Wheeler v. Mather

Mr. Justice McAllister delivered the opinion of the Court: This case is again before the court upon a rehearing granted at the instance of appellee. It has received an extended and careful reconsideration. But the court finds no reason for varying from the conclusion arrived at in the first instance. In order to a proper appreciation of the additional reasons and authorities given, it is necessary that a re-statement of the case should bp given. It is an action of assumpsit, upon the common counts, brought by a purchaser of real estate, to recover back money which he had paid the vendor, and the case was this: The appellee, plaintiff below, was the only-witness on his behalf. He introduced in evidence articles of agreement under seal, bearing date April 1, 1861, whereby appellant, as party of the first part, in consideration of the prompt payment of the money to be paid by appellee, agreed to sell appellee lands therein described, subject to a mortgage, appellee covenanting to pay for them $1,892 as follows : $550 cash at the time of making the contract, $550 ' on the 1st day of June, A. D. 1861, and the balance, $792, on the 1st day of April, 1862. Time was made of the essence of the contract. Appellant covenanted that, on the payment of the principal and interest as specified, he would, without delay, convey all his right, title and interest in the premises by deed with full covenants of warranty. The articles contained the proviso that they were upon the express condition that, in case of failure of the party of the second part (appellee) in the performance of all or either of the covenants on his part to be performed, the party of the first part (appellant) should have the right to declare the contract void, and take immediate possession of the premises. Appellee then produced in evidence a notice signed by appellant, dated August 2, 1862, and served on him about that time, which, after describing the contract, and reciting appellee’s failure in making his payments, notified him that appellant declared the contract void and terminated. From his own testimony, it appears that appellee had paid only part of the installment of $550 due June 1, A. D. 1861, and no part of that of $792,, due April 1, 1862. Sor did he offer any excuse for such default, or claim that there was any fraud or default on the part of appellant, but says he never demanded any deed from him. Under this state of facts the court, on behalf of plaintiff below, instructed the jury: “1. That unless the contract between the plaintiff and defendant, offered in evidence, provides that the plaintiff shall forfeit all that he had paid upon the rescission of said contract; and if they shall further believe from the evidence that defendant declared a forfeiture of said contract at his option under said contract, "and that said contract had not been rescinded by the plaintiff, then there was no forfeiture of the amount paid by the plaintiff to the defendant, and plaintiff has a right of action to recover back whatever he paid to defendant on said contract.” “ 2. That if the jury believe, from the evidence, that the contract of sale of the land mentioned in the articles of agreement offered in evidence by the plaintiff was rescinded by the defendant, then the plaintiff can recover from the defendant the sum or sums paid upon said land.” These instructions base the right of recovery upon the mere fact of appellant having declared the contract terminated, without reference to any question whether appellee was in fault or appellant without fault; and which, for this reason, were erroneous and must have misled the jury. There is no theory upon which this action can be sustained, if at all, except that of an implied promise. If appellant had violated the contract, or it had been rescinded by mutual consent, then the law would imply a promise on his part to pay back the consideration received. Faxon v. Mansfield, 2 Mass. 147; Seymour v. Bennet, 14 id. 266. But this contract was not rescinded by mutual consent. Appellee violated it, and then, as a consequence, appellant declared it terminated; and it was no breach of the contract on his part to do so. In Battle v. The Rochester City Bank, 3 Comst. 88, where the contract contained a similar provision and the right was exercised, the court said: “ The rescission of the contract in question by the bank was not a breach of it, but was in pursuance of a provision contained in it; and the defendants are chargeable with no violation of it whatever.” We believe it to be a sound principle, supported alike by reason, authority and good morals, that no man can make his own infraction of his agreement the basis of an implied undertaking in his favor, or of an action for money had and received against the other party who stands fair and innocent. It was upon this principle that the right of recovery was denied in the case of Ketchum v. Evertson, 13 Johns. 359, cited in the original opinion in this case. “ It would,” said the court, “ be an alarming doctrine, to hold that the plaintiffs might violate the contract, and because they chose to do so, make their own infraction of the agreement the basis of an action for money had and received. Every man who makes a bad bargain, and has advanced money upon it, would have the same right to recover it back that the plaintiffs have.” In Green v. Green, 9 Cow. 47, Chief Justice Savage reviewed all the former cases in Hew York on the subject, and closes his review by saying :, “ I forbear the citation of more cases. I have found none of a recovery, where the party wishing to consider the contract rescinded has not shown a breach of the contract on the other side, or what was equal to it.” The case of Battle v. The Rochester City Bank, 5 Barb. 414, involved the precise question in the case at .bar. The contract contained the' proviso that the vendors might declare it void for default of the vendee in making his payments. Default was made, the right was exercised, and the vendee sued to recover back what he had paid. Wellsí, Justice, who delivered thf opinion of the court (and it was afterward affirmed by the court of appeals, 3 Comst., supra), said, “ in the case at bar it is not pretended that the defendants have not fulfilled to the letter every part of the agreement on their part to be fulfilled, and the plaintiff, by his counsel, in his opening, admits that he neglected to pay the first of the annual installments mentioned in the contract. I confess myself entirely unable to find, in any elementary treatise or reported case, &■ principle recognized, which would allow the plaintiff to recover.” Stark v. Parker, 2 Pick. 267, is a case where the plaintiff' had agreed to work for the defendant a year for $120;' worked pai't of the time, then quit without any' fault on the part of defendant, and sued upon a quantum mermt for what he had done. Lincoln, Justice* in delivering the opinion of the court, uses this language: “Nothing can he more unreasonable than that a man who deliberately, and wantonly violates an engagement, should be permitted to seek in a court of justice an indemnity from the consequences of his voluntary act, and we are satisfied that the law will not allow it.” Rounds v. Baxter, 4 Greenlf. 454, is very- similar in its facts to the case of Ketchum v. Evertson, supra, and the court there said: “ The failure in the article of performance, then, was owing to the plaintiff’s own fault, negligence or inattention, and we are to decide whether the law, in such circumstances, will furnish him an indemnity against the consequences of this fault, negligence or inattention. It is a proverbial principle that a man is not permitted, in a court of justice, to take advantage of his own wrong or neglect. The principle is founded in the highest reason. The defendant never made an express promise to repay the money in question, and why should the law imply one in favor of a man who has violated his contract on the part of one who stands fair and innocent 1 If a man gives his neighbor $100 he can not by law recover it back; no promise of re-payment is implied, and when the plaintiff concluded not to perform his contract, but abandon it, we must consider him as waiving all claim to what he had paid, as much as if he had given it without any pretense of consideration received.” In the case of Hansbrough v. Peck, in the supreme court of the United States, the contract contained a similar power, and also a clause authorizing the vendor to retain such purchase money as had been paid. The court, however, does not place the decision upon that ground; because, that being a case in chancery, such a clause, if it operated as mere forfeiture, would receive but little countenance from a court of equity. But recognizing the rule as laid down in Ketchum v. Evertson, supra, the court said, “ and no rule in respect to the contract is better -settled than this: That the party who has advanced money or done an act in part performance of the agreement and then stops short and refuses to proceed to its ultimate conclusion, the other party being ready and willing to proceed and fulfill all his stipulations according to the contract, will not be permitted to recover back what has been advanced or done.” 5 Wall. The cases of Smith v. Lamb, and Same v. Powell, 26 Ill. 396, are in perfect harmony with the principles above enunciated. There the vendor was in fault, and the vendees were not. The first three payments had been made and accepted, and, if not made in time, the vendor had made no objection ; but, when the time came to make the last payment, he refused to convey, declared his inability to convey a good title for the reason that he had none and never had, and the court said: “ Then it appeared that the vendor was not entitled to, and could not receive, the purchase money, and he had no right to claim a tender of money which he had no right to receive. The purchaser had a right to repudiate the contracts as forfeited by the vendor, or rather, as never having been rightfully executed by him, because he had no right to make them. The plaintiffs had a right to say, you have received our money wrongfully, and even fraudulently, and you must pay it back to us as if you had never made these contracts which you can not perform, and which you should never have made.” So of the case of Gehr v. Hagerman, 26 Ill. 438. The right of rescission on the part of the vendee was based upon an alleged breach of the contract by the vendor. And so far from recognizing the right of a vendee who had made part performance and then stopped short and refused to go farther, the court said: “ The plaintiff, before he could rescind, was bound to restore the property, or at least offer to restore it, to the defendant, after homing performed or offered to perform his part of the agreement.” This is far from recognizing the doctrine that the vendee may violate the agreement on his part, and recover of the vendor what has been paid, even though the latter has not violated any part of his agreement. The case of Murphy v. Lockwood, 21 Ill. 611, is cited to show that appellant, in the case at bar, could not declare the contract forfeited without a return of what had been paid. A single sentence from the opinion of the court will show that the contract in that case was essentially different: “ 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, shotdd put the vendee in the same condition as before the making of the contract.” The absence of‘a provision in the contract making the time of performance or punctuality in the payments an essential condition, and of one authorizing the vendor to declare it forfeited for a failure to make punctual payments, is specifically noticed in this opinion, and constitutes an essential distinction between that case and the one at bar. Courts of law are not to amend or alter the contracts of parties; and where they agree, in unambiguous language, that, in case of a failure of the vendee to make his payments at the specified time, the vendor may declare the contract forfeited, we are unable to perceive upon what principle the courts can superadd a condition which the parties themselves did not see fit to impose. There is no question as to the general principle that where the parties have not themselves prescribed the right of rescission and the circumstances under which it may be exercised, restoration must be made. All of the other cases cited by appellee’s counsel are of this latter class. And none of them tend to support the position that a vendee shall be permitted in a court of justice to obtain indemnity against the consequences of his own mere default. From the authorities above cited, and others of like weight and respectability, we may deduce these rules: Where the vendee enters upon the performance of such a contract, and, paying part of the purchase money, makes default which is inexcusable, and the vendor, being without fault, exercises the right given by the contract of declaring the same terminated, and in so doing acts fairly and within the scope of the power, then no action can be maintained by the vendee to recover back what he has paid. But a vendor, who is himself in fault, for fraud or violation of his contract, can not exercise the power so given without making restoration of what he has received under it. In such case the law would imply a promise to repay the purchase money received, and the equitable action for money had and received lie to recover it. We do not, however, hold, or mean to be understood as holding, that these rules cover the entire subject matter. There may be cases where a vendee, chargeable with a technical default under such a contract, might, under particular circumstances, be entitled to other relief, as in a case where he had paid a large portion of the purchase money, made valuable improvements upon the property, and his default was the result of fraud, accident or mistake; or the vendor should attempt to exercise the power of forfeiture in a case not fairly within its scope; or unfairly and oppressively, with the view of taking an undue advantage of the vendee by a forfeiture of payments and improvements; and in all other cases falling within the principles by which courts of equity are governed, the vendee may resort to such court to restrain the act of the vendor, if about to be done, or, if accomplished, to set it aside, and to have the equities of the parties arising from their relations adjusted according to the circumstances of each case. The case at bar presents no grounds for the action for money had and received, or relief in equity, within any of the above rules. The judgment of the court below must therefore be reversed and the cause remanded. Judgment reversed.