found, upon examination of the decision hereinbefore referred to, that as to third parties the court seems to recognize that the same rule as to liens for purchase money should be applied to title bonds as is required in respect to deeds, so far as liens for purchase money are concerned. It will be seen that the title bond sued on in this action contains no statement at all indicating that any purchase money remained unpaid. On the contrary, the inference would seem to be that Blankenship had

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