Davis v. Tarwater

Hon. S. H. Hemfstead, Special Judge, delivered the opinion of' the Court. The first enquiry to be made, is, whether the instrument, executed by Aquilla Davis to George T. Tarwater, on the 19th of January 1839, was a conveyance of the four lots adjoining Spring Hill, or only an agreement to convey; in other words, whether the contract was executed or executory. The intention, when apparent, and not contrary to any rule of law, will control; because the intent, and not the words, is the* essence of every contract. In the construction of deeds, we are-to consider the entire instrument, and not merely any particular part of it; and such exposition should"be given, as that every part of a deed may, if possible, take effect, and every word operate... 3 Johns. 394; 16 Johns. 178; 2 Bl. Com. 379. The mere form of an instrument is not material, (2 Sumner 490,) and Kent says, a deed would be perfectly competent, in any part of the United States, to convey the fee, if it should be'to the-following effect: “I, A. B., in consideration of one dollar to me paid by C. D., do bargain and.sell to C. D., and his heirs, the-lot of land; (describing it.) "Witness my hand and seal.” 4 Kent 461, Any writing that identifies the parties, describes the land,, acknowledges a sale without reservation of the vendor’s right,, for a valuable consideration, and is sighed and sealed by the grantor, is a valid deed of gargain and sale. Chiles vs. Conely's heirs, 2 Dana 21. The deed in question, is sufficiently formal. It contained the names of the grantor and grantee, expressed a valuable consideration, used technical words of conveyance fit and appropriate to pass the fee to the vendee and his heirs, and which would have been improper in a mere agreement to convey, and finally contained the hdben&um clause, declaring that the grantee should have and hold the lots and appurtenances, to his heirs and assigns forever. The language used was amply sufficient to convey an estate in fee simple. The covenant, on the part of Davis, to make a good and sufficient deed with warranty of title, when required, connot certainly be construed so as to convert the whole instrument into an execu-tory agreement, because that would be to destroy a part of it, •and thus violate the rule that every part must stand, and every word operate if possible. It is to be regarded, then, as a covenant for further assurance. By placing that construction on the deed, the whole may stand; and this would seem to conform to the manifest intention of the parties. Although not in form, it is essentially a covenant for further assurance, because the covenantor, to comply with such a covenant, would be obliged, as we take it, to make a deed, answering -substantially to the description as contained in that clause. 'The covenant, for further assurance, does not prove that a contract is executory; but rather the contrary. The general warranty of title, contained in ancient deeds, has been long disused, and a set of covenants substituted in its stead, which are generally inserted in conveyances, by those who think, with Lord CoKE, that it is not advisable to depart from the formal and orderly parts of a deed, which have been well considered and settled. Rawle on Cov. for Title, 164, 165. These covenants are, (1) that the grantor is seized in fee; (2) that he has good right, and full power to convey; (3) that the grantee shall quietly enjoy the premises; (4) that the premises are free from incumbrances; and (5) that the grantor will make further assurance of title; the effect of which is, that the grantor binds himself and Ms heirs tó make all such farther assurances of the land, as shall be lawfully and reasonably required by the .grantee, or his heirs. (4 Cruise Dig. 408.) And all these -.covenants are probably contained in most English deeds, where there is not some more limited agreement. They pertain to complete «conveyances nf the fee to jpresentí, rath-er than to executory agreements. Under our statute, the wordsgrcmt, barrga/m cmd sell,” import •the first four covenants above named, unless limited by express words. Digest, 264. The case of Jackson vs. Blodgett, 16 John. 178, is aveiystrong one to support this deed as a present conveyance, and is directly to the point in hand. In that, the instrument in the form of a bond, conveyed the land for the consideration therein expressed, using the terms grant, bargain and sell, and then a clause was inserted to the effect, that the vendor .should, by a legal conveyance in the law, convey the land to the vendee and his heirs and assigns, as soon as he should be vested with the title. The court held the instrument to operate as a present conveyance, SpeNCER, C. J., in his able opinion, citing various authorities, amply -sustaining that view of the case, and moreover .¿bowing that it was conformable to reason. The doctrine as to leases, was referred to by way of illustration, and it was said that when there are •apt words of present demise, and to these are superadded a covenant for a further lease, the instrument is to be considered alease, -and the covenant as operating in the nature -of further assurance. 10 John. 337; 5 Term Rep. 165; Cro. Car. 207. Perhaps the best proof that the parties intended this deed to •operate as a present conveyance, Is, that no period was fixed when the deed, alluded to in the clause, was to be made. It was only to be done when required, thus -evincing that the vendee was ■quite willing to rest, for the present at least, on the deed he had received with the possession; leaving it to future events to determine whether it would be necessary to make the demand or not; and which, in. point of fact never has been made at all, unless we are to consider this suit as a sufficient request. Considering this deed, then, in all its parts, and to give effect to the whole, there can be but little, if any doubt, that it ought to be held as a present conveyance of the fee, with a covenant for* further assurance, and not as amere agreement to convey. When, this same instrument was before this court, in an action of covenant between the sanan parties, (2 Eng. R. 153, 157,) it was not deemed essential to determine whether it was a bond for title, or deed conveying the lands therein described; the court remarking, however, that “ were it necessary,., they did not conceive that it would be difficult to show that it was a deed of conveyance, with a covenant to execute, upon request, a good and sufficient deed in fee simple with warranty of title.” Inasmuch as the incumbrance, created by the- mortgage to the Neal Estate Bank, cannot be removed at present, this bill has-for its scope and object, the rescission of the contract of sale between Davis and Tarwater, and the repayment of the purchase money, with interest to the latter. Passing several interesting questions discussed by counsel, we are to enquire whether Tarwater is- in a position to demand rescission, because if he is not, it would be-quite useless to ascertain in what cases,, and for what causes an executed contract may be rescinded. ■ There are two obstacles in the way of the relief sought by the-bill; first, that it does-not appearthat the vendee ever surrendered the land, or gave notice of an intention to. abandon the contract", and second, lapse of time: The language of the authorities is uninformed, that he who seeks the rescission of a contract, must be in a situation to restore to the opposite party whatever he may have received from him; or, as more briefly expressed, he shall put his adversary in statu, quo. This- is the dictate of natural justice,- as well as a clear principle of law.. If the vendor cannot be placed m statu quo, the contract cannot be.rescinded. And the rule is the same, whether the rescission is sought on the ground of fraud, mistake, or for any other cause. McDonald vs. Fithian, 2 Gilman 269; 13 Ark. 182; Cunningham vs. Fithian, 2 Gilman 651. In tbe case of tbe rescission of a contract, it is well settled, says tbe court in Griffith vs. Depew, 3 A. K. Marsh. 180, “that tbe court ought to place tbe parties back in statu quo, as near as eafi be equitably done; that tbe vendor ought to refund tbe money with interest, and tbe vendee ought to restore tbe subject purchased with rents, and payment for waste, receiving credit for tbe valuable and lasting improvements be may have made. Williams vs. Carter, 3 Dana 201; Caldwell vs. Caldwell, 1 J. J. Marsh. 53. In personal property, tbe rule is tbe same in actions at law. As where goods do not correspond with tbe order given, or with tbe sample, or are unsound, tbe purchaser ought immediately't© return them back to tbe vendor; or give him notice t-o take them back, and thereby rescind tbe contract. "Without this, be can not rescind tbe contract and recover back tbe price, (2 Kent 380; 1 H. Bl. Rep. 17; 1 Term Rep. 133) although be may sue for a breach of warranty without retiirning tbe goods. A party defrauded in a contract, has a’choice of remedies : be may stand on tbe bargain and recover damages for tbe fraud in an action at law; or be may rescind tbe contract and return tbe goods bought, and receive back what be paid -or sold. Campbell vs. Fleming, 1 Adolph. & Ellis 40. And this doctrine as to placing parties in stain quo, as nearly as possible, conforms to tbe civil law; and the application of a vendee to a court of equity to rescind a contract of sale, closely resembles tbe rescissory action of tbe civil law on tbe part of tbe buyer. .The object of this action is ’ to rescind tbe contract of sale, and it cannot be commenced but by virtue of letters of rescission obtained in chancery, by which a recission is_ directed, if tbe injury set forth by tbe buyer shall appear to tbe judge. Tbe seller must render to tbe buyer tbe price which be has received, upon condition that tbe latter render him tbe estate sold; which must be restored in tbe condition in which it was found; with all tbe augmentations subject to tbe contract, whether natural or alluvious, or artificial,, as buildings erected upon the land. The seller, however, must make allowance for necessary repairs and erections, and the buyer is' liable for rents and profits, Pothier on Contracts of Sale, part 5, c. 2, sec. 374, 381, 382. The duty and obligation of vendor and vendee, do not differ essentially, under our system and under the civil law, because under both, the vendee may obtain the purchase money with interest, and must restore the estate. And while he is accountable for rent» and profits, he may be reimbursed for necessary repair® and erections, and also for taxes and assessments. And indeed it would be most extraordinary for any tribunal, professing to dispense equal and impartial justice between man and man, to allow a vendee of an estate to rescind a contract, recover the purchase money back, and neither restore, nor offer to restore', the estate. Sir Edwakd SugdeN declares that where one party fails to perform a contract, the other, if he means to rescind it, must give a clear notice of his intention to do so. The case of Reynolds vs. Nelson, 6 Mad. Ch. Rep. 19, is to the same effect. 1 Sugden on Vendors, 279, 382; Hunter vs. Geridy, 1 Ham. 449. And so with regard to a sale of personal property, where there is fraud, the purchaser, if he wishes to rescind the contract, must tender back the property, before he can bring his action at law to recover the consideration. And it is not enough that he give notice to the vendor, and call on him to come and receive his goods; but he must himself return them back to the party defending him, before any right of action accrues. Bain vs. Wilson, 1 J. J. Marsh. 202; Stewart vs. Dougherty, 3 Dana 467; Norton vs. Young, 3 Greenl. 30; Butter vs. Blake, 2 Har. & J. 353; Ketletas vs. Fleet, 7 Johns 331. Tender would doubtless have the same effect, and although the rule is less stringent in regard to real estate, yet in chief ingredients it is the same. In Murphy vs. Officer, 8 Yerg. 502, it was held that, on rescinding the contract, the purchaser was bound to give up the land; and until he did so, an adverse title in himself, procured after the decree of rescission, could not be set up by him. And in Fitzpatrick vs. Featherstone, 3 Ala. 40, it was expressly held, that a contract for the sale of land could not be rescinded, where the purchaser did not offer to return the land to the vendor. This principle, so necessary to be enforced in these hinds of suits, is only a counterpart of the maxim, that he who asks equity must do equity. It may therefore be asserted, as a rule well sustained by reason and authority, that if the vendee has gone into the possession of the estate, and wished to rescind the contract, he must give fair-notice of his intention to do so, and must surrender, or offer to surrender the estate to the vendor, or, in case of death, to him on whom the descent is cast. He has no right to abandon it to the mercy of the public without notice, because the inevitable consequence would be waste and dilapidation, even if should escape a, sale for taxes, and thus pass beyond the reach of vendor and ven-dee forever. If after notice to the vendor, the possession is abandoned, the vendor can see that the land is properly taken care of, and taxes- and assessments paid, as they accrue, and if he neglects it, he cannot charge the vendee with unfair conduct. But in the absence of notice, and without the return or offer to return the land purchased, or showing that it can be restored, the vendee comes-into a Court of Equity with a poor grace to ask for the rescission of the contract, and under such circumstances is not entitled to it. And it is for the person asking for the exercise of this highest power of a Court of Equity to show clearly, that he can restore the land on rescission, and that the parties can be placed in statu quo, and it is not for the opposite party to show that it cannot be done. 1 S. & M. 146. Contracts are not to be anuulled on slight grounds, and a clear case must be presented to warrant it. 1 S. & M. 443; 3 S. & M. 394; 5 Munf. 295. Now Tarwarter alleges in his bill that, immediately after he found that the land was incumbered, and that he had been deceived and imposed on, he “abandoned a/nd yielded the'possession of said la/nd.” lie does not state when, nor to whom, but as he avers that he ascertained in 1845, that the land purchased by him was embraced in the mortgage to the Neal Estate Bank, we may infer that that was the time of the abandonment, and that would give six or seven years as the length of his actual possession, according to the showing made by himself. This bill was filed in 1850, and who had the charge or control of the land during the intervening five years, or whether any one had, or whether the taxes were paid, or whether it could be restored when the bill was filed, or the decree pi’onounced, does not appear, and no notice appears to have been taken of that point by the Court below. The bill does not offer to- restore it; nor is there a shadow of proof that any such offer was ever made; and which of itself, according to the case of Fitzpatrick vs. Featherstone, 3 Ala. 40, is a fatal objection. As all pleadings must be construed most strongly against the party pleading, we must take it that the possession of the land was not surrendered to any one, as it is not stated to whom. It cannot be contended that the surrender was made to the legal* representatives of Davis, or his executrix, or that any notice was given to them, or any of them of his intention to abandon the contract. There is not the slightest foundation for such a surmise, and in fact none such has been made. It comes then to this, that Tarwater, choosing to abandon the contract in 1845, left the premises without giving notice to those interested, or offering to surrender the land; and five years after asks a Court of Equity to restore to him the purchase money with interest. It is very clear, from the facts and circumstances of the case, that he is not in a situation to demand it. If he was entitled to a rescission, the Court should have decreed the can-celation of the deed, and the restoration of the - land, so as to do full justice between the parties, and the decree is erroneous in any view in which it may be considered. But this form of the decree is less important, as we do not deem Tarwater entitled to> tbe relief asked. We now come to consider tbe effect of lapse of time. Tbe bill was not exhibited, until more than ten years bad elapsed from tbe date of tbe contract, and, according to Tarwater’s own statement, five years bad elapsed from tbe discovery of the-imputed fraud. No excuse is offered for this delay, nor bas it been explained. A complainant wbo seeks tbe rescission of a contract, must show clearly tbe defect in tbe title, and that there bas been fraud, accident or mistake, and tbe remedy must have been- pursued in good time. Moss vs. Davidson, 1 S. & M. 112; Flecther vs. Wilson, 1 S. & M. Ch. R. 376, 134; Pintard vs. Martin, ib. 126; Ayers vs. Mitchell, 3 S. & M. 690. A party seeking rescission, must do so in a reasonable time. Davis vs. James Exr’s., 4 J.J. Marsh 9; 7 Johns. 331. And in Lawrence vs. Dale, 3 J. C. R. 42, it was said by chancellor KbNt, that if tbe law allowed a party to abandon a contract while im, fieri, be ought at least to act promptly and decidedly on-tbe very first discovery of tbe breach. Tbe case of Roach vs. Rutherford, 4 Desaus. 126, is more in point, and in many respects resembles tbe case at bar. 'It was there decided, that tbe purchaser after having remained in possession more than five years without being disturbed, could not resist tbe payment of tbe purchase money. A party bas no right to ly by for a long time for tbe purpose of first ascertaining whether be may not be able to realize a profit out of tbe contract, nor until tbe property, by a fall in prices, bas greatly depreciated in value, nor until tbe title to tbe property by neglect has become doubtful or impaired. 1 Gilman 269; 2 Gilman 651. Where a person has b¿en guilty of negligence and slept on his rights, Courts of Equity will refuse to enforce such rights,, deeming that tbe best interests of society require that causes of action should not be deferred an, unreasonable time. Since tbe decision of this Court in Taylor vs. Adams, 14 Ark. 62, this can hardly be considered as an open question in this State. It was there said that when a party seeking redress is apprised of his rights, or if they be fraudulently concealed from him, whenever the fraud is discovered, or might reasonably have become known, he must assert his rights in Equity within the period limiting the analogous remedy at law, unless he come within some saving or .exception. And it was also said that the objection that the claim is a stale one, may be taken at the hearing and when such a case is disclosed, the Court may-of its own motion deny relief to parties who have slept upon their rights. hi ow it cannot be successfully controverted that, if Tarwater had brought his action at law, for the recovery of the purchase money, he would, on his own showing, would have been barred by limitation; so in analogy to the statute, he must beheld barred by the lapse of time when he comes into another forum. Indeed, Equity will sometimes, under peculiar circumstances, hold a party barred of equitable relief when he is not of his legal right. Then it simply withholds its hand, and leaves a party to his remedy at law. Mason vs. Crosby, Davies R. 313. Lapse of time is not founded upon statutory provisions, though the statute may be referred to at fixing a reasonable time for its operation. The rule is applied by Courts on a broad view of all the circumstance of the case. And even in cases where the demand is not barred by positive limitation, Courts of Equity refuse to interfere after a considerable lapse of time, from considerations of public policy and from the difficulty of doing entii'e justice. Nothing can call a Court of chancery into activity, but conscience, good faith, and reasonable diligence, and where these are wanting, the Court is passive and does nothing. Piatt vs. Vattier, 1 McLean 164; S. C., 9 Peters 415; McKnight vs. Taylor, 1 How. S. C. Rep. 168. Without adverting to other errors which exists in the decree, we are satisfied, for the reasons above expressed, that it should be •reversed, and tbe bill dismissed at the cost of the complainant. ¡Reversed. Mr. Chief Justice Watkins not sitting in this case.