Hull v. Pitrat

45 F. 94 | U.S. Circuit Court for the District of Southern Ohio | 1891

Sage, J.,

(after stating the facts as above.) The first contention between the parties is whether the contract of October 2, 1889, is an executed or an executory contract. Pitrat agreed “to sell, and does hereby sell,” to Hull the patents, which are the subject of controversy, for $60,000, payments to be made by Hull, as agreed by him in the contract, of $1,500 cash in hand, the receipt of which is acknowledged, and the further sum of $8,500 on or before one year from the date of the contract, with 6 per cent, interest “ on all sums remaining unpaid at the expiration of six months from this date,” also 200 lots at Jerome Park, within 30 days, or a reasonable time, with an abstract showing a good title. Hull also agreed to convey the Arkansas lands to a trustee as a guaranty for the money payments. It was also agreed that Pitrat should make a full conveyance of the patents to Hull, and place the same in the hands of the trustee, to whom the Arkansas lands should be conveyed, to be delivered by him to Hull, when he should pay Pitrat the entire money consideration. Upon the authority of the Elgee Cotton Cases, 22 Wall. 180, 194, this must be regarded as an executory contract. The court, in that case, approve .and adopt the statement of the law by Benjamin in his treatise on Sales, at section 320, as follows:

“Where the buyer is by the contract bound to do anything as a condition, either precedent or concurrent, on which the passing of the property depends, the property will not pass until the condition be fulfilled, even though the goods may have been actually delivered into the possession of the buyer.”

The contract required Hull to remove a mortgage incumbrance of $1,232.75 from the Jerome Park lots. It is claimed on behalf of the complainant that the contract was in this respect modified, Pitrat agreeing that, if the holders of the mortgage were willing to let it remain, the money might be paid to him, and he would accept the deed subject to the incumbrance. Pitrat and Hull are in conflict with reference to this modification. It is not disputed that Hull, on the 17th of October, 1889, sent Pitrat $500, and on the 11th of December $100, by draft on New York. Hull testifies that those remittances were made under the modification of the contract, instead of applying them towards the payment of the incumbrance. Pitra't’s testimony is that he understood that the money was paid on account of the $8,500, which was to be paid within one year from the date of the contract. The complainant’s statement is entitled to the stronger weight, because it is in harmony with the correspondence between him and Pitrat, and with other undisputed facts in evidence. He testifies that before he left Gallipolis, Ohio, where, the agreement was drawn and executed, at Pitrat’s home, it was understood, after it was signed, that it should be modified as above, provided the mortgage could remain. Almost immediately after his return to Detroit, he wrote to Pitrat, under date October 5, 1889:

“J got here Thursday night about eight o’clock, the train being late. Yesterday I looked up interest on Jerome Park matters. The interest on the part I am to convey to you is not due until the 1st of November, but I shall pay it to-day. They at the bank said they would prefer to hav'e the incumbrance on that property remain, as the security was desirable. I will have the abstract brought down to date as soon as I can, (in a short time,) and send to you. I will also make a deed to the property, and get our business closed.”

It appears from the testimony that the hank held the mortgage on the Jerome Park lots.

On the 7th of October, .Hull wrote to Pitrat that he could send him $500 at any time. No objection was made by Pitrat to either of these statements: On the contrary, in his letter, acknowledging the offer of the $500, he stated that it would prove very acceptable, for it would “fill up a hole that I have been in a quandary to know how to fill.”

Pitrat, in a letter to Hull under date January 6, 1890, referring to his desire to adjust matters with persons to whom he had agreed to convey a part of Jerome Park lots free of incumbrance, requests Hull to obtain a release of the incumbrance from the hank, saying that it would greatly oblige him, and “put him on his feet,” but he makes this rather as a request than as a demand as of right under the contract.

Hull, in a letter to Pitrat, dated February 22, 1890, recalls to him that lie stated to him on the day of the date of the contract that the incumbrance was drawing only 6 per cent, interest, and could remain as long as desired, and that if ho preferred to use the mouey to having the mortgage paid he would pay it to him, and would pay the interest on his return to Detroit, which he did before it was due, and that Pitrat said that he would prefer the money, and then goes on to,recite the facts substantially as stated above, and adds:

“Now, Mr. Pitrat, I was not by our contract to pay you any more money until one year from October 2, 1889. I have paid you some, and will pay you the balance of the amount, $1,2:32.75, or you may return what I have paid, and I will pay the mortgage. It is immaterial which way I may do. It is so much money either way.”

Pitrat did not accept Hull’s proposition, nor return the money, and the mortgage incumbrance was not paid.

More than this. Hull mailed the abstract of title to the Jerome lots to Pitrat on the 25th of November, 1889. Counsel for Pitrat calls attention to the fact that in that letter Hull stated that the title was “all right, except we may want a quitclaim deed from the Detroit Savings Bank, which they will give.” But what follows immediately makes the meaning perfectly clear:

“This to release a tax-deed which was taken in the interest of George Jerome, of whom I purchased the property, who gives warranty deed, and is worth $1,000,000.”

On the 10th of December Pitrat writes to Hull, pointing out errors in the abstract, but there is nothing in that letter in reference to the failure to have the lots released from the mortgage shown by the abstract. In passing it may be remarked with reference to the suggestion that Pitrat is an old and infirm man, subject to be easily duped, that his letter is sufficient evidence\of the clearness and strength of his mind, as well as of his business sagacity. These characteristics appear in all his letters, and completely dispose of any suggestion that he was not fully able to take care of his own interests.

On the 13th of December Hull wrote, inclosing his deed for the lots, which he had caused to be recorded. In the same letters he answers Pitrat’s suggestion about the errors in the abstract.

On the 16th Pitrat wrote to Hull, acknowledging the receipt of the letter last above. Counsel for the defense say that in this letter Pitrat requested the release of the mortgage incumbrance on the lots. I do not so understand it. He says: “In my last letter I alluded to release deed from the Detroit Savings Bank.” He further states that one of his reasons for desiring to have that release at an early date was that he was under contract to conve}1^ a certain number of lots, clear of incumbrance. The reference is clearly to the tax-title held by the bank, for that was the matter referred to in his previous letter. ITe said nothing about the release of the mortgage claim. As his vendee would have the right to insist that every other lot of the 200 should be first sold, and the proceeds applied to its discharge, it was not probably regarded as practically any incumbrance, so far as he was concerned, but the tax-deed was for all the lots, and may have been regarded as a very serious incumbrance. If he had not modified the contract in respect to the mortgage, it was his duty to decline to receive the deed. But he did receive it, and retain it, until he presented it and had it attached to his deposition given in this cause.

It appears from the testimomr of Hull that when he made the contract with Pitrat he had money in bank more than sufficient to pay the mortgage on the lots. I cannot understand why, if the mortgage was not to remain, he should pay the interest upon it in advance. He could save nothing in the way of interest by anticipating at that time the payment of any portion of the $8,500, because interest on that sum was not to begin to run until six months after the contract. My conclusion is, therefore, that the contract was so modified as to substitute the payment of the amount of the incumbrance to Pitrat for the payment of the incumbrance itself. See Railroad Co. v. Trimble, 10 Wall. 376, 383, where tlio court, by Justice Swayye, says:

“The most solemn contracts under seal, where the statute of frauds is not involved, may be changed or abrogated by a new parol agreement, express or implied; atid a contract within the statute may be taken out of it by the conduct of the parties. ”

The bill is for specific performance. Although generally equity will not decree specific performance of contracts relating to personal property, for the reason that ail action for damages affords an adequate remedy; agreements for the assignment of patents, for the delivery of chattels which can be obtained only from the vendors, and for the renewals of leases, will be enforced, on the ground that otherwise irreparable injury may be inflicted. Hapgood v. Rosenstock, 23 Fed. Rep. 86; New York, etc., Co. v. Union, etc., Co., 32 Fed. Rep. 783; Pennsylvania R. Co. v. St. Louis, etc., R. Co., 118 U. S. 290, 298, 305, 6 Sup. Ct. Rep. 1094; 3 Rob. Pat. § 1228; Adams v. Messinger, 147 Mass. 185, 17 N. E. Rep. 491; Satterthwait v. Marshall, A Del. Ch. 337; Reese’s Appeal, 122 Pa. St. 392, 15 Atl. Rep. 807.

But it is urged that the contract was rescinded. It appears in testimony that on the 29th of March, 1890, Pitrat gave to Thomas S. Jerome, of Detroit, a power of attorney, in which he expressed his desire and intention to rescind and annul the contract, to renounce all rights, claims, and obligations under it, or in any way growing out of it, and to return to Hull every part of the consideration received from him, on the ground tiiat he had utterly failed neglected and refused to carry out his part of the contract. He therefore gave to Jerome full power to return and tender to Hull deeds for the lands convoyed by him, being the Jerome Park lots; also for the lands in Clay county, Ark., which Blackaller had conveyed to him, (at precisely what date does not appear,) and also all the money received from Hull, giving Jerome full power to act for him and do everything necessary in the premises, including the execution of deeds and indentures.

On the 31st of March, 1890, Jerome called on Hull at his office in Detroit, and, having shown him the power of attorney, stated that by virtue thereof he had certain deeds and some money to tender him on behalf of Pitrat, who, he wished to announce, utterly rescinded and annulled the contract of October 2, 1889. Then Jerome handed Hull two deeds, one from Blackaller to Pitrat and one from Pitrat to Hull, of the lands in Clay county, Ark. Hull received these, saying that they were what he wanted, and that ho had written for them. Then Jerome handed Hull a deed from Pitrat for the Jerome Park lots, which Hull declined to receive. Jerome then produced an envelope, containing $1,130.55, in legal-tender greenbacks and coin, tearing open the end of the envelope, bringing the bills part way out, and saying, “Mr. Pit2-at wishes to return to you the money he has received from you in this matter, with interest to date,” and handed him the envelope with the money, stating the amount as above. Hull said be did not question that Jerome had stated the amount correctly, hut declined to receive it, remarking that he did not want it; that it belonged to Pitrat. He claimed also that he had paid Pitrat $2,100. Jerome asked if he included in his estimate $1,000 paid Pitrat in June, 1888, on an option for the purchase of the patents, then held by Mr. Ward and Mr. Wilson. Hull said that he did, and notified Jerome that he was ready to carry out his contract with Pitrat. This notice Jerome declined to receive, on the ground that he was not authorized by Pitrat to receive any notice. Hull, on the other hand, expressly declined to receive the Jerome Park deed and the money, and stated that his contract with Pitrat was in force, and that he should insist upon it. Jerome then deposited the money with McLellan and Anderson, bankers, of Detroit, to the order of Hull, as he notified Hull he would do, to be delivered to him upon his request, and gave him notice thereof. Jerome states in his deposition that at the time of the tender referred to he did not demand from Hull a performance of his contract with Pitrat, and in answer to the question whether he called Hull’s attention to any respect in which Pitrat claimed he had not performed, and asked him to perform in that respect, stated that according to his recollection he said that Mr. Pitrat considered that the contract of October 2d had not been carried out by him.

On the same day he telegraphed the substance of his interview with Hull to Mr; Gottschall, of Dayton, who was counsel for the defendant the Dayton Autographic Register Company, which company, Jerome testified, intended to buy Pitrat’s patents as soon as he was in position to sell them.

Jerome further testifies that the power of attorney was made and delivered by Pitrat to him at Gallipolis, Ohio, on the 29th of March, 1890, Mr. Gottschall being present, as attorney for the register companj^, with Mr. Crume and Mr. Kirby, both interested in and also representing that company, and that the $1,130.55 tendered to Hull was furnished Pitrat by that company, which then had an agreeement in writing with Pitrat for the purchase of the patents.

To make the statement of the case complete, it is now necessary to refer to certain other contracts made by Pitrat prior to October 2, 1889. The first was dated June 1, 1889, and was with Ward and Wilson, for the sale of these same patents. It provided for a consideration of $1,000 to be paid within 30 days. That money was paid. It further provided that Pitrat should transfer the full and complete ownership of the patents by deed to Blackaller, as trustee, and that upon the performance of the conditions by Ward and Wilson, Blackaller should assign them to John T. Mulheron, Hull, Ward, and Wilson.

The contract further provided that if Ward and Wilson (who represented themselves and Hull and Mulheron) should fail to perform the agreement, the $1,000 should belong wholly to Pitrat.

On the 24th of October, 1888, a new agreement was entered into by Pitrat with the Detroit Computing Scale Company. It recited the execution of the agreement of June 1, 1888, and that, on June 29, 1888, Pitrat had executed a deed of trust for the patents to Blackaller, he to convey, if the contract was complied with, to Mulheron, Hull, AVard, and AVilson, who subsequently associated themselves together and formed an incorporated company under the name of the “Detroit Computing Seale Company,” and transferred to said company their rights in the patents: wherefore it was agreed that the scale company should buy and Pitrat should sell all his right, title, and interest in the patents, subject to the provisions of the contract of June 1,1888, with AArard and AVilson, excepting that the time for payment and performance on the part of the scale company was extended for six months from December 1, 1888, and it was agreed that .Blackaller should convey to the scale company instead of to the parties named in the first agreement. The time for the expiration of this contract was fixed at June 1, 1889. It was signed by Pitrat and by the scale company, per Hull, vice-president and general manager.

On May 11, 1889, an agreement was entered into between Pitrat and the Detroit Computing Scale Company that Hull should within 10 days convey to Blackaller in trust the Arkansas land, and that Pitrat would then extend the time for payment and performance of the contract by the scale company to October 1, 1889. This contract, which was signed by Pitrat and by Hull, further provided that if the scale company should then be in default, Blackaller should convey the Arkansas lauds to .Pitrat, and the same should be his sole property.

On the 17th of May, 1889, Pitrat, without any consideration, agreed with Hull that in the event of the failure of the scale company to carry out its agreement on or before October 1, 1889, Hull, for himself, should have 10 days within which to carry it out for his own benefit, subject to the conditions and stipulations binding upon the scale company.

The conditions of the contract with the scale company were not performed by that company, and on the 2d of October, 1889, Hull made the contract upon which this suit is based.

The next failure alleged against Hull is that he did not pay the $1,500 in cash, the receipt of which is acknowledged in the contract of October 2d. Hull testifies that the $1,000 which he had paid on account of the previous contract was included in and by consent made part of the $1,500. He is undoubtedly right in this claim. That there is no consideration for his agreement with Pitrat of May 19th is of no consequence. He had individually paid the $1,000. That contract was effective as a waiver of the forfeitures under the previous contract, and the rights of the parties now rest upon the contract of October 2, 1889, which was upon a new and different consideration. The previous contracts called for the conveyance of 150 Jerome Park lots. The contract of October 2d called for the conveyance of 200 Jerome Park lots. The acknowledgment in the contract of October 2, 1889, of the receipt of $1,500 by Pitrat, over his own signature, is so strongly corroborated as to settle it, in my opinion, that Hull's account of the transaction is correct.

The objection that Hull did not remove the mortgage incumbrance upon the Jerome Park lots has already been disposed of.

It is also objected that he did not convey the Arkansas property as he agreed to do. This objection is not tenable. That ’property was to be conveyed to a trustee. Hull nominated a trustee, Albert F. Moore, of Gallipolis, who had been suggested by Pitrat. Hull’s son saw Moore, who signified his willingness to accept the trust, and Pitrat was so notified. It appears from Pitrat’s own testimony that he obtained from Blackaller a reconveyance of the patents about December 16, 1889. There seems to have been no good reason why he did not at the same time obtain the reconveyance of the Arkansas lands. He did in fact obtain that reconveyance later, but- did not offer to convey to Hull, nor to Moore, as trustee; neither did he transfer the patents to Moore in trust. Pitrat’s agreement to so transfer the patents in order that they might be transferred to Hull was concurrent with Hull’s agreement to convey the Arkansas land to the same trustee, and 'so long as he ivas in default in respect to the transfer-of the patents, and did not offer to make that transfer, he had no right to complain of Hull’s failure to convey the land. More especially had he no such right when in fact, before he undertook to rescind-, Blackaller had conveyed the land to him, and he himself held the title.1’

Right here it may be remarked that equity, under the provision of the contract requiring Pitrat to transfer the patents to a trustee, as above, would regard Pitrat,-upon his failure to make that transfer, as himself holding the patents in trust for the benefit of Hull, subject to the provisions of the contract. This consideration alone would be ample to maintain the equitable jurisdiction of this court to enforce the contract.

There is another item of testimony bearing upon the question of the right of Pitrat to rescind that must not’be lost sight of, for it condemns him out of his own mouth. In his deposition given on the 29th of January, 1890, in the ease of Ward v. Detroit Computing Scale Company et al., he testified that Hull owed him upon this very contract the sum of $7,900, thereby recognizing it as in full force and effect long after the alleged default for which he subsequently claimed to rescind it. As to the effect of this testimony in that suit, see Clough v. Railway Co., L. R. 7 Exch. 26, and Gray v. Fowler, L. R. 8 Exch. 249, 280.

There is no case here for rescission. The contract contains no provision for rescission. No fraud is shown. Hull was not in default. If he had been, Pitrat would have had no right to complain, for the reason that he was at least equally in default, and that after he was fully aware of Hull’s default he affirmed the contract by his testimony in a suit relating to these same patents, to which Hull was a party.

It is not denied that on the 10th of April, 1890, Hull tendered to Pitrat full performance of all the terms of the contract. That the defendant the Dayton Autographic Register Company became a purchaser with full notice of Hull’s equities is an admitted fact. Indeed, it may be fairly concluded from the testimony that Pitrat’s desire to rescind his contract with Hull, and the steps taken to accomplish that end, were suggested and stimulated by that company and its agents in their eagerness to secure the patents. The objection that Hull had no title to the Jerome Park lots is not, in my opinion, sustained. I am clearly of the opinion that the equity of this case is altogether with the complainant, and the decree will be in his favor, according to the prayer of the bill, with costs.