Baker v. Smith, 135 Ga. 628

Baker v. Smith

135 Ga. 628 | Ga. | 1911

Evans, P. J.

(After stating the foregoing facts.)

The plea was constructed as a plea in abatement. It averred that the contract of sale made the final payment of the purchase-money dependent upon the plaintiff’s performance, of certain cove*632nants, which had not been performed, and therefore the action was prematurely brought. If the contract is to be construed as an undertaking to pay a definite sum of money on a day named, provided that by that day these covenants had been performed, then the performance of the acts covenanted to be performed would be a condition precedent to the right óf action. Baker v. Tillman, 84 Ga. 401 (11 S. E. 355); Clark v. Croft, 51 Ga. 368. Om the other hand, if the contract is to be construed as an agreement on the part of the vendors to sell certain property for a stated sum, in which agreement the vendors bound themselves by personal and independent covenants to do certain acts of a collateral nature, the performance of such covenants would not be a condition precedent to a recovery of the purchase-money, where the vendees were put in ■possession of the property. In the interpretation of written contracts courts will diligently seek the intention of the parties as therein expressed. Was it the intention of the parties that payment of all claims accruing prior to May 1st, 1906, was to be a condition precedent to the collection of the notes ? The contract does not say so, and the plain implication is,to the contrary. In the first place one fourth of the money was to be paid in cash, and the purchasers were to have immediate possession of the railroad property. The covenant that the vendors were to deliver the property to the purchasers, unencumbered of any claims whatever, plainly did not contemplate satisfaction of all claims prior to the delivery, because other portions of the contract show that such were.to be subsequently settled. The parties expressly provided for a deduction from the last payment of all outstanding indebtedness. The purchasers gave their notes payable at a stated time, and stipulated that the notes were subject to the terms of the sale contract. The stipulation had the effect to restrict the negotiability of the notes, but imposed no conditions or terms not contained in the sale contract. For their protection the purchasers exacted of the vendors two general classes of covenants, viz.: (1) that the vendors agreed to be responsible for and settle all claims or obligations against -the railroad company, originating prior to the sale; and (2) upon the payment of the purchase-money the vendors would execute a warranty title to the physical properties of the railroad company. The covenants of the first class did not go to the entire consideration. The subject-matter of the sale contract was- the stock, franchises, *633and physical property of the railroad company, and the notes represented the pnrchase-price, and the covenants contained only the vendors’ assurance that the purchasers would get what they purchased without encumbrance. While the covenants to pay the purchase-money and the covenants of assurance against debts and encumbrances are mutual, still they are not dependent, in the sense that the performance of the latter is a condition precedent to- the former. “ The mutual covenants must go to the whole consideration on both sides, where the one is precedent to the other; but when they go to a part only and a breach may be paid for in damages, the covenants are independent.” Water Lot Company v. Leonard, 30 Ga. 573. Aside from the technical rules of construction, the plain meaning o'f the contract is that the vendors’ covenant to discharge all debts and claims was an independent covenant and was not intended as a condition' precedent to the payment of the purchase-money. With reference to the covenant to convey the right of way, clearly the conveyance was by the terms of the contract not to precede the payment of the purchase-money. The case is essentially different from that line of cases, like Baker v. Tillman and Clark v. Croft, supra, where the note or contract expressly stated that the removal of encumbrances was to be a condition precedent to the payment of the notes. The plea was not good as a plea in abatement.

Is the defense set up in the answer good as a plea in bar as against the general and special demurrers of the plaintiff? The contract provides that all indebtedness outstanding at the maturity of the last payment is to be deducted from the purchase-price. The indebtedness referred to in this covenant necessarily comprehends only such items as rank as debts, and does not refer to unliquidated damages claimed as a result of a tort. The latter must be either established by a judgment or by agreement of the parties before they can be liquidated. So by the terms of the contract the parties agreed that debts against the railroad company were to be deducted from the last payment of the purchase-money; and if the vendors declined to allow the deduction voluntarily, the purchaser may plead such in reduction of the recovery. An item of indebtedness is the taxes for the year 1906. The sale contract was executed in the month of May, after the assessment of the taxes for that year. It contains no stipulation about the payment of the current taxes. As a general rule, in the absence of any stipulation as to the payment of current *634taxes, it is incumbent on the vendor to pay the taxes assessed at the time of his conveyance, in order to keep his covenants good. 1 Warvelle on Vendors, § 179; Gledney v. Deavors, 8 Ga. 479. There-is nothing in the contract indicating a departure of - the parties from the general rule.

There is no charge of the plaintiff’s insolvency or non-residence, nor is there any other equitable reason alleged tending to show that the purchasers may possibly be hurt by the ultimate result of .the damage suit pending against the railroad company, nor is it even averred that such suit is meritorious. Under such circumstances the purchasers are remitted to their remedy against the vendor on the covenant, in the event that such damage suit terminates in a judgment against the railroad company. There is an averment in the plea that the final contract of sale was to be supplementary and explanatory of the preliminary agreement, which contained a provision that “a certain amount of the purchase-price agreed on is to be held in escrow until all such claims are settled,” and for that reason it is contended that the plaintiff must settle this damage suit before he should be permitted to recover the last installment of the purchase-price. The final contract of sale contained no provision of this character, but, on the contrary, recited that the notes were 'executed to the plaintiff for all the purchase-price remaining after deducting the cash payment. The amount of money to be placed in escrow was not stated in the preliminary agreement, nor is it contended that any money was ever put in escrow to meet such demands against the railroad company. The final contract of sale was complete in its details, and evinced no intention of the parties to place any money in escrow.

As the plea was not of a dilatory nature and was filed at the appearance term, it was within the discretion of the court to allow it to be verified at the trial term.

On the trial the plaintiff introduced the note and contracts in evidence, and testified that the taxes had been paid partly by himself and partly by the purchasers, and that the Hinson suit had been settled. It-was error to grant a nonsuit.

Judgment reversed.

All the Justices concur.