Gates v. ParmlyGates v. Parmly
- Reporters:
- , ,
- Before:
- Pinney
The following opinion was filed February 18, 1896:
PiNNey, J.The allegations of the complaint and prayer for relief show conclusively that the action is an equitable one, in the nature of an action for specific performance and for relief from a condition precedent, by way of a penalty or forfeiture, as security for performance on the part of the plaintiff, and not a provision for liquidated damages. A vendor may maintain an equitable action against a vendee for specific performance of a contract for the sale and conveyance of lands when he agrees to convey to the vendee, and the latter merely promises to pay a certain sum as the price. Since the latter may, by a suit in equity, compel the execution and delivery of a deed of the premises, the vendor may also, by a similar equitable action, enforce the undertaking of the vendee, although the substantial part of his relief is the recovery of money. Pomeroy, Spec. Perf. § 6. As the vendor in this action seeks relief from a penalty or forfeiture imposed by a condition precedent in the contract and to enforce a vendor’s lien for unpaid purchase price, the jurisdiction of equity is undoubted, for in such a case he cannot have a complete and adequate remedy at law, as of these questions a court of law has no jurisdiction.
Upon the execution of the contract, the defendants became, in the estimate of a court of equity, the owners of the land, and the plaintiff the equitable owner of the purchase money which they held in trust for him; and the condition in the contract operated as an imperfect mortgage or pledge of his equitable ownership of the purchase money, that he *308Would furnish and deliver, on or before the time specified, an abstract of title showing .perfect title to the lands, and such imperfect mortgage or pledge would become redeemed or avoided upon what would be regarded as an equitable performance on his part. If the vendee obtains title to the lands or damages which can be regarded as compensation for partial failure, he gets all that, in justice, he is entitled to. This doctrine has been applied to many cases of breach of condition precedent where the parties could be put in the same situation as if the condition had been performed, and so it would seem that where the condition is security for the payment of money or the performance of any particular act, or in the nature of a penalty or forfeiture for nonperformance of such condition, such relief may be granted. Pom-eroy, Spec. Perf. §§ 391, 392; Waterman, Spec. Perf. § 435; Grigg v. Landis, 21 N. J. Eq. 494; Edgerton v. Peckham, 11 Paige, 352, 363; Sanders v. Pope, 12 Ves. 282; In re Dagenham Dock Co. 8 Ch. App. 1022. But, where there cannot bo any just compensation decreed for the breach, equity will not interfere. It is insisted by the plaintiff’s counsel that the defendants had, by their contract, waived the condition in question; but we Alo not find any evidence that would justify such a conclusion, and we think that, upon well-established equitable principles, the relief sought from the breach of the condition precedent in this case may be properly granted.
The statute^ in substance the same as the present one as to the effect of tax deeds, has been in force ever since 1850; and in the case of Delaplaine v. Cook, 7 Wis. 44, as early as 1856, this statute was sustained and applied, and it was held that the legal presumption attending a tax deed fair upon its face might be rebutted and overthrown by evidence on the part of the party attacking the deed, the onus probandi being upon him. This rule has been repeatedly affirmed. The latest case in which the validity of such a deed was fully considered is Hotson v. Wetherby, 88 Wis. 324; and the validity of the three years statute of limitation, in favor of and against tax deeds, was sustained in Edgerton v. Bird, 6 Wis. 527, and Falkner v. Dorman, 7 Wis. 388, and has been uniformly upheld. At the same time, it has been as constantly affirmed that tax titles, being under a mere naked statutory power, are strieti juris, and that the statutory authority must be strictly complied with or the title will be absolutely void. Potts v. Cooley, 51 Wis. 355, and cases cited. How easily the prima faeie character of the deed may be impeached will appear from the following, among many other adjudications that might be cited: Lain v. Shepardson, 18 Wis. 59; Jarvis v. Silliman, 21 Wis. 599; Iverslie v. Spaulding, 32 Wis. 394; Sprague v. Coenen, 30 Wis. 211; Cotzhausen v. Kaehler, 42 Wis. 332; Scheiber v. Kaehler, 49 *313Wis. 301; Hebard v. Ashland Co. 55 Wis. 148; Ward v. Walters, 63 Wis. 43; Hiles v. Cate, 15 Wis. 91; Hiles v. Atlee, 80 Wis. 220; Easley v. Whipple, 57 Wis. 485; Curtis v. Morrow, 24 Wis. 664. But, if the statute has been in all respects complied with, a tax title is as good as any other. Harding v. Tibbils, 15 Wis. 232. And certainly, after the three years statute of limitation has. run in its favor, there is no reason to doubt such a title. Lindsay v. Fay, 28 Wis. 177; Dean v. Earley, 15 Wis. 100; Knox v. Cleveland, 13 Wis. 245.
Whether such a title is a marketable one is a question in respect to which there is an almost entire want of authority. A tax title has nothing to do with the previous title. It does not in any way connect itself with it. It extinguishes the old title and all liens and equities depending upon it. Lessee of Neiswanger v. Gwynne, 13 Ohio, 74; Ross v. Doe, 1 Pet. 664. As a general rule, a title which is open to judicial doubt is not marketable; but what may be regarded as such doubt is not easily defined, depending much upon the discretion of the court. But in no case will a purchaser be compelled to accept and pay for a title which he can only acquire in possession by litigation and judicial decision, nor where it is evident that his possession must be defended in like manner. He is not bound to buy a lawsuit. Waterman, Spec. Perf. §§ 411 et seq. Specific performance will not be decreed at the suit of a vendor whenever the doubt concerning his title is one which can only be settled by further litigation, or when the court can see that the purchaser will, with reasonable probability, be exposed to bona fide adverse claims on the part of third persons. As the decree in the suit binds only parties to it, and constitutes no obstacle to the enforcement of adverse rights asserted against the title, the legal effect of events or acts collateral to it and capable of destroying its validity can only be determined by another judicial proceeding. Pomeroy, Spec. Perf. § 203; Shriver v. Shriver, 86 N. Y. 575; Ludlow v. O‘Neil, 29 Ohio *314St. 182; Richmond v. Gray, 3 Allen, 27; Gill v. Wells, 59 Md. 492; Dobbs v. Norcross, 24 N. J. Eq. 327; Butts v. Andrews, 136 Mass. 221; Walsh v. Barton, 24 Ohio St. 28. But facts must be known at the time which fairly raise a reasonable doubt and render the title doubtful, and not merely a possibility or conjecture that such a state of facts may be developed at some future time. In Cattell v. Corrall, 4 Younge & C. 237, AldeRSON, B., said in regard to a doubt from a fear of future litigation: There “ must be a reasonable and decent probability of litigation. The doubt must be reasonable, and, so far as it depends upon contingent events and uncertain facts, their occurrence and existence must be fairly probable.” Pomeroy, Spec. Perf. § 204; Vreeland v. Blauvelt, 23 N. J. Eq. 483; Kostenbader v. Spotts, 80 Pa. St. 430, 434. As applied to the case of a tax deed prima facie valid on its face, there must be some known grounds or reasonable belief, and not mere conjecture of the existence of facts which, if shown, would probably destroy the prima facie character of the deed and defeat the title. In Warvelle, Vendors, 52, it is said that “a title raised by tax sale is a purely technical, as distinguished from meritorious title, and depends upon a strict compliance with all the requirements of law, . . . but no presumption cam. be raised to cure radical defects in the proceedings, and the proof of regularity devolves upon the person asserting title; . . . that, owing to the complexity of procedure, the many errors which may arise, a tax title is regarded as among the poorest evidences of title to land, and is always taken with suspicion and viewed with jealousy.” These observatipns are not, we think, applicable under a statute such as ours; and a tax title is just as meritorious in point of law as any other if the requirements of the statute have been complied with. A tax deed being prima facie evidence of title in fee simple, the title is not to be discredited by the courts in the absence of evidence showing a reasonable *315probability of the existence of facts which render its invalidity fairly probable. The only decision, we have met with upon the question whether a tax title is a marketable one where the deed is prima facie evidence of title in fee simple and of the regularity of the proceedings up to and including the execution of the deed, is in Kramer v. Ricke, TO Iowa, 535, where it was held that such a deed was a title that would enable the vendor, upon objection to the title, to recover the purchase money, and that it was for the vendee to point out and sustain objections. After much doubt and hesitation, we have concluded that a tax deed, under our statute, fair upon its face, is prima facie a marketable title, which the vendee is bound to accept as such, unless specific objection is made and at the hearing, or upon the usual inquiry or reference as to the state of the title, it is found not free from reasonable doubt.
As to quite a number of such tracts, the plaintiff had previously made valid contracts of sale to others of the timber standing or growing thereon. These contracts passed an *319interest in these lands to the several parties with whom they were made (Young v. Lego, 36 Wis. 394; Daniels v. Bailey, 43 Wis. 566); and, as there was no competent evidence to show that such interests had ever been surrendered or released, the title was, to this extent, defective. The court received evidence tending to show that the parties holding these contracts had cut off the timber to which they were entitled, and held that the outstanding contracts constituted no defect of title; but as the persons holding them were not parties to this action, and could not be concluded by a finding or judgment in. it, it is plain that the objection to the title was not removed. Beach, Mod. Eq. Jur. § 610; Fleming v. Burnham, 100 N. Y. 1, 9; Abbott v. James, 111 N. Y. 673; Chesman v. Cummings, 142 Mass. 65, 68; and cases hereinbefore referred to on this subject. ¥e do not include in this category cases where the time Avithin which the timber AVas to be cut and removed had been limited to a period which had already expired.
As to another group of tracts, called the “ Atlee Lands,” it was shown that the tax deed under which the plaintiff claimed to make title was void for the reason that the lands were not, as the statute requires, advertised to be sold “at public auction.” Atlee brought an action to recover the lands, and it was compromised by Parmly, trustee, quitclaim-ing the lands to him for $184.37, while acting in good faith on the theory, induced by the plaintiff’s conduct, that the title was bad. The plaintiff, having certain tax certificates on these lands belonging to the defendant Parmly, trustee, and held with the view to perfect title, drew and retained certain redemption money thereon, to the amount of $64.01, which should be deducted from the $184.37; and the balance, $120.36, should be charged to the defendants in the adjustment of the final balance herein.
Of the lands embraced in tax deeds which were void on their face, having been executed before the time for redemp*320tion bad expired, and under which the plaintiff claimed to make title, as to four tracts the title has failed, but as to 920 acres included in such deeds the title was subsequently perfected. The court erroneously excluded these deeds; but, as the bill of exceptions shows that they were incurably void, the question is properly before the court, and the deeds were offered before the plaintiff had tendered his last abstract, and were not too late. There were other tracts where the tax titles relied on were void for the reason that the lands were not subject to taxation; and as to very many others the titles appeared to be in other parties, who had not conveyed either to the plaintiff or to Parmly, trustee, his grantee; and as to still other tracts the testimony of the plaintiff shows that the tax deeds relied on did not convey any title to him or either of the defendants.
The title to the lands known as the “Northwestern Lumber Company Tract” seems to have been perfected; but the allowance made to the defendants for 700,000 feet of timber cut off these lands, in performance of the plaintiff’s contract with that company, and after he had made a deed of the same to Parmly, trustee, according to competent and uncon-tradicted evidence should have been 2,000,000 feet, of the value of $4,000, for which sum the defendants are to be allowed accordingly. The evidence of the plaintiff was that he did not know what the amount thus cut from said lands was, but that he settled with the company for 700,000 feet. This was not competent evidence upon that subject.
The allowance to the defendants for $206.93 for money paid to redeem portions of the lands from tax sales is to stand as made by the circuit court.
Upon taking and stating an account showing a balance in favor of the plaintiff according to the principles thus settled, •:he is to have a judgment therefor in his favor, without interest and without costs; but the defendants are to be ¡.allowed the proper costs of the reference herein directed.
’ The voluminous character of the record and printed case, ;and the wholly unnecessary length of the appellants’ brief, ■have rendered the examination and decision of the case unusually difficult and laborious. In the taxation of costs, ^allowance will be made for only forty-five pages of the 189 ■of the principal brief and reply of the appellants.
It follows that the judgment appealed from must be reversed.
By the Court.— The judgment of the circuit courtis reversed, and the cause is remanded for further proceedings in -accordance with the opinion of the court.
Newman, T., took no part.The following opinion was filed May 22, 1896:
Pinney, J.The plaintiff, as well as the defendants, has ¡moved for a rehearing, but each for different reasons. The ■defendants’ counsel have discussed anew the leading questions involved in their appeal, but we see no reason for departing from any of the legal conclusions announced in the opinion. The defendants cannot now be allowed to rescind •the contract. They made no case in their answer and no ■ claim in it for rescission. Manifestly, the stipulation in the ■ contract that it should “ be construed to be a personal contract between the parties ” was not intended to preclude the plaintiff from maintaining an action upon equitable •.grounds for the recovery of unpaid purchase money. Full *322effect Ras been given to that stipulation in bolding that be. bas waived tbe vendor’s lien for tbe unpaid purchase money.. It was pointed out that tbe intention manifested by tbe deed and contract was that tbe grantee should have immediate possession of tbe lands described therein, with the-right to sell and convey tbe same at will, but tbe unpaid, purchase money was not to become due until one year after tbe date for furnishing tbe abstract showing perfect title to tbe land, and that, according to tbe terms of tbe contract,, tbe unpaid purchase money bas not become due at law. Our attention is now called to tbe fact that tbe defendants were-entitled to interest at tbe legal rate on tbe $4,000 allowed for tbe timber cut off tbe lands known as tbe “ Northwestern Lumber Company Tracts,” as defendants were entitled to that amount as constituting a part of tbe land sold to. them. Tbe plaintiff bas been charged for receiving and improperly retaining this money, when it ought to have been paid over at once to tbe defendants. We think that tbe defendants’ contention is correct, and that they are entitled to have interest on tbe $4,000 from tbe time tbe last sum was paid to the plaintiff by tbe North western Lumber Company, and tbe direction in respect to tbe reference in tbe opinion is modified accordingly.
Both parties have presented points on these motions, apparently upon tbe supposition that they are to be allowed to. go again into tbe merits of tbe case. This is not permissible. The case, as to all questions embraced in tbe record, except, as otherwise stated in tbe opinion as modified, is concluded. If tbe parties failed to produce proper or sufficient evidence, it is now too late to supply tbe defect. This court can. act only upon tbe facts contained in tbe record, and cannot review tbe finding of tbe trial court as to tbe facts, unless tbe points made are presented by proper exceptions to such, finding.
It is insisted by tbe appellants that they did not under*323stand that the entire equities of the case were being tried in the circuit court, but that only certain leading questions were to’ be heard, and then a reference was to be had, upon which proofs upon the different branches of the case, in detail, were to be produced. There is nothing in the record to warrant this contention. If there was any such mistake or misunderstanding in this respect, application should have been made to the circuit court to correct it. Some evidence appears to have been directed to every branch of the case, and parties cannot be allowed to experiment with the court, and retry cases, simply because they are disappointed at the result and think that they may be able to make a better showing upon another trial. No legal ground is apparent for opening the case upon the merits for further proofs.
The plaintiff has no ground of complaint for being charged with the entire costs of the reference . ordered, and of this litigation. Had he faithfully performed his contract, there is no reason to suppose that this litigation would ever have occurred. The fault is wholly his own, and he has no right to complain of the consequences. Nor is he in any position to complain of the allowance of $4,000 for timber cut and taken off the lands. He did not see fit to produce any evidence on the question which a court could consider, and the defendants did, and the result arrived at must stand. By the decision of this court, the allowance of $4,880 for the value of the 760 acres to which the plaintiff’s title proved defective is to stand. Compensation was still to be made for forty other acres, to make up the 800 acres specified in the contract. The provision in question is for the benefit of the defendants, and they may elect which forty on the list is to be taken to make up the quantity specified, for which $5 per acre, and what it may be worth over that sum, is to be allowed to the defendants.
Much criticism has been directed in respect to the list of lands for failure of title to which allowances by way of de*324duction are to be made to the defendants. Considering the character and condition of the record, it is not surprising that errors have intervened in respect to a few of the tracts. We find that one forty-acre tract was by mistake omitted from the list already filed, and it will be added at the foot. Another forty (the S. E. i of the S. E. \ of section 3, town 26, range 3) had been already included in the list of the trial court of lands to which titles were defective, and will be stricken off the list. As to certain other forty-acre tracts, the plaintiff’s title was found defective, and it is now pointed out that the record shows that the defendants have since perfected their title to these tracts. They are entitled to deductions on account of these tracts to the amount they have paid to perfect their title to them, not exceeding the sum they would otherwise be entitled to had the title in ■each instance not been thus perfected, with the reasonable and proper costs and expenses attending the perfecting of such titles. If it shall appear that the title to any of these lands, a special list of which will be at the foot of the former one, has been perfected by, or at the proper cost and expense of, the plaintiff, then no deduction or allowance will be made to the defendants therefor; but the case will not be opened to allow the plaintiff to show that the title to any of the other lands is not defective, or, if so, that it has been perfected, nor to allow the defendants to show that the title to any other tracts is defective.
With these modifications of the mandate, both motions for a rehearing will be denied, but without costs; each party to pay the clerk’s fees on his motion.
By the Court.— Ordered accordingly.