Hemming v. Zimmerschitte

Hemphill, Ch. J. This case was brought by the appellant (who wa= plaintiff in the court below) for specific performance! of a bond conditioned to be void on conveyance of title to lands therein described. The petition was filed in September, 1846, and the answer, or paper purporting to be an answer, in April, 1847. At tlie next, term a general demurrer or exception was tiled, and at a subsequent term tlie petition was amended and a second general demurrer was pleaded. On argument tlie demurrer was sustained and the petition dismissed. A motion to set aside (his judgment was overruled, and (lie cause has been brought up to tiiis court by error. It is assigned for error— 1. That defendant was permitted to file, a general demurrer subsequent toan answer putting in issue tlie facts of tlie case. 2. That the. plaintiff’s exceptions to tlie answer were overruled-. 3. That the demurrer was sustained. Tlie consideration of the first and second assignments of error may lie waived, as the record does not show that an answer to the facts was pleaded. There is in tlie transcript a copy of a writing purporting to be an answer; but it is not authenticated by the signature of either the defendant or liU attorney, and cannot properly be classed among the, pleadings in the cause. We will proceed, without further observation, to tlie important, point in the case, viz, whether there was ail error in tlie judgment sustaining the demurrer and dismissing the petition. In support of this judgment it is contended that the instrument sued upon contains iio such covenants as would maintain an action for a specific conveyance of the lands which form the subject-matter of tlie contract; that tlie ob-ligor had the option either to convey tlie land or pay tlie penalty, and having made his election by failure to convey, tlie bond becomes single, and a suit for the money alone can be maintained. Were this to be regarded as one of those alternative contracts in which the obligor has, until tlie day of performance, the option of which of tin two tilings lie will perform, yet this right is lost if lie suffer the period to elapse without malting the election; aud so, by analogy, the light, would be gone if no particular period was fixed, and performance was delayed until demanded by the obligee in the contract. (1 Bailey R., 136; Story oil Contracts, sec. 8. 976.) There does not appear on tlie record, as presented, a manifestation of willingness on tlie part of tlie obligor to discharge his obligation; and tlie right of election, if applicable at all, is lost and camiot avail tlie defendant. [83] But in equity an agreement such as the one nnrler consideration is not treated as one which can he' discharged at. the pleasure of the obligor by the payment of the penally or damages, but. as authorizing' a demand for the convey' ance of the laud at. all events. ' This is the usual form assumed in this country by executory contracts for the sale of lauds; and in their construction the penalty has been regarded as intended to secure the, principal intent and object of the irausiulion, viz, the conveyance of the land, and to reimburse such damages a« the vendee may suiter where performance is impossible or may not be sought by the obligee. Mr. Justice FStorv. in his Commentaries on Equity‘Jurisprudence, 1ms stated the. principle, as deduced from the authorities, in the following terms, viz : “The jurisdiction' of courts of equity to decree a specific performance is not dependent, upon or affected by the form or character of the instrument. What these courts seek to be satisfied of is that the transaction, in substance, amounts to and is intended lo he a binding agreement for a specific object, whatever may be the form or character of the instrument. Tims, if a bond with a penalty'is made upon condition to convey certain lands upon the payment of a certain price, it will he deemed in equity an agreement to convey the land at all events, and not to be discharged by the payment of a penalty, although it has assumed the form of a condition only. Courts of Equity, in all cases of this sort, look to the substance of the, transaction; and where that requires a specific performance, they will treat rite penalty as a mere security for its due performance and attainment.” (2 Story Eq., sec. 715; Fonbl. Eq., ch. III, sec. 9; Sug. V., 154; 2 Atk. R., 371; and the cases referred to by Mr. Justice Story.) Thu petition is not insufficient, then, on the ground that the only remedy of the obligee was a suit for damages, aud that the covenants arc noli such as to authorize action agaiusl tlic obligors for their specific execution. it is suggested in the argument of the appellant that the, demurrer was sustained oil the. ground that the action was barred by the statute of limitations. The ground may probably have been that the demand was stale, anil was not, therefore, a proper subject for the interposition of a court of equity. It. will he seen by reference to the statute of limitations that in no one of its provisions does it include an action for the specific iMH'formauce of agreements for flic transfer of property. The rules prescribing such actions must be sought elsewhere. They are to be deduced from decisions where the extent to which the, rights of parties to equitable relief have been affected by their laches lias been the subject of adjudication. It appears to be, a general rule that parties peeking specific execution of agreements should lile their petitions promptly, and not slumber on their rights. (Madd. Ch. Prac., 414.) In the cases generally where the effect of laches has been the subject of discussion, the contract had not been fully executed by either party; and the, one against whom relief was sought had indicated, by his acts or expressions, his intention to disavow or abandon the contract. In Watson v. Reid, (1 Russ. & Myl., 236,) the plaintiff' having notice that the defendant had abandoned the contract, aud not filing liis bill for nearly a year afterwards, the delay was held to be unreasonable', and the bill was dismissed. (4 Peters, 311; 2 Story’s Eq., sec. 771.) But in the case under review the vendee had, at the inception of the contract, completely discharged all his obligations by the payment of the purchase-money. lie was from that time, fully clothed with the. equitable title, aud had a perfect right at any time to have demanded the conveyance of the interest remaining iu the vendor. There was no delay in the discharge of the duties growing out of liis relation to the vendor as arising under the contract. There is no pretense that the plaintiff', on his own allegations, which are all we can now consider, shows that the bargain was hard, unconscionable, or iniquitous; and the only laches of which the plaintiff has been guilty is in not promptly demanding a conveyance to which lie was indisputably entitled. This is a delay which could operate no injury to the defendant, as all the duties devolving upon the plaintiff had been previously fully discharged. [84] That the most just rights may he lost by negligence in their prosecution is well settled; hut the character of the delay in this case (if there be any in legal contemplation) is not such as would defeat the relief sought by tlie petitioner. It is an acknowledged principle that vendor and vendee under ail executory contract for tlie sale of lauds occupy mutually and respectively the relation of trustee towards each oilier (Sugden, 1(50) so long- as they do not indicate by their acts an intention 1,o refuse compliance with' the obligations impo-ed by their contract. In this case, the vendee having- performed his obligations, the vendor’s subsequent possession or interest in the land was held in trust and in subordination to the superior equitable right of tlie vendee; and this possession would continue to maintain its fiduciary character until the vendor would manifest an intention to claim and enjoy tlie laud as his own. The possession would then become adverse; and so far as shown, it did not assume that aspect until the demand and refusal averred as constituting the breach on which the suit was instituted. There is no indication by sale of the land to a third person, or by any other mode, that the vendor claimed an exclusive interest in the lands, or that lie had repudiated or denied the binding-force of tlie contract. And until that was done in some mode tlie laws of limitation or the rules on the subject of laches would not commence their operation, so as to exclude a party who was in no default from his relief in equity. The possession of tlie vendor would continue to be that of the ven-dee; and though the trust may not be performed, (which in this case was the execution of a conveyance,) yet the possession of the vendor would not operate as a bar, because it was in accordance with his title. (7 Johns. Cli. K., 121.) This is the rule on the subject of trusts; though I can perceive no good reason why the character of the one existing in this case should, defeat the operation of the statute of limitations or tlie analogous rules by which equitable demands are barred. On the facts presented it is manifest that the vendee could, at any time after tlie date of the contract, have instituted his action for specific performance. Tlie fact of his being- fully entitled to relief was well known to the petitioner, as he had paid the money; and this is tlie only g'l-omid on which the relief he seeks could be obtained. How, where a party lias a right in equity and labors under no disability to prosecute his suit, I see no sufficient reason why his demand should not be barred by limitations applicable to analogous cases at law. The relation of landlord and tenant, or of an actual trustee and cestui que trust, is different in some respects from that existing between vendor and vendee. The possession in the former cases is intended to be consistent with the superior right, and lias some beneficial object and purpose to be accomplished by its continued existence in that character ; but what salutary object can be. promoted by permitting' the relation between the vendor and vendee to continue as a trust, when the purpose of the transaction between them was to create no such trust, but to transfer property from the one to the other, and when the only ground for eonliuuing the trust is to await the execution of a conveyance, to which there is no legal obstruction, and what would long- since have been decreed, had application been made to the courts of tlie country y The policy of statutes of limitation includes among its objects that of preventing deception on the community by permitting- credit to he obtained on (.lie fail'll of large property which might nevertheless he absorbed in the extinction of stale demands; and this policy would he counteracted, to some extent at least, by suffering vendors to remain in possession of property to which (hey have but a shadow of title, while the substance remains in another. Even where notice is had of the transaction, yet the delay of the vendee might lead to the supposition that tlie contract was rescinded, or that no real transfer had even been intended. When money is loaned to or deposited with another, there is a trust; but this will not prevent the statute from barring- an action for its recovery; and when the [85] purchase-money is paid, and a conveyance is only wanting to perfect the title, there would be no more hardship in a rule which would require the party, ill a limited period, to pursue his rights in this case than in the former, where money was sotta'iit to he recovered. Note 32.—Williams v. Talbot, 16 T., 3; Gregory v. Hughes, 20 T., 345; Bullion v. Campbell, 27 T., 653. Note 33.—DeWitt v. Miller. 9 T., 239; Mitchell v. Sheppard, 13 T., 484; Stramler v. Coe, 15 T., 211; Holman v. Criswell, 15 T., 394. Note 34.—DeCordova v. Smith, 9 T., 129; Smith v. Hampton, 13 T., 463; Geary v. Cummins, 28 T., 91. Note 35.—Holman v. Criswell, 15 T., 394; Vardeman v. Lawson, 17 T., 11; Early v. Sterrett, 18 T., 113; Gibson v. Fifer, 21 T., 260. It may be said that the vendor lias it in his power to extinguish the. trust by nut Mug the conveyance. So has a debtor the power of extinguishing the demand by paying the debt; but should he fail to do so, he eaiinot, after a limited period,-lie coerced. Circumstances may exist which worth! require a continuance of the trust relation after the conditions havc’been fully performed by one of the parties. The vendor, for instance, though fully paid, may not have it in his power to make immediately a-valid legal title. There is good reason, under such circumstances, for considering the relation between the parties as a continuing trust; but where (lie vendor could he constrained to execute the conveyance, and no other duty of the relation remains to he discharged, I see no reason why an action for that purpose should not be subject to the rules of prescription applicable to the ease. But the rule is otherwise, and tho petitioner is entitled to its benefits. Tile limitation oil his right of action did not commence its operation until the vendor had indicated an intention to refuse performance or to claim the property as his own. (7 Johns. Ch. Rep., 90; Cheves R., 22. 33; 2 Rich. Eq. R., 133; 20 Johns B., 33; 19 Verm. R., 526; 6 B. Mon. R., 479, and 1 Rice Eq. R., 373.) What would, under that state of circumstances, he the proper rule of limitation where the vendee is fully clothed wiili the equitable title can be determined when the question is presented for consideration. The facts upon which this opinion is given are those averred in the petition, as they are ¡done examinable on demurrer. On considering of these, we are of opinion that the judgment is erroneous; and it is ordered that the same he reversed and ttie case remanded. Judgment reversed.