Stone v. Fowle

39 Mass. 166

• Court: Massachusetts Supreme Judicial Court
• Decided: June 17, 1839
• Status: Published

Opinion

Putnam J.

delivered the opinion of the Court. The plaintiff is the indorsee of a promissory note, which was made payable to Samuel J. Gardner and James T. Hobart, or (heir order, and by them indorsed to the plaintiff after it was due and payable. The defendants therefore may make the seme defence which it would be competent for them to make if the suit were in the nameá of the payees. The signatures of the defendants are admitted, and the note purporting to have been made for value received, the burden is upon the defendants to show a sufficient legal reason why it should not be paid. And they contend, that the contract of which the note formed an essential part has been rescinded, and that there has been a total failure of the consideration for which the note was given.

It is proved, that at the time when the note was made, viz. on the 21st of September, 1835, Gardner and Hobart made and delivered their bond to the defendants, in the penal sum of $40,000, reciting, that “ whereas the said Gardner and Hobart have sold to the said Fowle one undivided fifth part of the township number 5, range 8, on the east branch of the Penobscot river in Maine, (the whole township contains, exclusive of reservation, 22,070 acres, more or less,) for the sum of six dollars per acre, one quarter thereof in cash, the remainder in equal annual payments, in one, two and three years from the seventh day of July last, with interest thereon, annually, from said seventh day of July ; and whereas the said Fowle has, in lieu of said cash payment, given to the said Gardner and Hobart a note for $ 6,703-76, dated this day, payable in six months from this date with interest, and signed by himself, Isaac Fowle,” and the other defendants, (being the note now sued upon in this action.) The bond then proceeds to declare the condition thereof as follows : “ Now if the said John Fowle, or his as signs, shall well and truly cause the said note to be paid at ma turity according to its tenor, to the said Gardner and Hobart, or tbeir order, and shall cause satisfactory security to be given to said Gardner and Hobart, or their legal representatives, for the remainder of the purchase money, payable, as aforesaid, in one, two and three years from the seventh day of July last, with interest annually from said day; and the said Gardner and Hobart shall thereupon convey to the said John Fowle or his assigns in fee, the said undivided fifth part of the township aforesaid; or if the said Fowle, or his assigns, shall fail to pay the note aforesaid, or to comply with the other terms of payment aforesaid ; then this obligation shall be void, otherwise, shall remain in full force and virtue.”

The verdict was taken by agreement, for the defendants ; which was to be set aside, and the defendants defaulted, provided the whole Court should be of opinion, that the evidence stated would not warrant the jury, with proper directions from the Court as to all matters of law, in finding a verdict for the defendants.

The note became payable on the 21st of March, 1836, but was not paid. And it is proved, that Gardner and Hobart were not then in a condition to convey a fee in the one fifth of the township.

It was proved, that, at the time when the note and Bond were made, Gardner and Hobart had an interest in a deed or contract between them and Daniel SpofFord and others, dated on the 27th of February, 1835, by which they undertook to grant, bargain, sell and convey to Gardner and Hobart, and their heirs and assigns for ever, the township of land described in the bond, to have and to hold, &c., for ever, reserving however 1000 acres of land for public uses, averaging in situation and quality with the other land in such township, and also reserving to the States of Massachusetts and Maine, (who were the grantors of the township to SpofFord and others,) a lien on all the timber cut on the township, (if any,) as security for the payment of certain notes due from SpofFord and others to those States, it being provided, that no timber was to be cut without written permits from the land agents. The conveyance was also on condition, that if Gardner and Hobart, their heirs and assigns, should well and truly pay those notes within the periods limited therein, according to the tenor thereof, this was to be a good and sufficient deed to convey the premises to them and theii neirs and assigns ; but if the payment of such notes should not be made as above specified, this deed should be null and void, and all payments which should have been made pursuant to this instrument, and the contract between the parties, should be forfeited to the use of the States. And Gardner and Hobart were to indemnify Spofford and others from their notes to the States of Maine and Massachusetts.

The conveyance by those States to Spofford and others was on the 24th of October, 1832, subject to similar reservations and conditions as was the conveyance from them to Gardner and Hobart. It was proved, that Gardner and Hobart after-wards, on the 7th of July, 1835, gave abend to one Ivory Jefferds similar to that which they gave to Fowle, which however was not carried into effect. It expired on the 21st of September, 1835, the day when the note now under consider ation was given. It is of no other relevancy, that I know of, to the case at bar, than as it shows the manner in which Jefferds dealt with his interest in the concern while that interest lasted. He assigned to several persons, but used no words indicative of his conveying a fee, but only such as should assign his right to such a particular part, (say one fifth or otherwise,) in the contract, “ one fifth part of my right, title and interest to the within bond.”

It was proved at the trial, that the condition in the deed oi contract of the State of Massachusetts, to Spofford and others, had not been complied with ; for the treasurer of that State produced one of those notes which became due in October, 1837, which was still unpaid. And the lands were also under mortgage to Spofford and others to secure a number of promissory notes given to them, exceeding $ 23,000, which had not become due on the 21st of March, 1836.

Now although Gardner and Hobart, at the time when the note and bond were made, bad no title in fee simple to the land, yet they might have procured a good title before the ex piration of the six months within which the contract was to have been completed. But they did not do so. They were willing indeed to give a conveyance which should in form purport to convey a good title, and to covenant, in as ample manner as if they had the fee, that the lands were free of all incumbrances, and that they were lawfully seised, and had good right to convey, and that they would warrant against the lawful claims of all persons. But those covenants would have been broken immediately ; for at the best, Gardner and Hobart had a right to acquire a title to the land upon the performance of certain conditions contained in the conveyance from the States to Spofford and others, and from the latter to Gardner and Hobart.

Now we do not intimate, that such a right is not the proper subject matter of contract, and a good consideration for either money or promissory notes. Indeed the plaintiff insists, that such was the true intent and meaning of the parties to the contracts now under consideration. He contends that this was a purchase of Gardner and Hobart’s right in the contract, deed or conveyance which the States of Massachusetts and Maine had made ; that the parties treated for scrip, and one relied upon the promise or undertaking of the other, as independent undertakings. It is said for him, that the defendants knew all the facts applicable to the case, and that there has not been any fraud ; that the defendants are bound by law to pay their note, which was taken as the cash payment on the bond, and that the remedy of the defendants is altogether upon the covenants which were made by Gardner and Hobart.

In the case of Tinney v. Ashley, 15 Pick. 546, the obligors undertook to execute and deliver a good and sufficient warranty deed of certain land, and the Court held, that the words good and sufficient, were to be applied to the deed and not to the title, and that the condition was performed by making and delivering a deed good and sufficient in point of form to convey a good title, the remedy for any defect being upon the cove nants of warranty contained in the deed.

In Allen v. Sanford, 5 Mass. R. 439, the Court held, that a condition requiring a conveyance of the land by a good and sufficient deed of warranty, was to be confined to the form of the deed and its execution. But they said, that they did not mean to determine, that in no case such words should not apply to the title. If the money was to be paid on receiving the deed, it might be a reasonable construction, that a good and sufficient title should be conveyed. In that case the money was to be first paid, and the deed delivered in are asonable time after-wards. Now in the case at bar, the money or equit alent was to be paid at the time when the deed was to be delivered.

But we cannot think that to be the meaning of the condition of the bond now under consideration. If it had been such, if the defendants had purchased the right which Gardner and Hobart had to acquire a title upon certain strict conditions, they would, as prudent men, have taken measures to perform the same. But Gardner and Hobart undertake on their part to convey a fee, which they would not be able to do unless they performed the requisite conditions. The parties were treating for land, and not for a chose in action. The payment of the note as part of the consideration, and giving security for the rest of it, and the conveyance of the fee simple estate, were to be simultaneous transactions. The purchaser was not to part with his money without getting a fee in the land. It is more like the agreement in Jones v. Gardner, 10 Johns. R. 266. Jones was to give “ a good and sufficient deed to vest Gardner with the title of a farm of land with the appurtenances which the court held to mean, that the legal estate in fee “ free and clear of all valid claims, liens and incumbrances whatsoever, was to be vested in the vendee and from the fact, that the wife of the vendor had a contingent life estate of dower, the deed which was offered, was considered not sufficient to vest an absolute title. In the case at bar, the condition is to convey in fee ; which we think is to be intended in fee simple absolute.

If instead of giving the note, the cash had been paid, and he vendor had stipulated to convey the land at a certain time afterwards, and had failed to do so, the purchasers would be entitled to recover back the money, as paid upon a consideration that had failed.

The tendency of the judicial decisions of modern times is, to construe dealings and contracts, whether under seal or'not, as dependent, since the result is to compel each party to do his duty, in regard to acts which may be properly considered as concurrent, and to prevent litigation. In Berry v. Young, 2 Esp. R. 639, note, Lord Kenyon said, “ As the seller has failed in completing his engagement, the plaintiff is entitled to a return of his deposit monev.

So in Roper v. Coombes, 6 Barn. & Cressw. 534, the question was, whether the plaintiff had a right to rescind a contract for a lease, and maintain an action for the money he had paid on account of the bargain. The agreement was made on the 31st of March, for a lease of a house for twenty-one years from the 29th of September then next, for £ 1000, of which £ 10 was paid down, £ 90 was to be paid on the 13th of April then next, and the residue on having the possession. No time was expressly mentioned for granting the lease. The £ 90 was not paid on the 13th of April. On the 20th of April the plaintiff requested of the defendant to exhibit his title ; but the defendant refused, and demanded the £ 90, and said that he was not bound to show his title or to grant the lease until the 29th of September. Lord Tenterden held, and his ruling was confirmed, that the plaintiff had a right to rescind, inasmuch as the defendant would not exhibit a title ; that it was unreasonable that the defendant should oblige the plaintiff to pay so large a sum as £ 90, without knowing that the defendant could perform his part of the contract. At the trial the plaintiff proved that the defendant had no right; and the plaintiff recovered back the deposit money.

That case is very strong against the present action ; for the payment of the £ 90 was to be paid several months before the lease was to commence. It might be considered that a reasonable time for the granting of the lease had elapsed ; and that therefore the defendant was bound then to make it, which he refused to do. But at any rate the possession was not to be given until September.

In the case at bar, Gardner and Hobart were, by the terms of the bond, to convey the fee, upon receiving the note and security. They were required, “ thereupon ” so to convey. And as the vendors were not in a condition to convey, it is very clear that the defendants had a right to rescind the contract and refuse to pay their notes. Judson v. Wass, 11 Johns. R. 528 ; Tucker v Woods, 12 Johns. R. 190. And the cases to this point may be multiplied indefinitely.

The result is, that there must be judgment for the defendants according to the verdict.