Bayley v. Greenleaf (1822)
In Bayley v. Greenleaf (1822), 20 U.S. 46, there was an outstanding vendor's lien, set up to defeat a deed made to trustees for the benefit of the vendees' creditors.
The court held it to be a secret trust; and although to be preferred to any other subsequent equity unconnected with a legal advantage, or equitable advantage, which gives a superior claim to the legal title, still, it must be postponed to a subsequent equal equity connected with such advantage.
Marshall, C.J., said:
"A vendor relying upon this lien, ought to reduce it to a mortgage, so as to give notice of it to the world. If he does not, he is, in some degree, accessary to the fraud committed on the public, by an act which exhibits the vendee as the complete owner of an estate on which he claims a secret lien." The remarks of Marshall, C.J., were very sensible:
"The lien of the 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 equity connected with such advantage."