Ewins v. Gordon

49 N.H. 444

Opinion

Foster, J.

The testimony in this case is conflicting, and the views expressed by the parties with regard io their mutual relations and understandings, quite irreconciliable. It is to be hoped that this conflict has arisen rather from an honest misunderstanding them from intentional fraud or misrepresentation ; but, however this may be, the evidence, as -we regard it, so strongly preponderates upon the side of the plaintiffs, that, in all particulars essential to a decision of the cause, we consider the allegations of the bill fully sustained by the proof. It remains to be seen, then, whether upon the plaintiffs’ own showing they are entitled to the relief which they seek.

The instrument upon which the plaintiffs found their right to ask for a specific performance of the defendant’s covenant, is not, in terms, a contract or agreement, but it is in form, a bond, such as the defendant describes in his answer, to which the signature of the defendant’s wife is appended, and the formal acknowledgement required in deeds of conveyance of real estate.

For all practical purposes however, the bond may be regarded as an agreement in writing, as set forth in the plaintiffs’ bill; for, although as a rule, a covenant cannot be created except by deed, yet it is equally true, that on any writing in the nature of an agreement under hand and seal, an action of covenant will lie ; and that on a bond, such action may be sustained ; for the bond is evidence of an agreement, and courts of equity will not look to the form but to the substance of the contract. Platt on Covenants *5 ; Newton v. Swasey, 8 N. H. 12 ; Chilliner v. Chilliner, 2 Ves. Sen. 528.

And whether the deed be an indenture or a deed-poll is immaterial. Rol. Ab. 517 ; Bac. Ab. 529, Covenant A.

The imperfect compensation afforded by damages recoverable at at law for a breach of covenant, occasions a frequent application to equity to enforce a specific performance of the agreement. The jurisdiction is specially conferred by the Gen. Stats, ch. 190 § 1, and rests upon the simple principle that the covenantee or obligee has a moral right to the observance of the contract, to which right the courts of law, whose jurisdiction does not extend beyond damages, have not the means of giving effect. Platt on Covenants *556 ; Hilliard on Vendors 450 : Viele v. Troy & Boston R. R. Co., 21 Barb. 389.

It is objected by the defendant that no consideration for the alleged agreement is stated in the bill or shown by the evidence.

It is true that a court of equity will not enforce a contract that is not shown to be founded on a valuable consideration. 1 Adams’ Eq. *78 ; but it is not essential that the consideration, if sufficiently shown by the evidence, appear upon the face of the instrument; for upon sufficient cause shown the court will decree specific performance of a parol contract for the sale of land, in case where the party does not, by plea or answer, interpose the statute of frauds. Newton v. Swasey, 8 N. H. 9 ; Tllton v. Tilton, before cited; Kidder v. Barr, 35 N. H. 235 ; Chilliner v. Chilliner, before cited.

The evidence abundantly shows a valuable and sufficient consideration for the defendant’s agreement to convey the property. It consists in the agreement of Russ to purchase the property at the price of $1200, and the payment of one-half of the agreed price prior to the execution of the bond. We are satisfied, from all the evidence, that 'whether or not the original understanding may have been that the sale should be for cash, that arrangement, if it existed ■was abandoned when the bond was given, and that the bond was accepted by the plaintiff Russ, at the special request of the defendant, who preferred that method of consummating the trade, rather than the interchange of deed and mortgage, which the plaintiff desired and proposed. The consideration, then, for the defendant’s agreement, contained in the condition of the bond, was the plaintiffs’ agreement to purchase and the part payment of the purchase money.

The defendant contends that the bond is not in itself an agreement, nor contains evidence of an agreement absolutely to convey the land, because it is at the defendant’s option to forfeit the condition and pay the penal sum fixed by the bond, or to convey the land on performance of the conditions precedent on the part of Russ to be performed ; that there is not, therefore, in the bond or condition or in both together contained, any contract or agreement of the defendant to convey the land to Russ.

Precisely this objection was urged by the defendant, to a bill for the execution of a marriage-agreement by conveyance of lands, pursuant thereto, in Chilliner v. Chilliner, 2 Ves. Sen. 528. In that case the two fathers of parties contracting marriage, agreed to settle lands. One of them did so ; but the other, not doing so at the same time, gave his bond of £600, with a penalty of £1200, if he did not. It was held that the defendant had not an election to forfeit the £600, or settle, the settlement being the primary agreement; and the £600, only a penalty or further security; and the Lord Chancellor Hardwicke said : “ Suppose this agreement which is contained in the condition of the bond, (which is a common, but inaccurate way of making marriage agreements; and this is inaccurately expressed, although the intent of the parties appear,) had been iu articles, instead of the condition of a bond, and an express direction, in the same words as it is here, that the husband and his father covenanted to settle these lands in such a time, or in default thereof that then they shall pay £600 ; suppose all this had been in the articles ; the construction the court would have made, would not be, that this gave an election to the husband or his father to settle the lands or pay £600, certainly not; but the court would without hesitation say, that this was an agreement to settle the lands ; and that the payment of £600 was only a penalty, if they did not settle in a certain time, and nothing else. If this would be so, then there is no ground to make a different construction, when this is contained in the condition of the bond.”

And in an earlier, similar case, where the same objection was made, the Lord Chancellor, Macclesfield, said : “It can be no argument to say that the defendant ought only to pay the penalty of £5000, because the agreement is recited in the bond; and such agreement was not to be the weaker but the stronger for the penalty.” Hobson v. Trevor, 2 P. Wms. 191. And Shaw, C. J., in Dooley v. Watson, 1 Gray 414, says: “Courts of equity have long since overruled the doctrine that a bond for the payment of money conditioned to be void on the conveyance of land, is to be treated as a mere agreement to pay money. When the penalty appears to be intended merely as a security for the performance of the agreement, the principal object of the parties will be carried out:” And see Hilliard on Vendors 435; Ensign v. Kellogg, 4 Pick. 1; Hall v. Sturdivant, 46 Maine 34.

We are, therefore, of the opinion the bond and its condition being in equity a valid agreement and being founded upon a valuable and sufficient consideration, is also, independent of the parol testimony in the case, (which, however, leads to the same result,) evidence of a mutual and reciprocal agreement — an agreement by the one party to purchase and by the other to sell. The tie is reciprocal ; the obligation of the plaintiff to pay the balance of the agreed price being capable in law of enforcement, as well as that of the defendant, in equity, to convey — the difference of security by bond for the ultimate performance by one party only, (not more advantageous certainly to the plaintiff than that afforded the defendant by the payment of one-half the price of the land,) not affecting the legal or equitable rights of the parties. We understand that the obligation is mutual where both parties are required by the agreement to do something; the agreement of the one being a consideration for that of the other; that it makes no difference in this respect whether the obligation of the one is secured by bond and that of the other not thus secured, nor that when the cause comes or for hearing, the plaintiff’s part of the agreement has not actually been performed, if its fulfillment is tendered, and can be secured by the same decree which compels specific performance by the defendant; and especially if the defendant has sustained no damage, or none which cannot be compensated by the decree.

In such case the agreement sought to be enforced will be regarded as mutual and the tie reciprocal. This proposition is but the converse of that stated by the defendant in argument, in support of which he relies upon the authority of Adams’ Equity *82 and numerous cases cited in the note. And see Gazley v. Price, 16 Johns. 267 ; Cooper v. Penna, 21 Cal. 403.

The contract, being in writing, is not within the statute of frauds, and therefore it becomes unnecessary to consider the evidence of part performance, relied upon by the plaintiffs to take it out of the statute.

If it were essential, however, to páss upon this matter, we should not hesitate to find that the continued possession of the premises by Russ for several months after the expiration of his lease, and before the date of the bond, without any demand upon him at any time for the payment of rent, and the improvements made by him subsequent to the date of the bond, with the defendant’s knowledge, and without his objection or warning that they were being made at the plaintiffs’ peril of. ultimate forfeiture, constituted such a part performance of the contract as to take it out of the statute ; See 3 Washb. Real Prop. *553 ; Parkhurst v. Van Cortland, 14 Johns. 15 ; Newton v. Swasey, 8 N. H. 13; Hawkins v. Holmes, 1 P. Wms. 771; Earl of Aylesford’s case, 2 Strange 783 ; 1 Madd Ch. *303.

The possession and improvements by the plaintiff, under the circumstances, amounted to such acts as, if not considered part periormance, would operate as a fraud upon him, unless the whole conitract were executed. Ex parte Storer, Davies 294; Ayers v. Hawkes, 11 N. H. 154; Kidder v. Barr, 35 N. H. 235.

These considerations apply also very forcibly to the objection of the‘defendant; hereafterto.be considered, that the plaintiffs are not entitled to relief because Russ did not perform his part of the agreement within the stipulated time. “Under such circumstances,” says Judge Story in Taylor v. Longworth, 14 Pet. 176, “where there had been & part performance and large expenditures on one side, under the contract, and acquiesence on the other side, it would be incompatible with established doctrines to hold that one party could at his own election, by a suit at law put an end to the contract. It could be rescinded by Taylor, only by the decree of a court of equity, which decree would, of course, require full equity to be done to the other party under all the circumstances.”

But the defendant insists that the plaintiffs are not entitled to relief, because Russ has not performed the condition precedent to a right to claim a conveyance of the property, by payment within the year, of the balance of the price. Pie contends that time was of .the essence of the contract; and that he has not extended the time, nor waived his right to insist upon a literal performance by Russ of the conditions precedent to a conveyance.

I think it may be safely said that, in general, equity will not regard time as of the essence of a contract for the sale of lands.

Lord Thurlow in Williams v. Bonham, cited in 1 Sugd. on Vend. 303, where the contract was that if the title should not be made out in three years the agreement should be void, held that the time fixed was merely formal, and not of the essence of the contract; and he went so far as to indicate the opinion that equity would not allow parties to stipulate that time should be of the essence of the agreement. In this, however, he is not sustained by the decisions of other English Chancellors.

Lord Loughborough, in Lloyd v. Collet, 4 Bro. C. C. 469, said : “ There is nothing of more importance than that the ordinary contracts between man and man should be certain and fixed, and that it should be certainly known when aman is bound and when he is not.” But while he insists that parties to a contract may, by clear and express stipulations, provide that unless the agreement be performed within a fixed time, the party not in default may rescind it; he also says that it cannot be true that time is so essential that in no case in which the day has by any means been suffered to elapse, the court would relieve against it and decree performance. “ The conduct of the parties, inevitable accident, &c., might induce the court to relieve.”

In Parkin v. Thorold, 16 Beav. 65, Sir John Romilly, M. E., is reported as saying: ‘ ‘ Although the doctrine of Lord Thurlow, that time could not be made the essence of the contract in equity, has long been exploded, yet time is held to be of the essence of a contract in equity only in cases of direct stipulation or of necessary implication. The cases of direct stipulation are, when the parties introduce a clause expressly stating that time is to be of the essence of the contract. The implication is derived from the circumstances of the case, such as where the property is required for some immediate purpose, such as trade or manufacture.” See Longworth v. Taylor, before cited; Sugden on Vend. 305 ; Fry on Specific Performance of Contracts, §§ 711—713.

If it be conscientious that the agreement should be performed, though the action may be lost at law by the default of the very party seeking a specific performance, it will notwithstanding be decreed. Viele v. Troy & Boston Railroad, before cited; Barnard v. Lee, 97 Mass. 92 ; Pennock v. Ela, 41 N. H. 191.

But courts of equity do have regard to time so far as it respects .the good faith and diligence of the parties. If circumstances of a reasonable nature have disabled the party from a strict compliance, or if he comes, recenti facto, to ask for a specific performance, his suit is treated with indulgence and, generally, with favor.

But in such cases, oven, it should be clear that the remedies are mutual: that there has been no change of circumstances affecting the character or justice of the contract; that compensation for the delay can be fully and beneficially given ; that he who asks for a specific performance is in a condition to perform his own part of the contract, and that he has shown himself ready, desirous, prompt and eager to perform it. 2 Story’s Eq. Jur. § 776.

The parties in the present case have indicated by the terms of the condition of the bond, an expectation that the balance of the purchase money should be paid within one year, though the peculiar phraseology employed, might seem to qualify the degree of certainty intended or contemplated in that respect, the condition being thus expressed : “If said Gordon upon the payment of six hundred dollars and interest yearly by said Buss, within one year.”

But although such period of time is thus expressed, it is not apparent that circumstances of a reasonable nature have not disabled the party from a strict compliance. The purchaser seems to have been desirous to fulfil his part of the condition. Having paid six hundred dollars of the purchase money, and expended some hundreds of dollars in permanent improvements upon the land, and no essential change in the value of the property, other than its increased worth, by reason of the improvements made at his expense, it is manifest that nothing but pecuniary embarrassments, abundantly disclosed, prevented a strict compliance with the contract on the part of the vendee. There has been no change of circumstances affecting the character or justice of the contract; compensation for the delay has been tendered by the original purchaser’s assignee, and is now offered in court; the vendee has shown himself desirous and eager, if not prompt and ready, to perform his part of the contract; and under these circumstances, to require of the one plaintiff a total sacrifice of the large sums expended in part performance of his agreement, and of the other plaintiff the sum of eight hundred dollars, paid by him as a consideration for the assignment, would be a subversion of equity to the ends of an unwarrantable oppression and wrong.

But in view of all the evidence, as we are impressed by it, it is not essentially material whether time was originally regarded by the parties as an important element of the contract or not. The defendant, not only by his conduct, if not in express terms, (and we think an express agreement to that effect is sufficiently shown), has waived the objection now taken, by extending indefinitly (if he had the power to do so) the time for the performance of the plaintiff’s con-, dition. The evidence is quite clear that at various times during the summer and fall, after the year expired on the 21st day of May, 1867, the defendant desired and requested the plaintiff Buss, to pay the money due, according to the original stipulation. Instead of doing this, he should have informed Buss that he considered himself absolved from his obligation to convey; and his omission to do this is very strong evidence that he regarded the original agreement as still in force. Barnard v. Lee, 97 Mass. 95. This would leave the condition to be performed within a reasonable time ; and we regard the tender of performance by Ewins on the 29th of May, 1868, about a year after the expiration of the time originally stipulated for, (no circumstances prejudicial to the defendant’s interests during the effluxion of time being indicated,) as a tender of performance within a reasonable time, and therefore as sufficiently prompt and ready. Mason v. Wallace, 3 McLean 148.

Many cases are cited by Mr. Hilliard in his work on Vendors, page 191 and notes, in which courts of equity have exercised a discretion to relieve against the lapse of. time expressly fixed by the parties. Thus where an agreement for the sale of land was suffered to remain unexecuted for fourteen years, the vendee having continued in possession, the court, under the circumstances of the case, decreed a specific performance of the contract. Waters v. Travis, 9 Johns. 450.

In the present case, it is observed that the defendant made no effort to regain possession until after tíre tender of the balance of the purchase money, the interest and damages.

Mason v. Wallace, 3 McLean, 148 was a suit in equity to enforce specific execution of a contract to convey land. It was considered by the court that the delay of payment was unreasonable; nevertheless, the complainant having made large and valuable improvements, with the knowledge and acquiescence of the dsfendani, who had suffered no damage, which interest would not compensate, specific execution was decreed, upon payment of the agreed price, with interest.

In Edgarton v. Peckham, 11 Paige 352, the owner of land made a written agreement to sell it for $300, one third to be paid down and the residue in one and two years with interest; possession to be • delivered immediately; and if the purchaser should make default in either of the payments, the vender to be discharged and the purchaser to forfeit .all previous payments and deliver up possession.

The vendee took possession, made valuable improvements, and paid the first two instalments at the time specified. He then assigned his contract to the complainant, who took possession but did not make the last payment at the day specified.

The defendant did not call upon him for payment, nor offer a conveyance upon payment; but a few days after, the complainant tended the money and demanded a conveyance. It was held that time was not of the essence of the contract, and the complainant was entitled to specific performance.

But, as we have already suggested, if this were a case in which time was originally regarded as an important and essential part of the contract, it may subsequently cease to be regarded as essential, and this change arises from and is evinced by the subsequent conduct of the parties. And a waiver of the express stipulations of the conditions precedent to a conveyance may be inferred where the party has assented and acquiesced in delay, Hilliard on vendors, 197.

Though time were regarded as essential, there can be no doubt that the party having the right to insist upon it, may by express agreement extend the time.

It would seem that such extension of time may be by parol, although the original agreement was in writing; especially since, as we have seen, the writing is not essential, in equity, to the validity and enforcement, of the original agreement. 4 Cow. Phil. Ev. 605, 606, Notes Part, 2 n. 298; McMurphy v. Garland, 47 N. H. 322; Hilliard on Vendors 199 and cases cited in note 5 ; Mill Dam Foundry v. Hovey, 21 Pick. 417.

However this may be, without reference to any express or implii d agreement to extend the time, we are of the opinion that the jurisdiction of the court in the premises is restricted by no narrower rule than is contained in the broad proposition, that, whenever in any particular instance it is just and reasonable, under the circumstances, that performance of a contract within a stipulated time should not be insisted upon, relief against the lapse of time may be granted, in the discretion of the court.

Whether the circumstances call for the exercise of such discretion is a question of fact and of law, to be determined by the court upon careful consideration of the evidence.

Hilliard on vendors 180; Pickering v. Pickering, 38 N. H. 407 ; Laverty v. Hall, 19 Iowa 526 ; Radcliffe v. Warranton, 12 Ves. Jr. 326 ; Myers v. Watson, 7 Eng., L. & Eq. 66; Barnard v. Lee, before cited.

This subject is very fnlly treated in the elaborate and exceedingly luminous opinion of Lord Eldon in Seton v. Slade, 7 Ves. Jr. 272—279.

And in Hearne v. Tenant, 13 Ves. Jr. 289; Lord Erskine says that “ the principle upon which the court acts is now, upon all the authorities, brought to the true standard ; that though the party has not a title in law, as he has not complied with the terms, so as to entitle him to an action, as to the time, for instance, yet, if the time, though introduced, as some time must be fixed, where something is to be done on one side, (as a consideration for something to be done on the other,) is not of the essence of the contract, a material object, to which they looked in the first conception of it, even though the lapse of time has not arisen from accident, a court of equity will compel the execution of the contract: upon this ground, that the one party is ready to perform, and the other may have a performance, in substance, if he will permit it.”

And the doctrine upon which these decisions are based is fully recognized by the supreme court of the United States in repeated instances, Hepburn v. Dunlop, 1 Wheat. 196 ; Taylor v. Longworth, 14 Pet. 172; Braizer v. Gratz, 6 Wheat. 533 ; and see Schroeppel v. Hopper, 40 Barb. 425; Williston v. Williston, 41 Barb. 635 ; Richmond v. Robinson, 12 Mich. 193.

The bill alleges an assignment of the defendant’s agreement, and the proof shows that the assignment was in writing under the hand and seal of the assignor. It purports to convey all the assignors interest in the covenants and agreements contained in the original instrument.

We are satisfied that it was executed in good faith and for the actual consideration of eight hundred dollars therein expressed, and that the same was paid without reservation by the assignee. But the question of the validity of the assignment on account of the consideration, is not open to this defendant. It is a matter that can be enquired of only by the creditors of the plaintiffs. Ensign v. Kellogg, 4 Pick. 5.

We are of the opinion that the assignment is sufficiently set out in the bill, and that it is not requisite for the application of proof by the production of the instrument and evidence of its execution, that it should be declared upon as an instrument under the hand and seal of the assiguor.

And although made antecedent to the parol extension by the defendant of the time of payment under the original agreement, yet since it purports and was intended to convey all the assignors rights and interests under that agureement, it equally applies to the agreement when subsequently extended and continued in force beyond the period of time originally contemplated.

The contract was properly assignable. The counsel for the defendant suggests in argument that the defendant may have been willing to pay or convey to Puss, but not to Ewins or any one else ; but no reason for this preference is intimated in the argument or in the evidence, nor has the defendant in his dealings with either of the plaintiffs given any warrant for such an intimation. Courts of equity act in favor of all person claiming by assignment under the parties, independent of that privity of contract generally indispensable at law. 2 Story’s Eq. Jur. § § 788, 1040, 1057, 1057 a.

Notice of the assignment, though not immediately given was not withholden, to the defendant’s detriment. The defendant says tnat he was not aware of the assignment, certainly, though he had heard rumors of it. However, this may be, it is certain that he never made objection to the execution of the deed tendered him for that purpose by Ewins, by reason of the assignment, but for the reason, as he expresses it, that he thought it was time to take the property into his own hands, as he had waited long enough.; or, as Ewins expressesses it, because, he said, he had “ made up his mind not to take the money.”

The tender was unconditional and sufficient. The defendant ¡made no objection to the form of manner nor to the amount of it, nor to the form of the deed, but refused solely upon the ground that he had concluded not to convey the land. Buffum v. Buffum, 11 N. H. 456 ; 1 Selw. N. P. 158, 159 ; 2 Greenl. Ev. §§ 601-605.

And we are of the opinion that after tender and refusal, the plaintiffs arc not required, in order to entitle themselves to equitable relief, to allege in their bill that they have always been ready to pay the monev, if that fact is established by the evidence and a profert of the money is made in court, as in the case before us. Buffum v. Buffum, 11 N. H. 459, The evidence of readiness to pay, accom.companied by profert, made by the terms of the bill, is sufficient. Perry v. Carr, 41 N. H. 371.

The default of Euss with regard to the payment of taxes and premiums for insurance is cured by the tender of a sum sufficient to compensate the defendant for all his damages, for reimbursement for the amount of premiums paid and of taxes paid, whether legally assessed or not, and for interest on the balance due of the purchase money and the other disbursements of the defendant.

The defendant objects to the joinder of the parties plaintiffs, without suggesting the grounds of his objection, and we are unable to discover them.

On the contrary, whether it were indispensible that the assignor should be joined or not, in a case where the court have broad jurisdiction to -require of the parties seeking relief effectual compliance with the terms and conditions, upon the performance of which alone, the relief will be granted, it is eminently proper that all the parties should be before the court, to receive and do what may be required of each. Story’s Eq. Pl. §§ 153, 154. 1 Dan’l Ch. Pl. & Pr. 250, 251; Cathcart v. Lewis, 1 Ves. Jr. 463 ; Ray v. Fenwick, 3 Bro. C. C. 25.

The granting of a specific performance of a contract, for the sale of land, said Mr. Justice Sargent in Eastman v. Plumer, 46 N. H. 478, “is nota matter of right, to which the party is entitled when he has proved his contract, but is always a matter of sound and reasonable discretion on the part of the court, in the exercise of which discretion it grants or witholds relief, according to the circumstances of each particular case.” It will be denied where the granting of the prayer would be inequitable.

But in the case before us we are clearly of the opinion that denial of the plaintiffs’ reasonable claim would be inequitable and unjust.