Opinion
No. 28923.
June 9, 1931. October 10, 1931.
1. VENDOR AND PURCHASER.
Purchaser, obliged under contract to accept deed to land under lease to certain party, was under no obligation to accept deed when land was leased to another tenant at lesser rental.
2. VENDOR AND PURCHASER.
Vendor held not entitled to specific performance where unable to deliver possession with deed as contract required.
3. SPECIFIC PERFORMANCE.
Vendor is entitled or not to specific performance according to circumstances of case.
4. SPECIFIC PERFORMANCE.
Vendor, having unreasonably delayed performance, during which time land materially decreased in value to purchaser's prejudice, held not entitled to specific performance.
5. VENDOR AND PURCHASER.
Vendor unable to deliver possession of land with deed as contract required could not recover damages for purchaser's failure to accept deed.
6. SPECIFIC PERFORMANCE.
Where vendor was unable to deliver possession of land with deed as contract required, purchaser, defendant in specific performance suit, could recover earnest money paid with interest.
APPEAL from chancery court of Bolivar county, Second district; HON. HARVEY McGEHEE, Chancellor.
Maynard, FitzGerald Venable, of Clarksdale, for appellant.
At time performance was demanded by complainant he, himself, was not in position to perform, having disqualified himself from so doing.
A contract to convey, if not otherwise stated, is one to convey free from encumbrances.
39 Cyc. 1496; 39 Cyc. 1487 and cases cited, note 90; Nash v. Phillips, 2 Miss. Dec. 628; Roberts Corley v. McFadden, 74 S.W. 105.
A conveyance of land subject to a lease is one subject to encumbrance which a vendee is not obliged to take.
Thurman v. Pointer, 67 Miss. 297.
By making lease complainant disabled himself from performing contract and so breached contract.
Hawkins v. Merritt, 19 So. 289; Hester v. Hooker, 7 S. M. 768-779.
Specific performance is not a matter of right but is addressed to the judicial discretion of the court.
Hester v. Hooker, 7 S. M. 768; Daniel v. Frazer, 40 Miss. 507; Joffrion v. Gumbel, 48 So. (La.) 1007; King v. Hamilton 4 Pet. U.S. 311; Clement v. Reid, 9 S. M. 535; Boldt v. Early, 104 A.S.R. 255; Young v. Rathbone, 84 Am. Dec. 151; Gas Co. v. Gas Co., 289 Fed. 826.
Material change in the situation of the parties, without fault, which would work great hardship and injustice if specific performance be required, is ground for its refusal.
Brashier v. Gratz, 5 L.Ed. 322; Green v. Coveilland, 70 Am. Dec. 725; Young v. Rathbone, 84 Am. Dec. 151; Boldt v. Early, 104 A.S.R. 255 Note; Holdgate v. Eaton, 29 U.S.L.Ed. 538; Rogers v. Sanders, 33 Am. Dec. 635; Patterson v. Martz, 34 Am. Dec. 474; Liddell v. Sims, 9 S. M. 596; Merrit v. Brown, 84 Am. Dec. 155; Twinlock Oil Co. v. Marbury, 91 U.S. 587; Vanburen v. Starkling, 49 N.W. 50; Hallett v. Parker, 39 A. 433; Chicago, etc., R.R. v. Stewart, 19 Fed. 5.
The complainant being unable to perform, and the contract having been rescinded because of the inability of the complainant to perform it, the defendant is entitled to recover earnest money paid.
Elterman v. Hyman, 127 A.S.R. 860. Cutrer Smith, of Clarksdale, for appellee.
In event of the death of a party to a cause, which is on appeal to the Supreme Court, the death of said party occurring prior to the rendition of a decree or judgment therein, and even after a suggestion of error had been overruled, renders the said opinion and judgment thereon void and entitles the legal representatives to again present the merits of the cause on the record as made up.
Chapman v. Machinery Co., 77 Miss. 890; Section 3384, Code of 1930.
Equity may enforce the specific performance of a contract for the sale of land although the vendor may have had no title at the time of the sale or even at the time of the filing of the bill, if he can make a good title at the time of the decree.
25 R.C.L., Specific Performance, sec. 50; Hepburn v. Auld, 5 Cranch 262; Hepburn v. Dunlop, 1 Wheat 179.
The word "possession" does not imply occupation or residence.
U.S. v. Arrendondo, 6 Peters 601-793, 8 L.E. 547.
The word "possession," as used in giving the remedy of partition, means the possession which the law imputes to the holder of the legal title.
Heinze v. B. B. Consl. Mining Co., 120 Fed. 1, 61 C.C.A. 63; Wombel v. Pike, 87 P. 427-9, 17 Okla. 122.
Where a stipulation relates to a guaranty for the payment of rent due under a lease, while the tenant was in occupation of the premises, the word occupation will be construed to mean in possession.
Woods v. Broder, 113 N.Y.S. 335, 129 App. Div. 122.
And again a strict tender is not necessary when the defendant repudiate any obligation on their part, or where it is evident from the facts of the case that any tender would be refused by the defendants, so that if made, it would be but an idle and unnecessary ceremony.
Griffith's Chancery Practice, seec. 523.
It seems to be sufficient if the plaintiff show that the defendant would have refused the tender if it had been made and that a purchaser need not aver a tender of performance, if he avers that the defendant has repudiated the contract.
25 R.C.L., Specific Performance, sec. 152; Bateman v. Hopkins, 157 N.C. 470; Marten v. Merritt, 57 Ind. 34.
A bill for a specific performance or for the rescission of a contract is addressed to the sound discretion of the court. No certain definite rule can be laid down which would determine when a party was or was not entitled to such relief. When the complainant has not done all that he stipulated to do, or has not placed himself in a situation to be ready to do so upon compliance on the other side, the court would not interpose in his behalf.
Hester v. Hooker, 7 S. M. 778.
While it may be true that a contract will not be enforced, which imposes a hardship on one of the contracting parties, yet this question of hardship of the contract, like others of like character, should be judged of as of the time it was entered into and not by subsequent events; and the fact that a contract was fair when made and has become a hard one by force of changing events or subsequent circumstances, will not necessarily prevent specific performance.
25 R.C.L., Specific Performance, secs. 16-22.
The equitable rule is established by numerous authorities, that where time is not of essence of the contract, and is not made material by the offer to fulfill by the other party, and request for a conveyance, the seller will be allowed reasonable time and opportunity to perfect his title, however defective it may have been at the time of the agreement. And in all cases it is sufficient for the seller, upon a contract made in good faith, if he is able to make the stipulated title at the time when, by the terms of his agreement or by the equities of the particular case, he is required to make the conveyance, in order to entitle himself to the consideration.
Dresel v. Jordan, 104 Mass. 407, at 415; Felts v. Moss, 85 So. 656; 39 Cyc. 1326; 27 R.C.L. 445.
Having knowledge of the pendency of the Irwin suit, and electing to continue the time of performance to such time as necessary, or reasonable, to dispose of the case, appellant's decedent cannot be heard to object to delay in the performance. The delay thus occasioned was reasonable, and if we were to assume the contrary to be true, appellant's decedent waived the delay by acquiescing in the method and manner adopted in clearing the title.
13 C.J. 683.
After appellant's decedent had waived the time of the performance, appellee was not in default until appellant's decedent demanded a compliance with the contract, and the lapse of a reasonable time to comply with the demand.
Garrison v. Newton, 96 Wn. 284, 165 P. 90, 4 A.L.R. 804.
The mere decline in the value of the land, from the date of the contract to the date of the offer of performance on the part of appellee, cannot permit appellant's decedent to resist a specific execution at the suit of appellee.
Pomeroy's Specific Performance, p. 397.
When the lessee was apprised of the rights of a third party in and to the property, sought to be leased, this notice is tantamount to full knowledge of everything, "to which such attention or inquiry might reasonably lead."
Baldwin v. Anderson, 103 Miss. 462; Ladnier v. Stewart et al., 38 So. 748; Sanford et al. v. Lumber Co., 83 Miss. 78.
Argued orally by Ed Smith for appellee.
On a former day of this term, March 30, 1931, this court rendered its opinion herein and entered its judgment reversing the cause and rendering a decree here for the appellant. 133 So. 217. Thereafter, on April 30, 1931, the appellee, through his counsel, filed a suggestion of error which has since that date been pending here. On May 6, 1931, counsel for the appellee filed a petition for revivor, in which it is made known to the court that Paulus Horn, the appellee, died on the 27th day of March, 1931, and was dead on the date of the rendition of the judgment herein. The judgment heretofore rendered will therefore be vacated, the former opinion withdrawn, and this cause will be revived in the name of the petitioners, legal representatives and heirs at law of Paulus Horn, deceased, and the cause will be remanded to the docket and set for hearing on the first call of Division A in September, 1931, to which term and date this cause is continued.
Counsel for Mrs. Callicott may, if they see proper, answer the brief on suggestion of error now on file.
Chapman v. White Sewing Machine Co., 77 Miss. 890, 28 So. 749, is authority for the procedure herein outlined.
Former decree vacated, and cause ordered revived in the name of the petitioners.
Horn sued Callicott for the specific performance of a contract by which Callicott agreed to purchase from him certain land. Callicott died while the suit was pending, and the suit was revived in the name of his widow, who had qualified as the administratrix of his estate. Callicott made his answer a cross-bill, and prayed for a decree awarding him a judgment for one thousand dollars earnest money paid Horn. There was a decree for Horn in accordance with the prayer of his bill of complaint.
That decree was reversed at the last term of this court, and a final decree was rendered here denying Horn the relief prayed for and awarding the administratrix a judgment for the one thousand dollars earnest money paid Horn by Callicott. 133 So. 217. While a suggestion of error therein was pending, it was ascertained by counsel and made known to the court that Horn had died a few days prior to the rendition of the judgment here. That judgment was thereupon vacated ( 135 So. 215), the case was remanded to the docket, revived in the name of Horn's administrator, and reargued by counsel.
After mature consideration, we feel constrained to adhere to our former opinion, after eliminating one of the grounds thereof, the decision of which in the appellee's favor would not entitle him to an affirmance of the decree, and which we think it best to not now decide. The former opinion will be withdrawn, but the case will be stated and disposed of in the language thereof, except in so far as it is necessary to vary the same in order to eliminate the first of the three grounds on which the decision was then based, and to respond to after argument of counsel.
On January 6, 1920, a written agreement was entered into between Callicott and Horn, by which Horn agreed to sell, and Callicott to buy, certain lands in Bolivar county, Mississippi, for the sum of forty thousand dollars of which one thousand dollars was paid by Callicott when the contract was signed, the remainder to be paid as follows: five thousand dollars in cash upon delivery of deed to, and abstract of title of, the land; and five thousand dollars annually thereafter, beginning on the 1st day of January, 1921. The contract stipulates that "possession is to be delivered upon delivery of deed and abstract, subject however to the present rent contract of C.C. Stanley for the years 1920 and 1921." The one thousand dollars paid Horn was to be refunded by him in the event the sale of the land was not consummated.
When this contract was executed, a suit, of which the parties to the contract were not aware, had been begun in the chancery court of Bolivar county against Horn by Irvin, challenging his title to the land; and because thereof Horn was unable to comply with his contract to sell to Callicott.
A short while thereafter Horn and Callicott agreed that the execution of the contract might await the termination of this suit, both of them being of the impression that it could be brought to an end in the succeeding summer or early fall. The suit remained undisposed of until some time in January, 1921, and a deed to and an abstract of title of the land were tendered by Horn to Callicott in February thereafter.
In the meantime, land in Bolivar and surrounding counties had suddenly, rapidly, and very materially declined in value, so that, when the deed to this land was tendered to Callicott, it was worth very much less than when he contracted to purchase it. Callicott intended to resell the land, and could have sold it at a reasonable profit, had he obtained title thereto prior to January 1, 1921. When the deed was tendered to Callicott, Horn had leased the land to another for the years 1921 and 1922, without Callicott's consent.
The contract of purchase provides that "the parties of the first part agree to furnish to the party of the second part, a complete certified abstract showing good and merchantable title to said land, and agree to make or cause to be made and delivered, a good and sufficient warranty deed conveying said property in fee simple to the party of the second part, or his assigns."
One of the appellant's contentions is that the appellee should have introduced, but did not introduce, evidence disclosing his title to the land. One of the appellee's contentions in this connection is that it was not necessary for him to prove that he had title to the land, for the reason that the appellant agreed to accept his warranty deed thereto when furnished with a "complete certified abstract showing good and merchantable title to said land."
The decision of that question, as hereinbefore stated, will be pretermitted and no opinion whatever expressed thereon.
Stanley, to whom the land had been leased by Horn for the years 1920 and 1921, was under contract to pay an annual rental of two thousand three hundred sixty-seven dollars therefor. He abandoned the land, and without Callicott's consent, and before Horn tendered him the deed to the land, Horn leased it for the year 1921 to Day for a rental of one thousand three hundred fifty dollars. Afterwards Horn again leased the land without Callicott's consent to Day, in 1922, for a rental of one thousand five hundred dollars. Day testified that his lease was subject to this contract of sale, though exactly what he meant thereby does not appear, nor does it appear that Horn could have delivered possession of the land to Callicott free from this lease. One of the contentions of counsel for the appellee in this connection is that the stipulation of the contract hereinbefore set out as to the delivery of possession of the land by Horn to Callicott means "that delivery which is to be effected by the attornment of a tenant." Callicott's obligation was to accept a deed to the land, though under a lease to Stanley for a stipulated rental. He was under no obligation to accept the deed when the land was leased to a tenant other than Stanley at a lesser rental.
The appellee being unable to deliver such possession of the land along with the deed thereto, as his contract required, Callicott was under no obligation to accept it, and Horn was without the right to a decree for a specific performance of the contract. Thurman v. Pointer, 67 Miss. 297, 7 So. 215; Hester v. Hooker, 7 Smedes M. 768.
A vendor of land is entitled or not to the specific performance of his contract of sale according to the circumstances of the case, Liddell v. Sims, 9 Smedes M. 597; and one circumstance which bars his right thereto is an unreasonable delay on his part to comply with his contract, during which the land had so materially decreased in value as to render it inequitable to force the vendee to accept it. 36 Cyc. 726; Liddell v. Sims, 9 Smedes M. 596; Young's Adm'r v. Rathbone, 16 N.J. Eq. 224, 84 Am. Dec. 151; Bryan v. Lofftus' Adm'rs, 1 Rob. (40 Va.) 12, 39 Am. Dec. 242; Brashier v. Gratz, 6 Wheat. 528, 5 L.Ed. 322; Holgate v. Eaton, 116 U.S. 33, 6 S.Ct. 224, 29 L.Ed. 538. Callicott was without fault in the delay here, and, as hereinbefore set forth, was materially prejudiced thereby, and therefore it would be inequitable to force his administratrix to accept and pay for the land.
The court below should have declined to grant the relief prayed for by Horn.
This brings us to the prayer of the cross-bill for a judgment against the appellee for the one thousand dollars earnest money paid by Callicott. One of the appellee's contentions in this connection is that, if he is not entitled to a decree for specific performance, he would be entitled to a judgment at law against the appellant for damages, because of Callicott's refusal to accept the deed to the land, and therefore no judgment for the earnest money should be here rendered. Leaving out of view the second ground on which the decree of the court below is reversed, the first ground thereof, i.e., the inability of Horn to deliver possession of the land to the appellant when the deed thereto was tendered, relieved Callicott of any obligation to accept the land, and prevents the appellee from obtaining either a decree for the specific performance of the contract or a judgment for damages against the appellant because of Callicott's failure to accept the deed. The court below should have awarded the appellant a recovery of the one thousand dollars earnest money, with interest thereon at the rate of six per cent per annum from the filing of the cross-bill.
Reversed, and decree here for the appellant in accordance with the prayer of the cross-bill.
Reversed, and decree here for the appellant.