Rickard v. Taylor

WADDILL, District Judge (after stating the facts as above). The question to be determined by the court is, what is the effect of the two alleged contracts, in the light of the facts and circumstances surrounding their execution, as shown by the letters and telegrams o.f the parties to the transaction at the time? The court below decreed specific performance of Exhibit B, making no mention of Exhibit A, from which it may be inferred that at least that instrument was. not deemed to be a valid and binding contract between the parties. In passing, it may be said that this conclusion was manifestly correct, as upon the face of the instrument it appears that it was not in [935] tended to be the actual contract to be entered into; and, besides, it is quite apparent that Maxwell, in the transactions in question, was not the agent of the owners of the timber to be sold, and had no authority to sign a contract in their behalf, or to impose upon them terms and conditions in respect to the sale of their property. As to Exhibit B, signed by the parties themselves, and decreed by the court below to be a valid contract, a more difficult question is presented, and its correct determination depends upon the effect to be given to the limitation of time placed by the vendors at the time of the deposit in escrow of the paper, within which it was to be accepted, or the payment of the purchase price of the property sold was to be made, and whether or not at that time they had the right to impose such conditions. Ordinarily the question of the precise time within which money may be paid is immaterial, where time is not the essence of the contract, and there has been no specific direction made in that regard; that is to say, where a contract has been entered into between the parties, with the exact time of payment not specified, or, if actually specified in the first place, arbitrary and unreasonable limitations as to when payments shall be made, or, in the latter, the failure to pay on the precise day designated, will not be allowed to work a forfeiture of such contract, or of rights arising thereunder, provided the condition can be subsequently performed without unreasonable delay, and no circumstances have intervened that would render it unjust or inequitable to give such relief. The cases of Cheney v. Libby, 134 U. S. 77, 10 Sup. Ct. 498, 33 L. Ed. 818, and Camp v. Parker, 34 C. C. A. 55, 91 Fed. 710 (the latter a decision of this court), referred to by appellees, are illustrations of this doctrine. In each of the cases cited a contract had been entered into, and the questions determined related to the effect of failure to comply with the provisions of the contract. The present case, as we view it, turns upon whether or not the vendors entered into any contract save the one filed as Exhibit B with the bill, and delivered conditionally to the bank, or so bound themselves as to prevent them from imposing any condition or limitation as to time of acceptance of contract and payment of money thereunder at the time of delivery of said Exhibit B. If they did not, then, confessedly, they had the right to impose such conditions as they saw fit, as to how, and the time within which, they should sell their timber. Story’s Equity Juris. § 777a, and cases cited. A careful examination of all the letters and telegrams between the parties shows that the vendors neither authorized the execution of the paper filed as Exhibit A, nor gave authority to Maxwell to sign any paper, or impose upon them any terms or conditions whatever, in reference to the sale in question, and that, so far as they are concerned, they were neither bound by or committed to any proposition of sale at the time of the deposit of the paper Exhibit B with the bank, and that on that day they had the right to enter into, or not, as they thought proper, with the appellees, or with Mr. Maxwell on his own account, or in their behalf, an agreement to sell their timber; that, being in this position, they could impose, as of right, such conditions and limitations as to terms [936] of payment or. otherwise as they saw fit. The contract inclosed by them to the bank was a unilateral contract, in which the vendors stipulated that payment should be made within a specific time, or the paper signed by them, whatever it may be termed—whether an option to buy or a contract of sale—should be returned to them; and it was so returned at the expiration of the time, and some eight days before the appellees offered to pay for the property. Pomeroy on Contracts, § 387, in discussing when, and when not, time becomes essential in the performance of unilateral contracts, says: “Where the contract is really an offer on one side, with a provision that this offer must he assented to and accepted, when a mere acceptance is contemplated, or payment must he made, when payment was the act of acceptance contemplated, at or before a specified date, then, of course, the act of assent or of payment must be done within the prescribed time, and time is, from the very form of the contract, essential. If, therefore, a vendor agrees to convey if payment be made at or before a given date, or if an option is given, which is to be accepted by payment within a given time, then the time of the payment is certainly essential. In fact, payment is a condition precedent to the vesting of any right in the vendee.” The case of Waterman v. Banks, 144 U. S. 394, 12 Sup. Ct. 646, 36 L. Ed. 479, in its essential features, is similar to the one at bar, and would seem to be conclusive of the controversy at issue here. There, by agreement of the 14th of May, 1881, R. W. Waterman agreed that at any time within 12 months from that date, upon demand, he would execute to J. S. Waterman a good and sufficient deed to an undivided 24/100 of certain mines, with improvements thereon, or to be placed thereon. J. S. Waterman did not demand a deed within the year, but in March, 1883, assigned the agreement to Abbie E. Waterman. After the death of J. S. Waterman, she brought a suit for specific performance, and recovered; the lower court holding that the agreement passed a present interest, and required a deed to be made on demand at any time, before or after the expiration of one year. Upon appeal the lower court was reversed, the Supreme Court holding that the conditions of the contract were not fulfilled within the time specified therein. Mr. Justice Harlan, speaking for the court, approved the following 'quotation from Potts v. Whitehead, 20 N. J. Eq. 55, as the correct rule: “There can be no question but that, when an offer is made for a time limited in the offer itself, no acceptance afterwards will make it binding. Any offer without consideration may be withdrawn at any time before acceptance, and an offer which in its terms limits the time of acceptance is withdrawn by the expiration of the time.” And in discussing the question as to when and when not time was the essence of the contract, Mr. Justice Harlan further says : “The rule is well expressed in Lord Kanelagh v. Melton, 2 Drewry & Smale, 278, 281, where it was said: ‘No doubt, if an owner of land and an intending purchaser enter into a contract, constituting between them the relation of vendor and purchaser, and there is a stipulation in the contract that the purchase money shall be paid and the contract completed on a certain day, this court, in ordinary cases, has established the principle that time is not of the essence of the contract, and that the circumstances of the day fixed [937] for the payment of the money and the completion of the purchase being past does not entitle either party to refuse to complete. On the other hand, it is well settled that, when there is a contract between the owner of land and another person, that, if such person shall do a specified act, then he (the owner) will convey the land to him in fee, the relation of vendor and purchaser does not exist between the parties unless and until the act has been done as specified. The court regards it as the case of a condition on the performance of whieh the party performing it is entitled to a certain benefit, but in order to obtain such benefit he must perform the condition strictly. Therefore, if there be a day fixed for its performance, the lapse of that day without its being performed prevents him from claiming the benefit.’ ” Reference may also be had, as illustrative of this doctrine, to Stitt v. Huidekoper, 17 Wall. 384, 21 L. Ed. 644; Insurance Co. v. Young, 23 Wall. 85, 23 L. Ed. 152; and other cases from the state and federal courts might be cited almost without number. For the reasons herein mentioned, the decree of the lower court will be reversed, and the cause remanded to that court, with instructions to enter a decree dismissing the complainants’ bill, with costs. Reversed.