Avery v. Kellogg

Williams, Ch. J. The first objection made to this bill, is, that it combines a prayer to redeem and a prayer for specific performance. In support of this objection, the case of Jerome & al. v. Jerome, 5 Conn. Rep 352., is cited. That was a bill to perpetuate testimony, and also for relief; and upon a demurrer, it was held, that these subjects could not be united. Here has been a hearing upon the merits ; and this objection is urged against a decree. The plaintiff has, in his bill, stated the facts, upon which he founds his claim for relief, and prays the Court for such relief as these facts will warrant. If the facts constitute this transaction a mortgage, he wishest o redeem ; if only an agreement to sell, he prays that this agreement may be carried into effect, according to its true intent. We do not think the case is within the principle of the case cited ; and feel no embarrassment, in this stage of the cause at least, from the form in which the facts are presented. Do the facts disclosed, constitute this a mortgage ; and has the plaintiff a right to redeem ? That a decree of foreclosure had been obtained of this land, and another lot, called the Purple lot, which had been mortgaged, by the plaintiff, to Taintor, and that a negotiation had been had between the plaintiff and Taintor, relative to the lands mortgaged, are facts found by the court. This negotiation, however, failed ; and the foreclosure went into effect; by which, Taintor became the complete owner of the land After this time, Kellogg, for the purpose of assisting the plaintiff, and at his request, and with the assent of Taintor, agreed to pay the balance due on the mortgage debt due to him, deducting the avails of the Purple lot, which was sold, and the costs and fees, which were paid by the plaintiff. And Taintor was to give a deed of the land to Kellogg, — 569 — who, on his part, at the same time, and as part of the same agreement, stipulated to execute the bond and lease above-mentioned, by which Kellogg binds him, if the plaintiff should pay 500 dollars, on the 1st of April, 1834, and the remainder on the 1st of April, 1835, to convey to him the land in question; the bond to be void, if he failed to make either of these payments. The interest on the debt to Taintor, was computed to the 1st of April, 1835, and provision was made to deduct interest on sums paid before they were due. Kellogg also leases the premises, at a nominal rent, to the plaintiff, until the first of April, 1835 ; the plaintiff to pay all taxes, and to pay 500 dollars, by the 1st of April, 1834, and if not paid, said lease was to terminate, and Kellogg had a right to take possession of the premises. Do these facts create the relation of mortgagor and mortgagee, between Avery and Kellogg ? Avery had been the mortgagor to Taintor ; but the time of redemption had expired. Taintor had become the equitable, as well as the legal owner of this land; and he conveyed it to Kellogg, unclogged by any condition or limitation. It is found, however, that Kellogg received this property of Taintor, at the request of the plaintiff, and for the purpose of assisting him. This, however, was not done until the title had gone from the plaintiff, and no interest, legal or equitable, remained in him. Had Taintor conveyed to Kellogg, with the understanding, and for the purpose of this arrangement, there certainly would have been a strong equity in Avery, as against Kellogg. But Kellogg would, even then, stand rather in the relation of a trustee, than a mortgagee of the property. It is said, that Kellogg came in as a purchaser, to prevent a forfeiture. But the forfeiture had occurred before this transac-action; and Taintor’s title had become absolute. The fact of the computation of interest to the 1st of April, 1835, and the lease of the land at a nominal rent to that tinte, it is also claimed, shows that this is a mortgage. These facts certainly show, that the plaintiff was eventually to have this land; but do not prove, in what character he was to receive it, whether as purchaser, or as mortgagor. The case of Barrel v. Sabine, 1 Vern. 268., somewhat resembles this, except that there was no foreclosure. There, the plaintiff had paid for in-cumbrances, renewals of leases, &c., 950l. for property worth much more; took articles for a conveyance ; received a con570 veyanee ; and went into possession, with a declaration that up-on payment, of the money advanced, with 100l. for his trouble, within one year and a half, the defendant should have the land again. This, being before the statute of frauds, seems to have been placed upon the same ground, as if there had been a writing; and the claim was, that this was a mortgage; but the court held it to be an absolute purchase. It is said, that had Taintor made this agreement, it would have opened the foreclosure. Courts of equity do guard, with such anxious care, the interests of the mortgagor, in consequence of the power of the mortgagee over him, that this may be true. But when a third person comes in, who has never stood in the relation of mortgager, less care is observed, and the same vigilance is not exercised over him, as over the original mortgagor. Here, Avery does not become responsible, expressly, to Kellogg, for the whole debt paid by him to Taintor ; nor is he the owner of the land, which Kellogg is to convey to him. We cannot, therefore, say, that he is to be considered as the mortgagor to Kellogg; although his former relation to this property might have had an important influence upon this arrangement. The next question presented, is, as the plaintiff has not complied with the terms of the contract on his part, can a court of equity grant him relief? By the contract. Kellogg was to convey the farm by the 1st of April, 1835. upon the plaintiff’s paying 500 dollars on the 1st of April, 1834, and the remainder on the 1st of April, 1835; and on failure to do either of these, Kellogg's contract to convey, was to be void. On the one side, it is claimed, that in such a case, time is not the essential part of the contract; and therefore, that a court of chancery will relieve, although there is not a strict compliance in this respect; in support of which, the case of Gibbs v. Champion, 3 Ham. 335., in the state of Ohio. is cited. On the other hand, it is claimed, that time is essential in a court of law and equity ; and no relief, therefore, can be afforded to the plaintiff; and the case of Benedict v. Lynch, 1 Johns. Ch. Rep. 370., and some other decisions of Chancellor Kent, are cited. This question has been several times before the supreme court of the United States, who, while they have held, that time is not of the essence of the contract, and that a failure to perform at the day. will not, of itself, prevent a specific perform571 &nce, have, in the cases before them, denied the relief sought, on account of the failure, of the plaintiff to perform, coupled with the fact of a great change in the value or situation of the property sought, Brashier v. Gratz & al. 6 Wheat. 528, Pratt v. Carrol, 8 Cranch, 471. In the case from Ohio, a contract was made on the 1st of May, 1825, by which Champion agreed to convey a lot of ground to Gibbs, for 250 dollars ; payments to be made on the 26th of January, and 26th of July, 1826; the conveyance to be made on payment of the money as it became due ; posssession to be taken immediately, and then 25 dollars paid or secured, Nothing being done, Champion wrote to Gibbs, that if he did not lake possession, and pay or secure the 25 dollars, he should consider the contract abandoned. Nothing was done until the last payment became due; (Champion retaining the negotiable notes he had received for the money,) when the plaintiff tendered the amount due on the notes. The court granted the relief: and said they had known no case where a neglect to make the first payment, which had been so promptly remedied, by a proffer to pay the whole, had been held an abandonment of the contract. 3 Ham. 335. S. C. Ohio Cond. Rep. 599. So, too, in the case of Tyree & al. v. Williams & al. 3 Bibb, 366., in Kentucky, the court say, that at law, time is of the essence of the contract; but unless the parties have expressly stipulated it shall, be so, it is otherwise in a court of equity ; and its execution will be decreed, notwithstanding the time has elapsed for its performance, unless there has been a culpable negligence, or a wilful delay, on the part of him who is seeking the aid of a court of equity. In the case of Benedict v. Lynch, in New- York, the plaintiff, on the 28th of March, 1810, agreed to purchase of the defendant, al piece of ground, and pay in two, three and four years, with interest annually; and upon complying with the payments, the defendant agreed to give a deed. If the plaintiff failed in them, or any of them, the agreement was to be void. He entered, and made improvements ; but omitted to make the payments until 1814, when he tendered all the money due on the contract, which the plaintiff refused to accept. The plaintiff had often declared his inability to pay, and disclaimed any right to the premises, and relied on the defendant’s liberality — 572 — for the occupation of them. In 1812, the defendant notified him to quit the premises ; and the plaintiff then agreed, that if he would permit him to remain one year, and occupy, he would clear and fence five acres of the land ; to which the defendant assented. In October, 1813, when a purchaser applied to the defendant, the plaintiff acquiesced in the sale, and declared he should abandon, whether sold or not. The Chancellor held, that there was an abandonment of the purchase, and that there was no colour of equity in the plaintiff. In his opinion, the Chancellor goes at length into an examination of the English authorities on this subject, with his usual learning and accuracy ; and the result of his investigations is, that it is an acknowledged rule in courts of equity, that where the party applying for a specific performance, has omitted to execute his part of the contract, by the time appointed for that purpose, without a sufficient reason to justify or exxuse his delay ; and where there is nothing in the acts or conduct of the other party that amounts to an acquiescence in that delay ; the court will not compel a specific performance. This rule, he says, is founded in the soundest principles of policy and justice. Its tendency is to uphold good faith and punctuality in dealing. The notion that seems too much to prevail, that a party may be utterly regardless of his stipulated payments, and that a court of chancery will, almost at any time, relieve him from the penalty of his gross negligence, is very injurious to good morals, to a lively sense of obligation, to the sanctity of contracts, and the character of the court. He adds : “ From the view which I have taken of the cases, the general principle appears to me to be perfectly established, that time is a circumstance of decisive importance in these contracts ; but it may be waived, by the conduct of the party ; and it is incumbent upon the party calling for a specific performance, to show that he has used due diligence, or if not, that his negligence arose from some just cause, or has been acquiesced in ; that it is not necessary for the party resisting the performance, to show any particular injury or inconvenience ; it is sufficient if he has not acquiesced in the negligence of the plaintiff, but considered it as releasing him.” 3 Johns. Ch. Rep. 379. In the views thus expressed, by this eminent jurist, the court fully concurs. In the case before us, there is an express stipulation, that if the plaintiff failed to make the payments, or either of them, the — 573 — bond and lease executed by Kellogg, were to be void. Avery did fail to make the first payment, and has shown no just cause for his negligence. Kellogg then might have treated this contract as at an end, and placed himself on his legal rights. He might, on the 2nd of April, 1834, have said to the plaintiff, “ The land is mine ; you have neglected to do what you expressly promised ; and you cannot remain in possession under that agreement.” It is not intended to say, that Kellogg was bound to give this immediate notice; but he had no right, if he meant to avail himself of this lapse, of time, to do any thing, which would tend to lull Avery into security, or which would lead him to make payments or improvements, under the idea that the property was to be his. When, then, he knew of any advancements Avery was about to make under that impression, it was his duty to inform him, that he should insist upon his legal rights. But what does he do? He had undertaken to assist Avery ; and Avery doubtless relied upon his assistance. He ventures to do what a cautious man would not do, and suffers the time of the first payment to elapse, and within fourteen days, pays Kellogg 100 dollars. It is not found, in so many words, that it was on that account; but it is not claimed, that there was any other debt due from 4ve-ry to Kellogg ; and this money Kellogg receives. No one can believe that this money was paid by Avery, for any purpose but in part payment of this bond of 500 dollars; and if Kellogg did not mean to receive it on that account, he was bound in good faith so to inform him. It may be said, that the terms of the receipt show, that Avery was so informed. They were such as were calculated to excite suspicion as to Kellogg’s intention, but left the final result equivocal. He says, he has received of Avery 100 dollars, “ to account for, by the 1st of May next, either to pay back to him, or apply it to rent of farm, as he shall prefer, or as he and I shall agree.” No one will believe, that Avery in-tented to loan money to Kellogg ; or that he was paying in advance for the rent of a farm, which he had never contracted to hire ; but he takes the receipt, such as it is, knowing that its mysterious language will soon be explained ; for Kellogg was to account for this money on the 1st of May. At that time, Avery had a right to expect, thatKellogg would inform him, whether he received that money to apply, as he, Avery, — 574 — intended, or not; for on that day, Kellogg had promised to account for it. The first of May pases by. Kellogg retains the money. The application contemplated by the receipt, is not made. The same silence as to Kellogg’s intention is continued, and Avery remains yet in entire ignorance how Kellogg means to apply the money. As Kellogg had, by this receipt, left this matter for future adjustment, and presumed that this would be done on the 1st of May following ; and as he then wholly neglected to do any thing on the subject, or come to an explanation of his views and intentions in relation to this matter; we think be must be considered as having acquiesced in the application, which the plaintiff intended to give to that money originally. Such a construction best comports with the integrity of the defendant, and the justice due to the plaintiff. The defendant, then, having received this money, on account of the payment due on the 1st of April, must be considered as having waived any advantage from the omission of the plaintiff to make the first payment at the day. Besides, the plaintiff has gone and made repairs upon the dwelling-house and wall upon the lands, reposing with confidence upon the assistance of the plaintiff, and the fact that he had not claimed any thing from the non-fulfilment on his part. It is not, indeed, expressly found, that Kellogg knew of these improvements, although as he lived in the same town, it cannot be doubted that it would not have escaped his notice. But whether he did or not, the course he had pursued was exactly calculated to lead the plaintiff’ to go on as if the property was his, and upon the faith of that he has acted. The case differs entirely from that of Benedict v. Lynch. There, the defendant had given the plaintiff notice to quit; had conversed with him about the sale; had allowed his stay upon terms; the plaintiff had declared his inability to pay; disclaimed all right to the premises : acquiesced in the sale, and said he should abandon it, whether sold or not. And while we hold that case to have been properly decided, we think that the facts in this case, will justify a result entirely different. The defendant here did not take that open and manly course, which he should have done, if he intended to rely upon a strict performance by the plaintiff, but acquiesced in the plaintiff’s neglect to make the first payment at the day. It was objected, that a waiver of art advantage given by a — 575 — written contract, could not be proved by parol. And the case of Littler & al. v. Holland, 5 Term Rep. 590., was cited, That was an action on a covenant to build two houses by a given day. They were not completed by the day; and the plaintiff, instead of proving performance, as alleged, offered to prove that the time had been enlarged, by parol agreement of the parties ; and it was held, that the proof did not support the issue. This was correct; and has been followed by a course of decisions in New- York. Langworthy v. Smith, 2 Wend. 587., and the cases there cited And yet it is a well settled principle, that the conduct of a party may be considered as a waiver of a compliance with the condition of a bond ; and there is no infringement of any principle of law in permitting parol evidence of such waiver. Fleming v. Gilbert, 3 Johns. Rep. 528. In the case of Goss v. Lord Nugent, 5 Barn. & Adol. 58., (27 Serg. & Lowb. 33.,) where there was an agreement to sell sundry lots of land and make a good title ; and it was afterwards verbally agreed to waive the title to one of the lots ; the court of King's Bench held, that this evidence could not be received within the statute of frauds. The court, speaking of these cases of an enlarged performance, say, they were decided on the ground that the original contract, continued, and that it was only a substitution of different days of performance, and abstained from any opinion whether these cases were rightly decided, and whether relief in the case before them could not be had in a court of equity. Here, however, the plaintiff does not rely upon any express agreement of the party to waive performance, but upon his acts; and why these acts cannot be shown, as well as in case of a forfeiture under a lease, it is not easy to see. We perceive no more objection to parol proof, in this case, than where there is a claim of part performance, or where a person has stood by and seen another make improvements upon lands he bad agreed to sell him. It was also claimed, that there was no mutuality in this contract.-It is true, that the plaintiff does not expressly bind himself to pay the whole sum; but he binds himself to pay 500 dollars; and that doubtless was considered by the parties as a sufficient pledge that the remainder should be paid, or an — 576 — ample compensation in case it was not. This objection cannot prevail. It was intimated, also, that there was adequate remedy at law. If Brown can be reached, upon this application, there can be no foundation for this claim, as the law cannot compel a reconveyance of the land. The question then arises, can any decree be passed against Brown ? It is said, he had no notice of the receipt, and some of the other facts in the case. But he did know of Kellogg’s agreement to convey this estate to Avery. He had enough, then, to put him on inquiry why this was not done ; and no good reason is shown why he had not full information on the subject. The principal facts were before him ;-enough to put him on his guard; and if under these circumstances, he purchased, he can be in no better situation than his vendor. The superior court is, therefore, advised to grant the prayer of the bill. In this opinion the other Judges concurred. Decree for plaintiff.