McCullough v. Staver

Opinion, Mr. Justice Williams : In April, 1883, McCullough was the owner of a tract of land containing fifteen hundred and twenty-two acres. He contracted in writing to sell the tract to James M. Staver for $3,000, with a reservation of all the hemlock and oak tan-bark to himself, with the right of entry to take and remove the same in quantities of from five hundred cords upwards, each season, as might suit his own business purposes. Staver had six months within which to pay the purchase money, and upon payment was entitled to a deed; but no part of the purchase-money was paid down, nor was there a promise on the part of Staver to pay it. His contract was in effect a refusal; a promise by McCullough to sell to him for $3,000, provided he paid that sum within six months. Before the time expired Staver had found a purchaser for the land at a large advance upon the price he had agreed to pay, and on the 14th of September, 1883, he brought A. D. and M. S. Squires to McCullough and a new contract was entered into upon that date. This contract recites that of 3d April, 1883, between McCullough and Staver, and that between Staver and A. D. and M. S. Squires, and then provides that the terms of payment by Staver shall be changed to correspond with the terms of payment to him by A. D. and M. S. Squires, so that McCullough shall receive his purchase-money as follows: $2,000 on the 10th December, 1883, and the balance out of a three thousand dollar payment to be made by the Squireses on the 1st December, 1884. The contract contains a further stipulation “that when A. D. and M. S. Squires [438] shall have paid 'all the purchase-money they have agreed to pay to said James M. Staver, viz.: eight thousand dollars and interest, that said Robert McCullough or his legal representatives will make title to said lands as provided in his said agreement with James Staver unto the said A. D. and M. S. Squires or their heirs or assigns,” etc. The two thousand dollars were paid by A. D. and M. S. Squires on the 8th December, 1883. There can be no question but that, under the terms of the tripartite contract above recited, Staver’s refusal had ripened into an equitable title; and that the deed to which he was entitled upon the payment of $3,000, was to be made to A. D. and M. S. Squires, his vendees, when they had fully paid the purchase-money due both to McCullough and himself. But A. D. and M. S. Squires paid no more purchase-money on the contract, and in February, 1886, McCullough brought an action of ejectment against them. With the summons he caused a rule to arbitrate to be served, and as soon as it could be done an award was obtained against them in the nature of a conditional verdict, to be released upon the payment of the sum of $1,287.65 within thirty days from the date of the award. The defendants made no defence to the action, and did not appeal from the award or comply with its terms. The plaintiff obtained a writ of habere facias and was put into possession by the sheriff. On the 19th June, 1886, Staver,who was not made a party' to- or served with notice of the action of ejectment brought by McCullough, his vendor, tendered to him the amount remaining due under the terms of his contract, and,.the tender being refused, brought this action. The sole question is whether Staver’s equitable title was extinguished by the award against A. D. and M. S. Squires. We think it was not. The action in' which that award was obtained was brought to enforce the tripartite contract of 14th September, 1883. Staver was a party to that contract. Under its provisions he was debtor to McCullough for the balance of the purchase money which he had undertaken to pay for the land, and he was also entitled to receive from A. D. and M. S. Squires several thousand dollars more than was due from him; and McCullough had undertaken to hold the legal title as security for its payment. [439] Under such circumstances it was the duty of McCullough to see that Staver had notice of the proceedings to enforce performance of the contract; or, if unable to give notice, then to take his award in accordance with the terms of the tripartite contract for the entire balance due from A. D. and M. S. Squires. What he did was to bring his action against Stayer’s vendees, who were also made his own by the contract of 14th September, 1883, and then to take an award for the amount due from Staver to himself upon a contract which had been merged in the tripartite contract, and had no longer an independent existence. The award should have followed the existing contract and have embraced the entire amount due from the'defendants. Of this sum, $1,287.65 was due to him to extinguish his claim upon Staver, the balance he would have held for Staver under the stipulation in the contract by which he was to convey to A. D. and M. S. Squires, when, and only when, they had paid Staver in full. The practical effect (if not the actual intent of McCullough and the Squireses) is, if the award is permitted to stand, to extinguish Staver’s equity without notice to him, and to extinguish his demand upon his vendees for purchase-money by the action of one who stood in the relation of trustee of the legal title for his benefit. The learned judge of the court below was right therefore in his ruling, and The judgment is affirmed.