When no specific time for the payment of money is fixed in a
contract by which the same is to be paid by one party to the other
in judgment of law, the same is payable on demand.
In contracts for the sale of land by which one agrees to
purchase and the other to convey, the undertakings of the
respective parties are always dependent unless a contrary intention
clearly appears.
Although many nice distinctions are to be found in the books
upon the question whether the covenants or promises of the
respective parties to the contract are to be considered independent
or dependent, yet it is evident the intimation of courts have
strongly favored the latter construction as being obviously the
most just.
In such cases, if either vendor or vendee wishes to compel the
other to fulfill his contract, he must make his part of the
agreement precedent, and cannot proceed against the other without
actual performance of the agreement on his part or a tender and
refusal.
An averment of performance is always made in the declaration
upon contracts containing dependent undertakings, and that averment
must be supported by proof.
The time fixed for the performance of a contract is, at law,
deemed the essence of the contract, and if the seller is not ready
and able to perform his part of the agreement on that day, the
purchaser may elect to consider the contract at an end. But equity,
which from its peculiar jurisdiction is enabled to examine into the
cause of delay in completing a purchase and to ascertain how far
the day named was deemed material by the parties, will, in certain
cases, carry the agreement into execution although the time
appointed has elapsed.
It may be laid down as a rule that at law, to entitle the vendor
to recover the purchase money, he must aver in his declaration
performance of the contract on his part or an offer to perform at
the day specified for the performance. And this averment must be
sustained by proof unless the tender has been waived by the
purchaser.
If before the period fixed for the delivery of a deed for lands,
the vendee has declared he would not receive it and that he
intended to abandon the contract, it may render a tender of the
deed before the institution of a suit unnecessary. But this rule
can never apply except in cases where the act which is construed
into a waiver occurs
previous to the time for
performance.
The taking possession of property by the vendee before
conveyance is a circumstance from which is to be inferred that he
considered the contract closed, but would not deprive him of the
right to relinquish the property if the vendor could not make a
title or neglected to do so. After a relinquishment for such
causes, the vendee could sustain an action to recover back the
purchase money had it been paid.
Where the legal title cannot be conveyed to the vendee by the
vendor, and the vendee mast resort to a court of equity to
establish his title
Page 26 U. S. 456
notwithstanding a conveyance of all the right of the vendor to
him, the court will not compel him to pay the purchase money. It
would be compelling him to take a law suit, instead of the
land.
The plaintiffs instituted their suit in the Circuit Court for
the County of Washington against the defendant on a special
agreement to purchase two lots of ground in the City of Washington.
The plaintiffs, to support the issues joined on their part, offered
in evidence certain deeds, papers, and letters, the handwriting of
the parties and the delivery of the letters at their several dates
being admitted.
John Templeman, being indebted to the plaintiffs in a large
amount, conveyed by deed dated 31 March, 1809, to Walter Smith, in
trust to secure the debt, certain lots in the City of Washington,
the two lots alleged to have been sold to the defendant included,
the said trustee being authorized to sell, at public sale, the
property conveyed.
On 31 March, 1821, the bank, under seal, authorized Walter Smith
to release the two lots to John Templeman, and under this authority
the trustee conveyed the property to Templeman, who by deed dated
29 April, 1821, conveyed the same to Peter Hagner, the
defendant.
The conveyance, by Walter Smith to Templeman and from Templeman
to Mr. Hagner, were made by the direction of the bank for the
purpose of vesting a title to the two lots in Mr. Hagner in
execution of their part of the agreement upon which the suit was
founded and before the suit was commenced.
The material evidence offered by the plaintiffs to establish
their claim upon Mr. Hagner and to prove a contract made by him for
the purchase of the two lots was contained in a correspondence,
&c., between General John Mason, the president of the bank, and
Mr. Hagner, commencing on 14 May, 1817, and ending on 19 May, 1821,
numbered from 1 to 11.
No. 1, dated 14 May, 1817, letter, Peter Hagner to General
Mason, expressed a wish to purchase the lots if the bank was
disposed to sell them at a reasonable price; No 2, from General
Mason to Mr. Hagner, dated October 16, 1817, stated that the board
of directors had fixed the price of the lots at twenty-five cents
per square foot; No. 3, from Mr. Hagner to General Mason, dated
October 17, 1817, communicated an offer of ten cents per square
foot, which, by letter dated 17 December, 1817, No. 4, was extended
to fifteen cents per square foot; No. 5 was a memorandum sent by
Mr. Hagner to General Mason to be signed by him, and which was so
done, on 27 April, 1818, the memorandum bearing date April
Page 26 U. S. 457
25, 1818, and stating that the lots were on that day sold to Mr.
Hagner at twenty-five cents per square foot, "payable at such
periods as the bank may approve."
On 27 April, 1818, No. 6, Mr. Hagner wrote to General Mason
desiring to have the payments for the lots purchased by him at
twenty-five cents per square foot, to meet his income, and proposed
to have the same divided into six quarterly payments, the first to
be made on the first day of the following October, offering his
notes and asking for a deed, or if this should not be agreed to
stating that he would bind himself to pay the money as proposed
"and receive a bond of conveyance, conditioned to give a full
title, when the money should be paid." This letter requested a
return of the memorandum, No. 5.
Upon this letter there was written in pencil, in the handwriting
of General Mason, according to the usual practice at the sittings
of the board of directors, "accepted -- interest on each note, as
it becomes due"; No. 7, April 27, 1818, from General Mason to Mr.
Hagner, enclosed the memorandum, No. 5, and mentions that his
proposition would be submitted to the Board.
On 7 October, 1818, Mr. Hagner wrote to Gen. Mason (No. 8)
stating that he was prepared to pay the installment falling due on
1 October and requesting a bond of conveyance. December 26, 1820
(No. 9), Mr. Hagner, by letter, states that a long time had passed
since his purchase, without the title to the lots having been
completed, and the bank continues without authority to convey. The
bank at the time of the purchase had no authority to sell at
private sale, and must have made title by a circuitous and
doubtful process of a public auction, at which someone might have
interposed and obtained the lot. That the bank might have held him
bound to take the property, although not reciprocally bound, and
that the answer of the president of the bank, was not certain and
absolute, but was referred to and made dependent on the
determination of the board of directors. Under these and other
circumstances stated by him, he communicates his determination to
relinquish the purchase.
On 8 May, 1821, Mr. Hagner notifies General Mason (No. 10) that
he considers his agreement to purchase the lots void, and that he
has no claim or title to them. In reply to this letter, upon 19
May, 1821 (No. 11), Gen. Mason says:
"You will no doubt, Sir, recollect a conversation I had with you
soon after the reception of your letter of 26 December last, when I
informed you that that letter had been submitted
Page 26 U. S. 458
to the board of directors, and that it had been determined that
the purchase by you of the lots in question being considered in all
respects a firm and
bona fide purchase, it would not be
relinquished, and that measures would be taken to make you a title
valid in law. I am now instructed to inform you that those measures
have been taken -- that deeds to that effect have been made by the
proper parties, which are expected to be soon received here, when
they will be tendered you, and a compliance with your part of the
contract expected."
Evidence was also given on the part of the plaintiffs to prove
the entire insolvency of John Templeman and the nonpayment by him
of any part of his debt to the plaintiffs. That on 28 September,
1821, a tender of the deeds already mentioned was made by an
officer of the bank to the defendant, who refused to accept them.
The deed of Templeman to Hagner, dated 3 April, 1821, was recorded
by the consent without prejudice.
A witness also proved that in the month of June, 1818, he was
employed by defendant to enclose the two lots in question, and did
enclose them with a board fence; that before enclosing the said
lots, an old house was pulled down by order of the defendant, and
some part of the materials used in making the said enclosure; that
sometime afterwards the witness was employed by defendant to pull
down the fence, which was done, and the lots left open; that the
said house was a small frame house, very old and in bad repair;
that it had been inhabited some time before, but was not in
tenantable order and condition; that if the house had been put in
good repair, which would have cost half as much as building a new
house of the same size and kind, it would have rented for about
three dollars per month.
The Clerk of the Circuit Court of the District of Columbia
certified that there was no judgment in force on 30 March, 1821
against John Templeman, and proof was also made that the taxes on
the two lots of ground from 1809 to 1821 inclusive had been
assessed to and paid by the Bank of Columbia.
On 19 May, 1821, the situation of the lots was examined by order
of the president of the bank, and it was found "that the fence had
been removed apparently that spring, and the lots appeared to have
been cultivated the fall before."
Upon this evidence, the defendant, by his counsel, prayed the
court to instruct that jury that upon the evidence so given on the
part of the plaintiffs, though found by the jury to be true as
above stated, the plaintiffs are not entitled to recover in
this
Page 26 U. S. 459
action the purchase money for the lots in the declaration
mentioned, which instruction the court gave as prayed.
The plaintiffs prayed the court to instruct the jury that upon
the evidence, the plaintiffs were entitled to recover such damages
as the jury should think the plaintiffs had sustained by the
defendant refusing to comply with the contract stated in the
declaration if it should believe from the said evidence that the
defendant consented to the delay on the part of the plaintiffs to
make a deed or give a bond of conveyance for the lots mentioned in
the declaration, which instruction the court refused to give.
A bill of exception was then tendered by the counsel of the
plaintiffs to the instructions given by the court on the prayers of
the counsel for the defendant and also to their refusal by the
court to give the instructions to the jury prayed for by the
counsel for the plaintiffs.
While the bill of exceptions was preparing, the following
additional evidence was discovered by the plaintiffs and was
offered and read to the jury:
A deed, commissioners to J. Templeman, 19 September, 1801. Liber
G. fol. 490.
A deed, Templeman & Stoddart to Bank of Columbia, 19
January, 1802. H. 386.
A deed, Stoddart to Templeman, 25 September, 1804. M. No.
12,151.
A deed, Templeman to Bank of Columbia, 7 March, 1807, No.
18,346.
The deed of 7 March, 1807, conveyed
inter alia to the
plaintiffs the two lots alleged to have been sold by Mr. Hagner,
and authorized the bank to sell the property vested in them by
private or
public sale.
This evidence being exhibited, the court adhered to the
instructions and opinions given to the jury, and an additional
exception was taken thereto by the counsel for the plaintiffs, and
a writ of error was prosecuted to this Court.
For the plaintiffs in error it was contended, that upon the
evidence, the plaintiffs were entitled to recover, and that the
circuit court ought to have so instructed the jury.
Page 26 U. S. 461
MR. JUSTICE THOMPSON delivered the opinion of the Court.
This case comes up from the Circuit Court of the District of
Columbia upon a writ of error. It was an action against the
defendant Hagner, on a special agreement to purchase of the
plaintiffs two lots of ground in the City of Washington. The
Page 26 U. S. 462
court below, on the prayer of the defendant, instructed the jury
that, upon the evidence given on the part of the plaintiffs, though
found by them to be true, would not entitle the plaintiffs to
recover in this action the purchase money for the lots mentioned in
the declaration. Under which instruction a verdict was found and
judgment rendered for the defendant, to reverse which the present
writ of error has been brought.
The special agreement as stated in the declaration is
substantially that on 25 April, 1818, it was agreed between the
plaintiffs and defendant that the plaintiffs should sell to
defendant lots No. 1 and 2, in square 141, in the City of
Washington, the property of the plaintiffs, at and for the price of
twenty-five cents for each and every square foot contained in said
lots, and that defendant agreed to purchase the lots at that price
and to pay for the same when thereunto required by the plaintiffs,
setting out the quantity of land and amount of the purchase money,
with an averment that the plaintiffs had full power and authority
to make the sale and that they then were and ever since have been
fully competent and able to make and deliver a good and sufficient
deed conveying to the defendant a good title in fee to said lots.
And that afterwards, on or about 8 May, 1821, the defendant
declared and gave notice to the plaintiffs that he considered the
agreement and sale void, and would not comply with the same, and
discharged the plaintiffs from making or causing to be made any
deed of conveyance, and the plaintiffs further aver that
afterwards, on 28 September in the year 1821, they being willing
and able to make a conveyance of a good title to said lots, offered
so to do and requested the defendant to pay the purchase money
according to the terms of the agreement, which he refused to do.
The first inquiry that naturally arises is whether any contract was
in point of fact concluded between the parties. It has been
objected that it does not appear that General Mason, through whom,
in behalf of the bank, the negotiation was carried on had any
authority for that purpose. There is certainly great plausibility
in this objection. There is no evidence expressly showing such
authority. But this perhaps ought to be considered as having been
waived by the defendant, as that part of the correspondence from
which the contract is supposed to be collected was carried on with
him in his official character of president of the bank. And the
defendant at no time puts his objection to carrying the contract
(if any was made) into execution upon the want of authority in
Mason to make it.
The contract is alleged in the declaration to have been made on
25 April, 1818, and the letter of Mason of
Page 26 U. S. 463
that date, and signed by him as president of the bank, has been
considered as closing the contract. This letter is as follows:
"I have this day sold to Peter Hagner, of Washington City, lots
No. 1 and 2 in square 141 in Washington City, and belonging to the
Bank of Columbia, at twenty-five cents per square foot, payable at
such
periods as the bank may approve."
The time of payment being left to the option of the bank, it is
said that in judgment of law the purchase money was payable on
demand, and this is no doubt true if the bank had then closed the
negotiation and apprised the defendant that such was their
determination as to the payment of the purchase money. But this was
not done, and the terms of the letter look to and necessarily imply
some further negotiation. The payment was to be at such
periods as the bank may
approve. It was therefore
clearly understood to be payable by installments and the periods to
be approved by the bank, which would seem to leave the subject open
to propositions to be made on the part of Hagner and submitted to
the bank to be approved. And that such was the understanding of the
parties is evident from the letter written by the defendant two
days after, April 27, 1818, to the president of the bank as
follows:
"It would be desirable to me to have the payments to make for
the lots No. 1 and 2 in square 141 purchased of you by me on
Saturday, at 25 cents per square foot, in proportions and at
periods to be met by my income. I accordingly propose that the
whole amount of the purchase money be divided into six quarterly
payments, the first to be on the first of October next. If this be
approved by the bank, I will given my notes, and I presume
the bank will have no objections to give me a deed. If however it
be preferred, I will bind myself to pay the money at the times
stated above, and receive a bond of conveyance, conditional to give
a full title when the money is paid. Do me the favor to send me in
return a memorandum of our agreement on Saturday."
Upon this letter was written in pencil by General Mason "accept
interest on each note as it becomes due."
Whatever, therefore, might have been the right of the bank to
have closed the contract in the terms of the letter of 25 April, it
was certainly waived by an acceptance of the modification contained
in the letter of 27 April. Nor would any contract seem to be closed
by this letter. It contained two distinct propositions by the
defendant -- the one to give his notes for the purchase money,
payable in six quarterly payments, the first to be made on the 1st
of October then next, and
Page 26 U. S. 464
take a deed from the bank; the other to bind himself to pay the
money at the times stated, and take a bond for a deed, to be given
when the whole purchase money was paid. This necessarily required
some further answer from the plaintiffs, not only to signify their
election between the propositions, but to do some further act in
confirmation of such election. Either to give the deed or a bond
for the deed. The note in pencil, made by the president of the bank
upon the letter could not fairly be understood as implying anything
more than an acceptance of the proposition to pay by installments
and settling the terms of the contract, to be concluded between the
parties upon the bank's electing which proposition to accept as to
the mode of concluding the contract. But the contract could not be
said to be consummated until such election was made and the
writings executed.
Here the matter rested for nearly three years without anything's
being done on the part of the bank to close the contract or to
intimate that it considered any contract in force in relation to
the purchase, and that not until after the defendant had given them
formal notice that he considered the agreement void and at an
end.
And he certainly had very good reason to think the bank so
considered it, or that no agreement had in fact ever been
concluded. For the defendant by his letter of 7 October, 1818, gave
the plaintiffs notice that he was prepared to pay the first
installment, which according to his proposition fell due on the
first of that month, and requesting of them a bond for a deed, to
which no answer appears to have been given nor anyone of the
instruments paid or demanded, although the whole purchase money
became payable by 1 January, 1820, according to the proposed terms
of the contract.
Upon this view of the case, it is at least very doubtful whether
any contract was concluded between the parties, and if the cause
turned upon this point alone, the judgment of the court below would
be affirmed by a division of opinion in this Court. But as there
are other questions in the cause the determination of which leads
to the same result and upon which no difference of opinion exists,
it has been thought proper to notice them.
Admitting, then, that a contract was entered into between the
parties, the inquiry arises whether the plaintiffs have shown such
a performance on their part as will entitle them in a court of law
to sustain an action for the recovery of the purchase money.
In contracts of this description, the undertakings of the
respective parties are always considered dependent unless a
Page 26 U. S. 465
contrary intention clearly appears. A different construction
would in many cases lead to the greatest injustice, and a purchaser
might have payment of the consideration money enforced upon him and
yet be disabled from procuring the property for which he paid
it.
Although many nice distinctions are to be found in the books
upon the question whether the covenants or promises of the
respective parties to the contract are to be considered independent
or dependent, yet it is evident the inclination of courts has
strongly favored the latter construction as being obviously the
most just. The seller ought not to be compelled to part with his
property without receiving the consideration, nor the purchaser to
part with his money without an equivalent in return. Hence in such
cases, if either a vendor or a vendee wish to compel the other to
fulfill his contract, he must make his part of the agreement
precedent, and cannot proceed against the other without an actual
performance of the agreement on his part or a tender and refusal.
And an averment to that effect is always made in the declaration
upon contracts containing dependent undertakings, and that averment
must be supported by proof. And that the one now before the Court
must be considered a contract of this description cannot admit of a
doubt.
The plaintiffs, however, aver that they were willing and able to
make a conveyance of a good title, and offered so to do on 28
September, 1821, but this was only the day before the suit was
commenced, and nearly two years after the time fixed for
performance, and they set up as an excuse for the delay in making
the tender of a deed the notice received from the defendant on 8
May, 1821, that he considered the agreement void and refused to
carry it into effect.
The time fixed for performance is at law deemed of the essence
of the contract. And if the seller is not ready and able to perform
his part of the agreement on that day, the purchaser may elect to
consider the contract at an end. In Sugden's Law of Vendors 275, it
is said
"The general opinion has always been that the day fixed was
imperative on the parties at law. This was so laid down by Lord
Kenyon, and has never been doubted in practice. The contrary rule
would lead to endless difficulties if in every case it must be
referred to a jury to consider whether the act was done within a
reasonable time, and the precise contract of the parties would be
avoided in order to introduce an uncertain rule which would lead to
endless litigation. But equity, which from its peculiar
jurisdiction is enabled to examine into the cause of delay in
completing a purchase and to ascertain how far the day named was
deemed material by the parties, will in certain cases carry the
Page 26 U. S. 466
agreement into execution although the time appointed has
elapsed. But, he justly adds, perhaps there is cause to regret that
even equity assumed this power of dispensing with the literal
performance of contracts in cases like those."
It was urged at the bar that the rule on this subject was the
same at law and in equity, and the case of
Thompson v.
Miles, 1 Esp. 184, was referred to in support of this
proposition. And it is true that some of the remarks which fell
from Lord Kenyon on the trial of that cause would seem to
countenance such an opinion. For he permitted the seller to prove
he had a good title although the power of making that title was
attained after the action was brought.
This was certainly going great lengths for a court of Law. But
it ought to be observed that in that case no time appears to have
been fixed for completing the contract, and an application for the
title had not been made by the purchaser previous to the action
brought by the vendor for breach of the contract, which it seems
was considered necessary in that case. But that Lord Kenyon did not
mean to be understood as holding that the evidence would have been
admissible to sustain the action if there had been a time fixed for
the performance of the contract is very evident from his doctrine
in numerous other cases before him. Thus, in the case of
Bury
v. Young, 2 Esp. 641, he says a seller of an estate ought to
be prepared to produce his title deeds at the particular day. That
a court of equity will under particular circumstances, enlarge the
time. And in the case of
Cornish v. Rowley, 1 Wheaton
Selwyn 137, the action was for money had and received, to recover
back money paid as a deposit on an agreement for the purchase of an
estate, the defendant having failed to make out a good title on the
day when the purchase was to be completed; the counsel for the
defendant said they were ready to make out a good title, to which
Lord Kenyon replied
"As to the sentiments I have long entertained relative to the
purchase of real estate, I find no reason for receding from them;
they have been confirmed by conversing with those whose authority
is much greater than mine. The vendor must be prepared to make out
a good title on the day when the title is to become completed."
On which the counsel for the defendant asked
"Do I understand your Lordship to say that though the defendant
can now make out a good title, yet, as that title did not form a
part of the abstract, the plaintiff may avail himself of that
circumstance?"
To which Lord Kenyon answered "He certainly may, and avoid the
contract," and he directed the jury to find a verdict for the
plaintiff for the deposit money.
In the case of
Davis v. Hone, 2 Sch. & Lef. 347,
Lord Redesdale said a court of equity frequently decrees
specific
Page 26 U. S. 467
performance when the action at law has been lost by the default
of the very party seeking the specific performance. To sustain an
action at law, performance must be averred according to the very
terms of the contract. And again in the case of
Lennon v.
Napper, 2 Sch. & Lef. 684, he reiterates the same
doctrine, that courts of equity in all cases of contracts for lands
have been in the habit of relieving where the party from his own
neglect had suffered a lapse of time, and from that and other
circumstances could not sustain an action to recover damages at
law, for at law the party plaintiff must have strictly performed
his part of the contract. And in the case of
Wilde v.
Fort, 4 Taunt. 334, the rule is recognized that if the vendor
of an estate at auction does not show a clear title by the day
specified, the purchaser may recover back his deposit and rescind
the contract without waiting to see whether the vendor may
ultimately be able to establish a good title or not. A purchaser is
not bound to accept a doubtful title.
From these authorities it may by laid down as a settled rule
that at law, to entitle the vendor to recover the purchase money,
he must aver in his declaration a performance of the contract on
his part or an offer to perform at the day specified for the
performance. And this averment must be sustained by proofs unless
the tender has been waived by the purchaser.
The time fixed for the performance of the contract in this case
must be understood to have been 1 January, 1820. The payment of the
consideration money was to have been completed on that day, and no
part of it having been paid, the defendant had a right to abandon
his contract unless the plaintiffs were then ready and offered to
perform on their part, of which there was no evidence whatever
offered upon the trial. They have attempted, however, to show that
a tender of a deed was rendered unnecessary by reason of the letter
of the defendant of 8 May 1821, in which he gave notice of
rescinding the contract. But this letter can have no such effect.
It was written sixteen months after the time fixed for the delivery
of the deed, and when the defendant had a right to rescind the
contract. If before the period had arrived when the deed was to be
delivered, the defendant had declared he would not receive it and
that he intended to abandon the contract, it might have dispensed
with the necessity of a tender, as the conduct of the defendant
might in such case have prevented the act from being done, and he
who prevents a thing from being done shall never be permitted to
avail himself of the nonperformance which he himself has
occasioned. But that rule can never apply except in cases where the
act which
Page 26 U. S. 468
is construed into a waiver occurs previous to the time fixed for
performance.
The possession taken of the lots by the defendant could, at
most, only be considered a circumstance from which to infer that he
considered the contract closed, but could not deprive him of the
right of relinquishing it and restoring the possession if the
plaintiffs were unable to make a title to him, or neglected to do
it. The possession was taken, doubtless, under a belief that the
contract would be performed by the plaintiffs and a full title
conveyed to him, but if the contract was unexecuted, the defendant
had a right to disaffirm it and restore the possession, and would
have sustained an action to recover back the purchase money had it
been paid. Sug. on Vend. 173, 183, and cases there cited.
The plaintiffs have therefore clearly failed to show such a
performance on their part as to entitle them in a court of law to
call upon the defendant for payment of the purchase money.
But admitting that no objection in point of time lay to the
tender of the deeds the day before the commencement of the present
action, no title was thereby conveyed to the defendant, or at all
events not such a one as he would at any time have been bound to
accept. It was a title derived from John Templeman under the deed
of 31 March, 1809. Whereas Templeman had previously conveyed the
same lots to the plaintiffs by his deed of 7 March, 1807, in trust,
with authority to sell the same for the payment of a debt due to
the bank and to pay over to him the supplies if any there should
be. The legal title to these lots is therefore still in the bank,
and may be subject to the trust declared in the deed from anything
that appeared upon the trial. And to allow the bank to recover the
purchase money and turn the defendant over to a court of chancery
to obtain a title would be going further than any known principles
in courts of law will warrant, no act whatever having been done by
the plaintiffs to transfer to the defendant the title vested in
them under the deed of 1807.
To substantiate the present action under such circumstances
would be compelling the defendant to take a lawsuit instead of the
land for which he contracted.
Judgment affirmed with costs.
