222 Mo. 126 | Mo. | 1909
In 1902 plaintiffs sued in the Greene Circuit Court in equity for the cancellation óf a certain contract, and a deed made pursuant. Such contract and deed evidenced a compromise arrangement between plaintiffs and defendant whereby damages in tort, past, present and prospective, were released. Accordingly, in addition to rescission, plaintiffs sought to recover not only the damages compromised but damages for a continuance of the wrong (the maintenance of a switch track and switching and standing cars thereon) down to the date of suit — laid at $3,000 actual, and $1,000 punitive.
When plaintiffs offered their first witness defendant objected to any evidence, putting its objection on the ground the petition did not state facts sufficient to constitute a cause of action in equity and making five specifications under such general head, the divisions being immaterial. That objection was sustained — plaintiffs excepting.
Suffering a nonsuit, and failing to get it set aside, plaintiffs appealed to the St. Louis Court of Appeals. There Judge Goode did not sit. The two sitting judges disagreed — Bland, P. J., holding the ruling right; Nortoni, J., contra. Eventually such steps were taken that the Hon. B. Schnurmacher sat as special judge and wrote the opinion on a motion for rehearing, concurring with Bland, P. J. [Haydon v. Railroad, 117 Mo. App. 76.] Thereupon, on the dissent of Nortoni, J., the cause was transferred to this court on the theory that the majority opinion was in conflict with Lincoln Trust Co. v. Nathan, 175 Mo. 32.
II. The only question being whether the bill states a cause of action, a resume of its averments should precede the determination of the point. Attending to the bill, it alleges a contract between plaintiffs and defendant dated September 1, 1898 — setting it forth in full. That contract narrates the pendency of two certain suits. In one the present plaintiffs sued the city of Springfield and John F. Myers and Sons.' In the other they sued the present defendant and said Myers and Sons. In the first, plaintiffs obtained judgment for $100 damages and costs and defendants took steps to appeal to the St. Louis Court of Appeals. The second was pending in the Webster Circuit Court on change of venue. The contract further narrates that all said litigation had arisen because of the location by defendant railway company and Myers and Sons of a railway switch in front of plaintiffs’ property in Springfield, Missouri (describing it), and the subject-matter was the damages accruing and injunctive relief. The contract continues as follows:
“Now as a fair and complete settlement of all questions connected therewith, and full payment for all damages, past, present and prospective for the location and operation of said switch in front, of plaintiffs ’ property, defendants, the railroad company and John F. Meyer & Sous, agree to pay the plaintiffs the sum of six hundred dollars as satisfaction in full for all damages aforesaid, and also to pay all costs and expense: aCcn.hrg said litigations and save said plain*132 tiffs harmless on account thereof, and free from all costs necessary to be incurred for the final dismissal and settlement of said suits, and on account of said $600 paid to plaintiffs, receipt of which is hereby acknowledged and payment of costs as aforesaid, said plaintiffs grant and convey to defendants full power and authority to use said switch freely in front of their said property for railroad and milling purposes, but with the distinct understanding, that neither the milling company or railroad company shall be permitted to use said switch in front of plaintiffs’ property to stand cars thereon, but that the switch in front of their said property shall be kept open and free from cars except when in actual use as aforesaid. ’ ’
After setting forth the compromise contract, plaintiffs’ bill avers full performance of all its terms on their part and that defendant railway company paid plaintiffs the compromise sum of $600 and the costs incurred in the two suits mentioned in the contract; then charges as follows:
“Your petitioners further allege that by the agreement above mentioned, the plaintiffs granted to the defendant railroad company the power and authority to use said switch in front of said property upon the express condition (without which, said agreement would not have been made) that it would not use said switch to stand or store cars thereon, and that said switch was to be kept free and open from cars. But the plaintiffs allege that the defendant railroad company, wholly disregarding its' obligations in this behalf, continued to stand and store its cars on said track in front of plaintiffs’ said property.
“Your petitioners further allege that in pursuance of said agreement and as a part thereof, they did, about the time said above mentioned agreement was made, to-wit, on the thirteenth day of September, 1899, execute and deliver to defendant, a quitclaim*133 deed, granting them the right to maintain and nse said switch track in front of said premises, bnt not granting the right to store or stand cars thereon in front of said premises. Bnt the plaintiffs say that no other consideration was given to or received by the plaintiffs for said deed than that given for the above mentioned agreement and the plaintiffs say that no other rights were intended to be granted by said deed than those expressed by said above mentioned contract, bnt that the rights and privileges granted by said deed were upon the.same conditions as stated by said agreement. That is to say, that said company was not to stand its cars in front of said property.
“Your petitioners further state, to-wit: About two years prior to the making of said agreement said railroad company had wrongfully and unlawfully built a switch and had been unlawfully standing its cars thereon, in front of said premises and had thereby caused a depreciation of the rental of said property, and- your peiitioners had been damaged by the wrongful acts of defendant at the time of the making of the said agreement, to-wit, in the sum of fifteen hundred dollars, and that the payment by said railroad company of the said sum of six hundred dollars was on account of the damages your petitioners had suffered by the wrongful acts of said company prior to the making of said agreement and was made with the distinct understanding that said cars of said defendant were not to be stood in front of said premises.
“Your petitioners therefore ask that the said sum of six hundred dollars be regarded as part payment of so much as was really due by said railroad company to the plaintiffs at the time of the making of the said agreement, as your petitioners will fully show upon the trial of the issues herein, was much more than said sum of six hundred dollars and petitioners offer*134 to accept and do on their part, whatever equity requires in the premises.
“Tour petitioners further state that they have been damaged by the wrongful acts of said defendant company in building the switch as aforesaid and keeping its cars standing in front of said premises from the time their tracks were laid as aforesaid, to the first day of November, A. D. 1902, the sum of three thousand dollars depreciation in the rental value thereof.
“Tour petitioners further state that the placing of said cars in front of the premises aforesaid without the, permission of the plaintiffs, was a wanton and willful disregard of the duty of the defendants to the damage of the plaintiff’s in the sum of one thousand dollars, for which they ask judgment. '
“Tour petitioners further say that they have been damaged by the wrongful acts of the defendant in the total sum of four thousand dollars.
“Tour petitioners therefore pray this Honorable Court that it cancel and annul said agreement and deed, and set the same aside and hold them for naught, that the said defendant may be required to pay the damages which- have accrued to the plaintiff because of the depreciation in the rental value of said premises, because of the building of said switch, and standing cars on said switch, in front of said premises, from the date of the laying of said tracks to the 1st day of November, 1902, as aforesaid, less six hundred dollars paid as aforesaid, and such punitive damages as this court may see fit to inflict upon the defendant because of the premises and such other and further relief as may be deemed just and equitable.”
The answer, barring an admission of defendant’s incorporation, is a general denial.
(a) It is argued the bill is obnoxious to the cardinal equity maxim .that he who seeks equity must do equity; that it makes no offer to put defendant
Can the demurrer to the introduction of evidence stand on such fact? If the case were at law, the contention would be sound beyond question; but it, is in equity and the better doctrine seems to be that under a bill (good otherwise) containing a general offer to do equity the chancellor, as the price of his decree, may let conscience have full play in doing her perfect work in disentangling the relations of the parties, and in placing them where they were before as-nigh as may be. Such is the doctrine of Whelan v. Reilley, 61 Mo. l. c. 569 et seq. and cases cited. That case was followed in Clark v. Drake, 63 Mo. l. c. 360. In Kline v. Vogel, 90 Mo. 239, the doctrine of the Whelan case was somewhat shaken. But in a later case, Paquin v. Milliken, 163 Mo. 79, the question was again up, our decisions were marshalled, distinguished and applied. The reasoning of the Whalen case was greatly corroborated and fortified by the exhaustive consideration given in the Paquin case, and the doctrine needs no new exposition.
In leaving the matter we may refer to Shuee v. Shuee, 100 Ind. l. c. 481. In that case it was said: “It is urged that the court below should have sustained a demurrer to the bill, because it failed to show an offer to rescind on the part of the plaintiff before filing the bill, and it is argued that because it appears from the facts as found by the court, that no offer to rescind was made, nor to return the money paid as the consideration of the settlement, before the suit was commenced, the court could make no decree in plaintiff’s favor setting aside the settlement. It is
Such, too, was the conclusion reached by all the judges in Haydon v. Railroad, 117 Mo. App., supra, l. c. 90 to 94, inclusive.
The premises considered, we rule the point against defendant. In doing so we put aside certain contentions; for instance, it is pointed out (as we grasp it) that the plan of the bill is to off-set the hard cash paid by defendant by way of compromise against a running account of unliquidated damages. It is argued that this cannot be done, that the compromise amount is a fixed sum settled by contract and that the other is in nubibus (mere moonshine). But it must be apparent that question, if we state it accurately, is afield at this stage of the case. This, because the chancellor could mold his decree so as to adjust all its ramifications to the very nicest requirements of full equity. If, on the equity of the whole case on the hearing, defendant be entitled to repayment of the compromise sum and costs as the price of recission, the decree could go that way. Clearly there is nothing in plaintiffs’ mere offer putting the conscience of the chancellor in bonds in that behalf.
Again, it is argued the bill is bad for that it commingles a cause of action in equity with one at law— that plaintiff should have sued in two counts, one in equity for a rescission and one at law triable to a jury for the unliquidated damages for the tort. But the
(b) With the foregoing preliminary questions at rest, we confront the main proposition, viz.: Under the allegations of the bill is there a cause of action stated for rescission of the compromise contract and deed? In determining the question, it is well at the outset to remind ourselves of some general propositions indicating the trend of the judicial mind in this behalf. The question of rescinding deeds and contracts for the non-performance of conditions precedent or subsequent has been often before this court. The question always hinges on the dependence or independence of the covenant in the deed or contract. Thus, in Freeland v. Mitchell, 8 Mo. 487, Thomas sold to Freeland some land and bound himself in the penal sum of $600 to give Freeland possession. Presently (Thomas dying) Mitchell, his administrator, brought an action of debt for the balance of purchase price. The declaration did not aver any delivery of possession and defendant demurred on that ground. The question was whether the delivery of possession of the land was a condition precedent to the recovery of the purchase money. The conclusion reached by the cburt was that if a penal sum had not been fixed by the contract for failure to give possession then the covenant in the -contract would have been considered dependent — i. e., no delivery of possession, then no payment of the purchase price. But as there was a penal sum provided for in the contract for such failure, the covenants were not inter-dependent but were inde
Studdard v. Wells, 120 Mo. 25, is an illuminating case on the general law. There the widow and children of Theodore Studdard brought ejectment against the executor of the last will of Chas. F. Studdard. Chas. F. was the father of Theodore and, with Matilda, his wife, conveyed the locus to Theodore by a deed reciting a consideration of $3,000 paid, and further reciting that the land was a gift, that it was to remain in possession of grantors during their natural lifetime and was to become the property of Theodore on the death of grantors. A provision was inserted that Theodore was to pay the taxes, followed by this: “and has to support the said Charles F. Studdard and Matilda Studdard during their natural lifetime.” At the date of the deed all parties resided on the land. Matilda died, then Theodore. Up to his death he had supported his father and also his mother while she lived. Shortly after Theodore’s death a squabble arose between his widow and Chas. F. and the widow left the premises and thereafter furnished no support to him, nor did Theodore’s estate. The merits of the quarrel were not deemed controlling by this court. Two or three years subsequently Chas. F. died testate and by his will made disposition of the land different from that in his former deed. Thereupon the widow and minor children of Theodore sued for possession. It was ruled that the support of Chas. F. was not expressly made a condition precedent in the deed. The remaining question was whether the conveyance was made upon a condition subsequent. In ruling on that question it was pointed out as of sig
In addition to the general principles, outlined above, we may add that it is familiar doctrine that forfeitures (putting it with mildness) are not favored in equity; and that (while not controlling) it is not entirely without significance that there is no express provision making the subsequent standing of cars on the switch a condition subsequent, or a mutual dependent covenant, nor is there shown to be any clause of reverter in the deed, and we are left to an interpretation of the contract by the good sense of the thing in the light of its subject-matter and language used.
Further, the bill does not proceed on the theory of fraud, accident, surprise, mistake or duress; and it must be admitted that, as a general rule, rescission is an equitable remedy restricted to cases of that character.
However, there is another doctrine, vis.: Rescission is an equitable remedy applied in exceptional cases where there is failure of the entire consideration of the contract or where there is such radical nonperformance of a mutual dependent covenant, going to the very root and life of-the contract, as amounts to ‘ ‘ abandonment of the contract and releases the other party from any duty to further recognize its obligations.” [7 Am. and Eng. Ency. Law (2Ed.), 121.]
A sensible limitation on the last doctrine is stated in the work last cited (volume 24, p. 619) to be: “A bill for rescission cannot ordinarily be maintained where the ground of relief is .merely a breach of contract for which the complainant can obtain adequate compensation in an action at law. Courts of equity sometimes, however, exercise jurisdiction to rescind contracts upon the ground of a breach or non-performance by the defendant, in cases where the plaintiff’s remedy at law would be inadequate.”
Reliance is put by learned counsel of plaintiffs on Lincoln Trust Co. v. Nathan, 175 Mo. 32. That case was a suit for rent arising on a written lease. The parties to that lease had the forethought to insert a fire clause. That clause provided that the landlord rebuild or repair in case of fire as soon as possible and in that immediate connection it was further provided that, in consideration of the delivery of the new building to the tenants for occupancy, the tenants agreed to pay the heavy rent reserved for the period of the erection of said new building. A fire occurred. The landlord was guilty of inexcusable delay in rebuilding. The tenants were compelled to make permanent arrangement for another building to conduct the mercantile business. They paid two months’ rent after the fire while the demised premises were unfit for business purposes, and, presently, were sued for the rent of subsequent months. In defense they pleaded the provisions of the lease referred to, asked its rescission and to recover the two months’ rent paid after the fire. This court had no difficulty in reasoning out the conclusion, obviously sound, that in a case of that sort it would be against conscience to permit the landlord to violate the provisions of the lease requir
Not only is the case dissimilar to the case at bar in vital features, but, observe, there was no attempt to have the lease ripped up from its inception and to recover for all rents paid. The executed part of the lease stood and the rescission related back to the fire. Here, there is an attempt to cancel the compromise agreement in toto, whether executed or executory, and to put the parties where they were at the start, with plaintiffs’ right to recover all past and settled damages, as well as future, restored to them. In the absence of fraud charged and proved, the rescission of an executed contract is not equitable doctrine, but a rescission might go as to part unperformed where there is a breach amounting to abandonment. If the doctrine of the Nathan case be applied closely to this, the rescission would only relate back to the time when the defendant violated its covenant, if covenant it be; and, in that view of the matter, plaintiffs do not contend there was any necessity to go into equity to rescind the contract as to unreleased damages, subsequent to the compromise, for allowing cars to stand on the switch. This, for the plain reason that they can stand on that provision at law and recover their damages.
Other cases are relied on.by learned counsel. For example, City of Grand Haven v. Grand Haven Water
In a soundly-reasoned case, Union Pac. R. R. Co. v. Travelers Ins. Co., 49 U. S. App. 752, the test formulated by Lord Mansfield, in Boone v. Eyre, 1 H. Bl. 273, is approved, viz.: “Where mutual covenants go to the whole of the consideration on both sides, they are mutual conditions, the one precedent to the other. But where they go only to a part, where a breach may be paid for in damages, there the defendant has a remedy on his covenant, he shall not plead it as a condition precedent,” Judge Sanborn, speaking for the court, commented as follows: “The breach of a covenant of the first class, a dependent covenant which goes to the whole consideration.of the contract, gives to the injured party the right to treat the entire contract as broken and to recover damages for a total breach” (citing authorities). “But a breach of the-covenant of the second class, a covenant which does not go to the whole consideration of the contract, but is subordinate and incidental to its main purpose, does not constitute a breach of the entire contract or put an end to the agreement, but the injured party is still bound to perform his part of the contract, and the only damages he can -recover consist in the difference between the amount which he actually received or lost and the amount which he would have received or lost
Now, what was tbe “whole consideration” of tbe contract and deed to be rescinded here? Damages to accrue in tbe future from blocking access to or egress from plaintiffs’ real property by allowing cars to unnecessarily stand on tbe switches? Not at all. That character of damages flowing from that character of wrong, then non-existing because future, was merely incidental. To get at tbe real consideration, we must look to tbe character of tbe controversy. Plaintiffs were contending that tbe switch was unlawfully laid and that any movement of cars whatever on that unlawful switch was actionable, and that the unlawful location of the switch was actionable. They were willing to accept money to settle that controversy. They did accept money and by that act, in tbe absence of fraud, settled it forever, and by deed conveyed to defendant tbe right to locate and use tbe switch for switching purposes, on tbe theory, presumably, that they held tbe fee in the land appropriated by tbe switch (probably a street). Such was tbe controversy and main consideration in its settlement.
Tbe good sense of tbe thing is that tbe location and use of this switch, barring tbe standing of cars thereon unnecessarily, were, as said, set at rest for all time by tbe compromise, and that all past and prospective damages incident to tbe location of tbe switch and tbe proper use of it were estimated, paid and wiped off tbe slate. Tbe contract means that further damages for tbe improper use of tbe switch were not settled and that defendant agreed not to make such specified improper use of it.
Moreover, do not courts favor amicable settlements in tbe absence of fraud, as here? Does equity proceed in rescission in a revengeful mood? "Why rip up this settlement when tbe failure to perform does not go to the whole consideration and when there is
It has been loosely said that if the contract would not have been entered into but for the covenant broken, then there is such failure of consideration as will entitle the innocent party to rescission. We find but one case going to that extent — an old one in Louisiana, Moreau v. Chauvin, 8 Rob. 157. That case seems to have ridden off on a construction of the Louisiana Code — a code based on the civil law. As a general proposition, we do not agree to the rule announced. Many provisions in many contracts do not go to the whole consideration or touch the life and essence of the contract and yet, peradventure, the contract would not have been made if the provision had not been inserted. The approved doctrine is contrary to the holding in the Moreau case, and the rule announced there is too narrow. Therefore, if plaintiffs had proved by oral testimony that they would not have enterd into the contract of compromise and executed the deed, except the provision we have been considering had been put into it, yet it is for the court to construe the contract, and, if such evidence were admissible, we must still
Let tbe judgment of tbe circuit court be affirmed.