Neal v. Parker , 98 Md. 254 ( 1904 )

This is a proceeding by a bill in equity to enforce specific performance of a contract for the sale of certain lumber. The contract as set up in the bill of complaint is substantially as follows: On the 20th of August, 1902, the appellee, Parker, purchased from the appellant, Neal, two hundred thousand feet of pine boards for the price of $8.50 per thousand feet, cash on delivery. One hundred thousand feet to be 10 1/2 inches wide and 1 1/2 inches thick, and the other one hundred thousand feet to be 10 1/2 inches wide and 9-8 of an inch thick; all to be furnished by the appellant, Neal, from a tract of pine timber situated in Caroline County and known as the Bennett Todd tract. The said boards were to be sawed by the appellant and "stuck up" on the mill yard and from thence to be hauled away by the appellee, Parker, as soon as they had dried out sufficiently to warrant their removal. Neal was to begin cutting and sawing the growing timber on October 1st, 1892, and to continue until the completion of the quantity called for in the contract. In the answer filed by the appellant, he admits that he entered into a contract with the appellee, but avers that the quantity of timber was to be one hundred and fifty thousand feet, and that the undertaking was in effect a conditional sale depending upon the contingency that the delivery of this quantity of 10 1/2 inch boards would not injure the sale of the remaining lumber to be manufactured from said tract. At the time the contract was entered into, there was paid by the appellee to the appellant, to bind the bargain, a small sum as earnest-money. The contract as alleged in the bill was distinctly proved by the testimony of the appellee and of one Anderson, an entirely disinterested witness, who was present when the contract was entered into. The appellant, Neal, did not go upon the witness stand and has not denied the contract except as stated above in the answer. Upon hearing, the Court below decreed that the contract be specifically performed by the appellant. From that decree he has taken this appeal.

The question in the case is whether this is a contract whose specific performance can be enforced by a Court of equity? It is quite obvious from a reading of the record that it was not performed by the appellant, because the price of lumber sensibly advanced between the date of the contract and the time that its performance was to be commenced.

All that prevents the fifth sub-division of section four of the Statute of Frauds from applying to this agreement is the fact that the contract might have been performed within a year.Balto. Breweries Co. v. Callahan, 82 Md. 106. There is nothing in the contract set out in the bill to indicate that it was not to be performed and fully completed within a year from its date.

The grounds upon which it is insisted that the decree appealed from should be reversed are, First, that the contract, being one for the sale of personal property, it is against the policy of Courts of equity to require its specific performance.Secondly, that the specific performance would impose an unnecessary hardship on the appellant and would confer no benefit on the appellee that he could not obtain in an action at law for damages. Third, that the specific performance is impracticable inasmuch as it means an enforcement of personal services requiring the exercise of skill. Fourth, because the contract is vague and indefinite.

Treating these four propositions in the inverse order in which they have just been stated, we need say no more with regard to the fourth, or last one, than we have already remarked, namely that the contract as set out in the bill of complaint is definite, clear and distinct and the proof establishing it precise and uncontradicted.

The third objection, that specific enforcement is impracticable because it involves the rendition of personal services requiring the exercise of skill is fully answered by the case of Goodwin v. Co's Appeal, 117 Pa. St. 514, and by the facts in evidence. In the case just cited it was held by the Supreme Court of Pennsylvania that specific performance will be decreed of a contract by the owner of a patent right to furnish articles covered by the patent, which he alone can supply, when they can be made without the exercise of any particular skill; and the facts before us fail to show that it requires any special skill to saw boards a certain width and thickness. It is of common knowledge that it does not. The remaining two grounds of objections may be treated together.

It is, as stated by Mr. Brantly in his admirable work on the Law of Contract, p. 252, quoting from 63 Md. infra, "a general principle that equity will not decree specific performance of contracts for the sale of goods and chattels, not however, because of the nature of the property the subject-matter of the contract, but because damages at law calculated on the market price of the goods bargained for furnish in ordinary cases an adequate redress to the purchaser for the breach of the bargain by the vendor. But there are many exceptions to this general rule founded principally upon the inadequacy of the remedy at law in the particular case or the special and peculiar nature and value of the subject-matter of the contract." Thus a contract for the sale and delivery of chattels which are essential in specie to the plaintiff and which the defendant can supply while no one else can, will be specifically enforced. Equitable Gas Company v. Coal Tar Company, 63 Md. 299. And so in a case put by LORD HARDWICKE in Buxton v. Lister, 3 Atk. 385, a man may contract for the purchase of a great quantity of timber, as a ship carpenter, by reason of the vicinity of the timber, and this may be well known and understood on the part of the seller; in such a case a specific performance would seem to be indispensable to justice. Whilst this is so, we fail to see how the facts of this case bring it within any of the well recognized exceptions to the general rule as quoted above from Mr. Brantly's work on Contracts. The lumber, to be supplied under the contract, was ordinary pine lumber, to be used for the manufacture of box shucks. Any other pine, of the same quality but not cut from the Todd tract, would be just as available for the purpose as that which the appellant agreed to deliver to the appellee. The failure of the appellant to perform his contract created a breach which could be adequately compensated in an action at law where the measure of damage would be the difference between the contract price and the market price of similar material at the time the lumber contracted to be delivered ought to have been delivered. It is true, there is some evidence in the record tending to show that the appellee made efforts to purchase other lumber when he ascertained that the appellant would refuse to comply with his contract, but there is abundance of testimony to prove that he could in the open markets of Baltimore have procured the same quality of lumber of the same dimensions available for the same uses at a very much higher price. Had he done this he would have been entitled to recover from the appellant the difference between the contract price of $8.50 per thousand and the higher sum he might have paid in the open market. This being so, the jurisdiction of equity would obviously be ousted, unless we have some statutory provision expanding that jurisdiction and extending it to a class of cases to which this belongs. This brings us to quite an interesting question.

By the Act of 1888, ch. 263, now sec. 199 of Art. 16 of theCode of Public General Laws, it is provided as follows: "No Court shall refuse to specifically enforce a contract on the mere ground that the party seeking its enforcement has an adequate remedy in damages, unless the party resisting its specific performance shall show to the Court's satisfaction that he has property from which such damages may be made, or shall give bond with approved security in a penalty to be fixed by the Court to perform the contract or pay all such costs and damages as may, in any Court of competent jurisdiction, be adjudged against him for breach or non-performance of such contract."

This legislation has never been judicially interpreted. It was doubtless the policy of the Legislature in adopting it to do away with technical defenses to proceedings in equity instituted to compel parties to live up to their undertakings, and it was designed to preclude individuals who had entered into binding contracts from repudiating them at pleasure by merely electing to pay such damages for their breach as a jury in an action at law might assess. As was appositely observed by the Supreme Court of the U.S. in U.P.R.C. v. Chicago R.I. P.R.C., 163 U.S. 600. "It must not be forgotten that in the increasing complexities of modern business relations, equitable remedies have necessarily and steadily been enforced and no inflexible rule has been permitted to circumscribe them. As has been well said equity has contributed its remedies so that they shall correspond both to the primary right of the injured party and to the wrong by which that right has been violated and has always preserved the element of flexibility and expansiveness so that new ones may be invented or old ones modified in order to meet the requirements of every case and to satisfy the needs of progressive, social conditions in which new primary rights and duties are constantly arising and new kinds of wrong are constantly committed." We have just said that this provision of the Code has never been judicially interpreted. In fact it has never been alluded to but once in any decision of this Court since its adoption. In the case of Brehm v. Sperry, Jones Co., 92 Md. 408, it was referred to merely for the purpose of saying that it had no application to the case because the refusal to decree specific performance was not based merely, or at all, on the ground that there was an adequate remedy at law. But here the statute flatly confronts us. The appellee in this case is obviously entitled to the relief he sought under his bill unless he has an adequate remedy at law. There is no other defense available to the appellant. Therefore the Court could only refuse to enforce specifically the contract upon "the mere ground" that the remedy at law ousted the jurisdiction of equity. But it was to prevent just that result that the Act of 1888 was adopted. It means that or it has no significance. "No Court shall refuse to specifically enforce a contract on the mere ground that the party seeking its enforcement has an adequate remedy in damages." If the relief prayed for in this case were denied, it would have to be denied solely upon the ground that there is a remedy in damages, and if denied upon that ground, it would be denied on the mere ground that compensation could be recovered in an action at law. If the provision of the Code is to be given any force and to have any effect, this is the case, or the class of cases, to which it is applicable. It undoubtedly revolutionizes, in a very marked degree, the practice in cases of this character, and it would seem that almost any contract, though we do not so decide, may now be brought within the jurisdiction of a Court of equity for specific performance when the only defense is that there is an adequate remedy in damages, unless the party resisting that specific performance shall show that he has sufficient property to respond in damages or shall give bond as the statute provides. The manifest purpose of this legislation was to compel parties either to specifically perform contracts which theretofore a Court of equity could not compel them by decree to perform because of the existence of an adequate remedy in damages, or else, to give bond with satisfactory security which would be answerable for the failure to perform in the event of damages being recovered for a non-performance. The defendant who may be proceeded against has his election to give bond and oust the jurisdiction of the Court of equity and drive the plaintiff to a Court of law where damages may be assessed by a jury, or, upon failure to give bond, to subject himself to the jurisdiction of a Court of equity by whose decree he may be compelled to specifically perform his undertaking.

Entertaining this view of the case we must affirm the decree appealed from, though not precisely on the grounds or for the reasons stated in the opinion of the Circuit Court.

Decree affirmed with costs.

(Decided January 12th, 1904.)