Griggs v. Moors

168 Mass. 354 | Mass. | 1897

Morton, J.

The first question is whether the performance of his guaranty by the defendant was dependent on the performance by the plaintiff of his agreement to transfer and assign the security, and we think that it was. Whether stipulations in a contract are dependent, so that neither party can call upon the other to perform unless he is able and willing to perform himself, or whether they are independent, so that the remedy for non-performance is by action only, depends on the sense of the contract as a whole, and the intention of the parties as thus ascertained. Knight v. New England Worsted Co. 2 Cush. 271, 286. Howland v. Leach, 11 Pick. 151,154.

In the present case the defendant guaranteed to the plaintiff the full payment, principal and interest, of what Candler owed him, and he also agreed to pay the plaintiff the legal expenses and charges which he had incurred, and to further assume and pay all legal expenses and costs connected with the petition in insolvency against Candler, and the bill in equity against him and Baker to set aside the conveyance which Candler had made to Baker. The plaintiff agreed that the defendant should have the benefit of the security which he had received from Candler, and that on the defendant’s paying to the plaintiff the full, amount due him from Candler and all disbursements and expenses, and delivering to him an agreement to save him harmless from all costs and expenses in any way growing out of the legal proceedings referred to above, he would assign to him the security ; the agreement on his part being subject, however, to the right of Candler to pay his note and require a reassignment of the security, or of the owners of the equity to pay the mortgage debt. We think that these constitute mutual and dependent agreements. The defendant is not entitled to an assignment of the security until he has paid the claim against Candler and the costs, and given the indemnity provided for, and the plaintiff cannot compel the defendant to do this until and unless he is able and ready to assign the security. In other words, performance by one is conditioned upon and subject to performance by the 'other. This renders the agreements mutual and dependent. Johnson v. Reed, 9 Mass. 78. Dana v. King, 2 Pick. 155. Hunt v. Livermore, 5 Pick. 395. Cadwell v. Blake, 6 Gray, 402. Phillips v. Soule, 9 Gray, 233.

The plaintiff appears to have waived the written indemnity as to future costs and expenses. This he could do. But his waiver in regard to that does not affect the mutual and dependent character of other provisions contained in the agreement. Moreover, it is possible for some provisions to be mutual and dependent, and for others in the same agreement to be independent. Couch v. Ingersoll, 2 Pick. 292. Kane v. Hood, 13 Pick. 281. Knight v. New England Worsted Co. 2 Cush. 271. If therefore the provision in regard to future costs and expenses be regarded as independent, those relating to the payment of the Candler note and accrued costs and expenses, and to the assignment of the security, would still be mutual and dependent.

The security referred to is, we think, the mortgage deed and note. As between the original parties, the deed and note were one security. There is nothing to show any separation in dealing with them. The plain implication of the agreement is that Candler assigned both, and that the plaintiff had both. As matter of law, upon payment to the plaintiff of the Candler note, the defendant would have been entitled to the security accompanying it. There is no intention manifested in the agreement to cut down his rights in this respect. On the contrary, they are fully recognized and protected. These considerations derive force from the fact that the agreement provides for the contingency of the payment of the mortgage debt by the owners of the equity. Under the circumstances, therefore, we do not see how the meaning of the word “ security ” can be restricted to mortgage deeds alone.

At the trial it was uncontroverted that, some months before the agreement was entered into, the plaintiff had released one of the makers of the note. The defendant testified that he did not know this when he signed the agreement, though he was informed of it not very long ^after; u several weeks, possibly,” he says. He also testified that he relied on the maker who had been released, and on the note. He did not contend that he was induced to execute the agreement by any fraud or misrepresentation on the part of the plaintiff, but that the failure to communicate the information was due to inadvertence or mistake on the plaintiff’s part. On these facts the case presented would be one of mistake in an essential particular regarding* the property which was to be assigned to the defendant on his paying to the plaintiff the Candler note and the accrued costs and charges, and the agreement would not therefore be binding on him. Rice v. Dwight Manuf. Co. 2 Cush. 80. Benjamin on Sales, (6th ed.) §§ 50, 51. In consequence of the release of Drisko, there was no such note in existence as that which was referred to in the agreement, and which the plaintiff was to assign to the defendant. What the result would have been if the defendant had guaranteed the payment of the Drisko note, we need not now consider. See Veazie v. Willis, 6 Gray, 90; Jones v. Thayer, 12 Gray, 443.

The plaintiff contends that there was evidence which would have warranted the jury in finding that the defendant knew of the release and that the entire transaction was based on the worthlessness of the mortgage note as personal security, that the defendant should have notified the plaintiff, upon hearing of the release, that he intended to rely upon that fact, and that the defendant, having received a substantial part of the consideration, should perform his guaranty, looking to the plaintiff for such damages either by way of recoupment or action as he has sustained by any particular breach by the plaintiff of his agreement.

We do not think that either one of these contentions is sound.

Mr. Garret testified that, though the notes and papers were in his office, and were not withheld, and the defendant and his counsel were there one or more times in reference to the matter, and could have seen them if they had wanted to, he could not say that they saw them, and “ that at the time the agreement was made he had not in his mind the agreement with Drisko, and made no reference to it, and had at no time previously informed the defendant or his counsel of it.” He also testified that he told the defendant “ that they did not look to the Drisko note as good, but looked to the security, and considered that insufficient.” There was no testimony to control this, and manifestly it did not show, and had no tendency to show, that the defendant knew of the release before the agreement was signed, or that he regarded the mortgage note as worthless as personal security. Even if we assume that the bill in equity and the petition in insolvency are to be considered in connection with the agreement as forming one transaction, there is no allegation in either that Drisko had been released, or that the mortgage note was worthless as personal security, and it is not shown that the defendant had in fact any knowledge of their contents. Even if he had, it does not follow from the allegation that the security, meaning the land, was not worth more than $7,000, and that there was a balance of about $3,000, that the personal security of the parties to the mortgage note was regarded as worthless. The allegation only means that there was a balance of about $3,000 over and above the security due on the note as against Candler, not that nobody else was liable on the note, or that if there was anybody else liable the security afforded thereby was worthless, and was so regarded.

The plaintiff gave up his attachment on Candler’s property, and filed a petition in insolvency against him, and also a bill in equity against him and Baker to set aside the conveyance to the latter. He has performed a substantial part of his agreement, if, indeed, he has not done all that he agreed to do except assign the security. But so far as appears, this was all done before the defendant learned that Drisko had been released: The defend-

ant has not therefore received and accepted performance on the plaintiff’s part under such circumstances as to show that he knew or must have known that the plaintiff was unable fully to perform his agreement to assign the security. He has done nothing to mislead the plaintiff respecting the performance of his contract, or to throw him off his guard. The fact that the plaintiff has performed a substantive part of his contract, and will suffer loss, will not justify us in turning a condition precedent into an independent agreement, and in compelling the defendant to resort to his claim for damages either by way of recoupment or action. It must often happen in contracts imposing conditions precedent that, if a party fails to perform, the status quo cannot be restored. But parties have a right to make their contracts as they see fit, and in the absence of acts or conduct which would render it unjust or unfair for a party to take advantage of a condition precedent, we think that he is entitled to stand on the contract as made. Wiley v. Athol, 150 Mass. 426. Norrington v. Wright, 115 U. S. 188. Bowes v. Shand, 2 App. Cas. 455. King Philip Mills v. Slater, 12 R. I. 82. If the continued liability of Drisko was a matter of trifling importance, and it was apparent from the agreement that it was so regarded by the parties, it may be that the defendant would not be allowed to defeat the plaintiff by setting up the Drisko release. But we find nothing in the agreement looked at by itself, or in the light of surrounding circumstances, which fairly would justify such a conclusion.

The defendant was not bound to notify the plaintiff that he did not consider himself liable because Drisko had been released. He well might wait till the plaintiff took steps to enforce the guaranty. Even if the defendant were bound to give such notice, there is nothing to show that for want of notice the plaintiff did anything which he would not have done, or failed to do anything which he would have done. The doctrine of waiver or estoppel does not therefore apply. The plaintiff has not argued the exception as to the admission of testimony, and we therefore treat it as waived.

Exceptions overruled.