Yoss v. De Freudenrich

| Minn. | Dec 15, 1861

By the Cov/rt

Atwateb, J.

— Upon the demurrer to the answer in this case, the Defendants claim the right to attack the complaint, and show that it contains no cause of action, or is in other respects demurrable. This practice obtained under the old system of pleading, and has been sanctioned by this Court, at least to the extent of all defects in the complaint that would not be aided by verdict. (Smith vs. Mulliken, 2 Min., 319.) The objection to the complaint here raised is, that it does not state facts sufficient to constitute a cause of action.

The complaint in this case is substantially the same so far as the cause of. action is concerned, as in Pross vs. Dahl, decided at the present term. In that case a demurrer was interposed to the complaint on the sole ground that the com-, plaint did not state facts sufficient to constitute a cause of action. We held the complaint good, and the reasoning in that case, being equally applicable to the present, it will be unnecessary to enlarge on this objection of the Defendant.

The only question therefore requiring consideration isj did the Court below err in overruling the demurrer to the answer; or in other words, does the answer state facts constituting a defence to the action ? The relief demanded by the complaint is, that “ the said Defendants may be ordered and adjudged on or before a day certain to be fixed by this Court to pay or cause to be paid the amouut due on said note, and to receive the deed of said premises, hereby tendered by this Plaintiff. And that the amount due on said note may be assessed and ascertained by this Court or under its direction. And that in case the said Defendants fail to pay said money so to be found due on said note, on or before the day so to be fixed, that then the said Defendants and all persons claiming under them, &c., may be forever barred and foreclosed of all right, claim, title or equity, of, in or to the said lands,” &c.

The answer admits all the material allegations of the complaint, and alleges that the property, at the time of the purchase, was worth the agreed price ($6,500), but that by reason of the great depreciation in the value of real estate, it is not now worth, or of a greater value than $4,000.

“ That the said Defendant, Edmund De Ereudenrich, is desirous of redeeming the said property and of paying the amount which may be ascertained to be justly and legally due upon the said third promissory note ; but he respectfully shows to the Court and states, that by reason of the great depreciation of the value of said property, and the great difficulty that exists in raising moneys or securities in this state, and by reason of the stringency of the times since the date of the maturity of the said third promissory note, the said Defendant cannot at this time, nor within a short time, raise sufficient moneys to pay off the balance due and to become due upon said note, and that if an early day is fixed for the foreclosure of his equity of redemption in and to said property, it will be impossible for him to make such redemption. Whereby the said property will become wholly lost to the said Edmund,” &c.

The answer then further states, that the Defendants believe that in one year from this time the said property will be of much greater value and will sell to much better advantage than it will in the present time of depression in real estate, and that in three years from this time, or. in a much less time, the said Defendant will be able to raise an amount of moneys, amply sufficient to redeem the said property, under a sale for the amount due and to become due, with costs of sale, and that the property is ample security for all sums of principal and interest which can legally or justly accrue upon the said note, for the next four years, and that an extension of the time of sale under the decree to be made in this action and of the right of redémption after said sale, according to the laws of this State as they now exist, in case of like securities and mortgages upon real estate, will not prejudice the Plaintiff’s said security, and will be in accordance with equity and good conscience. And asking, in conclusion, (among other things not deemed material,) that a sale of the premises be decreed after nine months, and the Defendant be permitted to redeem at any time within three years thereafter, upon payment of the amount with interest, &c., for which the premises shall be sold.

The Court below, in its opinion on file overruling the demurrer, says, that “the answer does not state facts sufficient to constitute a defence, as that term is generally understood and used in pleading Tinder the code. That is, there are no facts stated which either can or are claimed to defeat the Plaintiff’s cause of action. But the facts set forth in the answer (some of them at least,) are such as the Court should know before rendering judgment, and which may affect or modify the judgment to be rendered. They are matters which, in a Court of Equity, bear upon the Plaintiff’s present right to a final decree, and may thus be said to constitute an equitable defence, not to the cause of action, but to the particular relief sought.”

Section 66 of p. 541, Comp. Stat., provides what the answer must contain, which must be either, 1st, a denial of each alie-gation of the complaint controverted by the Defendant, or, 2d, a statement of any new matter constituting a defence or counter claim. Unless the pleading can be brought within one or the other, or both these provisions, it is not admissible as an answer, either at law or in equity, since the form of pleading in both classes of actions is the same. The distinction attempted to be made between a defence to the cause of action, and to the particular relief sought, I do not think is well taken. The relief proper to be granted in any particular case must depend upon the cause of action, and an answer which stated facts showing that the Plaintiff was not entitled to the relief sought, or only to a part of the same, would constitute a defence to the cause of action, or a defence pro tanto, as the case might be. But even if any distinction of this kind does exist, we think the Court erred in holding that there is any new matter set up in the answer which constitutes a defence “ to the particular relief sought,” or of which it is necessary that the Court should be informed, before rendering final judgment in the case.

The making of the notes, and default in payment being admitted, the Defendant can have no legal claims upon the Plaintiff with reference to the property in question. He is remediless at law. If he seeks the aid of a Court of Equity, he must satisfactorily excuse or justify his default, and tender a performance of the contract of which he seeks the advantage, so far as the same may be possible, or in other words, he who asks the aid of a Court of Equity, must himself be ready to do equity.

The parts of the answer above quoted contain the only excuse or justification of his default, which the Defendant has to present. No fraud, accident, surprise, or any reason out of the ordinary course of events, is offered to excuse a default of some two years in performing his contract. The only reason assigned why he has not paid his note is, the great depreciation of real estate, and the stringency of the times. I presume no case can be found in the books, where a Court of Equity has relieved against a default on such a plea. So far as this part of the answer is concerned, it must be governed by the same rules that would apply to the consideration of a bill filed by the Defendant against the Plaintiff for specific performance. Such was the case of Benedict vs. Lynch, 1 J. Ch., 370, in which the Plaintiff had been in default and in which the Chancellor says, that “ it is incumbent on the Plaintiff, calling for a specific performance, to show that he has used due diligence, or, if not, that his negligence arose from some just cause or has been acquiesced in; that it is not necessary for the party resisting the performance to show any particular injury or inconvenience; it is sufficient if he has not acquiesced in the negligence of the Plaintiff, but con. sidered it as releasing him.” To the same effect is Hatch vs. Cobb, 4 J. Ch., 559. There are no allegations or proof in the case, that the Plaintiff ever agreed to extend the time for the performance of the contract on the part of the Defendant, nor that the delay has been by the Plaintiff’s consent. The Defendant therefore fails in establishing the first step, the very ground work of his defence; and were he bringing a bill for a specific performance, and tendered the balance due on the contract, I do not know on what principle the Plaintiff could be decreed to convey, if he objected to so doing.

But in this case the Plaintiff offers to waive his legal rights, and asks that the Defendant either now comply with his agreement, or that the same be abandoned. To this the Defendant in substance answers, that he has not the money, and cannot now do it, and that if the relief asked by the complaint is granted, he must lose what he has already paid on the land. And thereupon asks, that the land be sold after nine months, and that he be allowed three years after such sale, to pay the amount bid, and redeem under the sale.

How it can be for a moment claimed that there is anything in these allegations, or requests, in the answer, constituting a defence to the cause of action, or relief sought by the complaint, we are at a loss to determine. The Defendant not only fails to excuse his default, but wholly fails to show any valid reason for not complying with his engagement even now. For if the reason stated, to wit, the “stringency of the times and the difficulty of raising money,” be sufficient ground for releasing a man from his contract, a wide door would be opened lor the exit of unfortunate debtors, and but few contracts remain of binding force. Andrif the fact, that unless further time be given the Defendant will lose what he has already paid, be good ground for an extension of time, there are probably but few mortgages foreclosed in this State in which the same plea could not be truthfully urged. If the Defendant were filing a bill for specific performance, and tendered, or brought the balance due in Court, his claim would have perhaps greater equity on account of the amount already paid, but even then, it would only be regarded as a circumstance in his favor, and by no means conclusive of his right to the relief. Lead. Cas. in Eq., vol. 2, part 2, p. 14; 4 Ves., 686; 13 Ves., 225; 4 J. Ch. R., 559.

But the Defendant asks more than an extension of time. He asks a complete change of the contract, that a bond for a deed be changed to a mortgage, the Plaintiff divested of his legal title to the premises, and to have the same equity of redemption which he would enjoy under an ordinary foreclosure sale in Court. The Defendant in his pleading and on the argument, speaks of his equity of redemption, under this bond, and seems to take it for granted that he has such right of course. In this, he is entirely mistaken. No such right exists or is given by the terms of the instrument itself, or is granted by statute, or any authoritative construction of the law. Whether he has any equities of any kind entitling him to further indulgence, can only appear by the allegations of his answer, and proofs made thereon. In this case no equities are shown, save such as arise (if any) from the payment of a part of the purchase money, and as that fact appears from the complaint, the Court is as well prepared to render judgment without the answer as with ; there is nothing therein stated which constitutes a defence.

It is true, that the Defendant, in view of the amount paid upon this purchase, may, perhaps, suffer a hardship in granting the relief demanded by the complaint. But if so, it is in no measure owing to the fault of the Plaintiff, and that circumstance alone has never been considered a good ground for relieving a party from the obligations of his contract. If the Defendant has bought upon speculation, depending upon the rise of property to raise means to pay the purchase money, and tbe result bas disappointed bis expectations, be must be content to abide bis loss. As tbe Plaintiff would not have been permitted to repudiate bis contract, and decline to execute a deed, bad tbe property greatly appreciated in value, so must the Defendant be governed by the same rule, when tbe result is directly opposite. These fluctuations in the value of real estate are in tbe ordinary course of events, and furnish no ground of relief in equity to a party affected by them. “ It would be dangerous,” says Lord ErsMne, in 12 Ves., above cited, “ to permit parties to lie by, with a view to see whether tbe contract will preve a gaining or losing bargain, and, according to tbe event, either to abandon it, or, considering time as nothing, to claim a specific performance, which is always tbe subject of discretion.” Here tbe Defendant asks tbe privilege of lying by some three or four years longer, (having already bad more than two years after default,) and then if he shall choose, come in and take the property ; not even then offering to pay the balance now due, but only such sum as the property may bring when sold at public auction. If the property continues depreciating in value during that time, to the same extent which the Defendant alleges it has depreciated since the purchase, it is easy to see the Plaintiff would come far short of realizing the amount due him with interest. And it is manifestly impossible to prove that such result will not occur. The relief demanded by the Defendant, might, therefore, prove highly inequitable to the Plaintiff, and such as a Court of Equity could not grant upon the facts stated in the answer.

In no aspect of the case, therefore, does the answer state a defence; and it only remains to consider what should be the judgment of the Court upon the facts stated in'the complaint. In considering the relief to which the Plaintiff is entitled, regard may properly be had to the amount agreed to be paid by the Defendant for the land which he contracted to purchase, the amount which he has actually paid, and also the time which has elapsed since the forfeiture. "Where the amount of the purchase money is considerable, and the Defendant has paid the larger portion of the same, it would seem equitable that he should have more time granted to save an entire forfeiture of tbe land or sura paid, than where he has advanced but a small part of the agreed price. The Court may, perhaps, also have some regard to the monetary condition and general financial embarrassments of the country at the time of, and since the forfeiture of his agreement by the Defendant, though considerations of this nature should be entertained with caution, as, from the nature of the case, no settled or satisfactory rule can be stated which can affoi’d a guide in detei’mining the indulgence that should be gi’anted. That must rest in the sound discretion of the Court, and its exercise will not be interfered with by a court of x’eview, except an abuse of the same is shown.

We will remand the cause to the District Coui’t, which can detei’mine the amount due the Plaintiff, and dii'eet a judgment or decree in his favor, to the effect, that, in default of payment of the amount due, within six months from the filing of this decision, the bond be declared cancelled, and the Defendants, and all persons claiming thi-ough or under them, be barred and foreclosed from all claim, &c., in accordance with the prayer of the complaint.