FEDERAL.REPORTER.
evi4ence that that neither that defendant. nor the plaintiffs had any title or right or'possession. Besides, the husband has· a right to live with :his wife on her lands, and a judgment of ouster against him on a lease of hel," lands, not assented to by her, an,d which he had no right to make, that did not bind her, would result in dispossessing the wife from her lands, or in. separating husband and wife. .Neither of these things can be done. . The right of possession in the wife enures to the beuefit of the husband, in such case, and as the plaintiffs have no right of possession against the wife, have none against the husband, by reason of the paramount right and duty of. .husband and wife 'to live together, a,nd which is a right and duty founded on such high considerations of public policy that no instrument executed by either can be used by a third party, by way of estoppel or otherwise, to destroy the'right or release from the duty.
BUTLER
and others, Trustees,
'D. DOUGLASS
and others.
(Circuit C'ourt, E. D. .Arkansas. - - , 1880.) 1. EQUITY";" STATE AND FEDERAL COURTs.-In the detennination of a question of equity law, the. federal and state courts appeal to the sources of information on equity jurisprudence, and the decisions of either are not binding on the othet. 2. SAME'-VENDOR'S LIEN-FoRECLOSURE-STATUTORT BAR.-In Arkansas there is no statutory bar J;o a suit in equity to foreclose a vendor's lien for the purchase money of real estate, where the vendor has not parted with the legal title. S. SAME-SAME-SAME-REASONABLE TIME.-In such CMe the lien must be enforced within a reasonable time, and the federal courts hold that that reasonable time is not less than 20 years. 4. SAME-LEGAL TITLE-BONA FIDJ£PURCHASE-NoTICE.-The protection extended by a court of equity to a bona jide purchaser belongs onlY to the purchaser of the legal title without notice of an outstanding equity, He who purchases no legal title is not protected, even though without actual notice.
B. C. Brown, for plaintiffs. Pindall, DodfJe &; Johnson, for defendants.
BUTLER V. DOUGLASS.
613
MCCRARY, C. J. This c'ausa has been submitted upon pleadings and proofs. The facts are as follows ':' The com· plaina;nts, being the owners of the real estate described in tIle bill, contracted to sell the BaIne to B. W. Lee and Alfred Douglass. Lee [{aVe notes for the purchassmoney, and ants, retaining title 'inthemselv6s, gave a bond <londitioned for a conveyance upon payment of the'notes. ' . , The purchase-money notes are still, 'held unpaid by com· plainants, who bring this suit to enforce their vendor's The purchasers, B. W. Lee and Alfred Douglass, 'Sold'the land to the defendant Thomas Douglass, making to him a deed;under which he entered into possession and had held the same for a period of about 18 years prior to the commen'cement of this suit. There is a plea of the statute of limitations. 1. The supreme court of this state have decided that there is no statutory bar to a suit in equity to foreclose a vendor's lien for the purchase money of real estate where the velidor has not parted with the legal title. Hall v. Denckkt, 28 510. Whether, therefore, a federal court of equity in this state should, by analogy, iltdopt as the period of limitatibn the length of time required to bar an action at law for the purchase money, or an action of ejectment for the land, or whether the payment of the purchase money and of the lien will only be presumed after the lapse of 20 yeitrs, is, a question of equity law to be determined by a resort to the recognized authorities and sources of information 6n ,equity jurisprudence. In the determination of such a qnestion 9f equity law the federal and state courts appeal to the Same sources of infoI'. mation, and the decisions of either are not binding-on the other. Johnston v. Roe, 10 Cent. Law Jour. 328, [So C. 1 Fed. REP. 692,] and cases cited. 2. The defendant Thomas Douglass was not an innocent purchaser without notice, because his grantors had only an equity in the land. He was bound to take notice of the fact that the legal title was in complainants, and held as security for the unpaid purchase money. The protection extended by a court of equity to a bona fide purchaser belongs only to tlie
614
FEDERAL REPORTER.
purchaser of the legal title without notice of an outstanding equity. He who purchases no legal title is not protected, even though without actual notice. Story's Eq. Jur. § 1502; Vattier v. Hinde et al. 7 Pet. 252. 3. When a purchaser goes into possession under a contract of purchase, equity makes the vendor a'trustee to the vendee for the conveyance of the title; the vendee is a trustee for the payment of the purchase money and ,the performance of the terms of the purchase. 10 Pet. 225; Lewis v. Hawk· ins, 23 Wall. 119. Such a trust, however, must be enforced within a reasonable time. What that reasonable time is may be somewhat unsettled, and may vary according to circumstances; but it is settled, so far as the federal courts are concerned, that it is not less than 20 years. Boone v. Childs, 10 Pet. 177, 223-224; Lewis v. Hawkins, supra. The statute of limitations did not run against complainants during the war of the rebellion. Brownv.Hiatts, 15 Wall. 178. As the time of the defendant's occupancy has been less than years, exclusive of the period of war, the defence of the statute of limitations is not good, and there must be a decree for complainants. ON REHEARING.
Upon motion of counsel for respondents, in the foregoing case, a reargument was ordered, and the calilO has been reconsidered. It is insisted that it has become So rule of property in Arkansas that suits in chancery, to enforce a lien upon real estate created by sale under title bond, must be commenced within the same period limited by law for bringing ejectment, in analogy to the statute of limitations. This suggestion is answered by the case of Lewis v. Hawkins, 23 Wall. 119, which went up from Arkansas. In that case the supreme court say: "In many of the cases it is held that the lien of the vendor, under the circumstances of this case, is substantially ,a mortgage. It is well settled that the possession of the mortgagor is not adverse to the mortgagee. In the case last cited it is said that to apply the statute of limitations 'would be like making the lapse of MCCRARY, C. J.
615
time the origin of title in the tenant against his landlord.' That the remedy upon the bond, note, or /simple contract for the· purchase money is barred in cases like this, in nowise affects the right to proceed in equity against the land. As in respect to mortgages, the lien will be presumed to have been satisfied after the. lapse of twenty years from the maturity of the debt, but in both cases laches may be explained and the presumption repelled. The principles upon which this opinion proceeds are distinctly recognized in Harris v. King, 16 Ark. 122. That case alone would be decisive of the case before us. The considerations which apply where the vendor in such cases resorts to an action of ejectment were examined by this court in Burnett v. Caldwell, 9 Wall, 290." The case of Burnett v. Ca,ldwell here referred to seems to establish conclusively the doctrine that the vendee, under a bond for a'deed, though placed in possession by the vendor, does not hold adversely to the latter. The court say: "If the contract stipulates for possession by the vendee, or the vendor puts him into possession, he holds as a licensee. The relation of landlord and tenant does not exist between the parties. The characteristic feature of that relation is wanting. The vendee p:1Ys nothing for the enjoyment of the property. The case comes within the category of a license. In such cases the vendee cannot dispute the title of the vendor, any more than the lessee can question the title of his lessor." In Harris v. King, (16 Ark. 122,) the supreme court of Arkansas recognized the doctrine announced in these decisions. I do not feel at liberty to depart from that doctrine, and I do not think it can be maintained that a different rule has been, by other and later decisions, so firmly established in Arkansas as to constitute a settled rule, respecting property in that state, which the federal courts are bound to follow. The doctrine that the purchaser who enters into possession without obtaining a conveyance of the legal title, and without paying the purchase money, who holds only under a bond for a deed, to be executed when the purchase price is paid, is a mere licensee, and a trustee for his vendor, having no adverse relation to him, is so well grounded in reason, and so thor-
616
FEDERAL REPORTEr..
oughly fortified by authority; that I am not disposed to depart from it. By the very fact of taking and holding under a bond for a deed to be thereafter executed by the vendor, such a purchaser recognizes the title of his vendor, and aclmowledges himself as holding in subordination, and not in antagonism,to it. True, this relation may s.ub:3equently be changed, and the purchaser may assume an adverse position; but, when this is claimed, it must be shown by proof. If it appears that he entered into possession under a. bond for a deed, and in amity with the holder of the fee, the la,w will presume a continuance of that relation until the contrary appears. And it is equally clear that one who purchases from the holder of a mere equity of this charader takes no greater rights, or stronger equity, than his vendor possessed. It is said that the lien of the vendor in such a case is sub. stantially a mortgage, and that a suit to foreclose a mortgage must be brought within the period fixed for commencing an action of ejectment tu recover possession of the land. But this position is directly in conflict with the ruling of the supreme court of the United States in Lewis v. Hawkins, supra, where it is held that "the possession of the mortgagor is not adverse to that of the mortgagee," and that to apply the statute of limitations "would be like making the lapse of time the origin of title in the tenant against his landlord;" aud where it is said that the lien of a mortgage "will be presumed to have been satisfied after the lapse of 20 years from maturity of the debt," unless the laches be explained, and the presumption repelled. It seems to me that this decision establishes the rule by which I must be governed as a matter of authority. It also commends itself to my mind as eminently just 'and reasonable.
RORTER
v.
CITY OF JANl!l8VILLE.
617
PORTER
THE CITY OF JANESVILLE.
(Oircuit Oourt, 1. ACT OF MAUCH
w:
D. lVi·sconsiil..' - - , 1880.) OF MUNICIPAl, BOND-
CIRCUIT COURTS-JURISDICTION-ASSIGNEE
3, 1875, c. 137, § I.-The circuit courts of the United
States have jurisdiction, under seetion I, c. :137, of the act of March 3, 1875, over a suit brought by the assignee of a municipal bond, where such bond is in form a simpleacknowledgmertt of indebtedness, and au. unconditional promise to pay a certain 811m of at a time certain. . 2. NEGOTIABI,E BEARER" 01' "ORDER. "-The , words " bearer ", or" order II are not essential to the negotiability of a promissory note.
Demurrer to complaint. Wm. Ruyor, for plaintiff. Ed. F. Carpenter and John Winans, for defendant. BUNN, D. J. This action is brought by the plaintiff, who is a citizen of Massachusetts, against the city of Janesville, in Wisconsin, to recover the amonnt of a certain bond for the sum of $1,000 and interest issued by the defe'ndant to the Rock River Valley Railroad Company, a corporation in Wisconsin, and assignee to the plaintiff. The following is a copy of the bond: UNITED STATES OF AMERICA, STATE OF WISCONSIN,
J ANESVII,LE, July 1, 1853. $1,000. JANESVILLE SCnIP. No. 47. This certifies that the city of Janesville is indebted to the Rock River Valley Union Railroad Company in the principal sum of $1,000, payahle to said company or its assignees at the end of 20 years from the first day of July, 1853, with interest at the rate of 8 per cent. per annum, payable semi-annually in the city of New York, on delivery of t,he interest warrants hereto annexed, as they shall respectively become payable, until said principal sum is fully paid. In testimony whereof, and pursuant to a vote of the common council and citizens of the city of 'Janesville, in a city meeting