Summary
In Nichols v. Freeman, 33 N.C. 99, it is said "Nichols had the right to file a bill in Equity for a specific performance, and the decree would have been for the conveyance of the property upon his paying the balance of the purchase money with interest."
Summary of this case from Freeman v. MebaneOpinion
June Term, 1850.
1. A vendee, by contract for the sale of a tract of land, can maintain an action upon the bond for title, without having made a payment or tender of the whole of the purchase money, when, by a sale of the property, it is put out of the power of the vendor to make the conveyance at the time the vendee has a right to call for it.
2. And it makes no difference whether the vendor himself has made the conveyance or whether it has been made by a sheriff under process of law.
3. In such a case, the measure of damage is the difference between the real value of the property at the time of the breach and the amount of the purchase money remaining unpaid.
APPEAL from the Superior Court of Law of BERTIE, at Fall Term, 1849, Manly, J., presiding.
Smith and A. Moore for plaintiff.
Bragg for defendant.
On 1 January, 1841, the plaintiff purchased of one Sutton "the town lot, house and furniture" in the town of Windsor, at the price of $8,000, and to secure the payment thereof executed three notes for $2,666 each, falling due on 1 January, 1842, '43, '44, and drawing interest from date, and on that day was let into possession. At the same time Sutton, with the defendant as his surety, executed to the plaintiff a penal bond in the sum of $10,000. The condition, after reciting the contract, the execution of notes for the purchase money, and that the plaintiff was let into possession, but that the title was to be held by Sutton as a further security for the purchase money, is in these words: "Now, if the said Nichols, or any other person for him, shall well and truly pay the purchase money, and the said Sutton thereafter, upon being requested, shall (100) refuse to execute a good and sufficient deed, with covenants of seizin and warranty, to the said Nichols, his heirs and assigns, for the above-mentioned property, then the obligation to be in full force; otherwise, to be void."
The action was commenced in March, 1848, and is for a breach of this bond. The breach assigned is that on 8 May, 1843, the lot, house and furniture were sold by the sheriff under executions against Sutton issuing upon sundry judgments rendered against him at August Term, 1842, of the County Court of Bertie; by reason of which sale the said Sutton was disabled, and so continued until his death, and his heirs and administrator have ever since been disabled and incapable to convey the property, according to the true intent and meaning of the bond. The declaration has several counts, setting out the breach in different ways.
It was admitted that the sheriff sold the property and made a deed to the purchaser, who evicted the plaintiff in March, 1845. In January and February, 1841, the plaintiff made payments amounting to $6,552.78. Sutton died in December, 1843, intestate and insolvent, leaving several infants his heirs. The value of the property at the time of the sale by the sheriff was $2,500. It was also admitted that the plaintiff had not tendered to pay the balance of the purchase money; and in August, 1841, he conveyed his interest in the lot, house and furniture, in trust, to secure certain of his creditors, whose debts still remain unpaid.
And it was agreed that if his Honor was of opinion that the action could not be maintained, a nonsuit should be entered; otherwise, judgment to be entered for the penalty of the bond, to be discharged by the payment of $8,060.25, if his Honor should be of the opinion that the proper measure of (101) damage was the amount which had been paid by the plaintiff, less the rent of the property, while the plaintiff was in possession (from 1 January, 1841, to 8 May, 1843, the date of the sheriff's sale); or of the sum of $207.80, with interest from 8 May, 1843, if his Honor was of opinion that the proper measure of damage was the difference between the value of the property at the time of the sheriff's sale and the balance of the purchase money remaining unpaid with interest; or of sixpence, if his Honor was of opinion that the plaintiff was only entitled to nominal damage.
His Honor was of opinion that the action could not be maintained. A nonsuit was entered, and the plaintiff appealed.
Two questions are presented. Can a vendee, without making a tender of the balance of the purchase money, maintain an action upon a bond for title, on the ground that by a sale of the property it is put out of the power of the vendor to make the conveyance at the time the vendee has a right to call for it?
Lovelock v. Franklin, 55 E. C. L., 372; Bondel v. Parsons, 10 Each., 359; Coke on Littleton, 221, and the other authorities cited by the plaintiff's counsel, fully support the position for which he contends. In Lovelock v. Franklin the defendant had put the plaintiff in possession of the house, at an annual rent, and had agreed to convey the absolute interest to him at any time within seven years on payment by him, at any time during the seven years, of the sum of $1,406. The defendant, during the seven years, sold and conveyed the premises to a third person, and the action was brought before the expiration of the seven years and without a tender of the $1,406. The Court held that the defendant had broken his contract by making the conveyance, and that the action could be maintained without a tender; for, as the defendant had put it out of his power to make the conveyance, a performance on the part of the (102) plaintiff was dispensed with, and it would have been a "vain and foolish" thing to make the tender.
In that case the action was brought before the expiration of the seven years; and it was urged that there was no breach, for the defendant might recapacitate himself to make the conveyance by purchasing back the property before the time ran out; but the Court held that there was a breach, for the defendant had incapacitated himself at the very time when he might be called on and should be ready.
In this case, from the terms of the bond, we think that the plaintiff was at liberty to pay the money at any time and call for a title before his last note became due; for the credit was given for his benefit, and he might waive it and pay sooner and stop interest; and the defendant was to convey upon the payment of the purchase money, for which purpose alone the title was retained. This action was not brought until the last note fell due; and, admitting that the defendant might have recapacitated himself by a repurchase before that time, it is sufficient to say he failed to do so, and was incapacitated at a time when he "might be called on and should be ready."
The defendant's counsel, admitting the general principle, insisted that this case did not come within it, on three grounds:
1. The plaintiff, before the sheriff's sale, had conveyed all of his interest in the property to a trustee, who had a right to call for the title. The answer is: the legal interest of the plaintiff in this bond still continues. Whether he carries on this action for his own use or for the use of another, is beside the case. This Court must act upon legal rights, and has no concern with equities.
2. It does not appear that the plaintiff was able to pay the balance of the purchase money on the day it fell due, and it is to be inferred, from his making an assignment to pay the debts which are still unpaid, that he was not. So he first (103) became incapacitated, and has no right to complain that the defendant was afterwards equally unfortunate. This objection is fully met in Lovelock v. Franklin, supra. The plaintiff was not bound to pay until his last note fell due. The defendant was bound to convey sooner, if the money had been tendered; and as he was incapacitated from doing so, a performance on the part of the plaintiff is dispensed with, and the inquiry whether the plaintiff would have been able to pay the balance of the money is precluded.
3. The incapacity was not caused by the act of the defendant, but by the act of law. The sheriff's sale was in "invitum" on the defendant's part. Several cases were cited, which show that conditions not to assign or underlet leases were not broken by an assignment under the bankrupt and insolvent laws. Those cases are all put upon a strict construction of the terms of the condition; and it is admitted by them that if the terms of the condition are made broad enough to include assignments by force of the laws referred to, such an assignment would be a breach, although made by an act of law and in "invitum." In our case the terms are broad enough. The defendant is to convey on payment of the purchase money. It makes no difference, so far as concerns the plaintiff, whether the inability is caused by a conveyance made by the defendant or the sheriff, to pay his debts.
The second question is as to the measure of damage.
We cannot yield our assent to the position assumed by the plaintiff, that he has a right in this action against one of the obligees for a breach of a bond for title, to recover as damages the amount of the purchase money, which had been paid in the same way as if the plaintiff had repudiated the contract and sued the vendor for money "had and received to his use."
(104) In this action the plaintiff does not repudiate the contract, but seeks to recover compensation in damage for its nonperformance; and the question is, What damage has he suffered? What sum will put him in as good a condition as if the contract had been performed? In that event, he would have got a property which is worth $2,500, but he would have been forced to pay the balance of the purchase money and interest. He has not paid this latter amount, and his damage is the difference between that sum and the value of the property; which, by the case agreed, is $207.80, with interest from 8 May, 1843. This gives the plaintiff his redress at law, by compensation in damages, which he has elected to pursue as his remedy. He had the right to file a bill in equity for a specific performance, and the decree would have been for a conveyance of the property, upon his paying the balance of the purchase money, with interest. He would not have been entitled to a decree for the amount of the purchase money which he had paid; and there is no principle upon which he can recover it in this action upon the bond.
The only difference between his remedy at law and in equity upon the contract is that in the one count he gets the property by paying for it; in the other he gets compensation in damages, which is the difference between the value of the property and the amount of the purchase money remaining unpaid.
Our attention was called to the fact that in the action for a breach of a covenant of quiet enjoyment the measure of damage is the price paid for the land, which is taken, as between the parties, to be the true value; and it was urged that $8,000 should be taken as the value in this case, and not $2,500, which is admitted to be the real value at the time of the breach.
The analogy does not sustain the position for which it (105) was invoked, because the rule of damage in that action is founded on peculiar reasons. The covenant of quiet enjoyment is a substitute for the old real warranty, the remedy upon which was by voucher; and if the demandant recovered, the tenant had judgment against the vouchee for other lands of equal value. This remedy could only be used in real actions, where the land was demanded. After the action of ejectment took the place of those actions, the courts, to give effect to the warranty, were obliged to construe it into a covenant of quiet enjoyment, but allowed the new action to retain some of the peculiarities of the remedy for which it was substituted — among others, that of considering the price as the rule of damage in lieu of "other land of equal value." Williams v. Beeman, 13 N.C. 483.
There is nothing peculiar in the present action; and the general principle applies, that the plaintiff shall recover compensation for the injury which he has sustained.
The judgment of the court below must be reversed, and judgment be entered for the plaintiff for $10,000, to be discharged by the payment of the sum of $207.80, with interest from 8 May, 1843, according to the case agreed.
PER CURIAM. Judgment accordingly.
Cited: Freeman v. Mebane, 55 N.C. 46; Buffkin v. Baird, 73 N.C. 291; Dunn v. Tillery, 79 N.C. 500; Pendleton v. Dalton, 92 N.C. 191; Smith v. Ingram, 130 N.C. 103; LeRoy v. Jacobosky, 136 N.C. 458.
(106)