Brothers v. Moore, Clemens & Co.

Buchanan, J. (after stating the case as above), delivered the opinion of the court. The errors assigned and relied on are that the trial court erred in overruling the demurrer to the bill, and in perpetuating the injunction granted upon the proofs upon the final hearing. In the view the court takes of the case, it is unnecessary to pass upon the questions raised by the demurrer, for, if it be conceded that the allegations of the bill, including the statements in the exhibits filed therewith and made a part thereof, state a case entitling the complainants to have the agreement specifically executed, or to have the defendants enjoined from violating the contract on their part, the proof does not sustain those allegations. Specific performance of a contract may frequently be enforced, either by a direct decree to that effect or by an injunction restraining a party from doing what he has agreed not to do; but whether enforced in the one way or the other, the principles which govern a court of equity in the exercise of such jurisdiction are the same. 4 Pom. Eq. Jur., sec. 1431; 5 Id. sec. 271; 26 Am. & Eng. Enc. L. 15; 22 Cyc. 844-5. The general role is, that a court of equity will not specifically enforce a contract at the suit of a party who is himself in default in respect thereto, or has himself violated its terms and obligations. Powell &c. v. Berry, &c., 91 Va. 568, 22 S. E. 362; Cox v. Cox, 26 Gratt. 305, 308-9; Bowles v. Woodson, 6 Gratt. 78; Harvie v. Banks, 1 Rand. 408; Vail v. Nelson, 4 Rand. 478; Jones v. Roberts, 1 Call 187, 200, 3 Am. Dec. 576; 26 Am. & Eng. Enc. L. (2nd ed.), p. 70; 22 Cyc. 852-3; 2 High on Injunctions (3rd ed.), sec. 1119; Fry on Spec. Perf. (2nd Am. ed.), sec. 608; 6 Pom. Eq. Jur., sec. 805. [84] The general rule and an exception to it are thus stated by Judge Staples in delivering the opinion of the court in Cox v. Cox, supra: “Every bill for the specific execution of a contract is an application to the sound discretion of the court. It is not a case requiring the interposition of the courts ex debito justitiae, hut rests in their discretion, upon all the circumstances. He who seeks the exercise of this extraordinary jurisdiction must show a contract certain and definite in its terms; that he himself is in no default, but has performed his part of the agreement; or, in the language of the judges, that he is ‘ready, desirous, prompt and eager’ to do so * * * When the party seeking performance is himself in default, whether he can have it or not depends in a great measure upon how far the default goes to the essence of the contract.” If the only default of the complainants had been their failure and refusal for a time to credit the defendants with the fifteen per cent, of the first renewal premiums in cases where the complainants had to pay commissions or a per cent, to solicitors of insurance who had formerly acted for the defendants, it would not have been, perhaps, under the facts of this case, such a failure to perforin on the part of the complainants as would have justified a court of equity in refusing to enjoin the defendants from establishing a fire insurance agency in violation of their agreement. But this was by no means all of their default in keeping and performing the contract. It was clearly their duty under the agreement to make reasonable efforts to renew the policies of insurance which had been issued through the agency of the defendants by the line of insurance companies which the latter did. or had represented at the time the agreement was entered into. It was of the greatest importance to the defendants that the complainants should in good faith exercise reasonable diligence in the performance of that duty, since the only consideration which the defendants were to receive for the transfer of their business as insurance agents, the hooks and records and good will pertaining thereto and [85] their office furniture and fixtures was the fifteen per cení, of the first renewal premiums on such policies. . The preponderance of evidence shows that the complainants were unwilling to incur the usual and customary labor and expense incident to the renewal of such policies; that they refused to pay the commissions to which certain solicitors of insurance, who were sub-agents of the defendants at the time the agreement was entered into, were entitled in having policies renewed in companies represented by the defendants; and that this refusal resulted in such policies being renewed in other companies and the loss of the fifteen per cení, of such renewal premiums by the defendants. The complainants, having failed to keep and perform their contract in this respect, which went to the essence of the agreement, are not entitled to have a direct decree for specific performance nor to a decree restraining the defendants from violating the agreement on their part, but the parties should be left to -their remedies at law. We are of opinion, therefore, to reverse the decree appealed from, and enter such decree as the circuit court ought to have entered, dismissing the bill with costs and without prejudice. Reversed.