Haven & White v. Wakefield

Mr. Chief Justice Walker delivered the opinion of the Court: It is insisted that the contract in this case does not amount to a lease of the premises, because the ground on which the building was erected did not belong to appellees when the agreement was executed, nor was the building then in existence. A fair and reasonable construction of the contract, we think, bound appellants for the yearly payment of the stipulated sum as rents; but it gave them the election by which it could be changed from a lease to a purchase of the property, within the period limited for the purpose. And it provided that the money previously paid as rent, if they elected to purchase, should become a payment on the price of the land. Appellants desired the use of a house, and were willing to lease such a building, and appellees were willing to erect and lease such a building, for five years, at an annual rent of $600. And the house having been erected, and appellants having entered into the possession under the agreement, they cannot deny its legal effect as a lease. It is true, it is not a formal lease, nor could appellees, at the time this agreement was made, execute a binding lease of lands they did not own, or of a building not then erected; but the parties had the power to make an agreement for the erection of a house, and for a lease when erected. If appellants treated the building as completed and entered into possession, they cannot escape paying rent according to the terms of their agreement, unless they had become purchasers, and then it would be paid as purchase-money and not as rent. They, however, failed to purchase, and hence are liable for the rents according to their agreement. This being a contract entered into between two partnerships, and Haven being a partner in each, no action at law could be maintained by one firm against, the other. A person being unable to sue himself in any court, if one of these firms were to sue the other such would be the result. At law all of the parties to an agreement, who fail to perform their joint obligations, must be sued by all the parties to whom they are bound. The obligations on both sides in this agreement were joint, and not several. Hence, any suit which might have been brought at law on it would necessarily have been joint, and Haven would therefore have to sue himself in such an action. In such cases however, to prevent a failure of justice, equity takes jurisdiction and makes compensation for any injury that may have been sustained. The next question arising in the case is, whether the evidence sustains the allegations in the bill, to authorize a recovery of rent for the use of the building. It appears that, notwithstanding the house was not completed with all reasonable dispatch, appellants entered into its possession, and occupied it for almost two years. It is true, that appellees do not claim that the building was finished until some time in November, 1859, but appellants having taken possession under the contract they cannot refuse to pay rent. It may be, that, by the failure of appellees to finish the building according to the terms of the agreement, appellants were released therefrom; but, by entering into possession, they waived the right, and must be held to a performance of their part of the agreement. The remaining question is, whether appellants have sustained damage by a non-performance of the agreement by appellees; and, if so, whether such damages maybe recouped to the extent of the rent, and, if they exceed that amount, the excess may be recovered over against appellees. This is claimed by appellants by their cross-bill. The evidence shows, that the building was not inclosed so as to receive the broom brush in as short a period of time as it might have been done by several weeks. Nor do we see that any thing is shown in the evidence that should excuse appellees for the delay. The want of - lumber appears to have been owing to their neglect, as it could have been readily procured at St. Louis, and transported by rail to the place where it was needed. And the evidence also shows that- workmen could have been procured at the same place. But neither were obtained, nor do we see that any effort was made for the purpose. When it is remembered that appellants had large interests depending upon the punctual performance of their agreement, it was not “ reasonable dispatch ” to delay the building to suit their convenience. They were bound to use all reasonable effort that was in their power to have completed the building within six weeks from the time the contract was made, but they failed to make such effort. Appellees must have believed when they entered into the agreement that they could perform it. They have failed to show that they were prevented by any unforeseen impediment. All reasonable dispatch must mean that all means at their control would be employed, that every reasonable effort would be made to perform the agreement. The evidence shows that, so far from using all reasonable efforts, their hands were engaged, within the six weeks within which this building was to be completed, in the erection or completion of other buildings. The building was not inclosed so as to receive with safety broom brush when the time arrived when it should have been inclosed. A.nd for the want of proper room for storage, it became necessary to use the building in its uninclosed condition, and the brush thus placed in the building was thereby seriously injured by the weather to the extent that it became almost worthless. That, by reason of the non-completion of the building, appellants were delayed in cutting and housing their corn in proper season, and a large portion of it suffered injury from the effects of frost, rain and other action of the weather. This damage to the broom-corn seems to have been the immediate result of the failure of appellees to have the house in readiness to receive it, as they had contracted they would. And any damage they may have sustained by failing to plaster the house, or in other respects failing to complete the building according to their agreement, would be proximate damages growing out of a breach of the contract. And, inasmuch as an action at law cannot be maintained for the recovery of those damages, they may be recouped against the rent under the cross-bill, and, if they exceed the amount of the rent that accrued against appellants, they would be entitled to a decree over for the balance. . The decree of the court below is, therefore, reversed, and the cause is remanded, with directions to refer it to a master to state an account between the parties, in which he will charge appellants with the rents which accrued at the contract price during the time they occupied the building, and will charge appellees with all damages which were the immediate result of a failure to inclose and complete the building according to their agreement. If such damages shall be found to be less than the rent, then the court will deduct the amount from the rent; but if found to be greater, then the rent will be deducted from the damages, and a decree rendered in favor of appellants for the difference. The master, however, in stating the account, will exclude from his estimate all purely speculative damages, such as probable profits, and will confine the allowance of damages to those which result as an immediate consequence of the breach of the contract. Decree reversed.