Stoddart v. Smith

5 Binn. 355, 1812 Pa. LEXIS 71

• Court: Supreme Court of Pennsylvania
• Decided: December 28, 1812
• Status: Published

Opinion

Tilghman C. J.

This is an action of debt on a bond. The defendant pleaded payment and gaye notice that she should give in evidence a failure of the consideration for which the bond was passed. It appears that the plaintiff by his agent, the late colonel Burroughs, sold to John Smith deceased, forty five lots in the city of Washington, for the sum of 14,164 dollars payable by instalments. Several negotiable notes were given by Smith for the purchase money, as well as several bonds, of which this is one. The contract was made the 1st of August 1804. The defendant alleges, that the plaintiff was to give Smith a good title for the lots which it is out of his power to do for two reasons. 1st, That he has conveyed the property to other persons. 2d, That he never had a good title.

1. As to the first objection, the fact is that on the 3d of October 1804, Stoddart conveyed the lots to John Mason and John Laird, in fee simple, with a general warranty, in trust that they should convey them to Smith, his heirs or assigns, in fee simple, as soon as payment should be made of the purchase money and interest according to contract. I see nothing in this which should prevent the plaintiff’s recovery. This conveyance in trust was no injury to Smith. It was manifestly intended for hi3 benefit, by preventing any of Stoddart's creditors from getting a lien on those lots by judgments which they might obtain against him. If the trustees do their duty, the land will be conveyed to the devisees of Smith, as soon as the purchase money is paid. And if, (which ought not to be supposed), the trustees should not be disposed to do their duty, a court of equity will compel them.

2. In order to judge of the force of the second objection, we must examine the title which was shewn on the trial. These lots are part of 6000 lots in the city of Washington, which were sold by the commissioners of that city to Robert Morris and J. Greenleaf on the 24th of December 1793, fora large sum of money payable by instalments. The contract between the commissioners and Morris and Greenleaf, or to speak jnore properly, the remedy of the commissioners in case of default of payment according to the contract, was affected by an act of assembly of the state of Maryland, of which it is necessary to take particular notice. It passed the senate and house of delegates on the 24th of December 1793, and on the 28th of the same month, the engrossed bill was read and assented to in both houses, and received the signature of the governor according to the constitution of that state. It is said by the plaintiff that the act operated as a law on the 24th of December, as soon as it had passed both houses. On the other hand the defendant contends that it had no force as a law until the 28th of December, when the engrossed bill was read, and assented to. By this act the commissioners were authorised in case any sum of money should be unpaid for the space of thirty days after it ought to have been paid, to expose the lots so unpaid for, to sale by public áuction in the city of Washington, after sixty days notice in the newspapers. This power the commissioners exercised with regard to the 45 lots in question, of which Stoddart became the purchaser, and produced a regular title from the commissioners. As to five of the lots, it is alleged by the defendant that they were sold to another person by the commissioners after the default of Morris and Greenleaf, and that person also making default, they were again exposed to sale when they were purchased by the plaintiff. But this the plaintiff denies. It has been decided by the Supreme Court of the United States in the case of O’Neale v. Thornton, that the commissioners having once exercised their power of resale under the act of assembly of Maryland, could not exercise it a second time, so that if in fact there had been a resale before the purchase of the plaintiff, his title to these five lots was not good. But I do not consider this as a matter of any importance with regard to the question of a new trial, because although the defendant was entitled to a deduction for those lots in case the jury were in her favour on that point, yet without other ground it would not justify a verdict for the defendant. It has been contended indeed, that the contract was so entire as to be incapable of division, and that a failure of title to part dissolved the contract in the whole. It strikes me very differently. There are eases where failure of title to part ought to dissolve the whole contract; because that part may be so essential, that the loss of it would render the residue of little value. Such would be the case of the loss of a mine, or a valuable fishery, attached to a parcel of poor land. Such also might be the case of a loss of a parcel of meadow or woodland, or the right of water necessary for turning a mill. The principle is this, that when the part lost appears to be so essential to the residue that it cannot reasonably be supposed the purchase would have been made without it, the contract is dissolved in toto. But what is the case under consideration? The loss of five lots not adjoining or particularly connected with the others. There was no evidence of their being any way essential to the use or full enjoyment of the residue, and as the price at which each of the . lots was estimated in the contract between the plaintiff and Smith, was proved on the trial, there could have been no difficulty in making a proper deduction for their loss. But the great point in the cause turned on the act of assembly of Maryland, which was said to be ex post facto and in violation of a preceding contract, and therefore unconstitutional and void. The plaintiff’s counsel made a previous question whether this Court had a right to take into consideration, the validity of an act of assembly of another state, it appears clearly to me that we have not only the right, but are forced to do it. The contract between the plaintiff and Smith being of a transitory nature, an action may be brought any where. It has been brought here,, we are to try it, and consequently are to decide all points collaterally introduced, which are essential to the decision of the main question. That question is whether or not the plaintiff had title to the lots sold by him; his title depends on the act of assembly; the act of assembly depends on the constitution of the United States, which we are sworn to support. So that it is impossible to get at the merits of the case, without deciding on the act of assembly. Nor can our decision have the least effect on the independence of the state of Maryland, or on the validity of the act of assembly within the jurisdiction of Maryland. It only affects the cause before us; and jf the courts of Maryland should differ from us in opinion, they will pay no regard to our judgment, except so far as it affects this cause. Let us now consider the objections to this act of assembly. That of its. being ex post facto was .not much insisted on. Those expressions in the constitution have been construed to extend to the criminal law 'only. The decision of the Supreme Court of the United States in Calder and wife v. Bull and wife (3 Dall. 386), is on the very point. But it is said that by this law the obligation of the contract is impaired. If the law took effect before the contract, the objection vanishes. I am sorry that in the commission sent to Maryland for the purpose of obtaining the opinion of persons learned in the Constitution and laws of that state, the interrogatories were not pointed to this question. But they were only calculated to draw from the witnesses their opinion on the point whether the signature of the governor %vas essential to the validity of a law. Of this there could be little doubt, as the governor performs no more than a ministerial act in signing the laws and affixing the great seal of the state in presence of both houses. The journals of the legislature of Maryland shew their mode of proceeding, which is somewhat singular. The bill is put to its passage after the second reading; no question is taken nor any amendment offered in either house afterwards. What passes subsequently, is only matter of form; the bill is engrossed and read (or rather supposed to be read), and assented to by each house. I have never heard of any decision on this subject, but I cannot help supposing that light may be thrown on it by thé testimony of persons who have not yet been examined, persons who assisted in framing the constitution of Maryland, and know the construction put upon it, and the practice of the legislature from the beginning. At present I am not satisfied on this point, nor am I satisfied that even if the contract preceded the law, its obligation is impaired by it. In what is its obligation impaired? The purchasers of lots in Washington are not compelled to pay more money than they contracted for, nor at a different lime, nor is the land to be withheld from them in case they make payment according to contract. Every thing stands precisely as agreed on, but in case of default, a summary remedy is given to the commissioners. These commissioners were appointed by the president of the United States, with an adequate compensation for their services to be paid by the public, and totally disinterested in the sale of lots. They appeared to the legislature of Maryland to be no improper persons in whom to vest a power of enforcing a contract, to which, though they were nominal parties, they were substantially indifferent. This summary proceeding was of immense ‘ importance. A city was to be built in a short time for the accommodation of the legislature of the union. Suppose a court had been erected by the state of Maryland with power to proceed to judgment in a short time? This certainly would have been within their acknowledged powér. What they have done is not much different. For it must not be supposed that the purchasers of lots were left at the mercy of the commissioners. I presume that on an affidavit of a purchaser, that he had paid all the money then due, the Court of Chancery would have interfered, and stopped the proceedings of the commissioners till the matter could be enquired into. We have evidence of this law having been acted under for a great many years. Property to a very great.amount has been transferred under it; no court has decided against its validity. On the contrary we see that in the case'of CP Neale v. Thornton mentioned before, neither party entertained an idea of its being other than an operating law. I might add that there was evidence tending to shew that the contract was made by Mr. Greenleaf on behalf of himself and Mr. Morris, with an eye to this law, which would at all events preclude them from objecting to it. On a full consideration of this case, I have found no satisfactory ground for the verdict which has been given, nor does it appear to have accorded with the sentiments of the judge before whom the cause was tried. I am therefore of opinion that there should be a new trial.

Yeates J.

Equity will not decree the specific execution of an agreement respecting lands, the title whereof is defective: and I fully agree that in this state, where courts of jus.tice exercise certain equitable powers, a man will not be compelled to pay for lands which he has purchased, though even with general warranty, where it plainly appears that he cannot obtain a good right therefor. Why should a payment be enforced, which when made cannot be retained? Why should this circuity of action be permitted, when the insolvency of the seller of the lands, or other untoward circumstances, may prevent the recovering of the money back.

The chief objection which has been urged against the plaintiff’s recovery in this suit, is bottomed on the supposed unconstitutionality of the Maryland act of November Sessions 1793, No. 58, respecting the city of Washington; under which the plaintiff derives his title through a resale made by the superintendant. It is said that this law was passed on the 28th of December 1793, and being four days subsequent to the contract made between the commissioners of the city of Washington and Robert Morris and James Greenleaf for 6000 lots of ground, (whereof the 45 lots sold by the plaintiff constitute a part) impaired the obligation of that contract, and was therefore null and void by the provisions of the constitution of the United States.

This objection assumes as a fact that this law took effect from the 28th of December, which is at least highly questionable. I profess little knowledge of the received opinions in Maryland, respecting the constitution of that state, or when bills which have passed both houses of the legislature, are conceived to have operation as laws. It is admitted on all hands that the governor has no negative on the laws, but that his authentication of them is necessary previous to their enrolment. Were it absolutely necessary to give a decisive opinion, when the law in question took effect, I should be strongly inclined to say, that it existed as a valid law on the 24th of December. It appears by the journals of the senate and house of delegates, in their own language, that the bill passed both houses, though it was engrossed on a subsequent day. What strikes my mind with much force, is, that the act was applied for by the advice of Thomas Johnston, esq. one of the commissioners, a lawyer of the soundest cast, and that it was received by express from Annapolis and. acted upon as a law by the commissioners, previous-to the execution of their contract with Morris and Greenleaf. I adopt-the words of the Chief Justice of the United States in O'Neale v. Thornton, 6 Cranch 69, that the law must have been agreed upon by the parties to this contract, and was specially adapted to it.

But admit for the purposes of this argument, that its operative force did not commence until the 28th of December, that it had a retrospective effect on the previous agreement made with Morris and Greenleaf and that they had no knowledge thereof, how are the merits of the present controversy affected thereby? In what manner does it impair the obligation of the antecedent contract? It does not diminish in the slightest degree the legal or equitable rights of Morris and Greenleaf in the lands they had bargained for. It left the responsibility of the commissioners as to them, in the same state as the contract placed them in. The obligation of the contract on either side was wholly unimpaired. Each stood bound to perform their stipulated engagements. What change then did the law profess to introduce? None whatever, but the simple one of accelerating the remedy of the commissioners engaged in a momentous public trust, on the nonperformance by the vendees, of what they ought to have done. They were empowered to do summarily, what a Court of Chancery would clearly have done upon a disclosure of the facts by bill and answer. In this I cannot see any violation of the constitution. Private rights are preserved, but a remedy for a wrong is to be administered by a new tribunal. The sovereignty of a state would be a mere farce without such an inherent power, as exigences may arise. Insolvent and bankrupt laws, arbitration and limitation acts, are more liable to the exception now taken, than the present instance, and yet I do not know, that the exercising of such legislative powers has ever been questioned. It has been often said that an act of the legislature will not be pronounced to be unconstitutional by the judicial department in a dubious case. Where a plain instance occurs, in the necessary discharge of official duties, it is to be hoped, that judges bound by oath, will firmly act according to the honest dictates. of their consciences, independently of all consideration of consequences.

It will be remembered that the provisions of the Maryland act are adopted- and enforced by the law of the union of the 1st of May 1802, 6 U. S. Laws 126, and I have only to add that I have no difficulty whatever on this part of the plaintiff’s case.

Another ground of defence has been taken upon the testimony of Thomas Munroe, esq., who has sworn, that five of the lots sold to the defendant’s testator, are derived to the plaintiff under a re-resale by him as superintendant, the purchasers at the second sale not having complied with the conditions thereof, and that the superintendant had no legal authority to make such third sale, according to the decision of the Court in the case of O’Neale v. Thornton already cited. It is contended that the contract between the plaintiff and defendant’s testator is entire, and the consideration of the 45 lots of ground cannot be severed; and therefore if the title to five of the lots cannot be made good, the whole agreement is annulled. If these five lots have been resold by an agreement valid and binding by the laws of Maryland., the superintendant had no power to sell them again, because he had then fully executed his authority according to the case cited. But even in that case I think the consideration money might be apportioned, according to the prices stipulated to be paid by Smith for each distinct lot, which are particularly set out in the letter from the plaintiff to Turner, read in evidence on the part of the defendants. When the possession of particular parts of the land sold may fairly be deemed the inducement to the contract, (as in the case of buildings, valuable meadow or orchards standing and situate on a portion of the land), then the incapacity of the vendor to make a good title to such portion would afford a strong ground to vacate the whole agreement; but this could not apply to separate lots in the ground plat of a city sold at different rates. If a good title therefore could not be transferred to these five lots, the defendant would only be entitled to an allowance for the deficiency, and the trustees would be compelled to transfer the rest of the property, upon being paid the balance of the consideration money after a proper reduction.

In whatever light I view this verdict, I think palpable injustice would be done if it received the sanction of this Court, and therefore I concur in opinion, that a new trial should be awarded.

Brackenridge J.

Might not the commissioners of the city of Washington have proceeded to sell, or re-sell, no money being paid, or an inconsiderable sum; and this toties quoties as often as default was made? And would not courts of law and equity have sanctioned such a sale? More especially in such a case as this, where a great national object was in view, the raising money by the sale of lots in Order to erect buildings for the residence and accommodation of the general government? The sale was under an understanding with all concerned, that the consideration was to be paid, down, or at the expiration of the contemplated credit. Would not the nonpayment make it a fraud, and-avoid the contract ab initio? Reason and common sense and public utility, and the necessity of the case would say so; and I take it the law would say the same. For the law is founded on all these, and where the public interest is concerned, it makes a stronger case. I do not consider the law of Maryland as doing more than sanctioning this doctrine, and thus in a summary way expressing the same sense on this subject, which courts of law and equity would have done. I do not consider the law of Maryland as impairing a contract, but as pointing at, or authorising if that should be necessary, a remedy for the compelling a compliance with the contract, or ascertaining the evidence whereby it might be considered void. The resale was an act which the commissioners or the trustees had a right to make; the prior sales, or rather biddings down, amounting to no sales, and the purchasers, but persons in legal contemplation fraudulent, as defeating the object of the sale, and this for the great national purpose contemplated by those who brought the lots to market. I suggested to the counsel for the plaintiff on the trial, that the rule of the Maryland law might be laid out of the question. But declining this hint, and knowing his comprehension of mind, I yielded to his better judgment, and who had a right to manage his cause in his own way. But it confirmed me in my first idea, when I found that the learned counsel on reflection, and on the present argument, took it up in this point of view. For it appeared to me, and now appears, that the sale was immaterial, as the law authorising an act to be done, may be considered as ratifying an act which has been done. Fieri non debet, factum valet. As to the sale by the commissioners in this case, being a re-resale, I did say on the trial, and I think still there was no evidence of it. But I need not enlarge on this, as it may be seen that in my way of thinking, even a sale with solemnity and clerk’s entry &c., could be considered as no sale, where on the non-complying of the terms, which I consider as a precedent and implied condition of the sale, a fraud in contemplation of law did exist. And in fact in most of these sales in the town of Washing-ton, the purchasers on bidding down were on the speculation of an under sale to others, before the money was paid or became due, with a profit to themselves. On all these grounds, I am of opinion that the verdict be set aside and a new trial granted. But the plaintiff on a new trial having a verdict, and obtaining a judgment, it would seem to me, that there is something which he ought to do, before he can recover, or the money be paid over. Stoddart had given or contemplated the giving a bond, to refund in case of eviction by any claim. By his own shewing he is insolvent or embarrassed. Shall not the bank of Columbia do this, so far as respects the money which they are to receive? But this I leave to a motion which may be made when the case occurs. I take notice of the language of the Court of the United States, as confining ex post facto to a criminal case. It is an idea purely American, and not the worse for that, but it is incorrect. Ex post facto law, ex jure post facto, translated “ ex post facto law,” embraces civil contracts as well as criminal acts. The pama and the action, ex jure post facto, or arising on an act done or a contract made before the law passed, are both embraced by this term. Our constitutions use the phrase ex post facto law, or law impairing contracts. They mean no more than to specify under the idea of impairing contracts, a kind of ex post facto law, which was embraced under the general term ex past facto.

New trial granted.