Falls v. . CarpenterFalls v. . Carpenter
Carpenter died intestate, after service of the bill and before answer; and by a bill of revivor and supplemental and amended bill the suit
The administrators were P. Manney and Frederick Carpenter, (240) the younger, who was a son and one of the heirs of F. Carpenter, deceased. They answered, and admitted the contract of November, 1826; the possession of Falls under it; the payment of grain to the quantity and value charged in the bill; the sale and conveyance to Ormond and Birchett, and the subsequent payment by Falls of the balance due on his bonds, all as charged in the bill; that thereupon the intestate informed Falls that Birchett and Ormond had obtained a conveyance from him by inducing him to believe that Falls was unable to pay for the land, and that the contract with him was void; and offered then to make Falls a deed, which Falls declined accepting unless that to Birchett and Ormond were first surrendered and canceled; that the intestate then sent the bond of Birchett and Ormond to them by one Adderholt as his agent, with instructions to tender it to them and demand the deed, which was done, but they refused. These defendants then submitted to any decree between the other parties, and to repay the plaintiff his money, or to surrender to Birchett and Ormond their bond, as the court might decree the land to belong to the one or to the other.
By an amended answer, the administrators said that they had no personal knowledge of the transaction, and had before answered upon information which they have since discovered to be untrue, and to have been imposed on them by the plaintiff and those interested with him; and they and the other heirs and the widow of Carpenter then stated the contract of February, 1823, and that of November, 1826, and that although some grain was delivered they did not know how much, and believed not more than discharged the note for eighty-three dollars and forty-three and three-quarter cents, or certainly that and the interest on the other bonds, so that the whole principal purchase-money remained due in November, 1828, when the last bond became payable; and that no payment was made thereafter until the last of August, 1829, when Carpenter had sold to Birchett and Ormond. They stated that through the winter of 1828 and in the spring of 1829 Carpenter applied to Falls for payments, and insisted on them; and that Falls was unable, or alleged that he was unable, to make any, and proposed to Carpenter to rescind the contract, which was then agreed to by Carpenter, (241) and the contract considered to be rescinded; that it was thereupon understood between these parties that Carpenter should make
The answer then stated that, a few days thereafter, Falls and the plaintiff Wilson (who, with others, had formed an association to get a title and work the mines) offered to pay off the notes of Falls, and demanded a deed; that he was confounded at discovering the fraud that had been practiced on him by Birchett and Ormond, and also at the demand of Falls and Wilson, and disclosed to the latter his true situation and embarrassment, and asked Wilson‘s advice what he (242) should do; that they insisted on Falls’ claim, and repeated the tender of the money, and advised him to take it, as that could not make the matter worse for him, and that, intimidated by their menaces and at their suggestion, Carpenter appointed Adderholt, his agent, to take advice and act for him, who attempted to get the contract with Birchett and Ormond rescinded, but failed, and thereupon received from Falls and Wilson, in cash, a part of the sum due on Falls’ bond, and took the bond of Wilson for what they admitted to be the residue, but that Carpenter refused to accept from Adderholt either the money or Wilson‘s bond, or to make a deed to Falls, and, overwhelmed with the perplexities of his condition, soon after died, before he could answer the bill.
The defendants, Birchett, Ormond, and Dixon, answered, and admitted the purchase and conveyance from Carpenter, for which they gave their bonds for $750. They stated that, two or three days before, they had seen persons digging and washing for gold on a piece of land which they were informed and believed was vacant; that Dixon, who lived on an adjoining tract, so believed; that it was, on 22 August, 1829, agreed between the three that they would enter the land they supposed vacant, and as they expected the vein of ore to run also into the Carpenter land, the line of which, as they believed, ran very near the spot at which the gold was found, it was further agreed by them to buy that land also; that Dixon went to the entry-takers to make an entry, in his own name, on the joint account, and Birchett and Ormond proceeded to Carpenter‘s to make the purchase from him, and did so, taking the deed in their names, also on the joint account. They stated that they knew Falls had agreed for the land, but had understood and believed that he was unable to pay for it, and had before abandoned it, which belief was founded upon the facts that Falls was notoriously an imprudent and insolvent man; that Carpenter had repeatedly offered the land for sale to Ormond and others, from the autumn of 1828 up to that time, declaring that he was absolved from the contract with Falls by his noncompliance, and that, although this was generally known, they (243) never had heard that Falls forbade Carpenter to sell; that they did not use any persuasion to induce Carpenter to sell to them; that they considered him to be the absolute owner, and knew that he was desirous to sell to raise money, and that as soon as they made known their wish Carpenter agreed to make the sale; that the remarks about Falls’ claim came from Carpenter, who mentioned that he had a long time before agreed to sell to Falls, but he was no longer bound, and “his bond was dead,” because Falls had made no payment and never would be able, and because he (Carpenter) had sent to him, the spring before, to come and settle with him, as he was about to sell the land to other persons, and Falls neither paid anything nor came to see him. They admitted that Birchett and Ormond did not mention to Carpenter that gold had been found, and said that the reason was that they were not then certain that it was on his land, although they expected that it would extend into it. They denied that they made any falsе representations touching the gold, and stated that Carpenter made no inquiries, but voluntarily said, during the treaty, that he hoped they might find gold in abundance; that Dixon also came to Carpenter‘s in the evening, when they were writing the deed, and upon being informed by Carpenter of the contract, remarked to him “that he had better take care what he was about — perhaps there‘s gold on your land“; to which the other replied “that he wished they might find the best mine in the country;
By a subsequent answer, Robert Dixon disclaimed, and the defendants, Birchett Co., exhibited a deed from him to themselves, dated 3 May, 1832, with special warranty for all his share and interest.
Birchett and Ormond instituted an action of ejectment against Falls and others to recover the possession which was thus lost by them, and, the trial of the same being delayed, Birchett and the assignees in May, 1832, filеd their cross-bill against Falls and his partners, in which they charged the two contracts between Falls and Carpenter, and that the latter was merely an extension of the time by reason of his inability to pay the purchase money, and sought a discovery as to that fact and as to the particulars of those contracts. The bill also charged that Birchett and Ormond had heard various reports, which were in common circulation, that Falls had wholly failed to comply with his contract and had abandoned it, and that they then became desirous of purchasing from Carpenter, as was generally known, and particularly by Falls; that on 22 August, 1829, or the day before, Birchett and Falls were on the land together, and that the latter, then knowing of the intention of the former to purchase, made no sort of objection thereto, but expressed his satisfaction therewith; that, in fact, Falls had told Carpenter that he could not pay for the land, and directed him to sell to any other person who could pay for it, to whom he (Falls) would surrender all claim, and that Carpenter so declared to them, Birchett and Ormond, at the time that he sold to them. The bill further charged that no person was in actual possession of any portion of the land, but one Arrowood, who attorned to the plaintiffs, and that they entered into the peaceable possession and continued it for a few days, until turned out in the manner stated in their former answer, and that Falls and the other defendants got into possession and were making great profits and committing irreparаble waste. The prayer was for a discovery of all the matters charged, for an account of the gold already made, and for an (245) injunction against further waste or working.
All the defendants put in answers, but that of Falls was the only material one in the present state of the case, and none of the others were contradictory of it. That admitted the two contracts of 1823 and 1826, and that the last was substituted for the former at his instance, because it was more convenient to pay in grain than money. He denied that he was unable to pay for the land, and said he could always have done so, if pressed, but that Carpenter promised not to press him; that in the winter of 1826-27 he paid 200 bushels of corn, and in 1828 more corn and rye, amounting, altogether, to $240, and in the spring of 1829 Carpenter applied to him for $25, which he had not by him, and he requested Carpenter to borrow, and he would take up his note, and that he did pay Carpenter‘s note to John Falls for about $26, which was satisfactory to Carpenter. The answer denied positively any agreement with Carpenter to rescind the contract or any abandonment or any act or omission from which it could be inferred, or that he ever agreed that Carpenter should sell to any other person, and, on the contrary, stated that he was in actual possession of the land, claiming it under his purchase, cultivating and improving it, and digging for gold, both he and his hirelings and tenants, and that Arrowood was one of his tenants and had continued to work under him ever since; that it is true that on 21 August, 1829, both Birchett and Ormond (the formеr of whom was a stranger to this defendant) were on the premises and saw Falls and his hands collecting ore, and became fully aware of its richness and the great probable value of the mine, and, no doubt, formed the design then of purchasing from Carpenter, and may have thought they would hold the land if they could get his deed, notwithstanding the contract with Falls, as they, after getting the deed, insisted on it as a good title, because it was the first and a warranty deed, and said that Carpenter and Falls might settle the dispute upon their contract between themselves. But the answer denied positively that this defendant assented to or had the least knowledge of their intention to purchase, (246) or even suspected it, until he heard, in the evening of the next day, the 22d, that they had gone to Carpenter‘s for that purpose. The answer stated that both Birchett and Ormond conversed with this defendant, and neither of them intimated such an intention, but that, on the contrary, Birchett applied to him for a lease, and denied that he subsequently expressed his satisfaction at their purchase, but, so far from it, that upon hearing that such was their business he set off early on Sunday morning, 23 August, to Carpenter‘s, to put him on his guard and prevent him from making a contract; that upon getting there, he heard for the first time that they had obtained a deed, and was also told by Carpenter of the misrepresentations (as charged in Falls’ original bill) made to him by those persons as to gold being on the land, and also
At Fall Term, 1832, the heirs of Carpenter also filed their cross-bill against Falls and those claiming with him, and against Birchett and those claiming with him, to rescind the contract with Falls, and also for a reconveyance from Birchett and Ormond and others, upon the ground, as to the first, that it had been abandoned by Falls not making the payments stipulated, and by reason of his insolvency, being unable to make them, except from the great and sudden increase in the value of the land, and that it had been rescinded by express verbal agreement, and that Carpenter had been surprised into receiving the payment on 2 September, 1829, he heing [being] incapable of business, from age, infirmity, ignorance and weakness, and that, at any rate, as he had not made a
To this bill Fаlls put in an answer substantially the same with that to the cross-bill filed by Birchett and others against him, adding that when he went to Carpenter‘s in August, 1829, he carried and showed to him one of the best specimens of ore found in the mine, and made a full disclosure of its extent and richness, as far as then (248) discovered, and that Carpenter was dissatisfied only with Birchett and Ormond for their deception practiced on him, but was perfectly satisfied with his conduct, and expressed his willingness to make him the title as far as he could, and that he received the payment on 2 September without the least influence or menace from any person, and voluntarily, because he thought it right that the deed to Birchett and Ormond should be canceled and a conveyance made to Falls, and that he was then in the full enjoyment of his faculties; that the value of the mines was greatly overrated, for that shares of one-tenth part sold several months afterwards at $300, and it was a subsequent discovery that enhanced the value to a large but uncertain amount; that when his bonds fell due, he owned unencumbered land in the county, besides that purchased of Carpenter, worth $2,000, which was known to Carpenter, who neither wished to rescind the contract nor abandon it, nor would have let Falls do so.
Birchett and Ormond also answered this bill to the same effect with their answer to the original bill of Falls and others, admitting, further, that their principal object in buying the land was the prospect of gold, and that the spot where the gold was then found (which they then thought was vacant) was included within the lines of the Carрenter land, which had been sold to him by the party, Robert Dixon, and stating also that that vein turned out to be of little value, but that several months afterwards another of great value was discovered in another part of the land; that Carpenter expressly declared that he and Falls had rescinded their agreement, and that he readily contracted with them and sent for Adderholt, his friend and neighbor and ordinary adviser, to draw the writings, who came and did so, and that before he executed them Dixon arrived and informed him that there was probably gold, to which he replied “he did not care, and hoped there might be; that if there was he did not want it, but wanted money to pay his debts and put his mind at rest“; that he was perfectly competent to do business, and had the assistance of his confidential adviser, (249) Adderholt.
To the answers in each of the causes, replications were entered, and a large mass of testimony taken by all the parties. The most important were the depositions of Adderholt, the person mentioned in the pleadings, which were taken several times by the parties respectively.
That witness stated that he was the friend and near neighbor of Carpenter, with whom he generally advised upon matters of business, and on whom he called to do his writing; that he drew the contracts between Carpenter and Falls, and that he knew that Falls paid corn and rye in 1827 and 1828, though he could not state the precise amount of his own knowledge, and that he also paid a note of Carpenter‘s to John Falls for twenty-six dollars; that it was agreed the small bond should be first paid, and any surplus should be applied to those given upon the last bargain for the price of the land. He further stated that on 22 August, 1829, Ormond came to his house and stated that he and Birchett had bargained for the land, and that Carpenter had sent for him to draw the bonds and deeds; that he went, and on the way asked Ormond if Falls was there, and he said not; that he then asked if they had the bond to Falls, to which he also replied no, and that they had been to see him, but that he was intoxicated continually. The witness then remarked to him that Falls or the bond ought to be there, and Ormond stated that Birchett was with him the day before but that he was so stupidly drunk they could do nothing with him. The witness asked if they had found gold on the land, and Ormond said not as he knew, and that he and Birchett wanted to set up a mill and store on the land. Upon their arrival at Carpenter‘s the terms of the bargain seemed to have been settled, but Carpenter asked him what he thought of the trade, and upon his saying that he thought Falls or the bond ought to be there, Carpenter observed that he thought so too. Birchett or Ormond then said there was no danger, for as Falls had not paid his bonds, Carpenter‘s bond was void. When the deeds were drawn, Carpenter hesitated to sign them, and said he did not like to do so without (250) Falls or the bond; when Dixon, who had then arrived, said that the bond was void and there was no danger. It was understood by all parties that Falls was then in possession, and the witness then heard of no other person who was. After Dixon‘s remark, Carpenter executed the deeds, and in a little time Birchett or Ormond asked how they were to get possession, to which Carpenter replied, “You must see to that yourselves.” Both Birchett and Ormond denied at that time that they knew of any gold on the land; and on that occasion Carpenter said he had no persons to work gold mines, and did not care for them, but he wished they might find one; that what he wanted was his money for the land, which he believed he could never get Falls to pay him; and Birchett or Ormond then said there was no doubt Falls would give
It clearly appeared upon other proofs that Falls had been in possession from 1823 up to August, 1829, and that he or his tenants lived on the land and had parts of it in cultivation; and particularly, that some weeks before Birchett and Ormond‘s purchase he had applied to R. M. Crane (a witness for Birchett and Ormond) to borrow five hundred dollars to pay to Carpenter, saying then that he had paid about one hundred dollars towards the land, and if he could raise five hundred dollars more Carpenter would wait with him; and to induce Crane to make the loan, he offered to lease to him the land in dispute, and (252) to mortgage other land, worth twelve hundred dollars, and also this as a security, and did make a lease of part of the land to Crane; and also that on 18 August, 1829, he leased four acres to Riley Arrowood, to be worked for gold, on which the lessee proceeded to work, and the ore was found which Birchett and Ormond saw.
Thomas Dixon, a son of Robert Dixon, who was a party, stated that he heard Falls say, in the spring of 1829, that “he expected to give back the Carpenter land“; and also heard F. Carpenter, Jr., say that in the spring of 1829 “his father had sent him to Falls to see if he would pay or give up the land, and that he got no money,” but he did not state that Falls agreed to relinquish the land.
Hugh Patterson stated that in the spring of 1829 F. Carpenter, Jr., brought a message to Falls, and witness saw them conversing, but did not hear the particulars, and that next morning Falls said that “he must go up in a few days and settle with Mr. Carpenter“; but whether he meant to settle for the corn or pay for the land the witness could not state. A few days afterwards Falls was very drunk, and was complaining of Dixon having gained an expensive lawsuit for land against his father, and said that he must give up the Carpenter land and try Dixon himself.
Jacob Starnes stated that several days before Birchett and Ormond purchased, Falls had made leases to Arrowood and others, and they proceeded immediately to work, and that those leases were publicly known; that on the day Birchett and Ormond purchased, Falls mentioned to the witness that “they had gone to purchase the land and gold mine in dispute.”
John Hullett stated that in the fall of 1828, as he thought, though it might be in 1827, Falls delivered one load of corn to Carpenter, when the latter remarked, “You have come nearer paying the interest than I thought you had,” and the balance of interest was then stated to be between five and ten dollars; Falls said it was less than he had expected, but that he should never be able to pay for the land, and that Carpenter
Two other witness proved that in October, 1828, F. Carpenter, Sr., offered to sell the land to Ormond, and said that Falls would not even pay the interest; and that in the spring of 1829 Carpenter again sent word to Ormond to come and buy the land, as he could get nothing from Falls; and F. Cаrpenter, the son, said that Falls would give up, and had told him to sell the land. Falls was not present at nor informed of either of those conversations.
To the discredit of John Hullett, many witnesses were examined who said that he was not credible; and other witnesses proved that the last payment was not made by Andrew Falls, the party, but by John Falls, who delivered four loads of corn in 1828, while Andrew was in South Carolina, and that the delivery of the corn by Andrew himself was in 1827.
Benjamin S. Johnson stated that a short time after the sale to Birchett and Ormond, Carpenter informed him that when they proposed to purchase, they stated to him that Falls had consented that they should, as they intended to establish a mill and store which would be convenient to him, residing on his own land, which adjoined; and that he, Carpenter, told them that he did not think it right to sell to any person after having agreed to convey to Falls; but that, upon receiving the assurance before mentioned, and believing Ormond to be a very honest man, he thought he might do so; and that he would not have conveyed to Birchett and Ormond if he had not believed it was approved by Falls.
Richard McKee, a nephew of Carpenter, stated that two or three weeks before Carpenter died, and when he was “fully at himself,” he stated to the witness that he told Birchett and Ormond that he had sold to Falls, who held his bond, and that Ormond replied they had seen Falls, and he did not want the land, and had told them to go and purchase; that he, Carpenter, would still do nothing until Adderholt was sent for, who said, when he came, he thought the bond for (254) title was out of date; that, putting confidence in Ormond and thinking the bond void, he made them a deed; but that he soon learned from Falls that he had not given his consent to Birchett and Ormond, and therefore he received payment from him, and was willing to make the title to him.
Robert Dixon was, after his release and disclaimer, examined by Birchett and his associates under an order, subject to all just exceptions. He stated that those persons did not know that the gold found was on the Carpenter land, but they believed it extended to it; and that he told Carpenter before he signed the deed that he, the witness,
There was also much testimony as to Falls’ circumstances, in which the witnesses expressed opinions somewhat at variance. Upon the whole of it there was no doubt of his solvency. When he made the contract he had but little property, and was a young man living with his father, who was a farmer in easy сircumstances; and Falls could himself get credit, from the general confidence in his honesty. He added somewhat to his property, and contracted debts; and in the early part of the year 1828 his father died and left him lands and a slave, worth about two thousand dollars, but somewhat encumbered; so that Falls’ clear estate, after discharging his father‘s debts and his own (exclusive of the lands then in dispute and the price to be paid for them) was, in 1828 (255) and 1829, of the value probably of twelve or fifteen hundred dollars.
These cases were brought on and argued together at very great length by Badger for Falls and others; Thompson (of South Carolina), Devereux and Iredell for Birchett and others, and by Pearson and Winston for Carpenter‘s heirs. These three causes have been properly brought on and argued together; for nearly the same questions arise in each, and all those that are important to the rights of the parties appear upon the pleadings in the original suit.
The cross-bill of Birchett and Ormond is chiefly for discovering from Falls as to matters set up by those plaintiffs in their answer as defendants to his bill. It charges only one new fact, or rather puts that fact more distinctly and in a stronger light than their answer did. That is,
The cross-bill of Carpenter‘s heirs was probably filed principally to enable the plaintiffs therein to impeach the deed to Birchett and Ormond upon their alleged fraud, in case a decree should be refused to Falls in the original suit, and therefore Falls was made a party, that it might appear that his interest had been put out of the plaintiff‘s way. It brings forward no new matter against Falls; and if the matters charged, and admitted or proved, be insufficient to bar Falls from specific execution, still less will they authorize a decree that he shall give up the agreement. Equity may refuse to help either party, and leave both to law; but there is no ground in this Court to cancel a contract, fair in its origin, upon the score merely of default or abandonment. There cannot be a case of that sort, upon which that relief could be asked in equity, in which the facts, on which it was asked, would not defeat an action at law on the contract. As a bill of discovery simply, it has entirely failed with respect to Falls, who denies that he had either rescinded or abandoned the contract. The plaintiffs can have no relief, therefore, upon it, if Falls should be found entitled to a decree in his suit; for if Birchett and Ormond practiced the grossest fraud in obtaining the deed — although it may affect the costs — it becomes immaterial to these plaintiffs as soon as their interest in the subject (268) ceases and it is shown to belong, in the view of this Court, to the other party, Falls. It may be remarked, however, that the case is much stronger for Falls in the suit by the Carpenters than upon his own bill, because there is important evidence competent in the former
That question was made in the argument to depend mainly upon the right of Falls to have called for a deed from Carpenter, upon the facts existing before, and on 22 August, 1829, as those facts (270) appear upon the proofs, exclusive of the subsequent declarations and acceptance of the purchase money by Carpenter. Birchett and Ormond are purchasers who have not paid any money, and consequently stand in Carpenter‘s shoes in respect to the equity of Falls, but that equity must be established against them by evidence that is competent against them. The Court will consider the case in that light, and throw out of view the testimony of Johnston and McKee and the payment of the balance of the price.
The deposition of Robert Dixon must, for a like reason, be rejected upon this part of the case. Having released to his companions before Carpenter filed his bill, he was not made a party defendant to it, and his deposition was therefore competent for Birchett and Ormond against Carpenter. But it cannot be read against Falls, as to whom the release pendente lite is a nullity, and who must have a decree against the witness, if he gets one at all. Indeed, his liability for the costs, although in discretion, would be a sufficient objection, according to Barrett v. Gore, 3 Atk., 401. That case has been questioned in some of the courts of this country. Nevertheless, we approve of it, because it is a safe rule that a witness should be entirely disinterested, and in a case of this kind the Court must, upon its settled principles, decree costs against Dixon, if any decree be made against him.
In the point of view in which the case is now to be regarded, the offers of Carpenter to sell to others, and the declarations of him and his son that Falls had agreed that he might do so, must also be put aside, because the knowledge of those circumstances is not brought home to the plaintiff.
It may be remarked here, however, that upon one ground Falls might be found upon investigation to have a substantive equity against those purchasers distinct from that he might have had against their common vendor. Supposing that the contract had not been expressly rescinded, but that Carpenter thought that it had been abandoned by Falls, and, under that impression, sold to another, who contributed to produce (271) or confirm that impression, and represented that Falls had abandoned expressly in favor of the person seeking the second purchase — it would seem to constitute a case of deliberate deception by active means for the sake of gain, which ought to deprive the purchaser of all the advantage of his deed, and make it subservient to the interest of the party, whose conduct and wishes had been misunderstood by him who made the deed, and misreрresented by him who took it. In this aspect of the case, Carpenter‘s own interest is to be considered as gone, at all events, either upon his contract with Falls or his deed to the others; and the question is, to which of them ought it to go? Carpenter honestly disabled himself from conveying to Falls. He knew he had made default, and from that he may possibly have inferred that the contract was abandoned by Falls. He was ignorant that, in fact, it was not abandoned. But Birchett and Ormond knew, and fully knew, better. Their answer, indeed, states that Carpenter told them that the bond was void, and that Falls had abandoned — intending to imply a negative pregnant to the proposition that such remark fell from them. But they do not say that affirmatively, and, the answer being silent as to that charge of the bill, the unequivocal testimony of the witness (Adderholt) proves it; and also that Carpenter deemed it a most material circumstance that Falls was willing the other should buy. Admit that Carpenter might have insisted on the default as a forfeiture, yet, if he did not, and would then have conveyed to Falls, upon the footing of their former contract, in preference to conveying to Birchett and Ormond upon a new contract, against the wishes of Falls, ought not the last bargain — the price being the same in each — to be looked upon as having been made, substantially, in compliance with the first contract, as it was, expressly, upon the supposed wishes of the party to that contract? Carpenter is put out of the way because he would not rely on Falls’ default against him. Are the оthers in a posture to raise the objection simply because he might have done it, though he did not? Notice subjects them to all the equities against Carpenter, but their conduct may prevent them from being entitled to all his defenses against Falls. Now, (272) whether Carpenter told them that the contract with Falls was not binding, or they told him so, it is certain that Carpenter would not have made them a deed, as the contract had not been actually canceled, if he had not believed that Falls fully assented to it. This
The first objection on the part of the defendants would be (273) fatal if founded in fact. It is that the contract was expressly rescinded by a subsequent parol agreement. But to this allegation there is no evidence, while it requires that which is clear, positive, and above suspicion. Hullett‘s testimony comes the nearest to it. He states a proposition by Falls, but no assent on the part of Carpenter. Besides the witness is mistaken as to the time, for more than a year after the one load of corn, which Hullett saw Andrew Falls deliver, four other loads were delivered for him (1828) by John Falls. The parties, therefore, acted on the contract after the time Hullett speaks of, which proves that it was not then rescinded. As late as the spring of 1829, Carpenter sent for further payments, and the defendants have themselves examined witness who can go no further towards establishing even abandonment than to state Falls’ declarations about this last period, that “he would
The substance of the objections consists in the failure of Falls to pay the purchase-money punctually, and in his insolvency, which rendered him unable to perform his agreement until the land rose in value, and then only out of the land itself, and in the great increase of value immediately before he offered to comply. The argument for the defendants did not distinctly proceed upon those grounds severally, as if any single one of them constituted a bar to the relief, though the principal proposition taken was the general one, that time is material in equity, and is deemed of the essence of the contract, and therefore the relief (274) must be refused; and the other circumstances were invoked to sustain that doctrine by showing its reasonableness in its application to this cause. It struck us that it required the whole to make the argument plausible, and that if any one of the positions be false in fact or immaterial to the conclusion the whole proposition must fall.
The allegation of insolvency is unfounded. There was no change in the circumstances of the plaintiff except for the better, and he was fully able to pay the debt. Had he been insolvent, it would be a question how far one who contracts with a person known by him to be in that situation could, after an increase in the value of the estate, allege, for the first time, that as a reason for annulling the contract, or why a court of equity should not give full effect to it. It might form a proper motive for inserting in the contract a clause that default should avoid it, and be a reason with the Court for holding in such case that the provision was not formal but substantial. But when the vendor retains the title as a security, and also takes bonds of the vendees as a separate and absolute obligation, binding on the person, and recoverable without showing performance on the part of the vendor, and likewise deals with an insolvent person as if he were solvent, by leaving him in the articles at large as to time, it is not seen how the court can put a сonstruction on the instrument, founded on the circumstance of insolvency, as indicative of the intention of the parties. Insolvency, whether existing at the time of the contract or occurring subsequently, if continuing, so as to disable the purchaser from fulfilling his contract, may authorize the
It is otherwise with respect to the increase in the value of the land, which, at any rate, will bring a great deal more in the market than the contract price. It might be well, however, to ask, who now urges this fact, and whether that party can avail himself of it? Carpenter‘s interest in the subject in litigation is excluded, as already stated; and the decree, as one for specific performance, if made, must be against Birchett and Ormond, who have the legal title. They are alone interested, and they bought after they knew of the increased value; Falls, before it was discovered. It is not a case of turpitude, in which equity will not interfere, but leaves the possessor to his advantage, because the other has no merit on which it can be taken away; it is simply an objection that equity ought not to transfer so valuable an estate for so little money. Does that lie in their mouth, when they were to give precisely the same sum, and had notice of the other‘s purchase? But not to speak of that, it is certain that the increase of value is not such a change in the subject-matter of a contract as is, of itself, a ground for rescinding or not enforcing articles. The thing contracted for is, in equity, considered the purchaser‘s from the time of the contract, and stands as a security only to the seller. Ordinarily, therefore, advantages or disadvantages, arising subsequently, either from unforeseen accidents or from contingencies, on which the value was known at the time to be dependent, cannot be a cause for refusing to enforce an executory agreement more than for annulling an executed conveyance. Paine v. Meller, 6 Ves., 352; Pritchard v. Ovey, 1 Jac. Walk., 403; Revel v. Hussey, 2 B. Beat., 287. What happens to the property while the contract is in full force cannot alter the respective rights. If one of the parties refuse to perform, and there comes a change of circumstances, upon the strength of which he is desirous to go on with the bargain, and insists on it, he may properly be repelled, although he was not watching for that change, because a favorable chance ought not to profit him who would not run the risk of an unfavorable one. In like manner, if a loss arises by a fall in value оf things of fluctuating price (276) and subjects of traffic, and the vendor could not or would not make a title, according to his contract, in which case the purchaser
It has been contended that the nonpayment of the purchase-money at the day or, at any rate, that circumstance, with any other slight one of inconvenience or loss to the seller, is a sufficient reason for refusing it, and that here, the delay and the change in value discharge the vendor. The jurisdiction was traced to its origin, and it was said that its principle was to execute specifically a contract legally valid, and therefore that time must be essential in equity, because it is at law; and many cases were cited and minutely criticized. Certainly the cases show that, under a great variety of circumstances, the court has refused the relief when the party applying was in default in respect to the thing to be done by him, or in respect to the time in which the thing was to be done, and circumstances had then so changed that performance by him would not put the other party in the same situation as if it had been done in due time. On the other hand, the cases are as numerous in which the relief has been given, where there was default in those respects, and a change in the title or vаlue of the property, upon the ground of the conduct of the parties, before or after the alleged default occurred. We do not think it necessary to examine all the cases, nor to dwell much on the elementary principle, for we think the facts of this case are such that the decree we feel obliged to make will not be in conflict with a principle established or a precedent furnished by any one of the cases in the books.
What the Court deems the material circumstances of the case may be, in a great degree, gathered from what has been already said. But it may be well to group them together. The plaintiff agreed to give seven hundred and fifty dollars for the land, and executed two (277) bonds for the price, payable, with interest, at one and two years, the last of which fell due in November, 1828, and took a bond from his vendor to convey “at the payment of the purchase-money.” He went into immediate possession or, rather, continued that derived under a former contract, and acted in all respects as owner, without any objection on the part of the vendor, up to the moment of the sale made by him to the other defendants, which occurred between nine and ten months after the last payment fell due. In the meantime he repeatedly made payments, altogether to the amount of two hundred and forty dollars, of which he agreed that a part should be applied to another debt, and about the sum of one hundred and forty dollars, including interest, remained applicable to the debt for the land; and also, in the
It is not denied that time is material in equity. It is always respected here. Nor is it denied that time may be of the essence of a contract. Exact punctuality may be of great importance to the interests of a contracting party in many situations. In some, it is obvious from the state of the property and other circumstances. In others, we do not doubt that the instrument may be so framed as to show what is true, namely, that it is a substantial part of the contract. In those cases a court can no more dispense with that than any other vital provision. But the parties themselves can dispense with it, and the inquiry, where it has once existed, is whether they have dispensed (278) with it. It is in that sense true that time is not essential, but immaterial in equity, when comparing its effects here with that at law. It never was, and cannot be regarded in both courts in the same light. It is true, a maxim is found that equity does not decree performance of an agreement, upon which an action would not lie at law for damages, and anciently it was the usage to send the party to law. But that was to determine whether the agreement was so constituted as to have become binding at any time, whether it ever was a legal contract, and not whether the party had lost his legal remedy by accident or the nonobservance of a provision, deemed in equity merely formal. But the jurisdiction is established now, upon the view of the court of Equity, as to what forms a sufficient contract, and it is beyond a doubt that some are so considered which could not be stated to a court of law, as, for example, the cases of parol contracts with part performance, under the statutes of fraud. And in respect to time, so far from equity being governed by it as a conclusive bar, it was one of the earliest jurisdictions to relieve against it, as in the case of penalties. Suppose a day to be fixed for Carpenter to make a deed and that he made after the day, at law the penalty of his bond might be recovered. Ought equity to allow that? Certainly not, and would not. It could not be tolerated, that with the deed in his pocket Falls should say, “I stand upon the
Default in respect of the time is not therefore a bar of itself, except in peculiar cases, but is only evidence, with other things, of abandonment, and of course may be rebutted. It may in all cases be made essential, but where it is, it does not follow that it is necessarily conclusive in equity as it is at law. It cannot be made thus conclusive here, that is to say, so as to preclude a party from showing that it ceased to be essential, as is the case at law from the form of pleading and the mode of proof. But it is never to be forgotten that in equity a party may waive, and it may be shown that he did waive, a stipulation introduced into a contract for his benefit, whatever may be the subject or the terms of the stipulation. It was said, indeed, by the counsel for the plaintiff that both parties must be active, and that, even if articles expressly state that the agreement shall not be binding unless performed at the time, a party cannot avail himself of it unless, before the first default, he give notice that he will take advantage of it. That would be going very far towards saying that time could not be made essential, for, if the contract be not notice enough to the parties, it would be difficult for the Court to perceive upon the same instrument that it was essential.
The present is not like the case Hatch v. Cobb, 4 John‘s C. C., 559, which was much pressed at the bar. There was no acquiescence, but express notice that the vendor must sell again, and the purchaser had covered all his property by a recent judgment, and there was no separate security. All the vendor could do was to get his land again, and he gave the other the opportunity of paying for it and keeping it. But this question could not arise in that case, because the second purchaser was
The present case, on the contrary, stands on the common equity of a contract for an estate in possession. The purchaser is in arrear for a large part of the purchase money for nine months, but is fully able to pay it, and the vendor acquiesces in the default during the whole time; and then, without any notice whatever, makes a second sale to a person, with full notice, not only had before, but repeated to him at the time by the vendor himself. Having allowed it to subsist after the default, he cannot put an end to it by an act which, supposing it to subsist, is in violation of it; but to that end there must be a previous, formal and reasonable notice that if the purchaser does not fulfill it, the other party will not hold himself bound. This would be the law if the purchase money was only secured by the articles, and the time specifically made essential therein. It is much clearer when the vendor holds the bonds of the other party and does not offer to surrender them. Upon this agreement the time also seems to be as much at large as it could be, unless it had expressed that it should not be material, and left the money to be paid during the purchaser‘s lifetime, unless hastened by request.
An objection was made to the assignment by Falls, upon the ground of maintenance or champerty. But a cestui que trust may surely assign when he or his trustee is in possession, which has been the case at every moment since his purchase. He has never been out of possession, and contracted on the land. The occupation of a small part by the
We think, therefore, that the plaintiffs in the original bill are entitled to the usual decree for specific performance, and to be quieted in the possession by injunction; and that Birchett and Ormond, and those defendants who claim under them, must pay the costs, and that the cross-bill of Birchett and Ormond must be dismissed, with costs. Those decrees extinguish all claim of the Carpenters to the land, and consequently their cross-bill must also stand dismissed as against Birchett and Ormond, and without the necessity of determining the question of fraud from their imputed concealment or representations touching the discovery of gold, but without costs to those defendants.
PER CURIAM. Decree accordingly.
Cited: Barnes v. Strong, 54 N.C. 107; Scarlet v. Hunter, 56 N.C. 86; Taylor v. Kelly, ib., 244; White v. Butcher, 59 N.C. 233; Allen v. Pearce, ib., 311; Reynolds v. McKenzie, 62 N.C. 56; Faw v. Whittington, 72 N.C. 323; Herren v. Rich, 95 N.C. 503; Holden v. Purefoy, 108 N.C. 167, 170; Boone v. Drake, 109 N.C. 82; Taylor v. Taylor, 112 N.C. 31; Gorrell v. Alspaugh, 120 N.C. 368