Farmers' Loan & Trust Co. v. Hunt , 16 Barb. 514 ( 1853 )

Edwards, J.

This action is brought upon a contract made by Rogers, one of the plaintiffs, with the defendant, for the sale of a tract of land. The contract is dated on the 1st day of November, 1842, and provides that the consideration money shall be paid in certain installments, and that, after all the payments shall be made as agreed by the parties, Rogers shall execute a warranty deed of the premises to the defendant. The action was commenced before all the payments had become due.

The defenses set up were: First, that Rogers had not performed that part of the contract in which he agrees that when two thousand dollars shall have been paid, he will give deeds of certain parts of the tract agreed to be sold; and second, that he had not caused Stanley-street to be continued and opened to the defendants’ north line, and that the defendants should be allowed the damages sustained by reason thereof, by way of recoupment. The justice before whom the cause was tried decided that that part of the contract on which the claim first set up by the defendant was founded, was so uncertain and unintelligible that no effect could be given to it, and this decision seems to have been acquiesced in; at least no objection was made to it upon the argument. In reference to the second claim of the defendant, the judge charged that inasmuch as this action was commenced before the last payment had become due, the defendant was not entitled to any recoupment in this action

It will be observed that no time is mentioned when Rogers is to cause Stanley-street to be continued and opened, and this can only be ascertained by reference to other parts of the contract, taken in connection with the act to be done.

The opening of the street, so far as we have the means of knowing, could be of no benefit to the defendant, except as incidental to his ownership of the land agreed to be conveyed to him; and, as he could derive no advantage from the performance of this part of the contract until he received, or was entitled to receive a conveyance, so he could sustain no damage from its non-performance. It would seem, then, to be a reasonable inference, that the parties intended that the defendant should have the benefit of the incident when he was entitled to the benefit of the principal, that is, when he was entitled to a conveyance of the premises.

It is contended, however, on the part of the defendant, that in this case the law will infer that the parties intended that the street should be opened within a reasonable time after the making of the contract.

There are many cases in which, the parties having failed to agree upon a time of performance, the inference will and must be that they intended that the act agreed to be done should be performed within a reasonable time ; as where a party agrees to deliver an article of merchandise, or other property, at a particular place, and at a certain price, and no time of performance is mentioned, this rule of construction must be adopted, otherwise the contract could not be enforced. But is it necessary to resort to this rule when the time, though not mentioned, can, as in this case, be ascertained from the nature of the thing contracted to be done ?

But suppose that we adopt the rule of construction contended for; how, then, ought the ease to be presented to the jury ? It will certainly not be contended that the court should simply state that the parties must have intended that the act should be performed within a reasonable time; and the jury must say whether it was so performed. The judge at the circuit would be obliged to do more than this. It would be necessary for him to state the principles which the jury should adopt in ascertaining whether or not the act was done within a reasonable time. The rule on this subject which was laid down by Baron Alderson, in the case of Ellis v. Thompson, (3 Mees. & Welsb. 445,) is undoubtedly the proper one. He says that “ the correct mode of ascertaining Avhat reasonable time is, is by placing the court and jury in the same situation as the contracting parties themselves were in at the time they made the contract; that is to say, by placing before the. jury all those circumstances which were known to both parties at the time the contract was made, and under which the contract itself took place.” If we apply this rule to the present case, it seems to me that the only instructions which the court could give to the jury, would be that they must ascertain the time wrhen the performance would be advantageous, and the non-performance injurious to the defendant, and must consider that as the reasonable time for performance intended by the parties; or, in other words, that in this case, the reasonable time within which the street, which was the mere incident to the land to be conveyed, should be opened, would be the time when the principal thing to which the incident was to be attached, was agreed to be conveyed. But suppose that according to the rule which should be laid down by the court, the jury would be obliged to infer that the street was to be made before the land was to be conveyed, what would be the rule of damage? The defendant not being the owner of the land, he could not sustain any more than a nominal injury; and of course his damages would be merely nominal. It seems to me, then, that according to any rule of construction which has been suggested, we are led to the conclusion which was adopted by the judge at the circuit, that before the last payment had become due, and the defendant had become entitled to a conveyance, he could not recoupe his damages.

There were two cases referred to upon the argument by way of analogy, but it seems to me that they cast but little light upon the question before us. In the case of Rogers v. Salmon, (8 Paige, 559,) the bill alleged that during the prevalence of the speculating mania which existed some years since, the defendant had1 been induced to purchase three small lots in a lithographic village at the price of $16,000; which lots were, at the time of filing the bill, of no value except for pasturage; and not worth more than one-sixth of the sum agreed to be paid for them. One-fourth of the purchase money had been paid, and a bond and mortgage had been given to secure the payment of the residue of the $16,000, with interest thereon. The bill contained other allegations, and set forth representations of numerous things which were to be done, but which never were done, and which imposed upon the credulity of the defendant. The chancellor seemed to consider this a case of great hardship, as it » clearly was, although he said it was not without its difficulties, and, as he stated, it appeared to him “ to be inconsistent with the principles of equity, as well as of sound morality, that the plaintiff should compel the defendant to pay his bond and mortgage,- after lie had already paid four times as much as the lots were worth, if the contemplated improvements should not be made.” He then referred to the case of Donelson v. Weakley, (3 Yerg. R. 178,) and said that upon the authority of that case, and upon the equity arising upon the several matters contained in the bill of complaint, he overruled the demurrer which had been interposed, and he concluded: u But I express no opinion as to the nature or extent of the relief which the complainant will be entitled to if all the facts stated in his bill shall eventually turn out to be true.” There is an essential distinction which destroys all analogy between the two cases cited and the one before us; and that is, that in these cases the party seeking relief had received a conveyance of the property, and the relief was granted upon purely equitable grounds, arising out of the extreme hardship of the case.

The next exception was to that part of the judge’s charge in which he stated that the plaintiffs were entitled to recover the unpaid portion of the purchase money mentioned in the contract which was due at the commencement of the action, with interest on the whole amount unpaid from the 1st day of May, 1843. The contract, it will be observed, was made in the month of October preceding the 1st of May, 1843, and after making certain provisions as to payments before that date, declares that one thousand dollars shall be paid on the 1st of May, annually, for three years, from and after the 1st day' of May, 1843, and the balance in four equal annual payments, from and after the 1st day of May, 1846, with annual interest from the 1st day of May, 1843. It seems to me that the obvious meaning of this part of the contract is, not as was contended by the defendant’s counsel, that interest from the 1st of May, 1843, should be-paid only upon the installments which became due after the 1st day of May, 1846, but rather that all the installments -which should become due after the 1st of May, 1843, should draw interest from that date.

I think that the motion for a new trial should be denied.

Roosevelt, J.

The leading question in this case is, was the judge right in charging the jury that Rogers was not bound to open Stanley-street, until all the .payments had become due, and that, the time thus allowed not having expired,, he was not chargeable with any breach of his obligation, or with any damages by way of recoupment for such supposed breach. Rogers, it appears, on the 1st of October, 1842, gave Hunt a contract for 82¿ acres of land in the town of Mount Morris, Livingston county, at $100 per acre, payable by installments, as follows: $500 on the 1st November, 1842 ■; $500 on the 1st May, 1843; $100 on the 1st May, 1844; $1000 on the 1st May, 1845; $1000 on 1st May,-1846 ; and the balance in four equal annual payments thereafter, with annual interest from 1st May, 1843 ; thus making the whole consideration payable on or before 1st May, 1850. It was also agreed that when $2000 wTere paid Rogers should give deeds of “ certain [without saying what] parts” of the tract, and receive bonds and mortgages. Rogers also stipulated that .he would “see that Stanley-street is continued and opened [without saying when] to said Hunt’s north line, and said Hunt agrees [without saying when] to continue and open the same to the road on the south line of lot No. 37.” “ And at the expiration of the term of" this contract, the .payments having been fully complied with, said Rogers hereby agrees to convey, and authorize his heirs and assigns to convey to said Hunt, or his heirs or assigns, the above described premises,” &c. Hunt was to have partial possession on the 1st November, and Ml possession on the 1st April after the contract. On this statement it would seem obvious that Rogers was not to make' the final deed until all the payments were completed; and what reason, in the absence of express stipulation, is there to imply that he was to make the continued street before such fulfillment; and that too without any request (for-none is pretended) on the part of Hunt to do so ?

Ordinarily, I admit, where no time is mentioned, a reasonable time is presumed. But this reasonableness, in all cases, depends upon the nature of the transaction. Is it reasonable then in this case to say that Rogers was to incur the expense of opening the street before he knew whether Hunt would fulfill even the first payment ? Certainly not. ’ At which payment, then, was it to become reasonable, if at any before the last? Rogers was not to part finally with his land till then; and why should he part with his money, in causing a street to be continued ? Hunt, after the first payment of $500, might have become bankrupt or have abandoned the contract. Was Rogers, unless he so expressly agreed, to take the risk of these casualties ? If the land, unpaid for, came back to him, it might well be that a street cut through it, instead of being an improvement, besides its cost, would have been in his eyes a positive injury. Still, he might, if he saw fit, have' stipulated to do the act, or rather “ to see” the act done; and in that case the court would have said stat pro ratione voluntas. In the absence, however, of any expression to that effect, it seems to me unreasonable to imply that he intended to make the street, any more than the deed, before “ the payments were fully complied with.”

At all events, if any time other than that, is to be judicially-interpolated into the instrument, and a supposed omission of the parties to be thus supplied by the court, on the ground of a doubtful reasonableness, it should be accompanied at least with a qualification quite as reasonable—that the act was to be done by Rogers when reasonably requested by Hunt. And as no such request was made, no default in that view was incurred.

The charge therefore was correct, and. a new trial ought not to be granted.

Mitchell, J.

One question raised was whether the defendant was to pay interest from May 1st, 1843, on the three several sums of $1000, which were to be paid annually for three years from that-day,- and also on the balance of the purchase money; or to pay such interest only on the balance. The defendant contends that it was to be paid only on the balance; and he refers as part of his argument, to the conduct of the parties shortly after the contract was made, as stated in the complaint, namely, that on the 14th of October, 1842, he paid $500; that in December, 1842, he paid two sums of $100 each; and in April, 1843, he paid $274,65; on all of which sums interest was allowed to May 1st, 1843; and that on the 26th of September, 1843, he paid $959,50, on which he was allowed $40,50; making it thus equal to $1000, calculating interest to May 1st, 1844.

Where such an ambiguity as this exists, it is a better guide to the true meaning of the parties to ascertain what is the ordinary and reasonable agreement in such cases, than to look to acts which might have been influenced by particular circumstances. Here, by the agreement, Hunt was not to have possession of any part of the premises without paying rent, except the garden, door yard and a privilege in the barn yard, until April 1st, 1843. He was to have the house and part of the barn on the 1st of November, 1842; but for that he was to pay rent. The parties then considered that the possession of any part of the premises (except these small privileges) subjected Hunt fairly to the payment of rent. That repels the idea that the parties meant that he was afterwards to occupy the whole for three years from May 1st, 1843, without paying rent, or its ordinary equivalent, interest. When they were so particular as to require the payment of rent for the use of the house and part of the barn, for five months, they did not mean to allow the interest on $3000, part of the consideration of about 80 acres of land, to remain unpaid for several years, and the purchaser to be in full possession of the premises. Interest is deemed, usually, the equivalent for the possession of the premises; and when the agreement fairly admits of the interpretation that interest was to be paid from the time, or about the time, possession wras to be taken, that is the most reasonable interpretation. As full possession was to be given on the 1st of April, 1843, it is., not reasonable .to infer that the interest.to.be paid from May 1st, 1843, was not only on the balance referred to, but also on the three sums of $1000 each, to be paid in three years from that date. The acts of the parties referred to, allow the defendant interest on all sums that he paid before May 1st, 1843, only to that date, and so are consistent with this construction. The payment of $959,50, in September, 1843, was credited to the defendant as $1000 paid in May, 1844. That may have been, not as showing that he was entitled to that allowance, but by agreement, in consequence of payment in advance.

The judge was right in allowing interest from the 1st of May, 1843, on all the sums then unpaid.

The more important question is, as to the time at which the plaintiff was bound to cause Stanley-street to be opened to Hunt’s north line. The judge, at the circuit, held that the plaintiff need not do this until the whole purchase money should be paid. It is right to look at the purposes of the parties, as shown in their agreement, to discover their meaning. Stanley-street is spoken of as a street to be continued to Hunt’s north line. This indicates that it was then in existence, but not yet extended far enough to reach Hunt’s line. Hunt, in purchasing, required Rogers to agree to cause the street to be continued to Hunt’s north line; and Rogers also required Hunt to agree then to continue and open the same street from that line, three rods wide, to the road on the south line of lot Ho. 37; which the boundaries show was the southern boundary of the land bought by Hunt. Thus, both parties made it a matter of importance that Stanley-street, a street then in existence, should be continued to this land, and through it, to another road. They thus showed that they considered the access to this property by that street to be of considerable advantage to this property; and the access to the road on the south line of the purchase, to be of equal advantage to Rogers’ other adjoining property. Hunt, too, was to have actual possession, and under a contract which was intended to require Rogers to give deeds of some parts of the premises, as Hunt should sell them. Whether this intention was so indefinitely expressed as not to bind Rogers, or the contrary, it still shows the meaning of the parties. It could not, then, have been the intention of the parties, that a street which they deemed of such value to this and adjoining property, might be kept closed by either for seven years after Hunt should take possession. And that must have been their intention if the plaintiffs were not bound to open the street until all the payments should become due." The result Avould be, that for these seven years, Hunt would be in the- possession of the land, and have no use of the road, which he deemed so valuable as to make a special part of his contract; and that during all that time he could not sell to advantage any parts of his land, which would be benefited by the street, although he had provided in the agreement that on sales being made, he might pay the plaintiff in mortgages. This is contrary, as well to what is -usual, as to what is reasonable.

The contract also shows, by implication, that there was not to be@this long delay, in making the street. Here the parties first agree that Rogers shall sell the property; next, they treat of the payments, in order, to the last; then they provide that when $2000 .shall have been paid, Rogers shall give deeds of certain parts; next they state their agreement as to the opening of this street; and lastly, they provide that Rogers is to convey the premises at the expiration of the time of the contract, if the payments shall have been fully complied with. When any thing is to be done at a future or remote day, they so expressly state. They state when each payment is to be made, from 1st of November, 1842, to 1st of May, 1843; and so annually to 1st of May, 1850. They state when deeds are to be given for parts of the property; namely, wdien $2000 shall be paid. Then they, state the agreement as to this street, and after that, they state what is to be done “at the expiration of the time of this contract namely, the payments having been fully complied with, Rogers was to convey to Hunt. It is not that at the expiration of the time of this contract he was to convey to Hunt and open the road ; but he was then to do nothing but convey. The inference is that the parties meant that Rogers should, before this, do all that he agreed to do, and not that he ivas not to comply with his agreement to open the street, until the payments should all be made. The agreement of Rogers to open the street coming in order before the agreement as to what he shall do at the expiration of the time of the contract, is also some slight evidence that the former was to precede the latter in the performance.

The time, then, in which Rogers should have made the street, would be a reasonable time after the possession of the land was to be given; and Rogers having failed to do this, he is liable for damages, which the defendant may recoupe in this action. This is the more reasonable, as Rogers having made an assignment in trust for creditors, the remedy of the defendant by action might be ineffectual.

In Rogers v. Salmon, (8 Paige, 559,) the plaintiff had. bought three lots at Staten Island, of the defendants, and given them a mortgage for part of the purchase money. At the time of the sale, the defendants had represented, by maps and otherwise, that they were about to erect a dock in the immediate vicinity of their lots, and to lay out the adjoining and neighboring lands in village lots. These promissory representations were not made as part of any written agreement, but yet were in such form that the chancellor considered they restricted the defendants, in equity, from enforcing a contract which was entered into partly on account of them, unless the defendants would carry out those representations. They had not done so, when the bill was filed to prevent any suit on the bond and mortgage. It does not appear whether the mortgage was then due or not. The chancellor sustained' the bill, and adopted as authority the case of Donelson v. Weakley, (3 Yerg. 178.) In that case the representations at the sale, by map, and otherwise, were, that a canal should be made, to connect the town, in which the lots sold were situated, with the Tennessee river. The canal was commenced, and $10,000 expended on it, and was then abandoned, but not until it had become apparent that the town never would be settled, and that the canal would be of no use. The chancellor says, approvingly, that “ the court decided that the purchase having been made upon the faith of the .representations made at the sale, and .the vendors not having gone on and completed the contemplated improvements within a reasonable time thereafter, the complainant was entitled to he released from the contract and to have his notes cancelled.” (8 Paige, 564, 5.)

It was equally important in this case, that the street should be made within a reasonable time after the contract was made or possession given, as it was in the other two cases that the dock should be made and village lots and streets laid out, or the canal be constructed in a reasonable time after the contract. It was said that Hunt could not make his part of the street until he got his deed, as he would have no title until then j and so it could not be intended that Rogers should make his part before that time. Hunt could ma|e the street. He had the equitable title to the land, and was in possession, and had paid part of the purchase money. His control of the property, under these circumstances, could not be disturbed, if he paid the rest of the purchase money; and especially could he not be prevented from making a street, which by the contract he was required to make at sometime.

The court held that that part of the agreement, which required Rogers to give deeds of certain parts of the tract, and to receive bonds and mortgages, was void, for uncertainty. If this be correct, the consequence would seem to follow that no action can be maintained on the contract. This was a material part of what Rogers was to do, and must have been a valuable part of the inducement to Hunt to agree to pay the price which he agreed to pay. If the seller can avoid fulfilling all that he is to do, on account of its uncertainty, he cannot possibly sustain an action on the contract, against the buyer. He cannot get rid of all that he is to do, and still compel the other party to perform what that other agreed to do. So, if he gets rid of a material part of what he is to do, for a like cause, he cannot enforce the contract made by the other; the consideration for which was, in part, his doing what he escapes doing. He may recover for the value of the thing received or enjoyed by the other party, if that do not exceed the price which the other was to pay; but that is entirely different from a recovery on the contract. Although this last matter was not argued at the general term, it is material to consider it, if a new trial is to be ordered,

[New-York General Term, December 5, 1853.

Edwards, Mitchell and Roosevelt, Justices.]

A new trial should be granted; costs to abide the event.

New trial denied.