Mortimer v. Hannah

Truly, J., delivered the opinion of the court. Appellee, on the 9th of Eebruary, 1903, filed his bill of com — 649 — plaint against appellants seeking to rescind and have canceled a certain contract of lease and sale for causes set out in his bill. The facts are these: On the 9th of February, 1901, A. J. Hannah, being the owner of a tract of wild land containing five hundred acres, executed a contract of lease and sale to Sibley & Mortimer. In this contrae! it was provided that the term was to expire the 1st of January, 1909, at which time Hannah was to deed an undivided half interest in the property, conditioned that his lessees should carry out their part of the contract. In the contract the said Sibley & Mortimer bound themselves to put in a good state of cultivation not less than four hundred acres of land at the rate of fifty acres per annum from the date of the contract, and agreed to deaden all of said land not put in cultivation, and to erect twelvé houses, as described in the bill. It will be observed that while the lessees obligated themselves to put four hundred acres of land in cultivation “at the rate of fifty acres per annum,” the contract contains no pro? vision as to when the balance of the land is to be deadened, nor when the twelve houses mentioned are to be built. By mesne conveyances the interest of Sibley was conveyed, and is now vested in the other appellants. The bill of complaint, filed immediately upon the expiration of two years of the term, avers: “That none of the defendants have cleared the land at the rate of fifty acres per annum from date, as stipulated in said lease. The said defendants have failed to erect any of the twelve houses, as provided in said contract.” Complainant alleged that at the date of the filing of the bill there was not one hundred acres of land cleared up and put in a state of cultivation by any of the said defendants on said land, but only a very small part of said one hundred acres, and there are no houses erected at all. Complainant offered to pay defendants any amount that, on cancellation of contract, the court might think “suitable and just for the improvements made.” The bill further states as follows: “Complainant is advised, and so charges — 650 — the fact to be, that the said defendants, by their failure to comply with the terms and stipulations of said contract and lease, have forfeited all rights in the said land, and said complainant is entitled to have the said contract and lease canceled, and he be put in possession of the said land.” To this bill a demurrer was interposed by the defendants. Demurrer overruled, and defendants appeal, assigning the ruling of the court in the premises as error. The sole question presented by this record is, Is the appellee entitled to a rescission of this contract under the facts stated? It will be noted that the only breach assigned is that the appellants have not put the land in cultivation “at the rate of fifty acres per annum.” No breach is averred as to the “deadening” of the land or the building óf the houses, and none could be; for under the terms of the contract these could be performed at any time before the termination of the contract. We have given the matter the careful consideration which the importance of the legal principle involved demands, and after an exhaustive review of all authorities at our command, we formulate and announce as the true rule governing the class of contracts herq under discussion the following, viz.: A party to an equitable mutual contract in reference to realty, fairly entered into, has the right to rescind such contract for the following causes: First. When the other party has evinced his intention to abandon or repudiate the contract entirely; and this intention may be shown by express declaration, or by such acts and conduct in reference to the subject-matter of the contract as would prove such intention. Second. When the other party has breached the contract in a matter vital to its existence, or made of the essence of the contract by the terms of the contract itself, or by the evident intention of the contracting parties. Third. When the other party has been guilty of a partial breach of performance, which has inflicted damage upon the one with whom he has contracted, for which no adequate redress can be had, or — 651 — which might inflict irreparable injury, or which renders a final completion of the contract according to its terms impossible. This statement of the rule is in absolute harmony with all previous deliverances of our own court upon the subject, and is supported by the great weight of the most approved authorities and numerous decisions of other states. In Moak v. Bryant, 51 Miss., 560, the court says: “The vendee must repudiate the contract under which he entered, or fail to comply with its terms,” meaning, of course, in some substantial part of the contract. In Gullich v. Alford, 61 Miss., 224, the rule is recognized that the breach must be in some matter which is “of the essence of the contract.” And in Light Co. v. Jackson, 73 Miss., 642, 19 South., 774, it was held'that, while courts were reluctant to grant rescission, still it might be had when adequate damages for breach could not be had at law, or when a partial breach might result in irreparable injury, but that generally rescission would not be decreed unless the breach was one “going to the very substance of the contract.” See, also, Waterman's Specific Performance, sec. 456; Pomeroy's Equity Jurisprudence (2d ed.), see. 1408; Reid v. Mix, 63 Kan., 745, 66 Pac., 1021, 55 L. R. A., 706; Keenan v. Brown, 21 Vt., 86; Rhymny Ry. v. B. & M. T. J. Ry., 69 L. J. Ch., 813; Mixer v. Williams, 17 Vt., 457; Md. Fertilizing & Mfg. Co. v. Lorentz, 44 Md., 218. See, especially, Worthington et al. v. Gwin (Ala.), 24 South., 739, 43 L. R. A., 382, and citations. Viewed in the light of the foregoing statement of the rule, does the case at bar fall within any of its terms? As to the first, it cannot be contended that the defendants (appellants here) have expressly repudiated the contract, or by act or deed shown any intention of abandoning it; on the contrary, the bill of complaint shows that they were still in possession under the terms of that contract, and it nowhere appears that they wére not then engaged in carrying out its provisions. Nor, in thé second place, has the contract been breached in a matter vital — 652 — to its existence, or made of the essence of the contract by the terms thereof. The main object of the contract in the case at bar was the clearing and putting in cultivation of four hundred acres, and the building of twelve houses, and the deadening of the remaining one hundred and sixty acres. Manifestly, the essential thing in the minds of the parties was that at the end of eight years this tract of wild land was to have been changed into an improved and cultivated plantation, for their mutual benefit, so that each might share in its enhanced value and revenue producing power. The provision that fifty acres of land were to be put in cultivation each year is simply a statement of proportion • — - an estimate of the amount to be annually cleared. It nowhere appears that this provision of itself was intended to be 'considered of vital importance, and it is not made of the essence of the contract by the terms thereof. As a matter of fact, the appellee himself did not so consider it, because the bill of complaint herein -avers that, while the defendants have been in possession for two years under the contract, only a very small part of the one hundred acres has been put in cultivation. If this allegation be accurate, then the alleged breach upon which he now claims rescission occurred at the expiration of the first year, and it might be argued with great force that the appellee had waived what he now claims as a breach by allowing the defendants to remain in possession performing on their part the conditions of a contract which he considered at an end. Nor does the allegation of the bill of complaint show that the case falls under the third general clause of the rule as before stated. If it be granted that the appellants have been guilty of a partial breach of performance, it is nowhere intimated that any damage has been inflicted on the appellee, and the facts stated do not warrant the assumption. Even though it be true that at the date named only a small portion of the land had been cleared, it by no means follows that the entire contract may not be subsequently complied with before the date of its — 653 — termination. Nor does the bill of complaint aver that the appellee, if damaged, would not be able to obtain adequate redress for any damage which may have been inflicted upon him. The bill of complaint does not show appellants’ inability to perform the contract, it does not aver that they will not perform the contract, it does not show that they are not able to respond in damages. We do not think that the facts of this case warrant a court of equity in decreeing a rescission. The judgment in the court below is reversed, and the cause remanded for further proceedings in accordance with this opinion. Reversed and remanded.