Latrobe and Whistler v. Winans , 89 Md. 636 ( 1899 )

The first contention of the defendants, the executors of Wm. L. Winans, is, that this contract having been made in England for performance there, and having been in fact carried out in that country, the lex loci contractus must govern, and that by the common law of England no interest can be recovered in an action upon such a contract, not providing for interest, and therefore this decree, which allows some interest, is erroneous and should be reversed.

We do not, however, regard this contract as one made, or to be performed, in England, and to be governed by the law of that country. The subject-matter relates to real estate in Maryland, and the general rule in such cases is that the lex loci reisita governs. 2 Parsons on Contracts, 8th ed. p. 686.

Upon the mailing by plaintiffs of their acceptance of Wm. L. Winans' offer, the bargain was complete, subject only to the contingency that the acceptance reached him on or before August 31st, 1895. It was not in his power, after plaintiffs' acceptance was mailed, and before that date, to withdraw his offer. Wheat v. Cross, 31 Md. 103; Tayloe v. Merchants' Fire Ins. Co., 9 Howard, 390.

When notice of acceptance reached Wm. L. Winans it related back to the date of acceptance. The contract was thus actually made in Maryland, the offer having been both received there and accepted there, within the time prescribed for its acceptance. The contract, it is true, required the deeds, when executed, to be submitted to Wm. L. Winans, in England, for his approval and acceptance, but it named no locus solvendi, and the general rule therefore applied, requiring the debtor to seek the creditor for payment. The case of Costigan v. Sewell, 6 Gill, 232, cited by defendants in support of their contention, we regard as sustaining the view we here express, and not the contrary. We have no occasion, therefore, to consider the English authorities relied on by defendants, to show that the allowance of any interest was erroneous. Our own law must determine whether any interest, and, if so, what, is recoverable. The doctrine of our Courts is that this subject is not susceptible of any fixed or general rule of law, since no two cases present the same aspect, but each must depend upon its own peculiar circumstances. There are cases, other than those of bonds, in which interest is recoverable as of right, such as on a contract in writing to pay money on a day certain; and even where not recoverable as of right, its allowance is in the discretion of the jury, according to the equity and justice appearing between the parties on all of the circumstances disclosed at the trial. Newson v. Douglas, 7 H. J. 454; Frank v. Morrison, 55 Md. 408. And in the matter of allowing interest, equity follows the law. Hammond v.Hammond, 2 Bland, 370, Brantly's note m.

The next contention of defendants, and that upon which most reliance was placed, both in the oral argument and in the brief of their counsel, was, that by the express terms and conditions of the contract, the purchase money should not be payable until a deed of the land, and an assignment of the patents should beexecuted by plaintiffs, and be submitted to Wm. L. Winans, in England, and be by him accepted as satisfactory; and that as, in fact, such executed deeds were not submitted to him in his lifetime, he was never in default; and that as there is no evidence to show that his executors did not, within a reasonable time after the delivery of executed deeds to Brown, Shipley Co., examine and approve the same and pay the purchase money, they were not in default, and hence no recovery of interest can be had against the estate of Wm. L. Winans. This defence, both by reason of the authority cited in its support, and in deference to the opinion of the learned and careful Judge who sustained the defence so far as to deny any default on the part of Wm. L. Winans, in his lifetime, requires careful consideration.

The defendants plant themselves upon the doctrine of this Court as stated by JUDGE ALVEY, in B. O.R.R. Co. v. Brydon,65 Md. 225, 226, and claim that the rights of Wm. L. Winans, under the contract at bar, are conclusively settled in his favor by that case. There, an action was brought by the vendor upon a contract for delivery of a large quantity of coal of such quality as should be satisfactory to the railroad's master of transportation and master of machinery. After delivery of a portion had been made, the railroad refused to receive further deliveries, because the officials named pronounced it unsatisfactory. The Court ruled, that if this objection was not made in good faith, the action could be maintained, and the plaintiff had a verdict and judgment, which judgment, on appeal, was affirmed by this Court. On a motion for reargument the motion was overruled, JUDGE ALVEY using the following language:

"In cases where it is stipulated that an article to be furnished shall, unqualifiedly, be satisfactory to the party to whom it is to be supplied, the right to reject the article, as not being satisfactory, cannot be inquired into; but the party's own determination must be taken as final and conclusive * * *. It is quite permissible to parties to enter into such contracts, and where the approval or satisfaction of the party is made a condition precedent to the right to receive compensation, or the contract price, for the article to be delivered, the Court has no power or right to dispense with the condition, and say that the article was of a quality or character that ought in reason to have been accepted as satisfactory. If the plaintiffs think proper to enter into such conditional contract, it is not for any one else than the defendant to say that he ought to be satisfied; that is a matter expressly reserved to the defendant to decide for himself, and the reasons or motives for the decision whether reasonable or unreasonable, good or bad, are placed by the contract beyond question or investigation. For instances of this class of contracts, and as illustrations of the application of the principle here stated, I may refer to the cases of Andrews v. Belfield, 2 C.B. (N.S.), 779; McCarren v. McNulty, 7 Gray, 139; Brown v. Foster,113 Mass. 136; Zaleski v. Clark, 44 Conn. 218; Rossiter v.Cooper, 23 Vt. 522; Hart v. Hart, 22 Barb. 606; Gibson v.Cranage, 39 Mich. 49; Wood Reaping Co. v. Smith, 50 Mich. 565. "

An examination of the cases cited by JUDGE ALVEY, above, discloses that they all relate either to the manufacture or furnishing of some article, or the rendering of some service involving personal taste, feeling or judgment, such as the painting of a portrait, the execution of a statue or bust, the making of a suit of clothes, or a lady's dress, the manufacture of a book-case designed to harmonize with other house furnishings, the sale of a riding or driving horse, the use of a reaping machine, or similar instances. In all such cases, as in the case of coal for steaming purposes, there can be, we think, no doubt of the correctness of the principles declared by JUDGE ALVEY, but we have been referred to no case in which these principles have been applied to the title of land, and we do not think it follows from any of the cases cited, that they would be so applied. In the recent case of Pennington v. Howland, in the Supreme Court of Rhode Island, 41 At. Rep. 891, where suit was brought to recover the contract price for a portrait painted of defendant's wife, many of the cases cited by JUDGE ALVEY, with others, were reviewed, and the Court, in discriminating the cases which do from those which do not stipulate for personal satisfaction as distinguished from satisfaction as to quality, workmanship and other like considerations, says: "If one agrees to sell land with a satisfactory title, and shows a title valid and complete, the parties must have intended such a title to be satisfactory, rather than to leave an absolute right in the purchaser to say `I am not satisfied,' when no reason could be shown why he was not satisfied." So in Fagen v. Davison, 2 Duer, 153, it was said: "A title which is required to be satisfactory to the party by whom it is to be received, means a title to which there is no reasonable objection, and with which the party ought to be satisfied. Such a title he is bound to accept." And in Lord v.Stephens, 1 Younge Collyer, 222, the the clause in question, was: "In case the title shall not be satisfactory to the said Richard Stephens, these presents shall be void to all intents and purposes," and LORD ABINGER held that the purchaser could make no other than the usual objections. But without attempting to decide whether the title to land is excluded from the operation of the rule under consideration, it is to be observed that in Brydon'scase, as in all those like it, the question was whether the defendant could be required to accept and pay for the article in question, when he had stipulated he should not be required to do so, unless it was satisfactory to him — in other words, whether there was any enforceable contract at all, if the article was not satisfactory to him. In such case his dissatisfaction with the article avoided the contract, and both parties were released from its obligations. But in the present case, the question is not whether there is an enforceable contract, butwhen it was to be performed by the parties, and what duties were by it imposed upon each in its performance. Wm. L. Winans never repudiated the contract or declared he would not perform it. On the contrary, he steadily maintained his right to retain the purchase, though he failed to indicate to the plaintiffs the grounds of his dissatisfaction with the form of deeds tendered without execution, but with his assent for examination in ample time for completion of the purchase before the date fixed by him for that purpose. He stood in his lifetime, and his executors stand now, upon the technical defence that executed deeds were not tendered for his examination, and that this was a condition precedent to the expression of his satisfaction or dissatisfaction, and to payment of the purchase money. But when plaintiffs wrote him Sept. 6th, 1895, suggesting that the form of the deeds might require some time to arrange to his satisfaction, and that he authorize some one to prepare such form, he replied on Nov. 12th, 1895, "If you desire to commence drafting the documents required by my offer for passing the title, and submit them to Mr. Lanahan's examination, and then to me for my examination, whether I find them satisfactory, I have no objection to your doing so." At this same time he sent to Mr. Lanahan copies of deeds accepted by him in a previous purchase from another person of a one-tenth interest in these same properties, to be followed by plaintiffs in drafting their deeds, and they were so followed by them, and those drafts were forwarded to him for his examination, and were received by him Jany. 6th, 1896, nearly two months before the date fixed by him for delivery of the deeds and payment of the purchase money. Had he replied to plaintiffs' letter of Sept. 6th, 1895, that onlyexecuted deeds could be tendered for his examination, and had he then directed his attorney to prepare the deeds (that being the duty of the vendee in the absence of special agreement), or had he authorized plaintiffs to prepare them, it would then have been their duty to tender such executed deeds for examination, as a condition precedent to demand of the purchase money on the day fixed for its payment. Perhaps, even, when he received the unexecuted deeds Jany. 6, 1896, if he had then returned them, and insisted upon their execution, before submission for examination, he would have had the right to do so. But he did neither. On the contrary, he acknowledged their receipt Feby. 14th, 1896; stated he was then examining them, and would write to Mr. Lanahan and to plaintiffs concerning them after such examination. Here, then, is a plain and unequivocal waiver of the right to have executed deeds submitted for his examination, and we are thereby relieved from the necessity of further considering this aspect of the case. The unexecuted drafts of deeds having been prepared in exact conformity with the forms sent by him for that purpose, it would have been idle to execute and submit duplicates — which could not be satisfactory, if those in his possession were unsatisfactory — and it would have been equally idle to execute and submit deeds not conforming to those which he had sent to be followed. By his course of dealing in preparing and forwarding forms to be followed, he had in effect declared in advance his approval of those forms, if correctly followed, and for any errors therein, occasioned by himself or his agents, the plaintiffs could not be held responsible nor be visited with any loss arising therefrom.

The fourth clause of the offer of purchase provides that "the sale, giving up, and conveyance, assignment and transfer, shall be executed and completed by you, and all others necessary on the part of the estate of DeWitt Clinton Winans, as stipulated in this letter, within six months thereafter (that is, from Aug.31st, 1895); and the consideration of $126,000, which I have by this letter offered to pay for said two shares, shall be paid to you, or to your order, at the time of delivery to me, and myacceptance as satisfactory, of the documents required for the completion of said sale, giving up and conveyance." By the true construction of this contract, everything to be done by either party thereto, was to be done on or before Aug. 31, 1895. If the plaintiffs had failed to tender for examination executed deeds within that period, and no waiver of this requirement had beenmade, Wm. L. Winans could not have been required to take the property and pay the purchase money, and if executed deeds had been tendered Jany. 6th, 1895, when the unexecuted drafts were submitted under the waiver we have found, he would have lost his arbitrary right of rejection because of mere dissatisfaction, upon failure to declare such dissatisfaction within the six months; and thereafter, he could have relied upon none other than ordinary and reasonable objections. To hold otherwise would be to destroy the mutuality which must characterize every fair and rational contract, and which we think is apparent upon the true construction of the contract before us.

Moreover, Mrs. Williams' petition, which is under oath, states that she had directed her counsel to take proceedings for the partition of the real estate, so that her interest therein, when thus set apart, could be sold and made productive of income, and that the prospect of the sale to Wm. L. Winans, though at what she considered a low valuation, induced her to forego these proceedings and consent to the sale to him. In corroboration of this statement by her, and as independent proof of Wm. L. Winans' knowledge of the situation in this regard, the fifth clause of his proposition states that "the offer made by this letter is made with the view, amongst other considerations, of preventingany proceeding in Court, or elsewhere, concerning the partition or division of the Ferry Bar property, or the sale of all, or any part of it, * * * and that in event of any proceedings, in Court or elsewhere, by Mrs. Williams, or any one else, for the partition of the Ferry Bar property, or the sale of, or any part thereof, I reserve the right, if I choose, to terminate all proceedings for the purchase under this letter, and such termination by me shall render null and void all that may have been previously done hereunder."

It was entirely reasonable that proceedings for partition or sale should be prohibited for the six months stipulated during which each party was bound by the contract, but to bind the life-tenants indefinitely, after the expiration of the six months, and after Wm. L. Winans, upon his theory, was no longer bound to take the property, would be to inflict upon them a wrong which cannot be justified by any rule of law, or by any sound reasoning. By the course of Wm. L. Winans, in waiving the tender of executed deeds for examination, and in receiving in lieu thereof unexecuted drafts, in promising from time to time to examine the drafts submitted, and to advise whether they were satisfactory — and in delaying and neglecting for nearly two years to comply with these promises, he practically obtained the control and possession of the life-estate in this property — and if he is now discharged from liability for interest on the purchase money, the life-estate, to that extent, will be appropriated by him in disregard of the contract and without compensation. By his conduct the conditional sale provided by the contract was made absolute upon the principle applied in Delameter v. Chappell,48 Md. 244. This principle is clearly recognized in the recent case of Pistel Ridgaway v. Imperial Mutual Ins. Co.,88 Md. 552, in which JUDGE BOYD discriminates the cases in which the defendant gets the plaintiff's property and then wilfully refuses to pay for it, from those in which the approval or satisfaction of the purchaser is a condition precedent to the acquisition of possession and control by the defendant, as well as to the acquisition by the plaintiff of the right to recover compensation, or the contract price. And we think that Wm. L. Winans had no more right, under this contract, to affirm, as he did, "a binding bargain and sale," after March 1st, 1896, and yet withhold interest on the purchase money, than a purchaser who had obtained actual physical control of the subject of the contract, and had dealt with it as his own, would have had to refuse payment and tender back the thing purchased.

This view is sustained by the authority of Mr. Sugden, who says in vol. 2, p. 314 (Sug. Vend.): "A purchaser is entitled to the profits of the estate from the time fixed for completing the contract, whether he does, or does not, take possession of the estate, and as from that time the money belongs to the vendor, the purchaser will be compelled to pay interest for it, if it be not paid at the day. If the delay in completing the contract be attributable to the purchaser, he will be obliged to pay interest on the purchase money from the time the contract ought to have been carried into effect, although the purchase money has been lying ready and without interest being made of it." The same rule is laid down in Pomeroy on Contracts, sec. 429; and inSteenrod v. W.P. B.R.R., 27 W. Va. 15, it is said: "If the vendee would escape the payment of interest on the purchase money, even when the delay in the payment is caused by the default of the vendor, he must actually set aside the money, and appropriate it for the vendor, and must notify him of these facts and that the money is thus lying idle." To the same effect also is Calcraft v. Roebuck, 1 Vesey, Jr., 221.

Upon the whole case, we are of opinion that, upon waiver by Wm. L. Winans of the tender of executed deeds for examination, and the receipt of unexecuted drafts tendered for that purpose with his assent, he was bound to signify before March 1st, 1896, his satisfaction or dissatisfaction therewith, so as to enable the plaintiffs either to execute at once the drafts, if found satisfactory, or to correct any errors pointed out and to execute corrected deeds before March 1st, 1896; and that the delay thereafter in the execution and delivery of corrected deeds was wholly due to the default of Wm. L. Winans.

We are also of opinion that all the loss and damage occasioned thereby should be borne by his estate, and that the proper measure of such loss and damage is interest at the rate of six per cent. per annum upon the purchase money from March 1st, 1896, to date of payment, March 14th, 1898, together with the taxes paid by plaintiffs on the property, and which have become chargeable to it since March 1st, 1896.

The decree of the Circuit Court will be reversed and the cause remanded that a decree may be passed in conformity with this opinion.

Decree reversed, with costs above and below, to the executorsof DeWitt Clinton Winans, and cause remanded.

(Decided June 22d 1899).