Harris v. Greenleaf

79 S.W. 267, 117 Ky. 817, 1904 Ky. LEXIS 254

• Court: Court of Appeals of Kentucky
• Decided: March 8, 1904
• Status: Published

Opinion

Opinion or the court by

JUDGE O’REAR

Reversing.

Harris bought of Greenleaf three lots at $25 each, and executed his notes, with two of his children as co-obligors, for the purchase price. Greenleaf executed- a bond, for title, stipulating that “said Greenleaf is and be not required to make said deed until all the $75 is paid in full.” Harris was put into possession. Later, he says, he was induced to sign another paper with Greenleaf and Evans, whereby the latter agreed to sell to Harris the same lots at the price of $100 in the aggregate, to be paid October 1, 1899. In that paper it was covenanted that on payment of said sum Greenleaf and Evans were to make Harris a good and sufficient warranty deed. But it was further stipulated that, in event Harris failed'to pay the $100 as agreed, he thereby relinquished all rights or claim to the land, and was to “give up his contract, and also peaceful possession of said land, without any recourse at law or in any other way.” Harris paid $10 of the purchase price, and paid the tax for the two or three years while in possession, but failed to pay-as required by the contracts. He avers that thereupon appellees forcibly took and now keep the possession of the lots. He brought this suit in equity for a specific execution of the original contract of purchase, alleging his willingness and ability to pay the balance of the consideration, and asking an accounting, and credit for the value of the use of the lots during the time that he was wrongfully kept out of possession ■ by defendants. A demurrer was sustained to his petition, and, failing to amend, it was dismissed.

From the arguments here we assume the ground of the demurrer upon which the court held the petition defective was because of the failure of the plaintiff to allege-that he had tendered the balance of the purchase price and because he. failed to tender it with his petition. Appellees contend that, before the vendee in a contract for the sale of land can maintain an action for its specific execution, he must show not only that it is fair and reasonable, but that he has. been duly diligent, and has performed, or has offered to perform, the conditions imposed on him by the contract, and that in the matter of the payment of the consideration the only sufficient offer of performance is a legal tender of the balance of the purchase price. While it is true that, where a right is made dependent upon the payment of money, the general rule is that an action can not be maintained to enforce such right without allegation of a tender of the money, yet in equity this fundamental rule is subject to modifications and exceptions. If the .party suing avers that he is ready and willing to do all the acts required of him in the specific execution of the contract according to its terms, ic may be enforced, other equitable requirements being satisfied. In general, the' rules of equity governing an actual tender are not so' stringent as those of the law. In discussing the necessity of an actual tender in contracts in which time is not essential it is admitted in the note to section 1407, Pomeroy’s Eq. Jur., that the American decisions are conflicting on the subject. But the author declares that a certain “group of decisions adopts a rule more in accordance with the principles of equity, viz., that in such contracts an actual tender or demand by the plaintiff prior, to the suit is not essential. It is enough that he was ready and willing, and offered at the time specified, and even that he is ready and willing at the time' of bringing the suit, unless his rights have been lost by laches, and that he offers to perform in his pleading. The plaintiff’s performance will be provided for in the decree, and his previous neglect will only affect his right to costs.” Among the numerous decisions cited as supporting the text is the case from this court of Woodson’s Adm’rs v. Scott, 1 Dana, 470. The author adds (in which we concur) : “This is unquestionably the true equitable doctrine.” The case of Hart v. Brand, 1 A. K. Marsh., 159, 10 Am. Dec., 715, is enough like-this one to make its principles applicable. Hart covenanted to convey to Brand a certain tract of land at $25 per acre, payable in installments. The land was to be conveyed upon payment of the first installment, the purchaser to. give a deed of trust to secure the deferred payments. The circuit court decreed the execution of the contract, and Hart appealed. There was not a tender by the vendee of the purchase money; that is, there was not a legal tender, though the vendee, having the money at deposit with a banker, offered a check upon the latter, which the vendor refused, and would not wait till the specie could be got from the bank so as to make the tender good. The vendor at the same time tendered his deed. In fine, there was an apparent technical compliance by the vendor and noncompliance by the vendee, from which the vendor assumed that he was absolved from the contract. It does not appear that any other tender was attempted, and the vendee brought his suit for specific execution. The absence of the tender was relied on in defense. The court said: “Whether equity ought to give the relief sought surely depends on the circumstances of the case.” And we may add that this is the universal rule. After showing a vain effort by the vendee to make a valid tender, and the vendor’s leaving without giving him further chance to complete it, the court went on to say: “But the agreement did not depend on the payment of the money as a condition precedent, whereby the mere casual failure to make payment on the precise day should render it invalid. It is sufficient to justify the aid of a court of chancery that the purchaser has, with good! faith, shown a willingness and readiness, without injury to the vendor, to perform substantially the agreement.” The court lays some stress on the fact of the vendor’s having been instrumental in a measure in producing the delay, “giving countenance thereto by lying back.” In Hunter v. Daniel, 4 Hare, 420 (30 Eng. Ch. Rep., 420), a case very much like this one in lacking a tender by the plaintiff before suit brought for specific performance, the argument was submitted that payment wás a condition precedent to the right of the plaintiff to call for the execution of the agreement, and it was argued that the bill could not properly be filed before the plaintiff had, out of court, fully performed his agreement. The court responded: “The general rule in equity certainly is not of that strict character. A party filing a bill submits to do everything that is required of him, and the practice of the court is not to require the party to make a formal tender, where, as in this case, from the facts stated in the bill, or from the evidence, it appears that the tender would have been a mere form, and that the party to whom it was made would have refused to accept the money.” The case of Webster v. French, 11 Ill., 254-279, contains a very full and interesting discussion of this question. A number of cases are examined and applied, some of which were thought to be, though in fact they were not, opposed to the conclusion reached by the court; among the number being Jarboe v. McAtee’s Heirs, 7 B. Mon., 279. The court, speaking through Mr. Justice Catón, thus announced its conclusion: “The result of my examination of this subject clearly shows that the court of- chancery is not bound down by any fixed rules on this subject by which it will allow the substantial ends of justice to be perverted or defeated by thfe omission of an unimportant or useless act, which nothing but the merest technicality could require. The money may at any time be ordered to be brought into court, whenever the rights of the opposite party may require it; but while he is insisting that the money is not' his,, and that he is not bound to accept it, it would seem to be a matter of no great consequence to him whether it is in the custody of the court or not. The court possesses a liberal and enlarged discretion on this subject, by the proper exercise of which the rights of all parties may be protected.” To the same effect are Brock v. Hidy, 13 Ohio St., 306, and Deichmann v. Deichmann, 49 Mo., 107.

The following allegations of the petition in the case at bar bear on the question being considered: “Plaintiff further states that afterward, and while he was in possession of said lots of ground, to wit, on the 16th off January, 1900, he again saw defendant Greenleaf, and paid him $10, for which said Greenleaf executed to him, on the 16th of January, 1900, the receipt filed herewith (marked ‘Z’) and signed ‘Evans and Greenleaf,’ and said defendant Greenleaf then agreed with plaintiff he should have a prolongation of the time in which to pay for this land, and stating that he would not have any wrong done plaintiff, but his deed should be made to him; and the plaintiff remained in possession of his lots of ground until-day of-, 1901, when defendant Evans arbitrarily, and without any legal authority whatsoever, and against the rights and consent of this plaintiff, took forcible possession of same, and by his laborers and employes has been using same and getting the rents and benefits of same, and claiming that under the contract of April 5, 1899, they belong to defendants, and that plaintiff has now no right to said land or to a deed for same.- Plaintiff afterward, through a friend, got the money, and offered to pay Greenleaf, and defendant Evans would not agree to. it. . . . Plaintiff is ready and willing to do what is fair and equitable, and to pay what is justly due defendants after the deduction of what is reasonable and just for the use of same during the time possession had been withheld from him.” Appellees argue thai that is not a good allegation of a legal tender. It is not. Nor do we understand that it was so intended by the pleader. But, in our opinion, it does show such'a state of case as in equity should excuse a better tender, leaving the rights of the parties to be adjusted and enforced by the chancellor by appropriate decree, as was done in Hart v. Brand, swpra. The provision in the last contract, if there, be anything to support that instrument, for the vendee to forfeit his contract and all rights under it, including possession of the lots, upon nonpayment of the jjull purchase price at the time indicated in the paper, was merely a form of additional security. Of a somewhat similar arrangement this court in Kercheval v. Swope, 6 T. B. Mon., 367, quoted approvingly the following language of Lord Chancellor Hardwick in Yernon v. Stephens, 2 Pr. Wms., 66 “If the defendant has his money and interest and costs, he will have no reason to complain of having suffered; on the contrary, it would be a very great hardship on the plaintiff to lose all the money he has paid. Lapse -of time in payment may be recompensed with interest and costs. And as to these agreements, they were all intended only as a security for payment of the money, which end is answered" by +he payment of principal, interest, and costs.” Of the principal case on this point this court said: “The payment of the money after Swope should enter for default of payment was contemplated, and that Swope’s entry and holding the land and improvements was introduced as a security and incentive to payment by Kercheval, but was not intended to vacate the agreement?; and, if it had been, a court of equity ought to relieve against a hardship and penalty so grievous to the one party, whilst the other party (Swope) had received part performance, and held the notes for the money, not vacated or released nor extinguished by such entry upon the land.” Page 371, 6 T. B. Mon. True, in this case the cash payment was only $10 and taxes of no great amount. But that was by no means all that appellant was made to forfeit by the contract if the averments of this petition be taken as true, as they must be, for he says that the lots had increased in value till they are worth $375. So he would lose that enhancement which was undoubtedly his had he paid the purchase money. Appellees contend that this enhancement of value alone is an equitable consideration against the enforcement of the contract. Where, conditions have so materially altered between the making of a contract and a delayed action to enforce it that it would be unjust to the resisting party to compel its execution, a court of chancery may and • should refuse its aid in enforcing it. But generally mere increase in value of the property sold, happening before the specific enforcement is sought, but after the vendee has partly performed and is bound for the purchase price, and where his delay in offering to pay the balance is not unreasonable, and not in bad faith, is not enough to stay the chancellor’s hand. People buy and sell with an expectation of natural increase or fall in values. If the value of the lots had fallen naturally ever so low, ■it would have constituted no' defense to an action brought by the vendors to collect the purchase money. As held by the Court of Appeals of New York in Prospect, etc., R. R. Co. v. Coney Island, etc., R. R. Co. (N. Y.), 39 N. E. 17, generally a contract is to be judged as of the time at which it was entered into, and, if fair when made, the fact that it has become a hard one by force of subsequent' circumstances or changing events will not necessarily prevent its specific performance. It is stated that the exception to the foregoing rule is where circumstances arising subsequent to the making of the contract are such that its enforcement would be a great hardship to the defendant, and be of little or no benefit to the plaintiff. We are of opinion that the demurrer should have been overruled.

Judgment reversed, and cause remanded for proceedings not inconsistent herewith.