Opinion
(December Term, 1849.)
A. purchased a tract of land from B. and, afterwards, supposing that B. had not a good title, procured a conveyance from C., the original owner, under whom B. claimed. Held, that if B.'s title was but an equitable one, when A. was induced to believe that it was a legal one, upon B.'s refusal to procure and convey the legal title, A. had a right to have the contract rescinded. But, as he chose to purchase the legal title himself, he cannot claim more from B. than to be reimbursed what it cost him to get the legal title.
CAUSE removed from the Court of Equity of RANDOLPH, at Fall Term, 1848.
Morehead for plaintiff.
Iredell for defendant. (448)
On 22 January, 1844, the defendant sold to the plaintiff a tract of land containing 100 acres, on a short credit, at the price of $100, and he then executed a conveyance to the plaintiff, with general warranty, and took his bond for the purchase money. The defendant represented that the title was good, and the plaintiff purchased without further examination. The land was granted in 1838 to one John Cooper, who shortly afterwards removed to Illinois. In 1841 one Jesse Cooper, a brother of John, came in from Illinois, and, alleging that he had purchased the land from his brother, sold it to the defendant at the price of $50, and made him a deed. Jesse Cooper had then in his possession the original grant, and also a manuscript copy of it, with the difference that Jesse Cooper's name was inserted in it instead of John, as the grantee, and that it was signed by John Cooper, and dated 27 November, 1840; and when he, Jesse, made the conveyance to the defendant he delivered to him also the other two papers. The latter was without a (446) seal or subscribing witness, and it was represented by Jesse Cooper to be the conveyance made to him by John Cooper. In April, 1844, John Cooper wrote to the plaintiff that he had never conveyed or contracted to sell the land to Jesse Cooper, but that he still owned it and wished to sell it. Upon receiving this information, the plaintiff communicated it to the defendant; and the defendant replied that John Cooper did sell and convey the land to Jesse, and, as proof of it, the defendant produced and delivered to the plaintiff the grant and the said paper so signed by John Cooper, and represented that they were the title papers, under which Jesse Cooper claimed, and which he had delivered to the defendant when he made the deed to the defendant. John Cooper came to this State in May following, and made claim to the land; and the plaintiff then purchased from him and took a conveyance, expressed to be in consideration of $105, containing covenants of general warranty and against encumbrances.
The bill was filed in June, 1846, and states that John Cooper did not sell or convey to Jesse, and that Jesse's representations to the defendant on that subject were false; that when the plaintiff received the grant and other papers from the defendant, he became satisfied that the title was defective, and urged the defendant to get a conveyance from John Cooper in order to complete the title; that the defendant insisted that the paper purporting to be signed by John Cooper was a good deed, and passed his title to Jesse Cooper, and that it was then vested in the plaintiff, and the defendant refused to proceed further in the business; that the said John Cooper threatened to bring an ejectment against him; and the plaintiff, knowing he could not defend it successfully, made the purchase from John Cooper before mentioned. The prayer is (447) that it may be declared that the defendant's deed to the plaintiff passed no title, and therefore that the plaintiff ought to be relieved against the bond for the purchase money, as having been obtained without consideration, and, to that end, for an injunction against a judgment at law on the bond.
The answer states that Jesse Cooper represented to the defendant that John Cooper had sold and conveyed the land to him, and, as he had the grant and also a deed from John to him in his possession, the defendant believed him and purchased the land from him, and took those papers with the deed to himself. The defendant further states that, besides the price ($100) which the plaintiff was to give him, it was agreed orally between them that if any gold should be found on the land, the plaintiff was to give the defendant one-half. He admits that the plaintiff afterwards informed him that John Cooper denied having sold or conveyed to Jesse Cooper, and that he claimed the land, and applied to the defendant to complete the title; and he says that he then insisted that John Cooper had conveyed to Jesse by a good deed, and had no title; and that he then produced the grant to John Cooper and his deed to Jesse Cooper, and delivered them to the plaintiff, and that he received them and professed to be satisfied that John had no title. The answer states the defendant believed that the plaintiff's subsequent purchase, or pretended purchase, from John Cooper was intended fradulently [fraudulently] to get clear of that part of the bargain respecting the gold, which both parties thought then to be binding; and that the defendant believes further that the plaintiff did not pay Cooper anything for the land. The answer then avers that John Cooper did sell to Jesse Cooper, and that the said instrument, purporting to have been made by John Cooper, was executed by him, and it insists that it is a good and valid conveyance, whereby the defendant was seized of the premises in fee at the time he sold to the plaintiff.
The title is certainly defective, as the paper from John to Jesse Cooper is not a deed; for, supposing it to have been signed by John, it is not sealed, nor attested, nor acknowledged. The plaintiff had no knowledge of the defect when he bought; for the defendant, though he had that paper in his posession [possession], did not then show it to him. The equity between the parties in that state of the case would soon be evident. As the purchase money was not paid, and the vendor had represented the title to be good and covenanted for it, and the vendee did not know otherwise, the latter had a right to insist on its being made good. In order to avoid circuity of action and to secure the purchaser from loss by insolvency of the other party, equity would suspend the payment of the purchase money until the defect should be supplied, and, indeed, after a reasonable time, would, at the instance of the purchaser, rescind the contract; for when one bargains for a good title he has, in the view of a court of equity, a right to have it made good, as long as the contract in any part is unexecuted; and the case is therefore in such a state that the Court can lay hold of that part of it and thereby enforce the parties to a faithful fulfilling of the bargain as it was identified between them. That is always the case when the purchase money is behind; for the Court is able to treat that as a subsisting and stable security, which the vendee ought to have, and it will not put him off with the personal responsibility of the vendor on a remote breach of the covenant for quiet enjoyment. That is the equity between parties when neither was aware of the defect of the title; for the equity goes on the view taken by the Court of the representations and covenant respecting the title, as obliging the seller to perform it specifically before he can draw (449) the price out of the hands of the other party. It is a jurisdiction in the nature of decreeing specific performance, and, in the meanwhile, allowing the purchaser to hold to the security he has in the purchase money. It is singular that the defendant could have thought the paper signed by John Cooper was a deed; and it might be strongly suspected that he doubted it, and that it was for that reason he did not show it to the plaintiff. But no stress is laid on that, since the plaintiff's equity, as the matter now stands, does not depend on that at all. If he did not know that the title was defective, then, upon the discovery of it, the vendor had the same right to complete the title as the vendee had to require him to do so. The plaintiff, after taking a deed and going into possession under it, could not rescind at once, upon finding a flaw, but the other side had a right to mend it. Then the plaintiff's duty was to inform the defendant of the defect, when he found it out, and request him to make the title good. That is what he did. If the defendant had then got a good deed from John Cooper, that would have put the title to rest. But he did not; and, insisting most erroneously, indeed, that the title was good, he refused positively to move another step. Now, whether the defendant knew, or not, that the title was defective, it was so; and in either case the plaintiff might well have insisted that he was not always to be held in a state of uncertainty, and therefore declared the bargain at an end — that is, after a fraud, or an express refusal to complete the title. But the plaintiff did not take that course; nor was he bound to do so; for he might wish to hold the land, and he is entitled to have it made good to him, at least as far as his purchase money will go towards effecting it, since the one party, as much as the other, has the right to make good the contract by completing the title. Here, instead of availing himself of the power to annul the contract after the (450) defendant's refusal to buy John Cooper's outstanding legal title, the plaintiff, without further communication with the defendant, took a deed from Cooper to himself, and then filed this bill, asking peremptorily, in the first place, to have the first contract rescinded. But he cannot get that, for he has now a title to the thing which he bought from the defendant. Then, the equity between the parties, now, seems to be easily understood as that which before existed. It is that the plaintiff shall be reimbursed by the defendant what it cost him to get the legal title. At least, that is the utmost he can claim; for, being in possession under the defendant, he may by that means have made his last purchase the easier and upon better terms, and therefore his first vendor has a right to participate in the benefits derived therefrom. The parties stand in such a relation that while the plaintiff held to his possession and deed, obtained from the defendant, he could not appropriate to himself exclusively any benefits derived from dealing for the land. The plaintiff was not obliged to buy from Cooper, but, without first being off with Gray, he could not so bargain with another as to secure to himself an election to rescind and to leave none to the other party. If, then, the plaintiff had got the deed from Cooper for nothing, he would have no right to disturb his bargain with the defendant; or, if he had paid a price, he could only ask for an abatement pro tanto out of the purchase money. He says he paid $105, but that is denied and not proved, and therefore an inquiry must be directed on that point. If it should turn out that he did pay or oblige himself to pay that sum, it will not be a case of abatement, but of consumption of the purchase money, and the plaintiff would be entitled to a perpetual injunction; that is to say, provided he gave no more for the conveyance from John Cooper than it was worth; for although the legal title of Gray was defective for the want of a formal deed from the patentee, yet the defendant alleges that in fact that person sold to Jesse Cooper or in some (451) way authorized him to make sale of the land, and to that end put into his hands the grant and the other papers, and that the paper may at least be regarded as a binding contract, if not a deed; and those papers had been communicated to the plaintiff before he made his bargain with John Cooper. Therefore the defendant urges that the plaintiff bought at the risk of taking from Cooper a title not worth the buying. Now, it might be that the defendant declined purchasing from Cooper because he considered that he already had his title in equity, and could compel him to convey. That would have been a justifiable ground for refusing, as he might have believed that Cooper would not sue for the land and expose himself to the cost of a suit in equity. In that state of things the plaintiff assumed too much in taking on himself to determine that Cooper's title was good, and, so, purchase it with the view of charging the defendant, absolutely, with what he might think proper to give for it. The plaintiff is not entitled, then, to what he paid or agreed to pay Cooper, but to only to as much as Cooper's title, legal or equitable, such as it was in reality, was truly worth, or, rather what it would have cost the defendant to get it in. The plaintiff can justify claim as much only as he saved the defendant by dealing for the land; for the purchaser has no right to constitute himself the agent of the vendor, so as to bind him absolutely for whatever he may choose to give for an outstanding claim, whether good or bad. The purchaser buys in such a claim at the risk of losing, because the title is good for nothing, or because it was a naked legal title, and could have been obtained at less expense by legal proceedings. Then, the rights of these parties depend upon the inquiries of fact whether John Cooper did or did not contract with Jesse Cooper for value so as to bind him to convey the premises to the latter in fee, or in any sufficient manner authorize (452) Jesse Cooper to contract for the sale thereof on his behalf; and, if so, what it would reasonably have cost the defendant or the plaintiff to have compelled John Cooper to make a proper conveyance of the premises; or, if there was no such contract or authority on the part of John Cooper, what the title conveyed by him to the plaintiff was worth at the time of conveyance, and whether the plaintiff paid or agreed to pay for the same; and it must be referred to the master to have those inquiries made.
PER CURIAM. Decree accordingly.
Cited: Barcello v. Hapgood, 118 N.C. 732; Van Gilder v. Bullen, 159 N.C. 296.