28 Colo. 251 | Colo. | 1901
delivered the opinion of the court.
Of the Amanda and the Bogart conflicting lode mining claims, situate in Cripple Creek mining district, the former was the senior location. Application for a patent of the
Immediately succeeding the foregoing language of the contract was the following:
“It is agreed and understood that first parties failing to make the conveyance to said second parties as aforesaid, first parties will forfeit and pay to second parties the sum of one thousand ($1,000) dollars in lieu of said conveyance, and in full satisfaction thereof and of this agreement.”
Defendants, the present owners of the Bogart lode, refusing to do either of those things, the plaintiff (grantee of the original owners of the Amanda lode and of their rights under the contract) brought this action on June 26,1897, to compel them to make such conveyance. The answer was filed October 25, 1897, in which defendants deny the assignment to the plaintiff by the original owners of the Bogart claim of their rights under the contract, or that any demand for the conveyance was made upon them, or that plaintiff expended in developing and improving the tract of land in controversy any sum of money, as alleged in the complaint. By failing
March 30, 1898 defendants tendered in open court the sum-of $1,005, as the forfeit^ and interest) provided for in the contract, alleging, as a reason for not paying it within the time therein specified, that they did not know to whom it was payable, since divers persons were claiming it. They asked that upon this tender they be discharged from further liability under the contract.
The only testimony introduced in the trial was that produced by the plaintiff, and the necessary facts which entitled it to some relief under the contract were clearly established.
The patent was issued October 18, 1894. After the expiration of ten days from that time, numerous requests were made by plaintiff of defendants either to convey or pay the forfeit, but they failed to do either, giving as an excuse that the patent had not issued when demand was made; and when defendants neglected to perform either provision, plaintiff manifested its election by repeatedly asking for the conveyance. After waiting for more than two years after the patent was issued, this action was begun.
It is the position of plaintiff that, taking the contract as a whole, the essential thing intended by the parties was the conveyance by the defendants of the ground in controversy, and that the agreement to pay one thousand dollars, if they failed to convey, was in the nature of a penalty to insure the performance of that covenant. The position of defendants is that the contract, fairly construed, is in the alternative, and gave to them the option either to make the conveyance, or,if they chose otherwise, to pay the $1,000 and be discharged of any further obligation under the contract. In other words, the clause providing for the payment of the fixed sum of
1. As stated by Mr. Waterman in his work on Specific Performance of Contracts at section 23: “If the agreement be construed as giving to the party the option to do the act or paya certain sum, equity will not interfere.” It leaves the other party to whom the promise is made to his action at law. In determining the question, however, the court looks to the entire agreement, and not merely to the language expressing the sum. It may thus ascertain the real intention of the parties; and if it clearly appears that the contract is to perform one of the alternatives, this will be specifically enforced notwithstanding the contract be alternative in its form. But where the contract stipulates for one of two things in the alternative, the doing of a certain act or the payment of a certain sum of money in lieu thereof, as already stated, “equity will not interfere to decree a specific performance of the first alternative, but will leave the injured party to his remedy of damages at law.”. 1 Pomeroy’s Eq.Jurisp. (2d ed.) §447; Ery on Specific Performance of Contracts, § 66 et seq.
Yet where a person has agreed to do a certain act and has added a penalty for the purpose of securing its performance, if the contract is otherwise one which calls for its interposition, equity will compel the party specifically to perform. Pomeroy on Specific Perf. of Contracts (2d ed.)§50 and notes.
It is said by defendants that when plaintiff and its grantors made a demand upon the defendants for a conveyance, or, in lieu thereof, payment of the fixed sum of $1,000, a construction of the contract was thereby given which involves a recognition that it was one in the alternative giving to defendants the right to pay the money in lieu of making the conveyance,
We think it true that there were certain acts of the plaintiff tending to a recognition of defendants’ construction of the contract; and it is equally true that defendants recognized and admitted the construction contended for by plaintiff. We are inclined to hold, though not positively so deciding, since the parties made this arrangement to get a patent, for their mutual convenience, and to save litigation and expense, that the principal thing they had in view was the conveyance by the defendants, and that the provision for payment by them of a certain sum, in lieu of their failure to convey, was inserted as a penalty for the faithful performance of their covenant to do that principal thing, and not as liquidated damages for its breach. In case of doubt whether a sum so fixed is a penalty or liquidated damages, courts lean toward the former. Turch v. Mining Co. 8 Colo. 113; O’Keefe v. Dyer, 20 Mont. 477.
But if the contract is susceptible of the construction, as defendants contend, that it is in the alternative, a mere optional contract vesting in them the right to convey or pay, as they chose, yet, when the time elapsed in which they agreed to do the one or the other — the time for doing each being the same — the right of election shifted to the promisees, and they and their grantee might sue for the one or the other, as they saw fit. Having made demand upon the defendants
After defendants thus neglected to exercise their option to pay the money rather than execute the conveyance, it would be inequitable to compel the plaintiff who, because of such failure, was obliged to bring suit to compel defendants to comply with the contract, to accept the payment of money when it elected to ask for a conveyance.
The judgment of the district court being in conflict with this conclusion, it is reversed and the cause remanded with instructions to the district court to vacate its judgment heretofore entered dismissing the action, and to enter a decree requiring the defendant Mining Company (in which the title now seems to rest) to convey by good and proper deed of conveyance the land in conflict between the two claims described in the agreement set out in the complaint, andas therein provided, and to permit defendants to withdraw the money heretofore deposited in court.
Reversed.