Clark v. Harmer

Mr. Justice Shepard delivered the opinion of the Court: Covenant is a proper form of action for the recovery of [119] money on an instrument like this. 1 Chitty Pl. 118; Simonton v. Winter, 5 Pet. 141. There is no similarity between it and the one under consideration in Hale v. Finch, 104 U. S. 261. There is no general issue, strictly speaking, in covenant. Defendant’s pleas were wholly insufficient, and must all have been stricken out had plaintiff demurred, instead of joining issue. The second plea, though defective as a plea of non est factum (Stephen Pl. 159; Id. 196), may, however, be regarded as sufficient for that purpose by reason of plaintiff’s failure to demur. So to hold does not affect the merits of the case, however. Treating it as such a plea, its sole effect was to put in issue the execution of the instrument. “ The plea of non est factum denies that the deed mentioned in the declaration is the deed of the defendant. Under this the defendant may contend at the trial that the deed was never executed in point of fact. But he cannot, under this plea, deny its validity in point of law.” Stephen Pl. (Heard) 158-9 ; 1 Chitty Pl. 120. In support of the judgment it is contended that covenant is an action to recover damages, and that plaintiff was not entitled to a verdict upon the close of his evidence, because he offered no proof thereof. Simonton v. Winter, 5 Pet. 141, is referred to as sustaining this proposition. That was an action of covenant, as the court said, “sounding in damages,” the amount due plaintiff was uncertain, and depended upon matters dehors the record, hence requiring to be ascertained by proof aliunde. The court recognized the clear distinction between cases of that kind, and those where the amount sought to be recovered is fixed and ascertained by the instrument itself) as in the case of a bond, and thus proves itself. The instrument showed a promise to pay the certain sum of $8,000 in a certain contingency, the happening of which, if proved, entitled him to that amount as his damage. [120] This brings us to the actual point upon which the case was made to turn in the court below. Was it incumbent upon the plaintiff to show “ that Harmer took possession of the property or worked the same after that ninety days.” Had no actual possession been taken of the property by any one under the terms of the agreement, it would be necessary to construe the instrument with a view to ascertain whether the defendants were bound to give notice to plaintiff on or before the expiration of the ninety days that they had decided not to purchase the property. Taking the facts as proved, and uncontradicted, we think it unnecessary to construe the instrument save in application thereto. The defendants did take possession, according to this proof — Lippman actually and Harmer constructively through him. Possession taken under the agreement by one joint tenant inured to the benefit of both, and, in the absence of proof to the contrary, must be presumed to be on joint account and for joint benefit. Plaintiff, observing that possession had been taken and that work was progressing in accordance with the agreement, was under no obligation to inquire whether Harmer was still acting with Lippman, or had assigned or abandoned his interest. At the end of the ninety days, he saw Lippman still in possession of the property and engaged in work thereon. It was not redelivered to him, and no notice was given him of an intention to go no further. If he be held to take notice of the deed made by Lynch and wife to Lippman, trustee, of what did it inform him ? It necessarily showed that the option to purchase had been acted on by Lippman. This deed made it impossible for Lippman, at least, to withdraw from the purchase made of plaintiff. It was a complete acceptance before the expiration of the ninety days. The deed made to Lippman, trustee, without disclosing the beneficiaries thereof, was no notice that Harmer had withdrawn from association with Lippman, and had abandoned the contemplated purchase. Concede that he had the right to [121] release himself, without regard to the act or conduct of the joint contractor, Lippman, still, under the circumstances, we think it was incumbent upon him at least to show notice to plaintiff of his withdrawal and intention to proceed no further in the matter, or that plaintiff had this knowledge in some other way. It is urged that the assignment by Lippman and Harmer to Louchheim, indorsed on the back of the agreement and recorded therewith, was notice to plaintiff that Harmer had withdrawn and was no longer interested. It does not appear that this transfer was proved so as to entitle it to record. So far as the record before us shows, the transfer was apparently transcribed upon the record by the recording officer because it was endorsed upon the instrument which was offered for record in accordance with law. The record of an instrument that is not permitted by law to be recorded, or that is not proved for record as required by law, is constructive notice to no one. But had it been properly recorded, plaintiff was not bound to take notice of it. He had conveyed his interest, and had no concern with the subsequent conveyances affecting the property. If he was entitled to notice by Harmer of his intent to go no further at the end of the ninety days, which we have held he was, the notice must have been given directly or in such a way as to fasten actual knowledge upon the plaintiff. The court erred in directing a verdict for the defendant; and for that reason the judgment must be reversed, with costs to the appellant, and the cause remanded with direction to award a new trial; and it is so ordered.