This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
While the applicability of the Statute of Frauds to the creation of such a lien appears to be generally recognized,61 there are quite a number of decisions that the transaction is taken out of the statute on the theory of part performance, in case, on the faith of the verbal agreement, money was advanced by the person claiming the lien.62
In order that an equitable lien be thus created on land by agreement, it is necessary that the land itself row, 33 Colo. 509, 108 Am. St. Rep. 107, 81 Pac. 242; Tiernan v. Poor, 1 Gill. & J. (Md.) 216; Davis v. Clay, 2 Mo. 130; Dwight v. Newell, 3 N. Y. 185; Lanning v. Thompson, 45 Barb. (N. Y.) 308. 60. Ex parte Hall, 10 Ch. Div. 615; Jarvis v. Jarvis, 63 L. J. Ch. 10; Driver v. Broad (1893), 1 Q B, 539. In re Beetham, 18 Q. B. Div. 380, 766; Edwards v. Scruggs, 155 Ala. 568, 46 So. 850; Lane v. Lloyd, 33 Ky. L. Rep. 570, 110 S. W. 401; Clabaugh v. Byer-ly, 7 Gill (Md.) 354, 48 Am. Dec. 575; Kelly v. Kelly, 54 Mich. 30, 19 N. W. 580; Marquat v. Marquat, 7 How. Pr. (N. Y.) 417; Meixell v. Meixell, 161 App. Div. 518, 146 N. Y. Supp. 587. And sea Goodman v. Randall, 44 Conn. 321; Bowers v. Oyster, 3 Pen. & W. (Pa.) 239.
61. See last preceding note.
62. King v. Williams, 66 Ark. 333, 50 S. W. 595; Foster Lumber Co. v. Harlan County Bank, 71 Kan. 158, 114 Am. St. Rep. 470, 80 Pac. 49; Cole v. Cole, 41 Md. 301; Irvine v. Armstrong, 31 Minn. 216, 17 N. W. 343; Putnam v. Summerlin, 129 Mo. App. 353, 108 S. W. 625; Dean v. Anderson, 34 N. J. Eq. 496; Sprague be specified in the instrument,63 and that the intention clearly appear that the land is to be security for the performance of the obligation.64
- Deposit of title deeds. In England it is a well-established doctrine that, if the title deeds to land arc deposited by a debtor with his creditor, such deposit is evidence of an agreement to create a mortgage or charge on the land, which equity will enforce.64a The deposit of the deeds does not itself create a charge, but is merely evidence, with other circumstances, of an agreement to create one,65 and is regarded as a part performance taking the agreement out of the Statute of Frauds.66
A lien or charge of this character has been recognized in a number of judicial opinions in this country, usually, however, in cases not directly involving the validity of such a lien.67 In others, such a deposit is v. Cochran, 144 N. Y. 625, 38 N. E. 1001; Baker v. Baker, 2 S. D. 261, 49 N. W. 1064.
63. Mornington v. Keane, 2 De Gex & J. 292; Borden v. Croak, 131 I11. 68, 19 Am. St. Rep. 23, 22 N. E. 793; Carmichael v. Arms, 51 Ind. App. 689, 100 N. E. 302; Adams v. Johnson, 41 Miss. 258; Lee v. Cole, 17 Ore. 559, 21 Pac. 819; Boehl v. Wadgymar, 54 Tex. 589. Compare Payne v. Wilson, 74 N. Y. 348, in which case an agreement to give a mortgage on one of several houses was regarded as effective.
64. Mornington v. Keane, 2 De Gex & J. 292; Bowen v. McCarthy, 127 I11. 17, 18 N. E. 757; Carmichael v. Arms, 51 Ind. App. 689, 100 N. E. 302; Falmouth Nat. Bank v. Cape Cod Ship Canal Co., 166 Mass. 550, 44 N. E. 617; Hos-sack v. Graham, 20 Wash. 184, 55
Pac. 36; Knott v. Shepherdstown Mfg. Co., 30 W. Va. 790, 5 S. E. 266.
64a. 1 Coote, Mortgages (8th Ed.) 67 et seq.: Story, Equity Jur. Sec. 1020; Russel v. Russel, 1 Brown Ch. 269, 1 White & Tud. Lead Cas. Eq. 931.
65. Norris v. Wilkinson, 12 Ves. 192; Chapman v. Chapman, 13 Beav. 308; Ashburner, Mortgages, 26. Consequently, a deposit merely to enable the lender to prepare a regular mortgage is not suffi cient to create a lien. Norris v. Wilkinson, 12 Ves. 192; Lloyd v. Attwood, 3 De Gex & J. 614, 651; Hutzler v. Philips, 26 S. C. 136, 4 Am. St. Rep. 687, 1 S. E. 502.
66. Russel v. Russel, 1 Brown Ch. 269; 1 Coote, Mortgages, 68.
67. Jennings v. Augir, 215 Fed. 658; Richards v. Learning. 27 I11. 431; Hall v. McDuff, 24 Me. 311; regarded as not creating a lien, on the ground that the contrary view is inconsistent with the system of conveyancing and registration in force in this country, and also involves a violation of the Statute of Frauds.68 It would seem that, as between the original parties, and as against purchasers with notice, the only objection to the efficacy of the charge in such a case lies in the fact that it is not evidenced by a writing complying with the Statute of Frauds. If an agreement for a charge or mortgage is so evidenced, the fact that there is a simultaneous deposit of title deeds cannot affect the validity of the agreement as creating a lien; and the English cases take the further step of regarding the deposit of the deeds with the lender as sufficient performance to take the agreement out of the statute. In this country, where the title deeds are, by reason of the recording system, of but little importance as evidence of title, it does not seem that their deposit with the lender can well be regarded as part performance of the agreement.