Colwell v. Fulton

117 F. 931 | U.S. Circuit Court for the District of New Jersey | 1902

ARCHBALD, District Judge.¹

According to the agreement which is the basis of this action, Colwell, the plaintiff’s testator, in consideration of $193,442, was (1) to convey to the defendant, Fulton, 2,500 acres of land near Hammonton, Atlantic county, N. J.; (2) transfer to him 4,000 shares of the Industrial Land Development Company; and (3) assign and transfer a mortgage of $340,000, given by the said Industrial Land Development Company, on which he guarantied $337,380 to be due. As the first installment on the entire consideration named, Fulton was to pay $15,000 when the deed for the land was delivered and the shares of stock were transferred to him. This left $178,442 to be still taken care of, and it is with regard to this that the rest of the agreement is particularly concerned. Without going over it in detail, I see no special ambiguity in it, nor any great difficulty in construing its different provisions. It was evidently framed to carry out an arrangement by which Colwell was to turn over to Fulton the several things which he did, for which Fulton was .to pay him $15,000 down, and so handle the property that Colwell '.would realize $178,442 more out of it; Fulton making all that he could over and above that, which was evidently the inducement for him to go into the scheme. The demurrer is based upon the idea that the agreement was a terminable one, amounting to no more than an option, from which Fulton was entitled to retire at any time, and that, having given notice of his intention to do so in his letter of August 28, 1894, which is set out in the declaration, he is no longer liable thereon. There is nothing, in my judgment, in the various provisions which it is claimed sustain this contention, either singly or collectively, to support any such idea. It is averred in the declaration, and is admitted by the demurrer, that the agreement was fully complied with on the part of Colwell. It is therefore to be taken as a fact that Colwell conveyed to Fulton the 2,500 acres of land near Hammonton, and transferred to him the 4,000 shares of the' Industrial Land Development Company, as he undertook to do, and further assigned the $340,000 mortgage.' All this property is now in the defendant’s hands, and, notwithstanding that he has accepted the consideration so furnished by Colwell, which there is no suggestion that he proposes to hand back, he would have us believe that there was to be no continuing reciprocal obligation on his part which he could not throw off at any time. If this is the way the agreement reads, well and good; but it is not to be made to do so by doubtful implication. While it is true that Colwell was paid the $15,000 which he was to get at the outstart, this is distinctly stated to be the first installment on the $193,442, which is declared to be the entire consideration due him, and the rest of the agreement, as already stated, is concerned with the way the balance, $178,442, was to be worked out. When Colwell secured this, his interest in the matter was to cease. This was to be the specific result, according to the second paragraph of the agreement, if Fulton at any time within the 10 years should pay him whatever of the $178,442 had not been taken care of; and it was also to follow, according to the eighth paragraph, whenever this sum was realized from any source. There was but one other way practically provided for bringing the agreement to an end. According to the ninth paragraph, if Fulton had to foreclose the mortgage, and bought in the premises, he might either execute a mortgage thereon to Colwell for the balance due, with interest, without personal liability, or he could end the matter by conveying the premises directly to him without more. It is, indeed, provided’by paragraph 10 A that, in case of a default by Fulton for 30 days in any of his covenants, Colwell could foreclose the mortgage (which, according to another paragraph, was to be reassigned to him as collateral), or he might, at his option,-after demand and notice to Fulton; dispose of it at public sale. Just what would be the effect if the latter course were pursued, is not clear. To a certain extent it would terminate the agreement, and perhaps may be recognized as another means for doing so. But this comprises all that there is, either directly or indirectly, for bringing the agreement to a close, and the means so provided necessarily preclude any others. But in the meantime, while the scheme was in process of being carried out, Colwell was not to be left without any return from the property which he had turned over to Fulton, and hence we have the provision with regard to the payments on account of interest, which is the subject of this suit. By the very first of the numbered paragraphs of the agreement Colwell was to receive $500 monthly on the 3d day of each month as a payment on account of the interest accruing on the deferred $178,442. This undertaking by Fulton is absolute, and is not conditioned on the outcome of the transaction, or anything else. He was to pay it month by month until the agreement was brought to an end in some one of the ways which we have discussed. For a year and a half he recognized the obligation, making payments up to March 1, 1894; but he has done nothing since. At the time this suit was brought there were some ninety-odd of these installments due, and the plaintiff is clearly entitled to recover them in this action. There is no difficulty because it is brought during the currency of the agreement. It does not sound in damages for a breach, but is simply for the monthly sums of $500 which the defendant covenanted to pay; and it is well settled that, where installments of money are provided for, suit may be brought for them as they accrue. Bush v. Stowell, 71 Pa. 208, 10 Am. Rep. 694; Tucker v. Randall, 2 Mass. 283; Cooley v. Rose, 3 Mass. 221.

Let judgment be entered on the demurrer in favor of the plaintiff for the installments due on the agreement in suit at the time of the bringing of this action, with leave to defendant within 10 days, for cause shown, to apply to be allowed to answer over.

1 Specially assigned.

¶ 1. See Action, yol. 1, Cent Dig. § 614.