Brink v. Morton

| Iowa | Jun 15, 1856

Isbell, J.

This case, as presented to tbe court, raises a multitude of questions, upon tbe discussion of wbicb, unless absolutely necessary, we do not choose to enter in detail. "We are constrained to tbe conclusion, that in tbe zeal manifested by counsel-in the discussion of minor questions, tbe more important have been measurably overlooked, or lost ■sight of. Tbe first point made by counsel, demands óur attention, as lying in tbe way of arriving at tbe merits of tbe case. It is insisted, that tbe court erred in permitting tbe defendant Morton, to file an amended and sworn answer. We think tbe defendant’s counsel have fully and properly met this objection. Tbe Code, from section 1756 to 1759, inclusive, evidently shows tbe intention of tbe legislature to be, that a very liberal policy with regard to amendments should be adopted. By tbe latter clause of section 1758, amendments shall be allowed in any stage of tbe proceedings, upon such terms as tbe court deems just. In tbe case before us, tbe objection is not, that unjust terms were prescribed for tbe amendment, but that tbe amendment was allowed on any terms. Tbe question is not now as to tbe effect of tbe amended answer as evidence, but as to tbe power of tbe court to allow it. Of tbe power of tbe legislature to amend tbe practice in relation to pleadings in chancery, so that amendments may be permitted, which had not before been, we have no doubt. And that the framers of the Code, and the legislature which adopted it, intended the provisions of these sections to apply to proceedings in equity, as well as at law, if they did not actually intend to reduce the pleadings in both to one common system, there can be little question. We hold, therefore, that it was within the discretion of the court to permit the amendment.

We propose to pass over, for the present,, the several other points made by the plaintiff, and inquire as to the last point, namely, whether the court should have entered a decree for the plaintiff, non obstante veredicto. The first question which arises in this inquiry, is, was time of the essence of the contract, which is at the foundation of this suit. The condition of the bond, is verjr inartistically drawn. It recites that, “ whereas the above-named Austin Brink pays to the above Ezra Morton, two promissory notes, one fifty dollar note, payable on demand, at ten per cent, interest; the other payable in one year from date, two hundred dollars, at the rate of ten per cent. Whereas, if Elijah Austin Brink pays the above sum to the above Ezra Morton, at the expiration of the’year, then the above-named Ezra Morton does deliver unto the above-named Elijah Austin Brink, at the expiration of the year, August the 8th, 1854, a deed with general warranty (here follows a description of the land, and the bond concludes), then this obligation to be null and void, otherwise to remain in full force and virtue inlaw.” We understand the intent of the parties, by this condition, to be that Morton should bind himself to convey at the expiration of a year, provided the purchase money was paid. The notes were running at the highest rate of interest known to the law. The security was in the hands of the obligor, and although one of the notes was liable to be demanded at anytime, either by suit or otherwise, the obligor did not even take the precaution, to make the condition of the bond to depend upon the several sums being paid, as they should respectively fall due; and it is admitted by the answer, that, up to within a few days of the time the two hundred dollar note fell due, defendant (Morton) insisted upon payment of part of the amount, and interest on the whole, when the note fell due, showing that he then relied upon his money and interest, and not upon any forfeiture. We see nothing to justify the conclusion, that at the time of the execution of the bond, the parties regarded time as of the essence of the contract. The execution of the bond — the payment of the fifty dollar note — the fact that plaintiff entered into possession, and made improvements — and that defendant Morton, “without tendering to petitioner the money paid, and the note or a deed, on the 8th of August, 1854, before the days of grace had expired on the note,” sold to defendant Williams — are facts charged in the petition, and not denied in the amended answer of Morton; and the latter fact is not denied in the answer of defendant Williams. That the land had risen in value, either by the improvements of plaintiff, or from other cause, is apparent from the price admitted to have been paid by Williams. That defendant Williams, at the time he purchased the land of Morton, knew that Morton had made a contract with the plaintiff for the sale of the land in dispute, and that the plaintiff had paid part of the purchase money, is found by the jury, in response to the fifth issue presented by plaintiff, although in response to the third issue of defendant, the jury find that Williams purchased the land in good faith, for a valuable consideration, without notice that the plaintiff had any legal claim for, or upon, the land.

At first view, these findings would appear contradictory, and they are, in fact, so, except in one view, of which we shall speak hereafter, namely: that although Williams knew of the’ contract, yet, inasmuch as the jury believed it void for fraud, it was not a legal claim for or upon the land. We grant the proposition contended for by defendants, that an application" to enforce a specific performance, is addressed to the sound discretion of the court; and admitting, for the present, that this bond was not void on account of fraudulent representations or inducements to procure its execution, and admitting all the other issues which are found for the defendants, and we can but conclude, that there is a strong case — a case calling loudly for the interposition of the power of this court — to enforce specifically the performance of the contract. Compensation, and not forfeiture, is a favorite maxim of courts of equity. In the making this contract, the defendant had provided for the highest rate of compensation, for delaying the payment of the money, by stipulating for ten per cent. He had allowed the plaintiff to expend his means in improving the land, and let him into possession. He had received a part of the purchase money, and still retains it. He could have filed his petition, asking the court to require the purchaser to perform his contract, or to foreclose and sell his interest in the property (Code, § 2094), and thus recover his money. If time had been of the essence of the contract with plaintiff, it is true that his vendor, on a forfeiture occurring, might have sold to a third person, leaving the party to his action for the money advanced; but here, no such state of case existed; time was not made of the essence of the contract. We say nothing here of any extension of the.time for payment of the $200 note, or of the question of tender, and demand before the bill -\yas filed; for long prior to the time of filing the bill, the defendant Morton, had put it out of his power to convey, unless Williams should be first charged with notice. The money was tendered in court, on the filing of the bill. This was only about three months after it became due, the bill being filed on the 4th November, 1854. Admitting, then, that it was competent for the defendant Morton, to put an end to the contract, on the failure of plaintiff to pay the $200 when due, by placing the plaintiff in statu quo, by refunding the money paid, delivering up the unpaid note, and making reasonable compensation for improvements made with the acquiescence of Morton, or offering to do these; it is not claimed by the answer, that defendant has at ahy time so put an end to the contract, although it is claimed that he mailed to plaintiff the unpaid note. Now, by decreeing that the contract shall be specifically performed, Morton will get all he contracted for, and compensation for delay. By refusing such decree, plaintiff is driven to circuitous litigation to re-instate his rights. The defendant Williams, can claim no favor, having been an intermeddler in this contract. We conclude, therefore, that equity requires that the contract should be specifically performed, as the case stands upon the pleadings, and the issues as found, notwithstanding those found for the defendant, provided this contract was not procured by fraudulent means.

This leads us to a consideration of the fourth issue presented by the defendant, namely: “ did the plaintiff procure the execution of said bond, by means of false and fraudulent inducements held out to him by defendant.” This issue, as well as all the others, presented by the defendant, was excepted to by the plaintiff, as not being a proper issue to be presented to a jury, which exception was overruled. The first question that arises, then, is, was this a proper issue ? If made by the pleadings, it was certainly material; for this court will not lend its aid to specifically enforce contracts, in favor of him who shall have procured their execution by fraud. The issue, if it arises at all in the pleadings, arises from the new matter set up in the answer of Morton. The language of the answer in this regard is, “ This defendant states, that the inducement which led him to execute said bond to the plaintiff, was the express agreement of the plaintiff, to establish on said land a store, for the convenience of the defendant and the neighborhood; and defendant states that said inducement was falsely and fraudulently held out to him by the plaintiff, in order to get the defendant to execute the said bond, the plaintiff not intending at the time to establish a store on the said land.” From the manner counsel have treated this cause in the argument, we understand that the replication, although it bears date of filing prior to' the amended answer, applies to the amended answer. If this is so, taken with the agreement appended thereto, it constituted a specific denial of the several propositions contained in this statement of the answer. The issues raised by this statement and the replication, were, when placed in their proper order: First, did the plaintiff agree with the defendant Morton, to establish a store on the land in contro.versy? If this issue is found in the affirmative; then, secondly, was this agreement made without the intention on the part of the plaintiff, at the time, to establish such store? If this issue is found in the affirmative; then, thirdly, was plaintiff induced by said agreement, to execute said bond ? •

It is readily obvious that the issue presented to the jury, was much broader than that made by the pleadings. The pleadings are made to apply to a particular case of fraud, while that presented by the court, may apply to any fraud. It is no answer' to the objection urged to this issue, that fraud may be plead generally, and if any existed in the procuring the execution of the bond, that it ought not to be enforced ; for, in the first place, although a defendant may answer as to fraud generally, yet if he states a particular state of fraud only, he will be confined in his evidence to that; and the issues may not enlarge the pleading; and, secondly, the plaintiff should only be required to come with proof to make his case good, as it stood upon the face of the pleadings. The evidence in chancery causes is generally, as in this case, by depositions, and it would work a great surprise, if a party were allowed to come up on the hearing, with issues more enlarged or different than those in the pleadings, in relation to which the evidence had been taken. The issues, properly speaking, are the facts alleged in the pleadings on the one side, and denied, in like manner, on the other. The fourth issue presented by defendant, and sustained by the court, not arising upon the pleadings, to the extent submitted to the jury, a question arises, admitting that if no other difficulty presented itself,.would it be proper in such state of case as is here presented, to enter a decree non obstante? The jury have found that the plaintiff procured the execution of the bond sought to be enforced specifically, by false and fraudulent inducements held out by him to defendant. In the face of this finding, although more general than the charge in the answer, it would appear against conscience to enforce the performance. But it would rather seem the duty of the court, to set aside the verdict in this particular, and remand the cause, that the proper issues raised by tbe pleadings, might be passed upon by a_ jury. But, on a careful examination of tbe testimony, as to tbe issues of fraud made by tbe answer and replication, we conclude, tbat to remand tbe cause for tbe bearing of these issues by a jury, is not demanded at our bands, for tbe reason tbat there is not tbe shadow of testimony to sustain tbe charge, tbat plaintiff agreed to establish a store on tbe premises in controversy. This was new matter alleged by defendant Morton, and which it was incumbent upon him to prove. Tbe only allusion to such agreement, tbat we are able to find anywhere in tbe testimony, is a statement of Morton himself, in a conversation with tbe father of plaintiff, testified to by Silas Ballow, in which Morton said “ tbat be was disappointed in E. A. Brinks tbat be bad sold tbe place, with tbe expectation of having a store go up there,to make a business plaee there.” This being tbe state of tbe evidence, as to tbe main proposition contained in tbe issues relating to -fraud, we conclude, tbat if "Williams bad notice of tbe contract, there was no such fraud shown as to justify him in purchasing, upon tbe ground tbat tbe contract was void; and tbat it is unnecessary to resubmit tbe issues to a jury. Tbe decree of tbe District Court will, therefore, be set aside, and a procedendo issue, requiring a decree in accordance with this opinion.