Magaw v. Lothrop

The opinion of the Court was delivered by Sergeant, J. — Though in the decision of this case some general principles are involved of considerable importance, yet there are peculiar circumstances in the contract between the parties which must not be lost sight of, and which I shall in the first place advert to. By this contract, dated the 13th of July 1835, no particular time is mentioned at which the deed is to be made. The vendor agrees to sell a certain described property, and the vendee agrees to pay by instalments, the last of which is to fall due on the 1st of April 1840. All that is said concerning a deed is contained in a single clause in the middle of the instrument, which provides that a clause of general warranty shall be inserted in the deed which the vendor shall finally make to the vendee. In construing such a contract by its face, it appears reasonable to say that the vendor is to give a conveyance of a good and sufficient marketable title, such as shall be free from all reasonable doubt, and clear of encumbrances; that the deed is to be made on or before the payment of the last instalment; and that although the vendor might, without tendering any deed, have sued for the three first instalments as they became due, yet he could not sue for the last without such tender. As the matter has been left till after all these instalments became due, their payment and the tender of a deed became, on the 1st of April 1840, simultaneous and dependent acts, and neither party could sue the other without averring and proving a performance of or offer to perform his part of the agreement, unless discharged by the acts of the other. In relation to the subject of interest, which has been argued, it may be sufficient to say, that this is not exactly one of that class of cases in which the question- arises how far and in what cases the purchaser ought in equity to pay interest on the purchase money from having possession or other circumstances. The time when the instalments were to be paid was fixed by the agreement, and from that time the vendee was positively bound by his contract and the general principles of law to pay interest. He could [321] only be relieved from it by showing that it was the fault of the vendor that he did not pay; a defence which goes to both principal and interest, which indeed are here on the same footing. If the defendant tendered the money, and it was refused, from that time he might be excusable from paying interest, and of that he has had the benefit. For all but that, the subject of interest is involved in the general question whether the plaintiff had placed himself in a position to recover. It would seem, that where one person contracts to convey to another a good and sufficient title for a tract of land, on the payment of the purchase money by the vendee, the vendor cannot, as a general rule, bring an action against the vendee for the recovery of the purchase money, till he is able to convey, and has tendered a deed of conveyance of such good and sufficient title, free from all defects, and clear of all encumbrances which are a charge upon the land, unless where such defects or encumbrances were known to the vendee at the time of the contract, and he is considered as taking the property subject to them. It is true that an action for the purchase money being in affirmance of the contract, and seeking a specific performance of it, is analogous to a bill in equity for that purpose, and that for want of Courts of Chancery, we are obliged in our practice to adopt Chancery principles and Chancery remedies, in many instances in which such a course is refused by courts of common law in places where there is a Court of Chancery. It is also true that a Court of Equity allows a bill to be filed by the vendor before he is in a situation to convey, holding it sufficient if he can make himself so by the time of the decree. But a Court of Chancery, by its absolute control over the costs, and by having it in its power to impose terms and enforce orders, adapted to every variety of aspect the cause may assume, may do complete justice where it would be beyond the power of a court of common law to do so. An action in a court like ours, therefore, must be founded on a good cause of action subsisting at the time the suit is brought. I know no case in which it has been held that a plaintiff can, in a suit at law on articles of agreement, cite the defendant to answer a complaint where the defendant at the institution of the suit is in no default, although the plaintiff may by the time of the trial put himself in the condition of one having a complete right of action, unless it be where the plaintiff has the legal title, and is permitted to rebut a countervailing equity by showing payments made or things done after the commencement of the suit. Snyder v. Wolfley, (8 Serg. & Rawle 332); and Huber v. Burke, (11 Serg. & Rawle 246), seems to me to be express on the point, and have been followed by other cases. Gore v. Kinney, (10 Watts 139.) If, however, a defendant has waived the performance of this obligation on the part of the plaintiff, to make a good and sufficient title, the case is then altered. Thus, if he accepts a deed under [322] the contract, the vendor may sue for the purchase money on bond or otherwise, though if it should turn out there was a defect of title or outstanding encumbrance, he would be entitled to recover, the jury allowing to the defendant a deduction equivalent to their value. It would be no absolute bar to the action to say, that at the time of action brought the plaintiff had not conveyed a good and sufficient title, and this was the case of Hart v. Porter’s Executors, (5 Serg. & Rawle 201). I take it also that the defendant’s taking and retaining possession of the property contracted to be conveyed, may, under cei’tain circumstances, be of a similar character in its effects; but it is not every taking of possession under the contract that will have this effect. The law on this subject is stated in the latest edition of Sugd. on Vend. 10, to be, that taking possession will, in many cases, be deemed an acceptance of title. 3 P. Wns. 193; 1 Vez. Jun. 226; 12 Vez. 27; 11 Vez. 464; or would at least be a ground to leave it to a jury to consider whether the party had not taken possession with an intention to waive all objections. But, he goes on to say a purchaser may, with the concurrence of the vendor, take possession of the estate at the time of the contract, as he cannot be held to have waived objections of which he was not aware. Now, the taking possession by the defendant here would seem to have been at or about the time of the contract, and indeed is so averred in the declaration; and so far from waiving the defects in the outstanding encumbrances, the plaintiff’s letters and the defendant’s conduct go to show, that it was understood by them that the plaintiff was to get in the outstanding claims and encumbrances, and that he would complete the title. And this is the point of view in which the case also presents itself when the defendant alleges a tender of the purchase money, and claims the right of rescinding the contract on that account. Looking, therefore, to the errors assigned, we are of opinion, 1st. That whether the contract was rescinded was certainly a matter of fact, but if there was no evidence to show it, the charge of the court was right, and it would seem there was none. 2d. The instruction as to the interest was also right. 3d. Whether the defendant waived objections to the title existing at the time of suit brought on trial, was undoubtedly matter of fact to be left to the jury, on which the court were right to express an opinion, provided it did not bind the jury. 4th. We are of opinion that the court erred in saying the plaintiff could complete his title after suit brought. If he chose to sell a title which he had not, he was bound to perfect it and clear off the encumbrances before he could sue the defendant for the purchase money after the fourth instalment became due, unless the defendant agreed to accept such title as the plaintiff could give or waived objections to it. And a claim of dower seems to be such encumbrance, whether contingent or vested. Judgment reversed.