Staley v. Murphy

Mr. Justice Lawrence delivered the opinion of the Court: Murphy, the defendant in error, on the first of December, 1863, bought a tract of land from one Moore, paying $134.40 in hand, and giving seven promissory notes for the balance, the last note maturing in 1870. On the 26th of March, 1864, Murphy sold the land to Staley, the plaintiff in error, receiving a larger price, and a larger payment in hand than he had given Moore, but taking notes for the unpaid purchase money for the same amounts maiming at the same date, and drawing the same rate of interest. By the first contract, Moore reserved the right of forfeiture in case of non-payment for thirty days after maturity, and by the second, Murphy reserved a similar right at the end of ten days. Staley entered into possession, made improvements, paid taxes, and also paid the note maturing in December, 1864. He failed, however, to make the payment of December, 1865, on the day it fell due, but tendered it in January, 1866, and Murphy refused to receive it, claiming the contract was forfeited. Thereupon Murphy brought an ejectment against Staley to recover possession of the premises, and Staley filed a bill to enjoin its prosecution, tendering at the same time the money due and the unpaid notes given by Murphy to Moore, of which Staley had procured the control, and praying a decree for a deed. The court gave judgment for the -plaintiff in the ejectment, and dismissed the bill in chancery. Both records are brought here by Staley, and the same arguments having been filed in both, they will be disposed of in one opinion. The contract between these parties authorized the vendor to rescind for non-payment, but contains no clause authorizing him to retain the purchase money already paid. It is urged by counsel for plaintiff in error, that Murphy had no right to rescind and bring an action of ejectment, until he had tendered back the purchase money paid and the unpaid notes. The ordinary rule is, that a party rescinding a contract must place the other party in statu quo. Applying this rule, this court held, in Murphy v. Lockwood, 21 Ill. 615, that the vendor of land seeking to rescind for non-payment by the vendee, should first return, or offer to return, the unpaid notes and purchase money. There are undoubtedly cases where the purchaser has been guilty of gross la,ches, in which the vendor would be justified in re-selling to a third person, without first tendering to the first purchaser the money paid, either holding it subject to his order, or until the equities between them, growing out of the. contract and its violation by the purchaser, can be adjusted. Thompson v. Bruen, 46 Ill. 125. But while the money paid need not be, in every case, returned, as preliminary toa rescission of a contract for non-performance by the vendee, the unpaid negotiable notes must always be either returned or cancelled, so that they cannot be negotiated and their payment enforced. As was said by the court, in Chrisman v. Miller, 21 Ill. 236, the vendor who rescinds, must place himself in a position where he cannot enforce the contract as against the vendee. He cannot be permitted to retain the notes with the power of negotiating them to innocent purchasers, and, at the same time, insist that the contract is terminated, and the rights of the vendee extinguished. In this case, Murphy, when he brought his ejectment, v retained nncancelled, so far as appears, the several promissory notes of Staley, falling due, one every year to the year 1870. As Staley was on the land, there could have been no difficulty in offering to return them, and no reason is shown why they were not either returned or cancelled. We see nothing to distinguish this case, upon this point, from Murphy v. Lockwood, ubi supra. Although in ,the action of ejectment Murphy showed a legal title derived from Moore, from whom he had procured a deed by executing in return a deed of trust to secure his own notes, yet, having let Staley into possession under his conti'act, and having failed legally to rescind it, Staley could use the contract to protect his possession. Stow v. Russell, 36 Ill. 23. The fact that Staley had a good defense to the action of ejectment, rendered it unnecessary to file his bill to enjoin its prosecution; and so far as the bill seeks a decree for a deed from Murphy, by surrendering to him his notes executed to Moore, it cannot be sustained. It is urged that the notes of Staley to Murphy correspond precisely with those of Murphy to Moore; and if the latter are surrendered to Murphy, it would be only equitable in him to surrender Staley’s notes and convey the land. It is true, there would be no apparent injustice in such a decree, but, nevertheless, we cannot make it, for the simple reason that such was not the contract of the parties, and we have no right to make a contract for them. By the contract, Murphy cannot be compelled to receive payment of his purchase money in full before 1810, nor can he be compelled to convey before that time. It follows, from this view of these cases, that the judgment of the circuit court, in the action of ejectment, must be reversed and the cause remanded, while the decree in the chancery cause must be affirmed, the remedy at law being complete so far as relates to the application for an injunction. Judgment reversed. Decree affirmed.