Herrington v. Hubbard

Smith, Justice, delivered the opinion of the Court: Hubbard filed his bill against Herrington in the Cook Circuit Court, to compel the specific performance of a written contract to convey fifty acres of land, for the consideration of @3,750, payable by instalments, at different periods of time. It is deemed unimportant to the decision of the cause, to state with precision the terms of the contract, or the facts attendant on the first payment, and the subsequent overture and negotiations between the parties, to carry out the objects of the agreement, as they appear from the evidence, because it is supposed that there are three highly important points developed by other evidence, on which the decision of the case must of necessity rest, independent of these. It appears that Hubbard previous to the filing of his bill in equity, commenced in the Cook Circuit two actions at law, against Herrington, on this same contract: the first on the 2d of May, 1835, in covenant, to recover damages from Herrington for the non-performance of the contract on his part; and the second on the 9th of May, of the same year, in assumpsit, to recover back the amount of the consideration money paid by him. Both of these suits were subsequently dismissed, and the cause in equity instituted. On the 3d of June, 1835, and before the filing of the bill in equity, Herrington entered into a written contract with one Truman G. Wright, to sell and convey the same lands to him, for the consideration of $7,440; and on the 23d of the same month actually executed and delivered to Wright a full and absolute conveyance of these lands, which was placed for record in the office of the Recorder of the county of Cook, on the 1st of July following. From these facts, which are incontrovertible, three questions arise: First, was not the institution of the action of assumpsit, a virtual rescinding of the contract between Hubbard' and Herrington, and in legal contemplation must it not be so considered? Secondly, was not Herrington and Wright justified in so considering it; and is not the contract and sale between them for these lands valid, Wright being a purchaser for a valuable consideration ? Thirdly, ought not Wright to have been made a party in the suit; and if so, is not the decree erroneous for the omission to name him in the bill ? Whatever may have been the state of facts between the parties, as it regards the payment of the first instalment, and the readiness of Hubbard to complete the others after the time for the second payment had expired, there would seem to be no rational doubt that Hubbard had determined to treat the contract as rescinded, by the acts of the parties, in their non-compliance to carry it into execution at the precise time stipulated. He first institutes his action of covenant to recover damages for the non-performance by Herrington of his portion of the agreement; and afterwards brings his action to recover back the consideration money paid. We think this is sufficient evidence of his determination to treat the contract as rescinded; and that ■ it is equivalent to an express disaffirmance of it. Such must be the legal intendment of his act; for he certainly could not recover back the consideration money paid, but on the ground of a disaffirmance. Herrington, then, had a right so to consider it; and was at liberty to treat, and enter into a contract, with Wright for a sale to him of the lands. Wright finding this suit pending, must have considered it a disaffirmance; (and we are justified in presuming that Wright had notice, because the proceeding in legal contemplation is notice to every person) and felt that he might legally enter into a contract with Herrington for the sale and purchase without the existence of any obstacle; and accordingly did so, and consummated the purchase on the 23d of June, 1835. It will be perceived that the agreement between Wright and Herrington is entered into on the 3d of June, 1835, two days previous to the filing of the bill. Wright, therefore, purchased without any knowledge that Hubbard had any intention of insisting on a specific performance of the original contract between him and Herrington. There is no dispute that Wright is a purchaser for a valuable consideration; and we think from the facts, as they appear, that he acquired a legal title to the lands. Herrington being at perfect liberty to treat the contract as disaffirmed by the prosecution of Hubbard, to recover back the consideration money. It was urged at bar, that Hubbard had concurrent remedies, that he might proceed at law and equity at the same time; though he could not obtain damages and enforce a specific performance, he might elect which remedy he would pursue, and which to abandon, after their institution. The doctrine of concurrent remedies is not disputed; but he surely could not proceed to recover back in an action at law, the consideration money paid, which must be based on an actual or constructive disaffirmance of the contract; and also obtain a decree for the specific execution of a contract, pronounced by a judgment at law disaffirmed. The action for damages for the non-performance of the contract in covenant, and his remedy in equity, might probably have been proceeded in at the same time; and he might have elected which he would prosecute to final judgment; but most certainly the action in assumpsit, for the consideration money, cannot be ranked under the class of those termed elective. For these reasons we think the decree is erroneous, and that on the first two points it should be reversed. With reference to the third, upon the supposition that our views on the first and second are not justified, the interest which Wright had acquired in the lands, required that he should on the coming in of the defendant’s answer, which disclosed that interest, have been made a defendant to the bill. The rule is almost inflexible—certainly so, where it can be done without extraordinary difficulty, or where the defendants are not very numerous, and do not reside in remote and distant countries, that all parties in interest shall be made defendants, so that no decree shall be made which can affect their interest, without their being heard. Courts will take notice of the omission, though no demurrer be interposed for want of proper parties, when it is manifest that the decree will have such an effect. As then the decree in this case manifestly adjudges Wright’s title to the land void, it is, we think, for this reason, erroneous,—Wright having had no opportunity to defend his interests, which have been taken away without a hearing. For the reasons assigned, and a conviction that there is not sufficient equity in the bill, and that Hubbard has voluntarily abandoned those he may have acquired under the contract, we are of the opinion that the judgment of the Circuit Court should be reversed, and the bill dismissed with costs. Judgment reversed.