It is not indispensable that all the parties to a suit in equity
should have an interest in all the matters contained in the suit;
it will be sufficient in order to avoid the objection of
multifariousness if each party has an interest in some material
matters in the suit, and they are connected with the others.
Page 128 U. S. 404
To support the objection of multifariousness to a bill in equity
because the bill contains different causes of suit against the same
person, two things must concur: first, the grounds of suit must be
different; second, each ground must be sufficient, as stated, to
sustain a bill.
Testing the bill in this case by these principles, it is
held not to be multifarious.
Time is not of the essence of a contract for the sale of
property unless made so by express stipulation or unless it may be
implied to be so from the nature of the property or from the
character of the interest bargained or from the avowed object of
the seller or of the purchaser. Applying these principles to the
contract which forms the subject matter of this suit;
held
that time was not of its essence.
In equity.
This litigation arose from a creditor's bill filed in one of the
courts of Illinois by Edward R. Knowlton against the City of Joliet
Waterworks Company, W. Starr, and Harriet Brown, for the
enforcement of a judgment against the first-named two defendants,
for the appointment of a receiver of the property used by that
company in its business, and for an accounting with the remaining
defendant, Harriet Brown, who, it was alleged, asserted a vendor's
lien upon some of the property of the waterworks company, sold by
her to Starr, and by him to that company.
The Guarantee Trust & Safe Deposit Company, a corporation of
Pennsylvania, being made a defendant, the cause, upon its motion,
was removed to the United States Circuit Court for the Northern
District of Illinois upon the ground of the diverse citizenship of
the parties. Subsequently that company filed its cross-bill for a
foreclosure of a mortgage held by it upon the property of the
waterworks company, and for specific performance by Harriet Brown
of her contract of sale to Starr. The cross-bill alleges in
substance that by certain instruments in writing bearing date,
respectively, the 15th and 17th of June and the 9th of October,
1880, Starr undertook with the City of Joliet to construct and
maintain a system of waterworks for that city and its citizens, in
consideration of which it agreed to grant to him and his successors
certain franchises, rights, and rentals connected therewith; that
on the 4th of October, 1880, he entered into a written agreement
with
Page 128 U. S. 405
Harriet Brown by which, in consideration of $1,000 to be paid to
her, she agreed to convey to him a certain parcel of land in
Joliet; that subsequently he entered into a verbal agreement with
her for the purchase of other parcels of land, making, in all, 9.60
acres, for which he was to pay a total price of $4,800; that on the
10th of December thereafter, Mrs. Brown, by warranty deed, conveyed
all of said parcels to Starr, placing the deed in the hands of one
Hobbs for delivery to Starr upon the payment of the balance of the
purchase money, and that, on the 3d of November, Starr paid to her,
on that purchase, the sum of $500, and on the 17th of February,
1881, the further sum of $1,000.
It was also alleged in the cross-bill that immediately after
said agreements, all with full knowledge and consent of Mrs. Brown,
Starr took actual and open possession of all the premises so
purchased and immediately began to make permanent and expensive
improvements thereon for waterworks purposes; that he and his
assignee, hereinafter mentioned, continued to make such
improvements at a cost of about $50,000, and remained in
uninterrupted possession of the premises until they were delivered
to the receiver appointed in this litigation -- all this within the
daily sight of Mrs. Brown and without objection or molestation on
her part; that to supplement his individual resources, which were
insufficient to carry out his agreement with the city, Starr
resorted to the plan of creating a corporation under the local laws
of the state and by means of its negotiable bonds and stocks
raising money sufficient to complete said waterworks, and that, to
accomplish this purpose, the City of Joliet Waterworks Company was
organized, with a capital stock of $200,000, of which amount Starr
subscribed for $195,000 in his individual name. It is further
alleged in the cross-bill that immediately upon the organization of
that corporation, and on the 9th of December, 1880, Starr conveyed
to it and its assigns his contracts with the City of Joliet, as
well as the rights, franchises, and property, real and personal,
connected therewith, including the property purchased from Mrs.
Brown, and agreed with the company to complete the system of
waterworks contemplated
Page 128 U. S. 406
by his contract with the city, and deliver them to the company
within a reasonable time; that by the agreement last mentioned, the
company, Starr being a director and the principal manager, as well
as the subscriber for all of its capital stock except $5,000,
agreed to credit him forthwith with $195,000 on his subscription to
its capital stock and to deliver to him its bonds to the amount of
$140,000 par value, and also to secure their payment, by executing
to the complainant in the cross-bill a mortgage upon all the
property, rights, and franchises then owned or thereafter to be
acquired by it; that said bonds were accordingly delivered to
Starr, and the mortgage was duly executed to the complainant in the
cross-bill; that after getting the bonds in his hands, he forthwith
placed them upon the market, and they are now held by a large
number of persons and corporations; that the waterworks company has
made default in the payment of the interest coupons due on said
bonds, and for more than four calendar months has continued to make
default, and that in obedience to the request made to it according
to the terms of the mortgage by a majority in interest of the
holders of bonds, the complainant in the cross-bill, as trustee,
files its cross-bill for foreclosure. The bill still further avers
that in consequence of the assignment of Starr to the waterworks
company and the execution of said mortgage, the trustee was
invested with the right, upon the payment of the purchase money due
to Mrs. Brown, with interest thereon, to demand of her a specific
performance of her agreement with Starr; that as such mortgagee,
the Guarantee Trust & Safe Deposit Company has always been
willing to perform the agreement of Starr, and to pay his vendor
the residue of the purchase money due to her, with interest, on
having a proper deed of conveyance, and is still ready and offers
to pay the said residue, and that the waterworks company is
hopelessly insolvent, having no property except that covered by the
mortgage. The bill prays for a foreclosure and sale; that the
proceeds thereof, after paying certain fees and current expenses,
may be distributed in payment of said bonds and coupons; that an
account may be taken of the amount due on account of the purchase
money
Page 128 U. S. 407
due to Mrs. Brown from Starr, and that she be decreed to
specifically perform her agreements to convey, so that said
mortgage shall be a valid and first lien on the property.
Mrs. Brown filed a demurrer to the amended cross-bill alleging
specifically that the same was multifarious. This demurrer having
been overruled, she thereupon answered, averring her ignorance of
the contracts between Starr and the city, admitting the entering
into the written contract with Starr but alleging that it was
thereafter wholly and completely abandoned by him and that neither
he nor any person or corporation had ever offered or claimed the
right to carry out that contract, admitting that he afterwards
verbally negotiated for the purchase of a larger tract of land, but
alleging that said negotiation, as a contract, was void under the
statute of frauds; that, by its terms, the payment of the entire
purchase price was a condition precedent to the vesting in him of
any title whatever; that the possession and the improvements were
made without her consent, express or implied, and with his eyes
open, and that she is entitled to the whole, augmented in value, as
it is, by the improvements; that she had made a great many efforts
to secure the balance of the purchase money due from Starr, but had
been unsuccessful; that the negotiation and transaction, so far as
he and those claiming under him or acting with him were concerned,
had been a fraud upon her; that by reason of such failure on his
part, and that of his successors and assigns, to comply with the
terms of her contract with him, it had become broken and was void,
and that the amended cross-bill was multifarious, and praying the
same benefit of her answer as if she had specifically demurred to
the bill. To this answer a replication was filed.
Pursuant to a decree of the court on the 31st of March, 1883,
upon the petition of John D. Paige receiver, all the property and
effects of the waterworks company which it obtained from Starr, and
all the rights accruing to it by virtue of the contract with Mrs.
Brown, were sold and bought by Joseph H. Foster, of Portsmouth,
N.H. On June 9, 1883, a decree of foreclosure was entered upon the
cross-bill against the fund realized by the sale.
Page 128 U. S. 408
After some other proceedings, not necessary to be stated, a
further decree was entered August 12, 1883, adjudging that there
was justly due to Harriet Brown on account of said purchase money
of the premises sold to Starr, including interest, the sum of
$3,964, and that her said agreement with Starr be performed and
carried into execution. From this decree Mrs. Brown prayed, and
perfected the appeal which brings her case here.
Page 128 U. S. 410
MR. JUSTICE LAMAR, after stating the facts as above, delivered
the opinion of the court.
It is contended by the appellant that the decree below should be
reversed on the ground that the cross-bill is multifarious. In
Shields v.
Thomas, 18 How. 253, this objection was urged
against a bill, and in considering the objection, the Court
said:
"There is perhaps no rule established for the conducting of
equity pleadings with reference to which (whilst as a rule, it is
universally admitted) there has existed less of certainty and
uniformity in application than has attended this relating to
multifariousness. This effect, flowing, perhaps inevitably, from
the variety of modes and degrees of right and interest entering
into the transactions of life, seems to have led to a conclusion
rendering the rule almost as much an exception as a rule, and that
conclusion is that each case must be determined by its peculiar
features."
So, in
Gaines v.
Chew, 2 How. 619,
43 U. S. 642,
the Court said:
"In general terms, a bill is said to be multifarious which seeks
to enforce against different individuals demands which are wholly
disconnected. In illustration of this, it is said, if an estate be
sold in lots to different persons, the purchasers could not join in
exhibiting one bill against the vendor for a specific performance.
Nor could the vendor file a bill for a specific performance against
all the purchasers. The contracts of purchase being distinct, in no
way connected with each other, a
Page 128 U. S. 411
bill for a specific execution, whether filed by the vendor or
vendees, must be limited to one contract. . . . It is well remarked
by Lord Cottenham in
Campbell v. Mackay, 7 Sim. 564, and
in 1 Myl. & Cr. 603,"
"to lay down any rule applicable universally or to say what
constitutes multifariousness as an abstract proposition is, upon
the authorities, utterly impossible."
"Every case must be governed by its own circumstances, and as
these are as diversified as the names of the parties, the court
must exercise a sound discretion on the subject. Whilst parties
should not be subjected to expense and inconvenience in litigating
matters in which they have no interest, multiplicity of suits
should be avoided by uniting in one bill all who have an interest
in the principal matter in controversy, though the interests may
have arisen under distinct contracts."
In that case, the bill was filed against the two executors of
the will of Daniel Clark, the heirs at law of his legatee, and the
several purchasers of various pieces of property which had been
sold off from the estate. The relief asked was an accounting in
respect to the rents and profits of the several parcels and for
general relief as the heir and devisee of Clark under a different
testament. Under this state of facts, the court said:
"The right of the complainant, Myra, must be sustained under the
will of 1813, or as heir at law of Daniel Clark. The defendants
claim mediately or immediately under the will of 1811, although
their purchases were made at different times and for distinct
parcels of the property. They have a common source of title, but no
common interest in their purchases. And the question arises, on
this state of facts, whether there is misjoinder or
multifariousness in the bill, which makes the defendants parties. .
. . And the main ground of the defense, the validity of the will of
1811 and the proceedings under it, is common to all the defendants.
Their interests may be of greater or less extent, but that
constitutes a difference in degree only, and not in principle.
There can be no doubt that a bill might have been filed against
each of the defendants, but the question is whether they may not
all be included in the same bill. The facts of the purchase,
Page 128 U. S. 412
including notice, may be peculiar to each defendant, but these
may be ascertained without inconvenience or expense to
codefendants. In every fact which goes to impair or establish the
authority of the executors all the defendants are alike interested.
In its present form, the bill avoids multiplicity of suits without
subjecting the defendants to inconvenience or unreasonable
expense."
The case against one defendant may be so entire as to be
incapable of being prosecuted in several suits, and yet some other
defendant may be a necessary party to some portion only of the case
stated. In the latter case, the objection of multifariousness
cannot be allowed to prevail.
Attorney General v. Poole, 4
Mylne & C. 17, 31; Turner v. Robinson, 1 Sim. & S. 313;
Attorney General v. Cradock, 3 Myl. & Cr. 85.
It is not indispensable that all the parties should have an
interest in all the matters contained in the suit; it will be
sufficient if each party has an interest in some material matters
in the suit, and they are connected with the others.
Addison v.
Walker, 4 Yo. & Col.Ch. 442;
Parr v. Attorney
General, 8 Cl. & Fin. 435;
Worthy v. Johnson, 8
Ga. 238.
To support the objection of multifariousness because the bill
contains different causes of suit against the same person, two
things must concur: first, the grounds of suit must be different;
second, each ground must be sufficient as stated to sustain a bill.
Bedsole v. Monroe, 5 Iredell Eq. 313;
Larkins v.
Biddle, 21 Ala. 252;
Nail v. Mobiley, 9 Ga. 278;
Robinson v. Cross, 22 Conn. 171.
Testing now the case at bar in the light of these authorities
and their statements of the principle involved, it will be useful
to get a clear view of the exact relations of the parties. Assuming
the statements of the cross-bill to be true and the demands
preferred by it to be meritorious, the objection of
multifariousness, however presented, raises no question save the
technical one of an undue uniting of demands. The attitude of the
parties is this: Mrs. Brown, by her contract with Starr and by his
agreement with the Joliet Waterworks Company,
Page 128 U. S. 413
had become the trustee of the legal title for the benefit of the
company. Starr and the company, on the other hand, owed the
purchase money to Mrs. Brown. By his assignment to the company,
only an equitable title was conveyed, for he had not a legal title;
so the waterworks company's mortgage to the Guarantee Trust &
Safe Deposit Company was but the mortgage of an equity. Having no
legal title itself, the mortgagor company could convey none to the
mortgagee or the trustee. So also, as to the other defendants to
the cross-bill, the intervenors under the original bill, whatever
may be in fact the exact measure and nature of their various
rights, all are in common interested in the legal title held, as
above stated, by Mrs. Brown. Indeed, as to all the parties to the
cross-bill and their respective demands, she holds the key to the
whole situation, especially in view of the fact that the reservoir
and engines are on the land in question.
Every defendant to the cross-bill, as well as the complainant
therein, is directly interested in the calling in of the legal
title. It will necessarily enhance the value of the property to be
sold not merely by the increase in value by the amount paid by the
complainant under its tender, but also, and to a greater extent, by
the settlement of the title. To paraphrase the language of the
court in
Gaines v. Chew, supra: "In every fact which goes
to establish the identity and value of the property sought to be
sold," all the defendants are directly interested -- not interested
to the same extent nor in the same way, but still, in a substantial
sense, interested in any decree which may be rendered.
The case of
Dial v. Reynolds, 96 U. S.
340, relied on by counsel for the appellant in this
connection, and its cognate cases are not opposed to this view.
This is not an instance of an attempt, in a foreclosure proceeding,
to call in and litigate an outstanding legal title. It is the only
legal title in the field; it is that under and through which
mortgagor and mortgagee equally claim. To say that the alleged
trustee of that title, because he chooses to deny the trust
relation, can defeat the proceeding without an adjudication on its
merits, and drive the mortgagee to a distinct and preliminary suit,
is
Page 128 U. S. 414
to assume a position not supported by authority, and, in the
opinion of this Court, not maintainable.
The appellant further claims that as to Mrs. Brown, the case
made out below was not such a one as calls for specific
performance, and in support of this view relies on alleged
unreasonable delay in the payment of the purchase money. The legal
propositions applicable to this question are well settled in this
Court.
In
Secombe v.
Steele, 20 How. 94, it is said:
"Time may be made of the essence of the contract by express
stipulation, or it may become essential by considerations arising
from the nature of the property or the character of the interest
bargained, and the principle of the court of equity does not depend
upon considerations collateral to the contract merely, nor on the
conduct of the parties subsequently, showing that time was not of
the essence of the contract in the particular case. But it must
affirmatively appear that the parties regarded time or place as an
essential element in their agreement, or a court of equity will not
so regard it."
In
Holgate v. Eaton, 116 U. S. 33, the
court said:
"In the case of
Taylor v. Longworth, 14 Pet.
172,
39 U. S. 174, Mr. Justice
Story uses language which has since become a legal maxim in this
class of cases. 'In the first place,' he says,"
"there is no doubt that time may be of the essence of a contract
for the sale of property. It may be made so by the express
stipulation of the parties or it may arise by implication from the
very nature of the property or the avowed objects of the seller or
the purchaser. And even when time is not thus either expressly or
impliedly of the essence of the contract, if the party seeking a
specific performance has been guilty of gross laches, or has been
inexcusably negligent in performing the contract on his part, or if
there has in the intermediate period been a material change of
circumstances affecting the rights, interests, or obligation of the
parties, in all such cases, courts of equity will refuse to decree
any specific performance upon the plain ground that it would be
inequitable and unjust."
Apply these principles to the contract between Starr and Mrs.
Brown, and what will be the result?
Page 128 U. S. 415
It was not even claimed that there was any express stipulation
between the parties that time should be of the essence of the
contract -- nor, on the other hand, that such obligation arose from
the nature of the property or the avowed object of the seller.
It is asserted that there was an understanding that Starr should
have no right or title to the land or the right to any conveyance
of the land until the full purchase price should be paid. But that
is a very different proposition. It has relation to the security
reserved, and not to the time of payment. It is true that in his
deposition of April 18, 1883, Hobbs, the agent of Mrs. Brown,
states that Starr agreed to pay cash, and that such was "the basis
of the contract." But no such claim was presented by the pleadings,
and moreover Hobbs' testimony shows that there was an agreement for
the postponement of the payment while Starr should go to
Philadelphia, and finally, in the same deposition and in a
subsequent one, he states that Starr had agreed to pay eight
percent interest on the purchase money -- a proposition manifestly
inconsistent with the theory of appellant's insistence on a cash
transaction. Without stopping to array them, it will suffice to say
that numerous matters in the record show to the satisfaction of the
Court that Mrs. Brown consented to Starr's delay of payment --
reluctantly, perhaps, but nevertheless consented. Even were it
granted that time was of the essence of the contract, the conduct
of Mrs. Brown would have been a waiver of that fact. Her acceptance
of a partial payment of $1,000, on the 17th of February, 1881, was
certainly not a disaffirmance of the contract, but the contrary. So
again, her demand for performance on the 27th of November, 1881,
shows very plainly that up to that day, it had not been abandoned.
Hobbs in his first deposition states that there was a subsequent
demand made by him on Starr for the money, and his second
deposition shows that he sought an interview with the attorney of
the committee of the bondholders on the 26th of January, 1883, for
the purpose of getting the money due to Mrs. Brown on the contract
with Starr. The answer of Mrs. Brown declares that the contract
was
Page 128 U. S. 416
abandoned and cancelled in November, 1881, in Philadelphia. Even
if she had the power so to do under the circumstances, still it was
not done. The averments of the answer are not only not proved, but
are even disproved by Hobbs himself. Hobbs was an officer of the
waterworks company. In his first deposition, he gives this version
of the transaction relied on in the answer. He says:
"I got on the train and went to Philadelphia, and told Mr. Starr
we insisted upon the payment of that amount and others, and if it
was not paid or absolutely provided for while I was there in the
city for a day or so, that I should return to Joliet, and the
understanding was that Mr. Knowlton and myself would withdraw from
the company; Mr. Starr failed, after various plans he had made, to
produce the money; he failed in furnishing it, and I returned, he
following me back within a few days, and we then withdrew from the
company."
The witness is here speaking, as elsewhere appears, of not only
this debt, but also of the general liabilities of the concern.
Subsequently to this, he still demanded the money from Starr.
Pomeroy on Specific Performance §§ 395, 396;
Reynolds
v. Nelson, Madd. 18, 19.
As between the appellant and the bondholders, represented by the
trustee, it would be inequitable to refuse the consummation of her
bargain.
The decree of the circuit court is affirmed.
