Murphy v. Lockwood

Breese, J. This was a suit in equity to compel the specific performance of a contract under seal, to convey certain lands lying in Marshall county, purchased on credit in part. The contract bears date April 5,1851, and stipulates that the last payment shall be due April 5, 1852. The proofs show that the vendee paid down at the time of the purchase, one hundred dollars. On the eighth day of August, 1851, he paid another hundred dollars. He also paid all the taxes assessed upon the land from the time of the purchase, until the time of filing the bill, and also, took possession of the lands, and made valuable improvements on them. Prom the time the last installment became due, no payment was made on the contract until the second of May, 1855, when the vendee paid an additional hundred dollars, which seems to have been fully accepted by the vendor. During all this period, the vendor manifested the utmost kindness and indulgence towards the vendee, who, it appears had become very much embarrassed in his finances, which resulted in a failure in his business. He was not importuned to pay, nor threatened with extreme measures in case he did not pay. At the time of this payment, the vendor extended the credit two months, until the second day of July, 1855. On the expiration of this credit, the vendor demanded full payment of the residue of the purchase money, and tendered a conveyance of the lands, describing them erroneously as lying and being in Putnam county, but correctly as to township, range and sections, but did not tender the notes given by the vendee, or offer to return the money paid on the contract, or to reimburse him for the taxes and improvements made on the land. On failure of the vendee to comply, the vendor proceeded to declare the contract forfeited, and caused an affidavit to that effect to be made and recorded in Marshall county. After the receipt of the payment in May, 1855, .the vendor in August following, entertained a proposition made by the vendee, fo convey to him certain real estate in the city of Brooklyn, New, York, as a payment on the contract, which, for some reason not fully explained, was not acceded to. This failing, vendee obtained the money, and on the eighth of October, 1855, some eight weeks thereafter, tendered to the vendor the balance of the purchase money with the interest due, and demanded a deed according to the contract, which being refused, this bill was filed. These are the prominent facts in the case, and the question is, does the complainant, the vendee, occupy such a position, under all the circumstances, as to entitle him to a decree for a specific performance. It will be seen that the contract does not in terms, make the .time of performance, or punctuality in the payments, an essential condition, nor is there any provision in it, authorizing the vendor to declare the contract forfeited for a failure to make punctual payments, nor does it authorize him to retain any portion of the purchase money paid; and it stipulates for a deed with full covenants. It must be conceded that the vendee did not pay promptly, that a long time elapsed within which he should have performed on his part, or offered to perform, and which, under ordinary circumstances, would justify a rescission of such a contract. But it is apparent, in this case, the delay in payment, was not chargeable to any unwillingness to pay, or to a desire to take any advantage of the vendor, but a disposition was manifested throughout to perform the contract. ' The remissness we think, was overlooked by the vendor and is to be considered as waived, by him, he having taken no steps during that long interim between 2nd April, 1852, and the 2nd May, 1855, when he accepted a further payment of one hundred dollars, to declare the contract forfeited. His silence and inaction, under such circumstances, must be regarded as acquiescence on his part in the delay, and should preclude him from insisting upon a forfeiture. Time does not seem to have been regarded by the parties, as of the essence of this contract, and we must take it, as they regarded it. Parties may make time material, and so it may be considered as material, though no part of the contract itself. As when one party fulfills all the conditions of a contract, he may demand a like performance of the other party within a reasonable time, or on the day named for performance, and upon default may rescind. But in all cases, the fulfillment must be of such a character as will sustain a bill for specific performance, otherwise - it may not be sufficient to lay the foundation for a rescission upon the mere ground of delay. The circumstances attending such contracts serve to show whether time is material, and of the essence of the contract or not, and equity will not relieve the negligent party from the consequence of his own laches, the rule being, that the party claiming the benefit of the contract must show himself ready, desirous, prompt and eager to perform on his part. Nothing of this kind is shown by the parties to this contract. The delay in the payments was acquiesced in by the vendor, and no laches is now justly imputable to the vendee, but that which occurred between the payment on the second of May, 1855, and the eighth of October following when he tendered the whole amount due. Before July, 1855, the vendor had’ given no intimation of any kind, that he desired or intended, to rescind the contract, but seemed to be content with the conduct of the vendee in delaying payment. It is insisted by the appellant, that his tender of a deed, and demand of payment, was a complete fulfillment on his part, and rendered prompt compliance on the part of the appellee indispensable. Was this tender, a compliance with the terms of the contract ? The contract provides, that “ on the payment of all the herein described amounts as they become due and payable, the said William D. Murphy and his wife, agree to make and execute a warranty deed with full covenants free from all incumbrances except the taxes of 1851, for all of the described lands to the said Ralph Lockwood his heirs or assigns.” These covenants are mutual and dependent, and the rule, in such case is, that neither party can bring an action without first performing, or offering to perform on his part. Platt on Covenants, 86 to 90, and case referred to in notes. So a covenant by the vendee to pay, and of the vendor to convey upon payment are dependent covenants, and an action to compel payment cannot be maintained without proof of a previous tender of a conveyance. 2 Hilliard on Vendors, 2, chap. 26 ; Mc Cullough v. Dawson, 1 Carter (Ind.) R. 413 ; Adams v. Williams, 2 Watts and Serg. 227. Being then a mutual dependent covenant, the vendor should have accompanied his demand of payment with a tender of such a deed as was stipulated in the contract. Did he tender such a deed ? The covenants in the deed tendered were as follows: “ And the said parties of the first part do hereby covenant and agree with the said party of the second part, that at the time of delivery hereof, the said parties of the first part are the lawful owners of the premises above granted, and seized thereof in fee simple absolute, and that they will warrant and defend the above-granted premises in the quiet and peaceable possession of the said party of the second part, his heirs and assigns forever.” ■ The contract, as we have seen, provided for a deed with full covenants. A deed with such covenants should contain, first, a covenant that the grantor was seized of the very estate which he purported to transfer, called the covenant for seizin; second, that he had a good and perfect right so to transfer it; third, that the grantee should quietly possess and enjoy the premises without interruption, called the covenant for quiet enjoyment; fourth, that such should be the case free and clear from all incumbrances, leases, trusts, etc., called the covenant against incumbrances ; fifth, that such other deeds or instruments should be thereafter executed as might be necessary to perfect or confirm the title, called the covenant for further assurance; and sixth, the covenant of warranty. Rawle on Cov. for Title, 28. In the deed tendered, three important covenants are omitted, namely, the one against incumbrances, and for further assurance, and of general warranty of title, and also the covenant of a right to convey, unless that can be comprehended under the phrase, “ are the lawful owners thereof in fee simple absolute,” which we are inclined to think amounts to such a covenant. Our statute covenant of title, embraced in the words “ grant, bargain and sell,” seems to have been left out of the deed. The deed tendered therefore, was not such a deed as the contract stipulates, and could not fulfill the mutual dependent covenant therein, and could not be the ground-work of a suit to rescind, it not amounting to a performance, or an offer to perform on the part of the vendor. It is not a literal nor even a substantial compliance with the terms of the contract. Another objection equally fatal to the offer of performance by the vendor, is found in the fact, that the contract, nowhere imposes a forfeiture on default in any of the payments, and therefore, the vendor before he could rescind, should put the vendee in the same condition, as before the making the contract. Had the deed tendered, been such an one as the contract required, the vendor, in addition should have returned the notes given for the purchase money and the several advances of money, or at least have offered to return them, before he could be permitted to rescind. This is understood to be the universal rule in such cases. The party against whom a rescisión is sought, must be placed in statu quo. 1 Hilliard on Vendors, 38, and seq. 1 Sug. on Vendors, 306; Johnson v. Jackson, 27 Mississippi, 498; Buchenan v. Horney, 12 Ill. R. 336. Time not having been made of the essence of this contract by the express stipulation of the parties themselves, nor by the nature of the contract itself, or from the conduct and circumstances of the parties and no gross laches or vexatious delay changing the relative situation of the parties, or one of them, affecting the character or justice' of the contract, courts of equity have not hesitated to decree a specific performance. 1 Sug. on Vendors, 306 ; 2 Story Eq. Jurisprudence, 102. The doctrine of equity is compensation, not forfeiture. Morgan v. Herrick, ante, 481; Andrews v. Sullivan, 2 Gilm. R. 327. It is true in this case, the property, during this delay of payment, had greatly increased in value, but it must be observed, that the appreciation took place before the receipt of the payment of the second of May, 1855, and the entertaining the proposition to take Brooklyn property in August following. In justice then, the real delay, should be computed from July, 1855, up to October 8, of that year, the date of the tender of the purchase money, about three months. This is all the delay shown to be without the consent, and in defiance of the vendor, and it does not seem to us, to be vexatious or unreasonable under all the circumstances. The vendee was very much embarrassed and struggling to make his payments. The vendor was unusually indulgent, and should not now desire to convert his generous forbearance into seeming injustice and oppression. He has the vendee’s money, and his negotiable notes and has been offered in good faith, the whole amount due on the contract, and which he will receive before the execution of this decree. Receiving the payment on the contract in May, 1855, manifested not only the vendor’s consent to the previous delay, but also his understanding at least, that the contract was then in full force. It would neither be fair nor just, and would operate as a surprise and a fraud upon the vendee, to receive this payment on the contract, and then for the vendor to turn around, and without any previous warning or notice, exact the final payment to the very day, on penalty of a forfeiture of all previous payments, and without tendering such a deed as he had contracted to execute and deliver. It would .be a harsh proceeding thus to drive him to the wall. We are satisfied, the vendor could not rescind this contract without tendering such a deed, substantially, as the contract stipulated, and also returning or offering to return the advanced payments together with the notes. The ground for rescinding, failing, the case is left on the question of the vendee’s having shown such- a performance as will entitle him to a decree. Of this, we cannot doubt, and accordingly affirm the decree. Decree affirmed.