117 Mo. App. 76 | Mo. Ct. App. | 1906
Lead Opinion
Omitting caption, the petition is as follows:
“Your petitioners for their third amended petition respectfully represent unto this honorable court that on the first day of September, 1899, they entered into a contract with the St. Louis '& San Francisco Railroad Company, a corporation organized under the laws of Missouri, in words and figures as follows:
“ Margaret C. Haydon and W. J. Haydon, her husband, plaintiffs, v. The City of Springfield and John F. Meyer & Sons, defendants.
“‘Whereas, in the first above-entitled cause plaintiffs, on December '3, 1898, obtained judgment against said defendants, the city and Meyer & Sons, in the circuit court of Greene county, Missouri, for the sum of $100 and costs, for damages as set forth in said judgment, and from said decision defendants therein took their appeal to the St. Louis Court of Appeals on or about December 23, 1898, the transcript not having yet been sent to said appellate court.
“ ‘And whereas in said second entitled cause, plaintiffs instituted their suit against said St. Louis & San Francisco' Railroad Company and said John F. Meyer & Sons’ Milling Company in said circuit court of Greene county, Missouri, at the May term thereof, 1899, and said cause coming up for hearing on June 1, 1899, of said term, defendants filed application for change of venue therein and same granted to Webster county, Missouri, the transcript still in the office of circuit clerk of Greene county, and
“ ‘Whereas, depositions have since been taken by plaintiffs in said cause pending upon change of venue to Webster county and
“ ‘Whereas, all the litigation in said cause has arisen on account of the location by defendant railroad company and Meyer & Sons, of a railroad switch in front of plaintiff’s property in Springfield, Missouri, described as follows:
“ ‘Beginning on the north side of Phelps avenue and east side of Peach alley at a point where said alley and street intersect; thence north on east side of Peach alley sixty-eight feet, thence east one hundred and eight feet, thence south sixty-eight feet; thence west on the north side of Phelps avenue to' beginning, and also commencing twenty-three feet east of east line of above
“ ‘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 & Sons, agree to pay the.plaintiffs the sum of six hundred dollars as satisfaction in fnll for all damages aforesaid, and also to pay all costs and expenses attending said litigations and save said plaintiffs 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 nor railroad company shall be permitted to use said switch in front of plaintiff’s 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.
“ ‘This stipulation executed in duplicate, shall be a complete and full settlement of all questions connected and growing out of the establishment and operation of said switch as aforesaid.
“ ‘Given under our hands this first day of September, 1899.
“ ‘St. Louis & San Francisco Railroad Company,
“ ‘By J. T. Woodruff, Attorney.
«‘M. C. and W. J. Haydon, Plaintiffs,
“ ‘By G. W. S. Rathbun, Attorney.’
“Your petitioners further represent that in pursuance of said agreement, defendant paid to the plaintiffs the sum of six hundred dollars and the costs incurred in the above-mentioned litigation.
“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 obligation 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 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 deed, granting them the right to maintain and use said switch track'in front of said premises, but not granting the right to store or stand cars thereon in front of said premises. But 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, but that the rights and privileges granted by said deed were upon the same conditions as stated by said agreement.
“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 petitioners 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 to> accept and do on their part, whatever equity requires in the premises.
“Your 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.
“Your 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
“Your petitioners further say that they have been damaged by the wrongful acts of the defendant in the total sum of four thousand dollars.
“Your 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 plaintiffs 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 first 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 admits that defendant is a railroad corporation but denies every other allegation of the petition.
The cause coming on for trial, plaintiffs offered W. J. Haydon as a witness in their behalf. Defendant objected to the introduction of any evidence for the following reasons:
“First, because said petition states no- facts sufficient to constitute a cause of action in equity, and there is no equity in the bill or petition. . . .
“Third, because the contract sued upon, or attempted to> be sued upon, in equity, contains no affirmative provision authorizing a suit on same, and that plaintiffs’ cause of action, if any, is an action sounding in tort- and not one in equity.
“Fourth, because if the contract set out in the petition or bill is one that can be sued upon for the breach thereo'f by plaintiff, it must be sued by law, and the
“Fifth, because said petition or bill states no grounds for equitable relief, in that it shows upon its face that the entire controversy was heretofore settled, and six hundred dollars was paid thereunder, and defendant also paid the costs of suits then pending and therefore pending, and no part of said six hundred dollars has been tendered back, neither has the amount paid as costs been repaid, hence for these reasons plaintiffs are not entitled to recover in an action to rescind the contract.
“Sixth, because the facts pleaded in the petition do not show grounds for rescinding the contract, but does contain facts which show affirmatively that the plaintiffs are not entitled to rescind the contract.”
The court sustained the objection and plaintiffs took a nonsuit with leave to move to set the same aside. The motion to set aside the nonsuit was overruled by the court, and plaintiffs appealed.
A summary of the allegations of the petition shows that plaintiffs owned property in the city of Springfield, Missouri, fronting on Phelps avenue; that the defendant company unlawfully laid railroad switches in
The petition asks for the rescission of the contract and that plaintiffs recover all the damages which have' accrued to them from the date of the laying of the switches down to the day of the commencement of the :SUÍt.
Plaintiffs failed to return or offer to return the six
The answer is a general denial, and if the contract of September 1, 1898, is cancelled, then there is nothing in the case showing or tending to' show that defendant admits it has damaged plaintiffs in any sum whatever by the construction and use of the switches.
Plaintiffs rely upon the case of Girard v. St. Louis Car Wheel Company, 123 Mo. 358, 27 S. W. 648, as authority for the position that it is not necessary to return or offer to return what they had received on the contract as a condition precedent to their right to have the contract cancelled, and that they may allege the receipt of the money in their bill and consent that it may be set off against the amount of damages they claim to have sustained. The Girard case was an action for damages for personal injuries and defendant company pleaded a written release in consideration of the payment of a certain sum as compensation for the injury complained of. The reply confessed the execution of the release, but alleged that it was obtained by fraud and asked for its cancellation. The plaintiff did not return or offer to return what he'had been paid. No objection was made by defendant on account of this omission and the record showed that the benefits received were accounted for in the judgment. On this showing it was held that the omission in the reply to' tender back the benefits was non-prejudicial error. In the discussion of the necessity of the tender of the benefits received, Barclay, J., at page 372, said:
“It has been often held in other jurisdictions, that a tender of money (received by virtue of a release of similar tenor to that in question here) need not be made-before bringing suit, where the release was obtained by fraud; but that it is sufficient to offer its return, and to-
Concurrence Opinion
concurred in the result and wrote a separate opinion. Burgess, J., wrote a dissenting opinion concurred in by Gantt, P. J., and Sherwood, J., in which it is said (1. c. 385.) :
“If anything has been paid by the purchaser, although he obtain the property through fraud, before the vendor can recover it, he must restore whatever value he received to the purchaser.
“The parties should be put in statu quo as far as possible. [Stevens v. Hyde, 32 Barb. 171; McMichael v. Kilmer, 76 N. Y. 36; Graham v. Meyer, 99 N. Y. 611; Baird v. The Mayor, etc., 96 N. Y. 567; Tisdale v. Buckmore, 33 Me. 461; Camplin v. Burton, 2 J. J. Marsh. 216; Gifford v. Carvill, 29 Cal. 589; Estis v. Reynolds, 75 Mo. 563; Bisbee v. Ham, 47 Me. 543; 1 Bigelow on the Law of Fraud, pp. 73, 74.]
“When one has received anything of value on a settlement of a right of action and executed a release thereof, it follows inevitably that the contract of settlement, not being void, it constitutes an insuperable barrier against a recovery SO' long as it is rescinded or avoided by an offer to return the consideration paid for it. It was in principle SO' held in Insurance Co. v. Howtard, 111 Ind. 544. It was there decided that it did not 'alter the case that the compromise may have been brought about by the fraud and misrepresentation of the defendant. Or that in the end it was found that a sum largely in excess of the amount paid to settle the disputed liability was due the plaintiff.’ [See, also Brown v. Ins. Co., 117 Mass. 479.]”
If it be conceded that the opinion of Barclay, J.,
In Robinson v. Siple, 129 Mo. 208, 31 S. W. 788, on a review of the authorities, the court held that the failure of a party desiring to rescind a contract of sale to tender back the consideration of the sale and place the other party in statu quo, was an insurmountable barrier to his right to recover.
In Carson v. Smith, 133 Mo. 606, 34 S. W. 855, it was ruled: “Where one is induced to enter into a contract by reason of false and'fraudulent representations, he can rescind the same only by placing the other party in statu quo.”
These were all actions at law, and there is a broad distinction between a bill in equity brought to rescind a contract and an action at law based upon the theory that it has already been rescinded. The distinction is well drawn in Gould v. Cayuga County National Bank, 86 N. Y. 75, where the plaintiff brought suit upon the theory that a contract, upon which he had been paid twenty-five thousand dollars, had been rescinded. Before bringing his suit he failed to put the other party in statu, quo
“If this bad been an action in equity to rescind tbe contract, tbe court could have done equity between tbe parties and so moulded its judgment as to accomplish that result. It could,, if needful, have brought into tbe litigation matters pertaining to tbe trust created by Starin for plaintiff’s benefit, and to that end could have ordered that Starin and tbe trustee be made parties. This action was brought as an action at law, no mention being made in tbe complaint of tbe compromise agreement or of tbe $25,000 paid to tbe plaintiff. A purely legal defense was set up; it was tried-as an action at law, and no motion was made to convert it into an equity action.
“It is idle to say that tbe distinction between legal and equitable actions has been wiped out by tbe modern practice. It is true that all actions must be commenced in tbe same way; that in every form of action tbe facts constituting tbe cause of action or defense must be truly stated; that fictions in pleadings have been abolished, and that both kinds of actions are triable in tbe same courts. But tbe distinction between legal and equitable actions is as fundamental as that between actions eat contracto and ex delicto, and no legislative fiat can wipe it out.” On tbe succeeding page it is said: “Tbe difference between an action to rescind a contract and one brought, not to rescind it, but based upon tbe theory that it has already been rescinded, is as broad as a gulf.”
In Paquin v. Milliken, 163 Mo. 79, 63 S. W. 417,
“No more lucid exposition of the rule in equity has come under our observation than is found in the opinion of Chief Justice Cooper in Brown v. Norman, 65 Miss.. B69. Referring to the dintinction between a rescission by the party himself as a basis of an action at law, he says: ‘Since the law permits him to reacquire this legal right, by his own act, it puts upon him the necessity of restitution of the thing received by him as a condition of the exercise of the right to avoid the contract. From necessity, the law knows nothing of compensation but requires restoration of the thing received, for to permit the plaintiff to determine what would be just compensation would be to- make him judge in his own case. But in equity the complainant does not necessarily rescind and sue; he may sue for rescission. He is required to restore the consideration, not however as a condition of acquiring the right to sue but because of the equitable maxim that he wlm seeks equity must do equity.’ ”
Under the head of “Cancellation of Instruments,” Story says: “Courts of equity act upon an enlarged and comprehensive policy; and therefore in granting the relief they will impose such terms and qualifications as shall meet the just equities of the opposing party.” [2 Story’s Equity Jurisprudence, sec. 707.]
In Whelan v. Reilly et al., 61 Mo. 565, Judge Sherwood, after quoting the rule that he who seeks equity must do equity, and after citing instances where it should be applied, at page 570, says: “The above are only a few out of a large number of examples which might be cited in illustration of the rule referred to, which finds its application, not in questions of pleading, nor by what the plaintiff offers to do therein, but in the form and frame of the orders and decrees, both interlocutory and final, whereby equitable terms are im
Barker v. Wallace, 8 Beav. 92, was a suit to' cancel a life insurance policy on the ground that it had been obtained by false and fraudulent representations. Premiums had been paid on the policy by the assured. The plaintiffs did not make a tender of the' premiums before bringing the suit. On this ground, a demurrer to the bill was filed. The prayer of the bill was that the policy might be delivered up to' be cancelled, or that the plaintiffs might otherwise be" relieved, in such manner as the court might think fit. This Avas held sufficient and the demurrer was overruled. Substantially the same ruling was made by Lord Selborne, L. C., in Jervis v. Berridge, 8 Chan. App. Cases 351.
In their petition plaintiffs ask that the six hundred dollars paid be regarded as part payment of the damages alleged to have accrued to them. The rescission of the contract would as to the parties thereto, have the effect to expunge from the records of the Greene Circuit Court the judgment for one hundred dollars plaintiffs ■ recovered of the city of Springfield and the milling company, and also plaintiffs’ suit against the defendant railroad company and the milling company, pending at the time the contract was made, and likewise to cancel the deed made by plaintiffs to defendant and thus to reopen the entire controversy between the plaintiffs on the one side and the defendant, the city of Springfield and the milling company on the other, in respect to the laying of the tracks in the street in front of plaintiffs’ property and the operation and standing of cars thereon, and necessitate a new inquiry as to the damages caused thereby. Not only the six hundred dollars paid by plaintiffs, but the costs, also accrued and paid by defendant in the two suits, should be offset against any damages to which plaintiffs may be entitled. In their petition plaintiffs ask that the six hundred dollars paid to them be regarded as part payment of the damages, but no mention
The jurisdiction of a court of equity to rescind or cancel a contract or other solemn instrument is exercised for fraud actual or constructive, on account of mistake or oppression, or where the signature of the
In Union Pacific Ry. Co. v. Ins. Co., 49 U. S. App. at page 759, the court said: “But a breach of the covenant of the second class, a covenant which does not go to
I think the judgment should he affirmed.
Rehearing
The court having agreed with the contention of plaintiffs that a restoration of the six hundred dollars received by them from defendant and of the court costs paid by defendant was not a necessary prerequisite to confer upon plaintiffs the right to sue, the only question left for consideration and determination upon this motion is whether the petition states facts constituting an equitable cause of action in favor of plaintiffs. If it does, then the circuit court erred in sustaining the objection of defendant to the introduction of any evidence and the motion now made should be sustained. If, on the other hand, no such ease is presented by the petition, the action of the court in excluding all evidence was proper and the motion should be overruled.
From the averments of the petition, it appears that on September 1, 1898, in consideration of the payment hy defendant of six hundred dollars, and the payment by defendant of the costs of the litigation' referred' to in the compromise agreement, which agreement is set forth in full in the petition, plaintiffs released defendant from •all damages, past, present, prospective, resulting from the location and operation of the switch in front of their property; and upon the same consideration plaintiffs who, as is disclosed by the petition, had theretofore denied the right of defendant to maintain said switch’and had •instituted proceedings to enjoin such maintenance and to recover damages therefor, granted and conveyed to •defendant and the milling concern whose property was reached by the switch, “full power and authority to use said switch freely in front of their said property for railroad and milling purposes.” Thus plaintiffs, in consideration of said payments, gave their consent to the location and continued operation of the switch, so far as they could do so, and treated the payments so made as
The petition alleges that without this qualification, the contract of compromise Avould not have been made, and that, notwithstanding the same, and in violation thereof, the defendant has “continued to stand and store its cars on said track in front of plaintiffs’ said property.”
There is nowhere in the petition any suggestion that plaintiffs were overreached or defrauded into signing the contract of settlement, by misrepresentations or otherwise, nor is there any complaint that the agreement Avas the result of any mutual mistake. Its rescission is demanded by plaintiffs solely on the ground that since it was made cars have been allowed to remain on the switch in front of their property, in violation of its terms.
The argument of plaintiffs proceeds on the theory that the contract was made and based upon the undertaking of defendant not to stand or store cars on the switch; that such undertaking was a condition precedent to the agreement of plaintiffs and that the agreement of plaintiffs to accept the six hundred dollars in satisfaction of all damages by them theretofore or thereafter sustained, by reason of the location and operation of the SAvitch track, on the one hand, and the obligation
Giving full force to the averment that the settle- • ment would not have been made by plaintiffs in the absence of the qualification concerning the standing or storing of cars, is it true that these provisions of the contract are dependent, or that the qualification goes to the entire consideration? Assuming, in other words, as averred, that the contract would not have been made without the presence of the qualification, does the admission by defendant that cars have since been allowed to stand on the switch, entitle plaintiffs to equitable relief, or is their remedy in a court of law?
Plaintiffs rely on the principle that where conditions in a contract are mutual and dependent, a breach or default by the one party will ordinarily entitle the other to a rescission or annulment of the contract. Of the correctness of this general proposition, there can be no question. [Lincoln Tr. Co. v. Nathan, 175 Mo. 32, 74 S. W. 1007; Farmers’ Loan and Tr. Co. v. Galesburg, 133 U. S. 156; Grand Haven v. Grand Haven Water Works Co., 99 Mich. 106; Pironi v. Corrigan, 47 N. J. Eq. 135.]
Thus, in the case of Lincoln Trust Co. v. Nathan, 175 Mo. 32, an' action for rent by the lessor, it was held that the lessee, on an answer in the nature of a cross-bill, might have a decree rescinding the lease and a judgment for the return of certain rents paid, it appearing that the improvements on the demised premises had been destroyed by fire and that the lessor, in breach of his covenants, had failed to rebuild within a reasonable time.
The case of Farmers’ Loan and Trust Co. v. Galesburg, 133 U. S. 156, was a proceeding by the city of
Against the position of the city it was urged that the default of the water company was not concerning any condition precedent and gave the city no right to a decree rescinding the contract. From a decree of rescission an appeal was taken. The Supreme Court, in disposing of this particular feature of the case, made use of the following language:
“The principal contention on the part of appellants is that on the acceptance of the ordinance by Shelton, a right in the franchise vested in him, which could not be defeated, even though he afterwards failed to comply with its terms; that the failure of the water company to furnish water in the quantity and of the quality called for by the ordinance was only a breach of a condition subsequent; and that a court of equity will not lend its aid to divest an estate for such a breach; but it seems to us that in respect to a contract of the character of the present one, the ability of a water company to continue to furnish water according to the terms of the ordinance was a condition precedent to the continuing right of Shelton and his assigns to use the streets of the city and to furnish water for a period of thirty years; and that
The case of Grand Haven v. Grand Haven Waterworks Co., 99 Mich. 106, cites and follows the Galesburg case in a somewhat similar proceeding, where the city of Grand Haven filed its bill for the rescission of a contract with the waterworks company, on the ground mainly that the water supply agreed to be furnished was inadequate, the pressure insufficient and the quality unwholesome. The court quotes liberally the language of the United States Supreme Court in the foregoing case and declares the two cases to be on “all-fours.”
These cases illustrate the principle on which plaintiffs seem to rely. Has the doctrine of these cases any application to the present facts? For, after all, “the only principle to be extracted from the numerous cases in relation to the dependence or independence of covenants is that they are to be construed according to the intention and meaning of the parties and the good sense of the case.” [Freeland v. Mitchell, 8 Mo. 489.]
The contract in question is before the court. Its language is plain and free from ambiguity. There would seem to be no difficulty in arriving at its meaning, and through it the intention of the parties to this litigation.
Plaintiffs were maintaining in the courts that defendant’s location and operation of the track were without sufficient legal warrant. They were seeking both damages and injunctive relief. They had recovered a Small judgment against the milling firm in whose interest the track was constructed and against the city of Springfield. This action was pending on. appeal. An
Therefore, as is obvious from the context and from all the terms of the document in question, words were inserted negativing the thought that plaintiffs were authorizing such use of the track. It is as though plaintiffs had said to defendant: “If you will pay the costs of the pending litigation and pay us six hundred dollars, we will not only accept such payment in satisfaction of all past and future damages, but will sanction the location of the switch and its continued use; but in saying this, we want it distinctly understood that we are not agreeing that cars may be allowed to stand thereon; on the contrary, if they are, any damage that may ensue from such action is not embraced in this settlement and we shall be free to hold you responsible therefor.”
If this is the proper interpretation of the contract, then, conceding that plaintiffs would not have made the settlement but for such reservation, the defendant’s violation of its terms does not affect the validity of the settlement nor even the consideration upon which it was based. At most, it amounts only to a breach of contract arising subsequent to its execution, for which plaintiffs
“The answer to the suit on the note, then, upon, its face only pleaded a failure of consideration and breach of the contract after its execution. The said allegations were clearly no ground for rescission, as the counterclaim was only based on the efforts of defendant after the sale, to decry and destroy the good will of the property he had sold the plaintiffs.”
The contention of plaintiffs amounts merely to an assertion that if defendant had insisted on providing in the settlement and agreement that the payment of costs and the six hundred dollars should be deemed to cover future damages from standing cars in front of the property of plaintiffs, they would not have entered into the agreement. Giving the agreement the interpretation that plaintiffs have not compromised or released their right to claim damages, if any, resulting from the conduct of defendant in permitting cars to stand in front of plaintiff’s premises, and all their rights are fully preserved and protected. But the enforcement of those rights can be had in an ordinary action for damages at law. It may well be true, and for the purposes of this discussion it must be taken to be true, that without the “distinct understanding” plaintiffs would not have entered into the compromise; that they would not have signed the agreement if it had been left open to the imputation that it embraced future damages from the standing of cars — but how does that aid in the solution of the question, if the “distinct understanding” was merely an explanation and not a covenant?
The facts of this case make it unlike the ease of Lincoln Trust Co. v. Nathan, where, as already shown, a lessor in default respecting a covenant to rebuild, was seeking to enforce the payment of rent by a lessee under a covenant which was dependent on the performance of
“The obligation of the lessors to rebuild is stated first, aud the performance is required as a primary and precedent duty to any liability, and the lessee’s obligation to pay rent during that time is based upon the express consideration that the premises shall be rebuilt in a reasonable time and the lessees put into occupancy as soon as possible. The covenants are therefore as clearly dependent as if they had been declared to be so, in so many words, and the. lessee’s liability to pay the rent depends upon the prior liability of the lessors to rebuild.”
The rule thus referred to can have no application to the contract here under discussion. The defendant agreed to pay and did pay a certain sum of money to plaintiffs. In consideration thereof plaintiffs released defendant from all claim for damages for the maintenance and operation of the switch. There was nothing-further for defendant to do. There was no prior condition to fulfill. But to guard against any future contention by defendant that it had compensated plaintiffs for damages which might arise from standing cars in front of their property, it was recited in the agreement as the “distinct understanding” of the parties that no such meaning should attach to their agreement. In other words, the language relied on by plaintiffs was not intended to nor did it create any obligation on the part of defendant, in the sense of its furnishing a consideration for the compromise which was entered into, but was used merely to make clear beyond question the character of the prospective damages for which plaintiffs were being paid and which they were releasing.
Assuming, upon this view of the contract, that plaintiffs had been allowed to introduce proof and that they had established every averment of their petition, their prayer for a rescission of the contract would still have had to be-denied and they would have been remitted
For these reasons, the motion for a rehearing should be overruled.
Dissenting Opinion
DISSENTING OPINION.
Judge Bland held in the original opinion that because appellants had failed to tender or offer on the face of the bill, the amount of the costs expended by the railroad company in settlement of the several cases pending, that the allegation of the bill was insufficient for that reason to entitle the appellants to the relief prayed. I could not concur in that view after having examined the authorities.
I found, in the case of Jervis v. Berridge, 8 Oh. App. Oases 351, Lord Selborn, L. 0., at page 356, stated the question for decision thus:
“2. That they had not, by their bill, offered to repay to the demurring defendant certain sums paid by him to the Law Life Society, which they will be bound to repay if they succeed in obtaining the relief asked for.”
On the following page, 357, the learned chancellor said on this proposition as follows;
“Upon principle there appears to be no good reason why a plaintiff in equity, suing upon equitable grounds, should be required to offer, on the face of his bill, to submit to those terms which the court, at the hearing, may think it right to impose as the price of any relief to which he may be entitled. Such an offer, if made, might be rendered nugatory at, or at any time before, the hearing, by the plaintiff dismissing his own bill; and, if it were not made, the power and duty of the court to make the relief, if any, which it might grant at the hearing, conditional upon proper terms, would be exactly the samé; For this purpose, no submission on the part of the plain
And so the chancellor proceeds in discussing the question involved; and on page 358 says:
“The authorities appear to me to be consistent with this view. I confess I was surprised to hear the argument that in such a case as the present, an offer, upon the face of the bill, to repay the moneys expended by the demurring defendant, was necessary; my impression during many years of practice at the bar having always been to the contrary.”
This case is cited and followed in Brown v. Norman, 65 Miss. 1. c. 380, in which case Judge Cooper, at page 378, said (and the case is in point) :
“But in equity, the complainant does not necessarily rescind and sue; he may sue for rescission. He is required to restore the consideration, not, however, as a condition of acquiring the right to sue, but because of the equitable maxim that he who seeks equity must do equity.”
In Barker v. Walters, 8 Bevan’s Reps. 92, at page 96, the court, speaking of the alleged want of equity in the bill, says:
“The alleged want of equity is, that the plaintiffs have not, by their bill, offered to repay the money received by way of premiums on the policy.”
And in discussing the assignment, on the same page, it is said:
“First, it is to be observed that the prayer of the bill is, that the policy may be delivered up to be cancel-led, 'or that the plaintiff may be relieved in such manner as the court may think fit.’ The plaintiffs, therefore, have by their bill, in effect, asked for relief on such
These cases are quoted and followed by our Supreme Court in Paquin v. Milliken, 163 Mo. 79, 1. c. 104-105-106, 63 S. W. 417, 1092, where Judge Gantt, in a very able opinion, at page 105, quoting Lord Selborn, says:
“Upon principle, there appears to be no good reason why a plaintiff in equity, suing upon equitable grounds, should be required, on the face of his bill, to submit to those terms which the court at the hearing may think it right to impose as the price of any relief to which he may be entitled.”
In the case last cited, Judge Gantt also quoted approvingly Whalen v. Reilly, 61 Mo. 565, where Judge Sherwood, speaking of the rule pertaining to equitable relief, says: \
“Which finds its application, not in questions of pleading, nor by what the plaintiff offers to do therein, but in the form and frame of the orders and decrees, both interlocutory and final, whereby equitable terms are imposed as a condition precedent to equitable relief granted.”
And on page 571 in the same case, the. court, through Judge Sherwood, says:
“As the offer to pay was unnecessary, so> also was its accompanying incident, the payment itself into court. The foregoing considerations clearly indicate how widely variant equitable is from legal procedure, and induce the belief that whatever the necessity for bringing
[See, also, Kanppan v. Freeman, 47 Minn. 491; Coolbaugh v. Roemer, 32 Minn. 445; Hammond v. Pannock, 61 N. Y. 145; Irwin v. Blake, 33 U. S. 18; Hanson v. Keating, 4 Hare’s Rep. 1; Shuee v. Shuee, 100 Ind. 477; Could v. Cayuga Nat. Bank, 86 N. Y. 83, which cases sustain the views herein expressed.]
My opinion is, on this branch of the case, that it was not necessary for the appellants to offer, on the face of the bill, to return the costs paid out by the railroad company in settling the several cases mentioned, inasmuch as the bill sets up all the facts and seeks equitable relief on equitable terms, which evidence a willingness on the part of appellants to both do and accept equity and fully authorize the court to proceed, and upon the hearing, to impose upon' appellants the doing of such equities as may appear just as the price of the decree it gives.
I am therefore persuaded upon this proposition that a rehearing should be granted.
“The rule of la,w, as I always understood it, is that where there is a contract in which there are two parties, each side having to do something (it is so laid down in the notes to Pordage v. Cole [4]) if you see that the failure to perform one part of it goes to the root of the contract, goes to the foundation of the whole, it is a good defense to say, ‘I am not going to perform my part of it when that which is- the root of the whole and the substantial consideration for my performance is defeated by your misconduct.’ ” And in determining whether the violated covenant or portion of the contract which a party has failed to perform goes to the foundation or root of the whole contract and pervades the entire consideration, it is (as said by the Supreme Court of Louisiana) “only necessary to consider whether the engagement is such that the contract would not have been entered into without it,” and if it is, then its violation authorizes a suit for the dissolution or rescission *of the contract. [Moreau v. Chauvin, 8 Rob. (La.) 1. c. 160.] This principle, however, is so well established in the law as to require no further citation of authority. [Lincoln Trust Co. v. Nathan, supra.]
It will appear by reference to the contract set out in the bill that the grant made therein to the railroad is coupled with the following limitation: “But with the distinct understanding that neither the milling com
It is true that the case here under consideration is not as strong in the language employed, creating a dependent covenant, as the case last cited, but it certainly is in intention manifested, and such' manifested intention is the controlling principle in such cases; and it seems to me that there is sufficient here in language, when coupled with the manifest intent of the parties, to bring this case within the same controlling principle asserted in the case supra. I am therefore of the opinion that it is unconscionable to hold the appellants to the contract and let the railroad company violate the provisions of the covenant, without a “distinct understand
In a determination of this question, it is the duty of the court to place itself in the situation of the parties at the time and place the engagement was entered into and from the facts shown in the bill, indue itself with the facts and circumstances then within the contemplation of the parties. When we read the bill for this enlightenment, it seems to me that the facts there shown, clearly demonstrate that the grant contained in the contract would not have been made but for the covenant to so use the switch by not standing or storing cars thereon as to further reduce the value of appellants’ property than was actually necessary, and that this covenant or “distinct understanding” was one without which the grant would not have been made.
In conclusion, it appears to my mind that the covenant contained in the grant to use the switch, depended upon the covenant and mutual covenant therewith, to use the switch in accordance with the limitation imposed and coupled upon the wording of the grant itself, which was tantamount to saying that the railroad company, by accepting under the grant, covenanted on its part that it would have no rights thereunder except it fulfilled its
“Concurrent or Dependent Covenant. — Where the conditions of a contract are such that the parties must perform their promises at the same time, they are known as conditions concurrent. Neither party is bound to do the first act, but each must be able and ready to perform his own, and the one who is ready and able to perform has a right of action against the one who is not. If the obligations of the parties are mutual and dependent, then the refusal of one to perform without sufficient excuse is equivalent to an abandonment of the contract and releases the other party from any duty to further recognize the obligations.” [See also cases in point cited in notes, same page.]
It appears that upon appellants making the grant, a corresponding duty thereby arose and thereafter rested upon respondent railroad company, and the parties were therefore to perform their promise within the language of. the text, supra, “at the same time,” therefore the covnant is dependent; that is,' every day the railroad company occupied the switch under the covenant of the appellants, it was to occupy it under its own covenant so as not to stand or store cars thereon, and in. event of the railroad company’s refusal to perform its covenant without sufficient excuse, under the language of the text, supra, it was “equivalent to an abandonment of the contract and releases the other party from any duty to further recognize the obligations.” The railroad company’s right to use the switch being concurrent with and dependent upon its covenant to keep it clear of standing-cars and not to use it in clear violation of the authority which it asserted for its occupancy thereof, clearly constitutes a covenant dependent and not independent in that sense in which an adequate remedy at law exists.
I am therefore of the opinion that inasmuch as the contract would not have been made but for the “distinct understanding” whereby these dependent covenants arose, that such “distinct understanding” goes to the root and foundation and prevades the entire consideration of the contract, and therefore a bill in equity for its rescission on the principle above stated is a proper remedy. My own mind is persuaded beyond the semblance of a doubt to this conclusion after a most careful and thoughtful examination of the following among the most ably considered cases on the question in this country. [Lincoln Trust Co. v. Nathan, 175 Mo. 32; Grand Haven v. Waterworks Co., 57 N. W. (Mich.) 1075; Farmers, etc., Trust Co. v. Galesburg, 133 U. S. 156; Pironi v. Carrigan, 20 Atl. N. J. Eq. 218; 7 Amer. and Eng. Ency. Law (2 Ed.), 121, and cases cited in notes therein.]
I am of the opinion that the bill states facts entitling the appellant to' equitable relief and therefore the motion for rehearing should be sustained.
It is proper to say that since preparing the' above and foregoing memorandum opinion, the learned presiding judge has further considered the question and modified his original opinion, agreeing with my views on the first question referred to: i. e., holding that it was unnecessary for the appellants to offer on the face of their bill, to repay the costs expended by the railroad company in the settlement of the several lawsuits theretofore compromised, inasmuch as the bill prays for equitable relief upon equitable terms, which is universally re
I am persuaded that the decision of this court is in conflict with the doctrine of Lincoln Trust Co. v. Nathan, supra, and therefore request that the case be certified to the Supreme Court for final determination.
