Hunter v. Bradford

HAWKINS, J. We will take up the cases in the order in which they stand. First. The question raised by the pleadings is this — Is James M. Hunter, the administrator of his brother, Archibald R. S. Hunter, entitled to equitable relief from a Court of Chancery under the circumstances of this case ? It must be borne in mind, that this is not a bill for specific performance or the rescission of the contract. In the first instance, the party asking such specific performance “ must show that he has been in no default in not having performed the agreements, and that he has taken all proper steps towards the performance of his part.” 2 Story’s Equity, 81. Nor does he ask a rescission of the contract, but only asks an injunction against the collection of any further sum due upon the judgment obtained at law against James M. Hunter, administrator, on the promissory notes given by Archibald Hunter in his life time, to Leigh Read. It will be seen by reference to the statement of the case, that these notes were given to secure the payment for the land and negroes purchased by A. R. S. Hunter from Read. — 285 — The bill in this case charges, that there are heavy incumbrances upon the land, that is to say, a mortgage executed by Leigh Read, on the 3d September, 1839, to the Union Bank of Florida, to secure one hundred and twenty-seven shares of stock, amounting to $12,700 and $8,468 borrowed money, for which he gave what is usually known as a stock note. The bill further charges, that the estate of Read is hopelessly insolvent, and alleges that unless relief is had in a Court of equity, he will be remediless, as the resort to the covenants in his bond by action at law, would be futile and nugatory. The supplemental bill further states, that on the 27th of February, 1845, a judgment was obtained against James M. Hunter, administrator, upon these promissory notes for $9,432 34 ; and it is to restrain the collection of this money that the bills are filed. The answer denies that there is any other incumbrance upon the land sold by Read to Hunter than the mortgage given to secure the one hundred and twenty-seven shares of stock, and as to the insolvency of Read’s estate, declares that it “ cannot admit or deny it,” and cannot say whether the estate is solvent or insolvent, owing to circumstances which are set forth. The answer further asserts that at the time of the sale of Read to Hunter, he, Hunter, had full knowledge of the incumbrances, was bound by this knowledge, and that he must seek his redress at law upon the covenants in his bond for title. As to the answer of Bradford, in relation to the insolvency, we do not deem it a denial of the charge of insolvency contained in the bill. In Apthorpe vs. Comstock, Hopkins’ Chancery Reports, 148, the Court say: “ Where a defendant thus states his ignorance of the principal allegations of the bill, and merely asserts that while he is ignorant he does not believe them to be true, such an answer can hardly be deemed a sufficient denial of the facts alleged in the bill to dissolve an injunction issued as a proper auxiliary to the relief sought.” The case is like that of Roberts vs. Anderson, 2 John. Ch. R., 204, in which the Court continued an injunction after a similar answer. So, too, Chancellor Kent uses this language : “ With respect to the sufficiency of the answer, the general rule is, that to so much of the bill as is material and necessary for the defendant to answer, he must speak directly, without evasion, and not by way of negative pregnant. — 286 — He must not answer the charges merely literally, but he must confess or traverse the substance of each charge positively and with certainty, and particular precise charges must be answered particularly and precisely, and not in a general manner, even though a general answer may amount to a full denial of the charges.” “Indeed,” as Lord Eldon observes, “ the policy of the pleadings in this Court is, that a general denial is not enough, but that there must be an answer to the sifting inquiries upon the matter charged. If a fact be charged which is in the defendant’s own knowledge, he must answer positively and not to his remembrance or belief, and as to facts not within his knowledge, he must answer as to his information or belief and not to his information or hear say merely, without stating his belief one way or the other.” 1 Harr. Ch. R., 302. Mitford, 246, 247. Cooper’s Eq. Pl., 313, 314. 1 John. Ch. Rep., 107, Woods vs. Merrell. In Ward vs. Vanbokkelin, 1 Paige R., 100, it is laid down, that an injunction on coming in of the answer, will not be dissolved, unless the defendants deny all the equity of the bill. Governed by these principles, we must think that the answer of Bradford is not a denial of the allegation in the bill as to the insolvency of Read. Being the administrator of his estate, he could certainly have formed some estimate, some idea as to the solvency or Insolvency of the estate. And the facts as to this question being presumed to 'be peculiarly within his knowledge, his answer should have been explicit, and not being so, must be regarded as an admission of the charge of insolvency. This question, as will be seen, is of importance in the consideration of the case at bar. It is contended that the complainant in this case, is not entitled to relief, because his intestate bought with knowledge of the incumbrance upon the property, took possession of it, and that there has been no eviction and that his remedy must be upon his covenants for title. There can be no doubt as to the correctness of this as a general principle, in cases where a deed has been given and the contract executed. In Abbot vs. Allen, 2 John. Ch. R., 519, it was decided that a purchaser of land who has paid part of the purchase money and gives a bond and mortgage for the residue, and is in the undisturbed possession, “will not be relieved against the payment of the bond or proceeding on the mortgage on the mere ground of defect of title, there being .no allegation of fraud in the sale, nor any eviction, but must seek his — 287 — remedy at law upon the covenants in the deed. This decision is in accordance with the case of N. J. & S. Bumpus vs. Platner, et al., 1 John. Ch. R., 213, and many other cases. Courts draw a distinction as to claims for equitable interposition between contracts executed and executory contracts, a distinction, we think, founded upon good sense and justice. We will cite some of them, giving the language of the Judges pronouncing the decisions. In the case of Buchanan vs. Slade, 8 Humphreys, 518, the Court say : “ Where the purchaser has taken a deed with covenant of general warranty,, under which he has entered, and remains in undisturbed possession of the land conveyed to him, if there be no fraud in the transaction,, he cannot, before eviction, on the mere ground of defect of title, obtain relief in equity, or have the contract rescinded, or restitution of’ the purchase money. In such case, he must seek his remedy upon the covenant of warranty in his deed. But it is otherwise when the-purchase money has not been paid and title made.” If the purchaser is in possession under a mere equitable title, as a title bond, or covenant to convey,, he has a clear and well established right inequity to resist the payment of the purchase money, or to have the contract rescinded, and to have the purchase money advanced refunded to him on the ground of defect of title in the vendor. He will not be required to complete the purchase or accept a conveyance,, unless a title can be made according to the contract.” So, in a case reported in Monroe, 202, it is said “ A vendee will not be com pelled to accept a conveyance under an executory contract, until the vendor exhibits a regularly deduced title, free from incumbrances,, and apparently sufficient to assure the estate according- to the contract. But a vendee who has accepted a deed and the possession-with a covenant of warranty is presumed to have inspected the evidences of title and to have been satisfied with assurances, and to' have received the title papers.”’ The case at bar is one entirely executory in its character. It is an agreement to convey, and not a conveyance as to the real estate. In 5 Wendell, 29, Jackson vs. Moncrief, it is laid down that, although the instrument contains words of present purchase and sale,, yet those words must be construed in reference to the whole instrument ; and if further conveyances were to be made, it would be an-agreement to convey,.and not a conveyance — and until these convey — 288 — anees were made, the agreement was inchoate. The contract in this case being executory, we see no good cause why a Court of Equity should not interfere to restrain the further collection of the purchase money, for which judgment is had at law, when it is very clear that the covenants entered into by the vendor cannot be complied with, although the incumbrance was known by the vendee to exist. Yet if the contract was to the effect that the vendor should make good and lawful rights, the Courts will not compel him to accept a defective title in the teeth of his covenants. If the rule were otherwise, no course would be open to a vendee, who desires to secure himself against known defects. Jackson vs. Ligon, 3 Leigh, 161. 3d Munford, 68. And further, that, although the day of payment may have arrived, a vendee is not bound to part with the purchase money, unless a title is made or tendered, according to the terms of the contract. 4 Mun., 12. ■The first of these propositions is certainly not in accordance with the more rigid rules of the English Courts, in > which it is held that possession by the vendee is equivalent to a waiver of any objection to any incumbrance which may exist; but without positively adopting the rules of the Virginia cases, we must say they are based on justice and propriety. A person entering into an agreement for a purchase of land, knowing of an incumbrance, feels assured, that when he takes a bond from the vendor to make him a perfect title, on the payment of the purchase money, that he will be protected, in the language of Judge Tucker, “ against known, as well as unknown incumbrances.” Jackson vs. Ligon, case before cited. But resting the case upon the principle that the party in the present instance must seek his redress at law, upon the covenants in his bond — is that redress adequate, or complete ? The record, on the contrary, shows’ that, owing to the insolvency of the estate of Read, no redress whatever could be effected by a suit upon the title bond ; besides, supposing that the administrator of Hunter was now to pay the balance of the purchase money to the estate of Read, why compel him to seek his redress at law, and put him to this circuity of action, where a Court of competent powers can give him direct redress, should he present a proper case. In relation to the question, whether the insolvency of the vendor i s a good ground for an appeal to the equity side of the Court, we — 289 — quote the following language used by the Court in the case of Vance vs. House’s heirs, 7 Munroe, 541; and while we give the quotation our decided approbation, it will be observed that it was in case of an executed, and not executory contract. “ But passing from this preliminary suggestion, we would proceed to remark upon the merits of the controversy, that this is the case of an executed contract, where the conveyance has been made and accepted, with warranty of title, and possession delivered and uninterruptedly enjoyed, without eviction, or molestation. In such a case, a bill for the dissolution of the contract cannot be sustained, and the payment of the consideration enjoined, except in case of fraud, insolvency, or non-residency of the vendor, and a palpable and threatening danger of immediate or ultimate loss, without legal remedy, by reason of the defects of the title conveyed, and the inability of the vendee to protect himself against eviction under it. And to sustain such a bill, after the vendee has accepted the conveyance, the onus lies upon him to establish, to the satisfaction of the Chancellor, that the defect of title and imminent danger of eviction and loss exists.” There had been an injunction granted in this case, but the bill was dismissed, because it contained no allegation of fraud, insolvency, or non-residency. In Morrison’s administrator, vs. Beckwith, 4 Mum roe, an injunction was granted, upon showing the insolvency of'the vendor. Heironymous vs. Hicks, 3 J. J. Marshall, 701. 6 Munroe, 232. 1 Dana, 305. In the case of Vick vs. Percy, et al., 7 Smedes & Marshall, the Court hold the principle as laid down by Chancellor Kent, in the case of Abbott vs. Allen, 2 John. Ch. R., 519, but it remarks, “ that the only two grounds alleged for the interposition of equity axe fraud and insolvency of the defendant. These are denied by the answer, and there is no proof to establish either. The complainant being in possession, under a deed with warranty, with no fraud made manifest, and with nothing to show that the covenanter is not able to pay any damages that may be recovered against him, has no right to call his vendor into a Court of Equity to litigate an adverse title — he must rely on his covenants, if he should be evicted.” This Court here virtually admits that insolvency would be a cause for equitable interference. In Hunter vs. O’Neil, 12 Ala. Rep., 37, the Court lays down the following propositions: “ An obligation to make a deed to — 290 — certain lands, when the price contracted for is paid, is in law a covenant to make a good title, when the condition is performed by the purchaser. When the vendor entering into such a contract, becomes insolvent before the price is paid, and the purchaser shows an outstanding incumbrance created by the vendor, he will be entitled to-relief in a Court of Equity. But unless the money is actually tendered, upon condition that a title is made, the only relief is to enjoin the vendor from proceeding for the price, until he gives indemnity against the outstanding incumbrance.” After these adjudications, we are clearly of opinion that the insolvency of the vendor is good ground for equitable interposition, upon the principle that Chancery will lend its aid, whenever there is not a full, complete, or adequate remedy at law- As to the personal property sold by Read to Hunter, it requires no argument or authority to show that an implied warranty as to title followed the sale, though the record shows there was an absolute warranty. It is urged that Hunter was bound to tender the money due upon the purchase, and if he had, the incumbrance would have been removed — but is this a sequitwr ? The amount due upon the contract would not have been sufficient to have removed the incumbrance, and what guarantee would the vendee have had that it would have been so applied ? Again : Why tender the balance of the purchase money, if it was clearly ascertained and settled that the vendor could not give a title in accordance with his bond ? In the language of the Court, in Fisher vs. Bridges, 4 Blackford, 518, “the utter inability of the defendant to convey, dispensed with the necessity of the demand, as the law does not require a vain or nugatory thing to be done.” It is contended by counsel for defendant, that Hunter agreed to pay the stock note of Read, and Read was to transfer the Union Bank stock to Hunter. By reference to the record, we cannot perceive that any such arrangement was positively entered into. There was a negociation pending, no doubt, as to this subject, but it seems never to have been carried into operation, owing to the several deaths of Read and Hunter, and was altogether of an inchoate nature. Bembry says: “ They had agreed to come to a settlement, which was prevented by the sudden death of Read.” In his second examination, he says : “ Archibald has told me that he and Read were — 291 — to have a settlement, and that there would be a small difference between them, but in whose favor he did not know.” A Court could not consistently enforce an imperfect and incomplete verbal agreement between parties, at variance with the solemn obligations in writing, and when there is no evidence to show that it was executed in part or in whole by either of the parties. Before closing this branch of the subject, it will be seen, by refence to the evidence, that the land sold by Read to Hunter, and the negroes, except one or two, were sold under an execution against the estate of Read, in favor of the Union Bank, to satisfy Read’s stock note. This having occurred since filing the bill by complainant, no mention is made of it; but by looking at page 50 of record, we see an agreement in these words: “ It is agreed by the parties by their solicitors, that the property sold by the execution of the Union Bank vs. Read’s administrator, brought #5,079, #4,754 of which was recovered by the Bank, in full satisfaction of their execution against Read’s estate, and of their lien upon the property sold by Read to Hunter.” Although as a general rule, evidence is inadmissible, unless relating to the issues made up in the pleadings — still, the evidence as to the fact of sale being before the Court by consent of counsel, we feel authorized to advert to it. The sale in this case brings the suit substantially within the' rule laid down in Abbott vs. Allen. Here was a judgment at law — execution and property sold — a sheriff’s deed, no doubt, given, under which possession could have been enforced at law, unless the party in possession submitted, and covenanted to give up possession. It would have been idle and futile for complainant to have litigated further as to the land, and we see, in 3d J. J. Marshall’s Reports, 378, it is not the duty of a party so situated to do so. The Court say: “ If the party submits to the judgment, it is equal to an actual eviction by the habere facias. No other evidence of a legal eviction is required than the judgment of the Court.” Upon a review of the facts of the case, it would be, we deem, extremely hard and inequitable that there should be a further collection of the purchase money against the estate of Hunter. It has expended upwards of thirteen thousand dollars, and does not seek by the present proceeding a recovery of airy part of this sum against the estate of Read — the property for which this amount was paid — and — 292 — other liabilities incurred, has been sold under execution against the estate of Read, and goes to pay its debts. There may have been laches on the part of the estate of Hunter, no doubt, in not offering to complete the sale, though as we have seen, it would have been a mere form, owing to the insolvency of Read’s estate. The estate of Read, on the other hand, was bound to remove the incumbrance on the property sold, by the first day of January, 1843, which it did not do, and was equally, if not more in fault, than the estate of Hunter. The loss sustained by the latter estate is far greater than that sustained by Read’s, and we are disposed to let the parties remain where they now are. It is therefore, ordered, adjudged and decreed, that the decree rendered in the Court below, be reversed, and that the injunction heretofore granted in this case be made perpetual.