Bean v. Atwater

| Conn. | Jul 15, 1821

Hosmer, Ch. J.

The plaintiff can alone recover, on the facts stated in his declaration. If on examination of the covenant counted on, it appears, that there has been an entire performance of every stipulation on his part; this, undoubtedly, evinces a good cause of action for the whole consideration of the lands; but unless the declaration comports with this state of facts, the defendants are entitled to judgment. If the plaintiff recover, it must be secundum allegata et probata.

The plaintiff has not founded his action on a performance of contract, either in whole or in part. He has merely alleged, that the covenants of the defendants, were “for and in consideration of the undertakings on his part;” and instead of averring performance, he has only averred, that “he hath ever stood ready to perform said agreement.” The plaintiff has placed himself on this ground; that the covenants between the parties are mutual and independent; and upon the correctness of this assumption, entirely depends his right of recovery.

It is a primary and fundamental rule concerning contracts, that their construction must be, according to the intention of the parties; and so paramount is this rule, that to such intention, even technical words must give way. Porter v. Shephard, 6 Term Rep. 668. Campbell v. Jones, 6 Term Rep. 570. Norton v. Lamb, 7 Term Rep. 125. 1 Wms. Saund. 320. n. Gazley v. Price, 18 Johns. Rep. 267. When the enquiry is in relation to their dependence or independence, this is to be collected from the evident sense and meaning of the parties; and however transposed they may be in the covenants, their precedency must depend on the order of time, in which the intent of the transaction requires their performance. Jones v. Berkley, Doug. 684. If the language of a contract will admit of it, justice and general convenience incline to the construction of a simultaneous performance; but if a man will agree to pay his money before he has the thing for which he ought to pay it, and will rely upon his remedy, this is a law of his own making, and his agreement he ought to perform. On the other hand, courts should carefully endeavour, to avoid compelling a person to give credit, when he did not intend it. Thorpe v. Thorpe, 1 Ld. Raym. 666.

To investigate the intention of parties to a contract, certain auxiliary rules have been established. It was laid down by Lord Holt, in Thorpe v. Thorpe, 1 Ld. Raym. 665. and since has been uniformly recognized, that, if a day be appointed for payment of money, and the day must happen, or may happen, before the consideration of the money is to be performed, an action lies for the money before performance. The reason has already been assigned; it is, that the party relied on his remedy, and did not intend the performance to be a condition precedent. 1 Wms. Saund. 320. b. 1 Chitt. Plead. 313. This rule, undoubtedly authorizes the plaintiff's recovery to the extent of the two first instalments in the covenant sued on; or, in other words, it thus far sanctions the judgment of the Court below.

I am perfectly aware, that the rule adopted in Westminster-Hall, is broader than the one before mentioned; but it was not adopted until the case of Terry v. Duntze, 2 H. Bla. 389. adjudged in the year 1795. In this case, it was said to have been long established in the construction of covenants, that if any money is to be paid, before the consideration is to be performed, the covenants are mutual and independent. Since the determination of the case alluded to, it has been followed in Westminster-Hall; and for a time it was recognized as evidence of the law, in the neighbouring state of New-York. 1 Wms. Saund. 320. a. 1 Chitt. Plead. 313. Seers v. Fowler, 2 Johns. Rep. 272. Havens v. Bush, 2 Johns. Rep. 387. But in the case of Cunningham & al. v. Morrell, 10 Johns. Rep. 203. the supreme court in the state last mentioned, considered the case of Terry v. Duntze as a departure from principle; and the cases decided on the strength of it, were over-ruled. To the case of Terry v. Duntze, there exist two incontrovertible objections. In the first place, the cases relied on by the court, furnish no sanction to the rule there adopted. They merely decide, that where the entire consideration is payable at a time prefixed, which either must or may precede the consideration on the other side, there may be a recovery without performance. Thorpe v. Thorpe, 1 Ld. Raym. 662. Ughtred's case, 7 Co. Rep. 74. b. P ordage v. Cole, 1 Saund. 319. It requires no acuteness to discern, that if A. covenants to pay B. a sum of money on the 1st of April; and B. on his part, agrees, in consideration of the said stipulation, to convey to A. a tract of land, on the 1st of May succeeding, the money was intended to be paid before performance of the consideration. If, however, only a part of the money was to be paid, before the conveyance of the land, and the residue afterwards, there is no exhibition of an intent, that the whole consideration might be demanded, before performance on the other side, but of the contrary. And this is the second objection against the determination, I have been considering. The intention of the parties is contravened, by a rule, entirely artificial, and in disregard of language the most definite and perspicuous, making, instead of enforcing, a contract. It will be seen, on recurrence to the case of Terry v. Duntze, that, by the aid of this novel principle, the plaintiff recovered in defiance of the plain intention and agreement of the parties. In Cunningham v. Morrell, before cited, upon the principle, that “one’s bargain is to be performed according as he makes it,” it was decided; that a covenant may in part be mutual and independent, and in part dependent, or on mutual conditions. “The parties (said Kent, C. J.) have a right to mould their contracts so, as to suit their mutual convenience and interests, and when the courts can ascertain their meaning, they are so to construe the contract, as to give effect to that meaning, provided the purpose be lawful.” It results, as a necessary consequence, that the covenant of the defendants to pay the two first instalments, does not imply, that, without performance, they, of course, are bound to advance the entire consideration of their contract, and rely on their remedy.

The terms of the agreement, do not show it to have been the intention of the parties, to make their contract mutual and independent. The covenant to pay the plaintiff "therefor” refers, not to the agreement on the plaintiff’s part, but to his performance, by the execution of the stipulated deed.

From the expression in the covenant, that the plaintiff had bargained and sold, and “by these presents doth bargain and sell,” we are not authorized to assume, that the deed of covenant, (the only one that was executed) conveyed the land in question. We do not judicially know, what the law of Pennsylvania is. It must be alleged and proved, like every other fact. Hebron v. Marlborough, 2 Conn. Rep. 18. Mostyn v. Fabrigas, Cowp. 174. Phill. Ev. 301. notis. And if the land was conveyed by the articles of agreement, the plaintiff has not assumed this ground in his declaration; and instead of recovering on the covenant throughout, he must totally fail, by reason of the variance between the covenant and the facts averred.

It is an established rule, requiring, perhaps, some modification, that, where the plaintiff’s stipulation constitutes only a part of the consideration of the defendant’s contract, and the defendant has actually received a partial benefit, and the breach of the plaintiff may be compensated in damages, an action may be maintained by the plaintiff without averring performance. 1 Chitt. Plead. 313. 1 Wms. Saund. 320. b. Boone v. Eyre, 1 H. Bla. 273. Duke of St. Albans v. Shore, 2 H. Bla. 279. Campbell v. Jones, 6 Term Rep. 573. The reason assigned, is, that, when a party has received part of the consideration for his agreement, it would be unjust, because he has not had the whole, that he should enjoy the part received, without any compensation. But, to render this rule available, the plaintiff must have averred in his declaration performance of, at least, a part of that, which he had covenanted to do, or that otherwise the defendants have received a partial benefit. 1 Wms. Saund. 320. c. 1 Chitt. Plead. 314. Now, the plaintiff has made no such averment, but, by necessary implication from his declaration, the contrary is apparent; and the defendants have had no call on them to dispute the above fact. The court, in the face of the plaintiff’s declaration, and without averment or hearing, cannot assume an important and controvertible fact in his favour.

Having removed out of the way, the propositions principally relied on, in the arguments, I will refer to two established rules, decisive of the case before us.

The first of them is this; that, when two acts are to be done simultaneously, as where A. covenants to convey an estate to B., and in consideration thereof, B. covenants to pay A. a sum of money, on the same day; neither can maintain an action, without shewing performance, or an offer to perform, on his part. 1 Wms. Saund. 320. c. 1 Chitt. Plead. 114. and the cases there cited. On this established rule, neither party is obliged to perform the first act; but until such performance, there exists no claim by one against the other. The application of this principle, to the third instalment in the covenant, is obvious, and, in my judgment, conclusive. The plaintiff covenanted, on or before the 1st of June 1817, “to confirm unto the defendants the said undivided two third parts of the described land, by deed in fee-simple.” On the other hand, the defendants contracted, on the same day, to pay the plaintiff 500 dollars, and at the execution of said deed, to secure the sums remaining due, by bond and mortgage of the premises. These are mutual conditions, and until performance, or an offer to perform, on the part of the plaintiff, he had no claim to the correspondent consideration, on the defendant’s part. This result is confirmed, if confirmation were needed, by the nature of the stipulations. The defendants were to be invested with a title to the land purchased, as well to compensate them for their previous advancements, as to enable them to give security for the payments to become due, at a future period. Vid. Green v. Reynolds, 2 Johns. Rep. 207. West v. Emmons, 5 Johns. Rep. 179. Gazley v. Price, 16 Johns. Rep. 267.

When a day is appointed for the payment of money, and this is to happen after the performance of that which is the consideration of it; no action for the money can be maintained before the performance. Thorpe v. Thorpe, 12 Mod. 462. 1 Wms. Saund. 320. b. 1 Chitt. Plead. 313. This rule is applicable to all the instalments subsequent to the third, which I have already disposed of. The payments were all of them to be made posterior to the execution of the plaintiff’s deed, confirming the title to the land in question. The plaintiff’s performance, of consequence, was a condition precedent to their execution.

The penalty subjoined to the articles of agreement, and entirely collateral to it, was designed to secure their performance, and is, in no respect, indicative of the parties’ intention. To recover this penalty, he plaintiff has brought an action of debt; to entitle himself to which, he must shew, that he has “punctually, exactly and literally fulfilled his part of the contract.” 1 H. Bla. 279. This, in my opinion, he has utterly failed to do.

Peters and Brainard, Js. were of the same opinion. Chapman, J.

The plaintiff, after having “granted, bargained and sold” the lands in question to the defendants, their heirs and assigns, covenants, on or before the first day of June then next, to confirm the same to them, their heirs, &c. And the defendants covenant with the plaintiff to pay him therefor the sum of 4000 dollars, by instalments, two of which are to be paid before the said first day of June, one on that day, and the residue at periods subsequent; which covenants are expressed to be “for and in consideration of the covenants, contained in said articles to be performed and payments to be made;" and the covenants are secured on each side, by a penalty.

As the plaintiff has not averred performance, on his part, of the covenant to confirm the lands in fee-simple, it becomes essential, to test the correctness of the Judge’s charge, to determine, whether the covenants on the part of the defendants are dependent or independent. It is admitted, however, that the covenants to pay the two first instalments are independent; but it is insisted, that all the others are dependent.

In giving a construction to the articles in question, it may be useful to resort to a few established rules, and then enquire whether the case in question comes within their application.

And first,-“where the covenant goes only to a part of the consideration on both sides, and a breach may be paid for in damages, such covenant is independent." Boone v. Eyre, 1 H. Bla. 273. If I do not much deceive myself, the case under consideration comes clearly within this rule. It is material to observe, that the plaintiff covenants merely to confirm the lands, &c. not to convey them. This he had done expressly, by the articles. It would be difficult to find words more strictly appropriate for that purpose than those there used:-“hath granted, bargained and sold, and by these presents, doth grant, bargain and sell to the parties of the second part, their heirs and assigns,” &c.

Wherever the common law prevails, these words, in an indenture, will convey a fee-simple; and we are to presume, till the contrary is proved, that the common law prevails in the state where the lands in question lie. The executory covenant, on the part of the plaintiff, is, therefore, nothing more than a covenant for further assurance; a covenant usually inserted in conveyances in England, and in those states, which have adopted her common law. In Connecticut, a fee-simple in equity only would pass, because the mode of executing deeds, so as to pass the legal title, is regulated by statute.

In an action on such a covenant, provided the fee passed, by the first conveyance, the party could recover but nominal damages. The plaintiff had, therefore, substantially performed his covenants; has lost his lands, and lost 3000 dollars of his purchase money. Had a contrary decision been had, the plaintiff would have recovered his money; and the defendants would, at law, but certainly in equity, have been entitled to the lands.

But should I admit, that the covenants on both sides, were executory, I should be of opinion, that they were independent; for there is another rule often resorted to, in solving questions of this sort, found in the case above cited, which would seem decisive of this case; viz. If the parties trust to the covenants or promises of each other, and not to the performance of them, the covenants &c. are independent: Each trusts to his remedy.

In the case under consideration, the parties did expressly trust each other; for the defendants did covenant to pay 1000 dollars, before they were to receive the deed of confirmation, and the plaintiff was to execute such deed, on the payment of 1500 dollars of the purchase money only.

If this does not prove, that each trusted the other, it would be difficult to find a case where they did.

The very words made use of shew, expressly, that they did, not only as to part, but as to the whole:-“In consideration of the herein-after-mentioned covenants to be performed, (not performed,) each covenants, &c.”

The time when each is to perform, is specified; and there is not the slightest intimation, that the performance on the one part, depended, at all, on that of the other.

Further to illustrate the position, which I maintain, I will suppose the defendants had sued the plaintiff, for a breach of the covenant to confirm the title; could the plaintiff have said, I will retain the 1000 dollars you have paid me, and keep my lands too? Would not this have been manifestly unjust; and should such a construction be put upon an instrument, did it admit of any other?

If further arguments were necessary to prove the covenants independent, I would call to my aid the fact, that the performance of them is secured, by a penalty. This alone proves, that each trusted to his remedy, and not to the performance of the covenants, as a condition precedent.

A few cases, which I will cite, it is believed, will support the principles contended for.

A. covenanted with B. to serve him a year; and B. covenanted to pay him 10l. These covenants were holden to be independent. 1 Wms. Saund. 320. in a note. Several other cases, in the same note are referred to, as supporting the same doctrine.

The case of Boone v. Eyre, 1 Hen. Bla. 273. before referred to, was as follows. “Boone conveyed to Eyre the equity of redemption of a plantation, in the West-Indies, together with a stock of negroes, in consideration of 500l. and an annuity of 160l. for life, and covenanted he had a good title to the plantation, and was lawfully possessed of the negroes, and that he (Eyre) should quietly enjoy, &c.; and Eyre covenanted that Boone well and truly performing every thing therein contained on his part to be performed, he would pay the annuity.

Here, at first view, regarding the language only, and not the general intent, it would seem as if performance was a condition precedent, and that the annuity could not be demanded without it. But the court decided otherwise.

The case of Campbell v. Jones, 6 TermRep. 570. is a case still stronger in favour of the principles above laid down.

There A. in consideration of 250l. paid by B., and of the further sum of 250l. to be paid &c. covenanted, that he, with all expedition, would instruct B. in a certain mode of bleaching linen, (for which he had obtained a patent) and B. covenanted that he would, on the 24th of February, 1794, or sooner, if A. should before that time have instructed him, pay the further sum of 250l. These covenants were holden independent.

The case of Sears v. Fowler, 2 Johns. Rep. 272. carries the principle still further; and is cited merely to shew how far it has been carried.

Indeed, it seems to be a rule, which has no exception, that where one party covenants to do several things, at different times, and the other to make payment, by instalments, such covenants are independent, unless expressly made otherwise. Each necessarily trusts the other, as in this case, and must look to his remedy for non-performance.

Bristol, J. was of the same opinion.

New trial not to be granted.