Harper v. Tidholm

Mr. Justice Carter delivered the opinion of the court: Substantially the only question raised by the pleadings and proofs, as well as by the arguments of counsel, is, was the abstract of title furnished by plaintiff in error to defendant in error, under the agreement for the sale of the premises mentioned, a merchantable abstract? Counsel for defendant in error state the question as follows : “The issue raised by the pleadings, and upon which evidence was adduced, was whether the abstract furnished was merchantable, and in compliance with the .terms of the contract. * * * It is not a question of whether the separate conveyances noted are correctly given, but whether or not it is made by an abstract maker whose product, as such, is merchantable.” By the contract Tidholm bound himself to furnish Harper a complete merchantable abstract of title or a merchantable copy. Harper insisted by his answer and cross-bill, and insists here on argument, that Tidholm failed to do this, and that he was not, therefore, in default for refusing to take conveyance of the property and to pay for it. No defect in the abstract or in the title was pointed out nor was any alleged, but, as we understand counsel, the sole objection was and is this: that abstracts of title prepared and furnished by the recorder of deeds of Cook county are not merchantable. Twelve witnesses were examined by the master on behalf of the complainant, none having been offered by the defendant. These witnesses were lawyers, real estate agents and makers and examiners of abstracts, and conveyancers, and appeared to have special knowledge of the subject matter of the inquiry. Two of these witnesses testified to the methods used in making abstracts by the recorder, and ten of them testified that these abstracts were merchantable, and that they passed current as reliable and properly prepared abstracts of title among those buying and selling real estate and having occasion to examine and pass upon titles. On cross-examination defendant’s counsel drew from some of these witnesses statements to the effect that they had occasionally heard objections raised to the recorder’s abstracts, sometimes based upon the supposed irresponsibility of the recorder, and sometimes raised by persons interested in the abstract companies. It is to be noted that the defendant below, although relying upon this issue of fact raised by the pleadings as substantially the only question in the case, called no witnesses, and made no effort, except upon cross-examination of complainant’s witnesses, to prove that these abstracts were not merchantable. No review of the evidence is called for, as it was substantially all in support of complainant’s bill. It shows, without doubt, that the abstract furnished by Tidholm complied with his contract in that respect. If it was really desired to litigate the question whether or not these abstracts are merchantable, defendant below should have made some proof at least tending to disprove that adduced by his adversary. Something is said in the argument about the rule that a court of equity will never enforce either a penalty or a forfeiture, and that the decree in this case is erroneous in that it declares the contract forfeited, and that the complainant is entitled to retain as liquidated damages the §3500 paid as earnest money. The forfeiture had been declared by the complainant and the contract ended by him, in strict accordance with its terms, before the bill was filed, but Harper having placed the contract on record it was a cloud on his title, and the bill was filed to remove that cloud. In affording this relief, it of course became necessary for the court to determine whether the contract was still subsisting or not, and the effect of the decree was to find that it had been terminated in accordance with its terms, by the acts of the parties themselves, and that it was therefore null and void and a cloud upon the title. As to the forfeiture of the §3500 earnest money, that had also taken place b'y the acts of the parties to the contract, and no question was raised by the answer or cross-bill, or by the proofs, that this amount, which the contract provided should be treated as liquidated damages, wás in excess of the actual damages sustained by Tidholm by reason of Harper’s default. The question, therefore, as to whether equity would go behind the terms of the contract and declare the sum fixed by the parties as a measure of damages in case of default to be a mere penalty, and allow only the actual damages sustained, is not presented by the record. It is just as consistent with the facts proved that Tidholm’s damages exceeded §3500 as that they were less, and the parties having agreed upon that sum in their contract as the true measure of damages, and it not being brought in question by the pleadings and proofs, there is no occasion for this court to interfere in what seems to have been so satisfactory to those appearing to be most interested. The decree of the Superior Court is affirmed. Decree affirmed.