Maughlin v. Perry

Stewart, J., delivered, the opinion of the Court. This cause having been heard on the bill and answer, without replication, and the agreements of the counsel of the parties filed, the facts alleged in the bill and admitted by the answer, together with the whole of the answer susceptible of proof, have been taken as true, and from the proceedings we glean the following facts which seem to be material: John Wells, on the 9th of March, 1864, rented the property, of which he was the owner, to William Hyson for three years, renewable for a similar period, with the following covenant, which has occasioned the controversy in this case: “And the said party of the first part, for himself, his heirs and assigns, doth hereby covenant and agree with the party of the second part, his heirs and assigns, to sell and convey unto the party of the second part, his heirs and assigns, the above described property and premises, for the sum of $1500, at any time before the expiration of this lease or tenancy.” On the 15th of March, 1867, Wells contracted to sell the property to Maughlin for $1600, payable in short instalments, all of which have been paid. Wells died intestate before the termination of the lease, which by its provisions had become renewed for three years; and Richard Wells, one of the respondents, is his administrator. All the rights of Hyson now belong to Perry & Warren, the complainants. Under these circumstances, six days before, the expiration of the lease, this bill was filed, alleging that the complainants were ready to pay the stipulated sum, and desired to have a conveyance of the property, and praying for the specific performance of the covenant. ' This is resisted by Maughlin, on the ground that the acceptance of the terms proposed in the covenant has not been in time, nor in accordance with the covenant; and that the mere offer in the bill to pay the money is not a sufficient compliance with the provisions of the covenant. .The only question to be determined from these facts disclosed by the record is, whether the filing of the bill and the [357] offer to pay the price stipulated, is such a substantial compliance with the terms of the covenant, as to entitle the complainants to a specific performance of the contract on the part of the lessor and his assigns. Courts of Equity do not, ordinarily, regard time as of the essence of a contract, but will enforce it where there has not been a literal compliance with the terms, without inexcusable laches of the party insisting upon its performance. This is the case where the rights and remedies are mutual; Courts of Equity, rather inclining to uphold than to forfeit contracts, where there has been no culpable negligence, and where they can do full justice between the parties; but where there is a want of mutuality in the obligations arising from the transaction, time is essential as well in equity as at law, because it is not the province of a Court of Equity more than a Court of Law, to relieve parties from the substantial performance of their contracts. Their power to decree a specific performance of contracts is not a matter of absolute right, but rests in the sound discretion of the Court, which is guided by well established rules regarding the infirmities of all human transactions, and designed to sustain the substantial merits of the case, and promote the ends of justice between the parties. As a part of the consideration of the lease constituting the contract between the parties, Wells, the lessor, covenanted to sell the property to Hyson, his lessee, for $1500, at any time during the existence of the lease. This was a continual obligation running with the lease on the part of the lessor, with the option in the tenant to accept the same or not, within that time. , But, it seems Wells, before the right of Hyson to make his election had determined, made sale of the property to Maughlin, and died. Maughlin, with notice of the recorded contract between the parties, can acquire no greater right than possessed by Wells. The contract has no express provision in regard to the casualty of death, or a transfer of the property by Wells, the [358] lessor. Courts of Equity must determine the rights of parties according to the broad principles of justice and fair dealing, and not by technical and refined distinctions; and the two events — the death of Wells, and the transfer of the property antecedent thereto — afford just ground for the complainants to go into a Court of Equity, and have all the parties interested brought in, so that upon payment of the money they may be able to obtain a valid conveyance. This they could do at any time within the continuance of the tenancy. Upon the filing of the bill and tendering themselves ready to comply with the stipulation, they made their election. The mere fact that the money was not paid when such an offer is tendered to the Court, is immaterial. This Court, in the case of Smoot, et al. vs. Rea & Andrews, 19 Md,, 406, when adjudicating upon a bill for specific performance, have said, that 'although relief in a Court of Equity will not be granted where there has been gross laches or neglect; yet, if there has not been a strict legal compliance with the terms of the contract, and the non-compliance does not go to the essence of the contract, relief will be granted,” referring to 2 Story’s Eg., sec. 771. In the same case, it is further stated, that it is well settled that time is not generally deemed in equity as of the essence of the contract. Some question was also made in that case as to the nature of the tender, to enable a party to claim specific performance of' the contract, and the Court says, “ in such cases, the technical rules covering pleas of tender in actions at law are inapplicable. To entitle a purchaser to demand a deed, it is sufficient that he is ready and offers to comply with the contract on his part, and has the ability to perform it.” See also Oliver vs. Palmer, 11 G. & J., 426. The liberal rule of construction adopted in that case will apply to this. In secs. 775, 776 of Story’s Eg, it is said “ that where the terms of an agreement have not been strictly complied with, of are incapable of being strictly complied with; still, if there has not been gross negligence in the party, and it is conscien [359] tious that the agreement should be performed; and if compensation may be made for an injury occasioned by non-compliance with the strict terms; in all such cases Courts of Equity will interfere, and decree a specific performance. For the doctrine of Courts of Equity is, not forfeiture, but compensation ; and nothing but such a decree will, in such cases, do entire justice between the parties. Indeed, in some cases, Courts of Equity will decree a specific performance, not according to the letter of the contract, if that will be unconscientious; but they will modify it according to the change of circumstances.” “ One of the most frequent occasions on which Courts of Equity are asked to decree a specific performance, is where the terms for the performance and completion of the contract have not, in point of time, been strictly complied with. Time is not generally deemed in equity to be of the essence of the contract, unless the parties have expressly so treated it, or it necessarih follows from the nature and circumstances of the contra is true that Courts of Equity have regard to time, so respects the good faith and diligence of the partie circumstances of a reasonable nature have disab from a strict compliance, or if he comes, reoen for a specific performance, the suit is treated and generally with favor by the Court.” We have referred to these sections as and aim of a Court of Equity in all cases feet substantially the contracts of parties faith, and attempted, with due diligenc summated. We do not understand th extent of changing the contract the make, but they will carry out and according to the real intention of the state of circumstances that may arise, row and technical rules of construed Where it is manifest the parties h ence to time, and that constitutes 01 [360] contract, a Court of Equity, as well as Law, will carry out the contract accordingly. i, 1872.) Under the circumstances of this case we think the time material, and that the tenant was bound to make his election whether he would or not purchase the property before his lease expired; but as to the payment of the money after Wells had made another sale, and had died, it was especially proper, in order to procure such a title as Wells had contracted to give him, that he, or his assignees, should within the prescribed time, invoke the aid of a Court of Equity, as has been done in this case. The circumstances referred'to, after the execution of the contract, rendered such a step advisable, and certainly afford a sufficient excuse for the non-payment of the money — after they had accepted the terms proposed, and tendered himself ready to pay in the manner indicated. It is not perceived n non what grounds of equity this conclusion can be resisted, what way the respondents can be injured by such inter-of a Court of Equity. Jy concur' in the ruling of the Circuit Court, and 'n addition, to the authorities cited by the learned 'pg his opinion: O’Neil vs. Jones, 1 Rid., 170; s, et al., 2 B. Monroe, 439; Magoffin vs. Holt, 95. Decree affirmed.