Fessler's Appeal

75 Pa. 483, 1874 Pa. LEXIS 109

• Court: Supreme Court of Pennsylvania
• Decided: May 11, 1874
• Status: Published

Opinion

The opinion of the court was delivered, May 11th 1874, by

Agnew, C. J.

The clear and methodical report of the master saves us the necessity of discussing many of the questions raised by the numerous assignments of error. These appeals are from the same decree, and we shall notice a few leading points which will govern the decision. The principal question arises upon the agreement between Henry W. May and Philip G. Eessler, dated September 11th 1863. That this paper is a mortgage of May’s equitable interest in the land is very clear. Its terms are express. After- reciting that May held the land by agreement, Fessler agreed to advance for May two sums of $500 and $600 to pay the purchase-money due by May to L. A. Mackey and D. Carskaddon; and then agreed “ that the title of said land shall be made to the said Fessler, and be by him held until the $1100 shall be paid by the said May to the said Fessler, in saw-logs, as per terms stated in a contract for logs this day made between thep'arties.” This language is sufficient in itself, for it distinctly exhibits the relation of debtor and creditor, and not that of vendor and vendee. This is not all, for the writing contains this express covenant: “ Then (viz., on payment) the said Fessler agrees by himself, his heirs and assigns, to convey to the said May, his heirs or assigns, the said tract of land, free of encumbrance.” Thus, by express terms, the interest of May, whatever it was, passed to Fessler as a pledge or security for money to be advanced by Fessler for May, in order to secure May’s purchase of the land. Fessler was a lender of money, not a purchaser of land: Sweetzer’s Appeal, 21 P. F. Smith 264; Danzeisin’s Appeal, 23 P. F. Smith 65.

What interest did pass ? This is equally clear. It would be sufficient on this point to rely on the report of the master confirmed by the court, the testimony being uncontradicted. But let us turn to the evidence and examine it. That Mackey and Carskaddon had a good title is not questioned. The legal title was in William Fearon, in trust for them, but he executed this trust by his conveyance of the 4th of January 1865. Mackey testifies that he gave Carskaddon full authority to treat for the sale of the land with May, and that he transacted the business. Carskaddon testifies that Mackey and he had a contract in writing with H. W. May for the sale of this tract of land, that the nature of their contract was that they agreed to convey the land in question to May, upon certain payments, to be made by a given time or times, the purchase-money, he thinks, was $1100. Then the legal character of the writing was perfectly clear. It was an agreement of bargain and sale, making time of essence in the payment. But making time of essence in the performance of the contract does not change the nature of the agreement itself. So long as the time had not expired the agreement to convey was legally and fully binding. Therefore, calling it a refusal, or an option, cannot change its true character. May had a right to call for a conveyance on payment according to its terms. But even if it were an option contract it was binding and enforceable, if the option be exercised according to its terms: Kerr v. Day, 2 Harris 112; Corson v. Mulvany, 13 Wright 88; Siter, James & Co.’s Appeal, 2 Casey 180 ; Shollenberger v. Brinton, 2 P. F. Smith 98 ; Lowry v. Mehaffy, 10 Watts 389; McFarson’s Appeal, 1 Jones 503. But the case does not rest on the character of the writing alone ; for the parties carried it into actual execution. Carskaddon testifiés: “We considered the land as May’s if he complied with the contract. When we met at the office of Mr. Hirst it was for the purpose of carrying out this arrangement, as I .understood it.” May and Eessler were both present. “ Our object in meeting there was for the purpose of receiving the first payment, and for the purpose of closing up the transaction.” “What we were doing at the meeting in Hirst’s office was in furtherance pf the contract with May, as I understood it. I went there at the instance of Mr. May, for the. purpose of closing up the transaction for the sale of this land.” “We were all together. No one left the office until the matter was entirely closed up. I required the, $100 to be paid before the contract was signed by Mr. Eessler and Mr. Mackey. I got Mr. Mackey’s price for his interest, and I wanted a little more.” It is further in evidence that May paid the $100. It further appears by theagreementandreeeiptsthatEesslerpaid only $957.75. Thus the facts prove beyond a question that Eessler took May’s place under the contract between May and Mackey and Carskaddon, and advanced the money for May by virtue of the agreement of September 11th 1863. He is estopped from denying May’s title, both by his acts and by the recital in his agreement, which opens thus: “ That whereas, the said H. W. May holds an agreement with L. A. Mackey and D. Carskaddon for a tract of land on Lonsbaugh run, in Cameron county.” On every ground it is apparent that Eessler held the equitable title derived from Mackey and Carskaddon as a security for the money advanced by him for May. Hence, when he obtained the legal title from Eearon, the trustee of Mackey and Carskaddon, in execution of their contract, he held the land as a trustee for May under a covenant to convey to him upon the repayment of the sums advanced by him for May, according to the express terms of the agreement of September 11th 1863. This being the true relation of these parties, it puts an end to several controversies. A mortgagee is not the owner of the land, and is entitled only to his money and interest. No question of delay in filing the bill can arise. It is not a case of specific performance to which the doctrine of abandonment by laches can apply. It is not a parol trust, and is not affected by the limitation in the sixth section of the Act of 22d April 1856. Delay will be compensated by interest; and if the mortgagee be in possession, and has incurred expenses, they will be settled in his account for profits he has derived : Harper’s Appeal, 14 P. F. Smith 315.

The next matter to be noticed is the saw-log contract between May and Fessler of even date, viz.: September 11th 1863, set up by Eessler in his defence. By it May agreed to cut, sell and deliver to Eessler one million or more feet (board measure) of white pine saw-logs, at $5.25 per thousand feet, in the time and manner set forth in it, and Eessler agreed to pay to May, in consideration of this $500, within twelve days from the date, and the remainder in certain instalments. The defence turns upon the interpretation of this agreement as to the $500 to be paid in twelve days. Fessler paid but $250 of this sum. May was a poor man, according to Fessler’s own showing, and without this money, according to all the evidence, was unable to prepare for the execution of the log contract, and to carry it out. It is in clear proof that May repeatedly demanded money from Fessler to go on with the contract, and offered to refund what he had received if Fessler would release the contract; but Fessler refused all offers, and both neglected and refused to pay the money. It is beyond controversy that, if Fessler was bound to pay this sum of $500 in twelve days from September 11th 1868, he was in fault, and not May, in the execution of the log contract, and therefore cannot interpose that contract as a defence to the land contract or mortgage. To avoid this he contends that this sum of $500 in the log contract is the identical sum mentioned in the land or mortgage contract which was paid, and to make good this position insists that the two agreements of September 11th 1863 are one in effect. But it is immaterial whether we call the two papers one agreement or two; they contain intrinsic evidence, corroborated also by surrounding circumstances, and cotemporaneous acts, showing that the two sums are not identical. The very reason why the parties made two distinct writings was that the purpose of each was different. The mortgage contract was to enable May to secure the land by providing for the payment of the purchase-money to Mackey and Carskaddon. The purpose of the log contract was to supply Fessler with logs and enable May to refund the money advanced. By the express terms of the mortgage agreement, Fessler agreed to make the payment of $500 to apply on the land in twelve days. This money was not for May himself, but for Mackey and Carskaddon to save the land upon which the logging was to be done, and so the parties mutually treated it, the money being paid in the presence of both parties. On the other hand the $500 to be paid in twelve days on the log contract, was expressed in the agreement to be in consideration of the logs to be cut and delivered by May, and was also expressed to be the first instalment of the $5.25 to be paid per thousand feet. The proof does hot rest oh the expressed consideration alone, but the agreement further provides that the payments on the land shall come out of the last two instalments. The payment of $500 being the first instalment, it is impossible, without violating the express language of the agreements, to say that it is one of the land payments. JExpressio unius est exclusio alterius. This interpretation is supported also by the reason and necessity of the thing as shown in the evidence. Logging contracts such as this are prosecuted in the fall, winter and early spring, and a large outlay of money is necessary in the beginning to provide .a cabin or shelter for the hands and for the team, to make roads, lay in provisions and supplies of grain, hay, &c. The testimony is, that for such a contract this sum of $500 was not more than adequate; and afterwards money is required to pay wages and other current expenses. To conclude the proof, Fessler so interpreted his own contract, for in ten days, September 21st 1863, he paid one-half of this sum of $500, having already paid $475 on the land contract on the 19th of September 1863. It is very clear, therefore, that Fessler was in default on the log contract, and having repeatedly refused May’s demands for money to carry on the work, Fessler cannot now set up the log contract as a defence against the mortgage.

The next matter to be noticed is the relation of Harris to the case. On this point it is sufficient to take Harris’s own answer and his testimony, without entering into the disputed question of Perry’s agency and of actual notice. According to these, when the plaintiff’s bill was served on Harris, he had no title except an unexecuted bargain on which he had paid one instalment of $1000. The remaining one thousand dollars he did not pay until long afterward. The bill was filed May 6th 1867, and served on Harris November 23d 1867, while the second thousand dollars was not paid until October-1869. Harris relied wholly on his agreement of September 14th 1866, and set up no deed either in his answer or his testimony. Indeed, the deed is not referred to in any part of the case. He was, therefore, not such a bond fide purchaser without notice as would be protected, except to the extent of the $1000 paid before service of the bill: Youst v. Martin, 3 S. & R. 423 ; Union Canal Co. v. Young, 1 Wharton 410; Beck v. Ulrich, 1 Harris 636 ; Juvenal v. Jackson, 2 Id. 524; Coxe v. Sartwell, 9 Id. 488; Henry v. Raiman, 1 Casey 360; 2 Sugden’s Yen. & Pow., 8 Am. ed. 523. This being the status of Harris when the bill was filed, the legal title being still in Fessler, it was unnecessary to pray for a conveyance from Harris to May. The prayer for an injunction against Harris and his servants to stay waste by cutting timber was the only prayer then necessary. Had Harris set up a deed by supplemental answer, May might have amended under the Act of 4th May 1864, 1 Bright. Dig. 601, pi. 72 ; Danzeisin’s Appeal, supra. It was therefore an error to dismiss the plaintiff’s bill wholly as to Harris. The learned judge had probably not noticed the state of the case when the bill was filed, and Harris’s omission to set forth any title in himself. But in view of the report of the master, for compensation only against Harris, a prayer for a conveyance is immaterial. In strictness a reconveyance might have been decreed by making Harris’s grantees, Wells and Page, parties. A bill in equity is Us pendens, of which every one is bound to take notice. This is settled in the well-considered case of Diamond v. Lawrence County, 1 Wright 353, in which the doctrine is fully discussed and the authorities cited by Woodward, J. Page and Wells were, therefore, not innocent purchasers without notice. But a court of equity will look to the effect of a decree, and give it such shape as will do equity, and prevent injustice. In view of the relations of Wells and Page to the case, they not being brought in as parties, and to save Harris harmless from damages at their suit, we think the decree for compensation only against Harris is the most equitable and should be approved. The master seems to have weighed the case well and arrived at a judicious conclusion.

Upon the whole case the appeal of Philip Gr. Fessler is dismissed, with costs of appeal to Henry W. May; and in the appeal of Henry W. May, we reverse the decree of the court below dismissing the plaintiff’s bill as to N. 0. Harris, and adopt the report of the master and the decree reported by him, which is hereby confirmed, except as to the time of payment, which, in the case of Philip Gr. Fessler, is fixed at sixty days, and in the case of N. C. Harris at four months from the time of filing this decree. The costs of this appeal to be paid by the defendant P. Gr. Fessler, the costs in the court below to be paid as reported by the master.

SharswooD' and Mercur, JJ., dissented.