Woarms v. Hammond

5 App. D.C. 338, 1895 U.S. App. LEXIS 3552
Court of Appeals for the D.C. Circuit·Decided February 5, 1895·No. No. 414·Published·Cited by 2 cases

Opinion

Mr. Justice Mokkis

delivered the opinion of the Court:

The objection to the bill of complaint, because it fails to set forth any property of the appellee that could be affected by the claim of the appellants, is not entirely without foundation. The bill in this regard is rather loosely drawn. Under ordinary circumstances, the land records of the District of Columbia would show what real estate in the District the appellee held in his own name, or would lay the foundation for the ascertainment of such equitable interests as he held. But the appellants do not show that they had any recourse to those records, or that they made any attempt to ascertain what real estate the appellee possessed. Yet some of it was rather notorious. They allege, upon information and belief, that there was a large amount of real estate belonging to the appellee at the time of the maturity of their claim, but that they are not able to describe it. They show no reason for their inability to describe the property; and such inability might very well be the result of other causes than the want of knowledge of it. This looseness of allegation is rather unjustifiable; and yet it cannot be regarded as sufficient to defeat the right of the appellants to a discovery from the appellee of the real estate which he did actually hold; for that was a matter which was peculiarly, although [344] perhaps not exclusively, within his knowledge. He had covenanted to give a deed of trust on all the real estate that should belong to him at the time of the maturity of the note. It was his duty to tender that deed when the demand for it was made by the appellants; and it followed, of course, that he should have disclosed in that deed and described in it the real estate that 'then belonged to him. Discovery was by implication part of his contract.

Again: There is no allegation in the bill that the appellee had refused to execute the proposed deed of trust, but only that he had neglected to execute it. Neglect may amount to refusal, and often does, but not necessarily. It would seem to be reasonable that a person should not be called upon to respond to a suit in equity until there is positive violation of duty on his part, or positive refusal to execute a trust which it is incumbent upon him to execute. But no point is made in this regard by the appellee; and we do not regard it as of sufficient importance to defeat the claim of the appellants. We must observe, however, that the repeated demurrers interposed by the appellees should have induced the appellants to remove the palpable defects which those demurrers must necessarily have pointed out to them.

The important and substantial question in this case is, whether the appellants are entitled to an equitable lien upon the real estate of the appellee, under the agreement between them which has been set forth ?

Undoubtedly, that agreement is very inartificially and even ungrammatically drawn; and under the somewhat rigid rules that are usually applied in ordinary cases for specific performance in equity, the conclusion reached by the court below in this case is not, without justification. There might well be difficulty in decreeing the execution by the appellee of a deed of trust when no trustees had been agreed upon between the parties and none of the terms and conditions of the trust had been formulated by them in their contract. And yet it must be remembered that equity will not per[345] mit a trust to fail for the want of trustees, and that the terms and conditions of a deed of trust intended to serve merely the purposes of a mortgage, are largely, like a mortgage itself, within the control of a court of equity.

But it would be a narrow and illiberal view to regard this case as one of ordinary specific performance. It is true that the bill is framed for alternative relief, either to have an equitable lien declared upon the defendant’s property or to have the defendant required to execute the deed of trust for which he had stipulated. The substantial agreement of the parties is not for the conveyance of any property or the transfer of any right, but to give additional security, in a certain contingency for the payment of an existing indebtedness. That security was to be by way of lien upon the defendant’s property. The lien was the essence of the agreement; the form of the lien was a matter of no great consequence. A mortgage or a deed of trust would serve the purpose equally well. A deed of trust is the usual form of mortgage with us, and essentially is no more than a mortgage; and the purpose of both is to give a lien upon property, which a court of equity may enforce, whenever the parties have not bargained between themselves for any enforcement of it without the intervention of equity.

It is apparent from the agreement between the parties that no further time was to be given in the proposed deed of trust for the payment of the indebtedness, and that, therefore, such deed of trust should be subject to be enforced immediately upon its execution. The appointment of trustees in that event would be wholly unimportant. Their nomination might be conceded exclusively to the defendant ; but if they failed to execute the trust properly or refused to do it, the court of equity could intervene and remove or control them, and do substantially what it is now asked to do here by the complainants. It does not appear, therefore, that, by reason of the failure of the parties to agree upon trustees for the execution of their proposed deed [346] of trust, or by reason of their failure to specify in their agreement the terms upon which the trustees should execute their trust, the agreement is so vague and indefinite and so fatally defective that a court of equity must refuse to give it effect, especially when, as in the present case, there is no remedy whatever at law. For it is quite plain that a suit at law for the violation of the agreement would amount to no more than a suit at law upon the note or the indebtedness. And this evidently it was the purpose of the agreement to avoid. The manifest purpose of the agreement was that the complainants, in the event of the defendant’s default, should have an assured and satisfactory remedy in equity through the means of a lien upon real estate, instead of being remitted exclusively to their ordinary remedy at common law, with its ordinary risks, contingencies and delays. Apparently, it was not deemed necessary by the. complainants or expedient by the defendant to give the lien at the time the agreement was made; it was regarded as sufficient by both parties that the lien should arise only in the event of default, and that it should then be created at the option of the complainants, and be immediately enforceable.

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Woarms v. Hammond, 5 App. D.C. 338, 1895 U.S. App. LEXIS 3552 (D.C. Cir. 1895).

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