Manning v. Ayers

77 F. 690, 23 C.C.A. 405, 1897 U.S. App. LEXIS 1635

• Court: Court of Appeals for the Seventh Circuit
• Decided: January 4, 1897
• Docket: No. 177
• Status: Published

Opinion

JENKINS, Circuit Judge

(after stating the facts). It is insisted for the appellant that, under the supplemental agreement, he has the right to. purchase the lands, and to demand a conveyance of them from Carroll for the. consideration paid by him, or, if that may not be allowed, then for a reasonable price to be determined by the court. It is clear that the appellant would not have right, in any event, to obtain the lands for a consideration to be measured by the amount which they cost Carroll. He procured such title through sales of the land upon executions, and afterwards by composition with the assignee of Sawyer, Wallace & Co. The cost price, under such circumstances, might be an unfair criterion by which to gauge the value of the lands in accordance with the contract. If it be conceded that the appellant may properly demand that a court of equity should specifically enforce the agreement for an option, it must be upon the very terms of the option, and not upon other and different terms under which they were obtained by Carroll. It cannot be supposed that, when the lands were free and unincumbered, the owner, being solvent, would consent to terms which he would be* willing to take} and would perhaps be glad to obtain, when insolvency had occurred,- and the lands were incumbered by judgments and sales under executions. The contention in this behalf we regard as wholly untenable.

Nor is the contract one which can be specifically enforced in equity. The agreement was that if Manning should not avail himself of the option expiring December 31, 1888, then “a price is to be agreed upon at which either party may offer .to buy or sell the other, which, being accepted, discharges all obligations under the contract referred to. * * :i The payment for the property, in case Manning should elect to buy it, to be considered and settled subsequently.” There is here no obligation upon either party to accept the offer of the other. There is no price determined, nor are any terms of payment adjusted. Manning was at liberty to refuse to buy at the price which might be agreed upon, and, if he should elect to buy at that price, the agreement would still be inoperative, unless the minds of the parties should meet upon the terms of pay-merit. The agreement for sail1 would appear to liave been merely an optional modi1 of discharging tlie obligations and settling the rights of the parties under the original contract. It never became effective, by offer or by acceptance. Tlie agreement is wanting in obligation upon the part of both, — is obscure, indefinite, and uncertain. It; is not within the province of the courts to make contracts for parties, nor will equity compel a specific performance of a contract when any material part of it remains to be settled by negotiation. A court: of equity does not sit to determine the price or tlie terms of payment upon which land should he sold by one to another, or to compel specific performance of an optional agreement, to buy or sell where nothing has been done in pursuance of the agreement. Nor can a court, impose upon a contract terms, not therein agreed to, different from the contract both in form and in substance. Milnes v. Gery 14 Ves. 400, 407; Bromley v. Jefferies, 2 Vern. 415; Potts v. Whitehead. 20 N. J. Eq. 55; Norfleet v. Southall, 3 Murph. 189; Huff v. Shepard, 58 Mo. 242; Graham v. Call, 5 Munf. 396; Hayes v. O’Brien, 149 Ill. 403, 414, 37 N. E. 73; Winter v. Trainor, 151 Ill. 191, 194, 37 N. E. 869.

In Bromley v. Jefferies, one covenanted that; another should have his land for a certain sum loss than any other would give for it. The court refused to deem* a. specific execution of this agreement, hv reason of its uncertainty.

In Milnes v. Gery, the court refused specific performance of an agreement to sell upon a. valuation of arbitrators to be chosen by the parties in the manner specified. Arbitrators were appointed by the parties, hut they were unable to agree;. The master of the rolls, Si)- William Grant, delivering the opinion of the court, observed :

“The more 1 have considered this ease,, the more I am satisfied that, independently ot all other objections, there is no such agreement between the parties as can be carried to execution. The only agreement into which the defendant entered was to purchase at a price to be ascertained in a specific mode. Xo price having ever been fixed in that mode, tlie parties have not agreed upon any price. Where, then, is the complete and concluded contract which this court is called upon to execute? The price is of the essence of a contract of sale. In this instance, the parties have agreed upon a particular mode of ascertaining the price. The agreement that (he price shall be fixed in one. specific manner certainly does not afford an inference that it is wholly indifferent in what maimer it is to be fixed. The court, declaring that the one shall take and the other give a price fixed in any other manner, does not execute any agreement of theirs, but makes an agreement, for them, upon a, notion that it may be as advantageous as that which they made for themselves. How can a. man be forced to transfer to a stranger, that confidence which, upon a subject materially interesting to him, he. has reposed in an individual of his own selection? * * * I do not know that upon this point there can be any (inference between decisions at law and in equity. If you go into a court of law Cor damages, you must be able to state some valid legal contract, which the other party wrongfully refuses to perform. Tf you come to a. court of equity for a specific performance, you must also be aide to state some contract, legal or equitable, concluded between tlie parties, which the one refuses to execute. In this case the plaintiff seeks to compel the defendant to take this estate at such price as tlie master of this court shall find it to be worth. Admitting that the defendant never made that agreement (and my opinion is that the, agreement lie lias made is not substantially, or in any fair sense, tlie same with that), and it could only be by an arbitrary discretion that the court could substitute the one in the place of the other.”

In Graham v. Call, the contract was for the sale of land, and provided that the price should be thereafter agreed upon, which never w.as done, in consequence of the death of one of the parties. The court refused specific performance of the agreement, upon the ground that it was not completed and perfected, so that it could be carried into execution.

In Norfleet v. Southall, one of the two joint owners agreed to convey to the other upon payment of the sum which the mills cost him, to be determined by four persons named, which was attempted to be done, but the arbitrators were unable to agree. The court, upon a bill which asked that an account of the cost of the mill might be taken, and that there might be specific performance of the agreement to convey upon payment of the amount so ascertained, refused such specific performance, as wholly without the province of a court of equity, asserting that so to do would be the exercise of an arbitrary discretion, which a court of equity wholly rejects.

In Potts v. Whitehead, by the contract there in question, the offer was to convey the land within the time fixed at a price named, of which a stated portion was to be paid upon execution of the deed, and the balance in a mortgage upon the land with interest. It was held that the failure to designate the time of the payment of the amount to be secured by mortgage left a material part of the contract to be settled by negotiation, and therefore the contract could not be specifically enforced.

In Huff v. Shepard, an agreement for the sale of lands contained a stipulation that the purchase money was to be paid upon such terms as may be agreed upon between the parties. The court refused specific performance, asserting that, in the proposition to compel a person to agree, “the element of compulsion would annihilate in advance the thing it promised to create; for no contract can live in the law’s atmosphere, unless born of voluntary choice in the parties.”

The doctrine of these cases is recognized in Gunton v. Carroll, 101 U. S. 426, 430, where, after statement of the rule, it is said: “It cannot be successfully disputed that,' in the general terms thus stated, this is the established equity doctrine.” That case was taken out of the general rule by the reason that the consideration had there been already paid, while the doctrine, as the court states, rests upon the ground “that the court must be enabled to enforce the payment of the price simultaneously with compelling the conveyance, and it cannot do this by enforcing an arbitration.” There is manifest distinction between that case and the one at bar.

It is clear, therefore, that the agreement in question is so uncertain as to price and terms that we cannot decree a specific performance of it. It would be an anomaly in the history of jurisprudence for courts of equity to fix the value of land in enforcement of a contract of sale which fails to determine the price, and to compel the parties to abide by the price which the court should decree.

It is also urged that under the original agreement Manning acquired an interest in the land in question which a court of equity would recognize. Upon mature considera lion we are satisfied that the suggestion cannot be entertained. By that contract the appellant was engaged to reside upon the lands, and to effect sales of them under the direction of the owners, Sawyer, Wallace & Co. In compensation for hin services, the owners.agreed to pay him a sum of money equal to one-half of the net increase in the aggregate value of the land as would be shown by a sale of them over and above their then aggregate value expressed in the agreement. Manning was also to be paid a further sum, equal to one-half of the rentals derived from the land and one-half of the net proceeds of the stock and produce grown upon the lands, the owners furnishing all needful funds to operate and improve the land. Manning jnad, also, a right to the use of the produce of the farm necessary for the support of his family. The agreement was to continue until January 1, 1887, at which time all the lands, stock, produce, and farm implements should be sold, at auction or private sale, as might be agreed, in order to ascertain the net increase of the value of the land, the net profits of stock-raising and farming, and the amount of compensation due to Manning under the agreement. It must he conceded that scrupulous care was employed in the drafting of tills agreement to exclude Manning from any interest, legal or equitable, in the lands. The ownership and the right of sale of the lands remained in Sawyer, Wallace & Co. They conferred no title upon Manning, and he acquired none under any term of the contract. The statement in the agreement of the then value of the lands, and the provision for the sale of such as remained unsold at the termination of the agreement, merely indicated a method of determining the amount of compensation to which Manning was entitled. The covenant of Sawyer, Wallace & Co. was personal to pay such sum thus ascertained for Manning’s services. Such agreements do not confer an interest in lands. Le Moyne v. Quimby, 70 Ill. 399.

It is fui (tier urged that, failing in his other contentions, the appellant is entitled to an accounting, under the direction of the court, of the transactions between himself and Sawyer, Wallace & Co., under the agreements, and to a decree that the lands should now be sold for the purpose of ascertaining the appellant’s share of the net profits to he derived from the lands; and Smith v. Gear, 59 Ill. 381, is urged to our consideration in support of this contention. There one party furnished the funds to purchase,andtheotherbought, certain notes and a mortgage, which, it was understood, should be foreclosed, and the land bid in by the one furnishing the funds, and then sold, and one-half of the net profits should be paid to each. It was urged chat no sale should be ordered because it had not been shown that a profit would result from one. The court overruled this objection, and ordered a sale. That case is essentially different from the one in hand. There each party was entitled to a moiety of the profits in the land as such. Here the agreement was that the sale should be public or private, as the parties might agree, and for. the purpose, merely, of determining the amount of compensation which, under the agreement, Sawyer, Wallace & Co. were personally obligated to pay to Manning. This agreement was made in 1883, and was to continue in force until January 1, 1887. In April, 1888, the supplemental agreement a vas made, by Avhich an option was given to Manning to purchase the lands at cost. Whether that supplemental agreement may be considered in extinguishment of the original agreement to sell, or whether a failure to carry out the supplemental agreement would operate to restore in full force all the terms of the original agreement, we need not stop to consider. We are of opinion that there are equitable considerations which should avail in a court of equity to work a refusal to exercise any discretionary powers lodged in the court to grant the relief asked, if such relief could properly be decreed under any circumstances. There was nothing in the original agreement which prevented Sawyer, Wallace & Oo. from selling the land at any time. To the contrary, it was the manifest intent of the agreement that the land should be sold. Such an agreement could not avail to prevent creditors from acquiring title to the land through legal proceedings, or to prevent Sawyer, Wallace & Co. or their assignee, from disposition of the land. It would be strange, indeed, if, under an agreement Avliich gave no interest in the lands, the sale of them could be effectually prevented, unless the purchaser took them subject to the liability of their sale under order of the court for the mere purpose of ascertaining the ¿mount of compensation to be paid under a personal covenant in the agreement. That Avould work a most inequitable; result.

The contention of the appellant is also subject to the objections hereinbefore considered. Assuming that a court of equity could enforce such an agreement, it is to be observed that the contract of the parties was that the undisposed-of lands should be sold at auction or private sale, as may be agreed upon by the parties. It was contemplated that the parties should determine by agreement which of the two methods of sale was to be preferred. * In the absence of any agreement of the parties upon that question, and the absence of any attempt upon the part of either for its performance by the other, can the court noAV determine the question for them, and sa.y that a private sale is to be preferred to a public sale, or vice versa, and so impose upon the parties a term in a personal contract for payment for services to which they have not agreed? We do not consider that we have a right to do so, or, having the right, that it wóuld be equitable, under the circumstances of this case, to exercise the power, having the discretion to decline it. The decree will be affirmed.