Case ID: tenn_21/html/0119-01.html
Source: Caselaw Access Project
Author: {"author": "Tubeey, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Walker vs. Wheatly.
    1. A parol rescission of a written contract may be set up in equity in bar of an application for a specific performance; such parol rescission must however be clearly and satisfactorily made out in proof, and the terms of it fully complied with and executed.
    2. Where a parol agreement to rescind a bond to Convey land, had been made, and the bond for title and the note executed for the payment of the balance of the purchase money had been deposited in the hands of a third person to be delivered over to the parties entitled ther eto, when the money which had been paid by the vendee should be returned: held that this agreement to rescind continued an executory agreement till the money-ad.vjrnced was repaid, and that such parol agreement was not so far executed as to defeat an application for a specific performance.
    Thomas Walker filed his bill in the chancery court, at Columbia, against Samuel Wheatly, praying the specific execution of a contact. The bill charges, that Wheatly sold to him one hundred and fifty acres of land, lying on Flat creek, in Maury county, on the 1st day of March, 1837, and that said Wheatly then executed to him a bond in the following words:
    “Know all men by these presents, that I, Samuel Wheatly, am held and firmly bound unto Thomas Walker, in the sum of $575, for the payment of which, I bind myself, my heirs, executors and administrators, firmly by these presents. Given under our hands and seals, this 1st day of March, 1837.
    The condition of this obligation is such, that, whereas, the said Wheatly has sold to the said Thomas Walker, a certain tract of land, lying on Flat creek, and bounded as follows, &c., containing 150 acres, for the sum of $285, to be paid as follows, two hundred dollars in cash, and seventy-five dollars, to be paid next Christmas. Now, if the said Samuel Wheatly shall make, execute and deliver to the said Thomas Walker, a good and valid title in fee simple for said tract of land, with covenants of general warranty of title, on or before the 20th of April next, then this obligation to be void, otherwise to remain in full force and virtue.”
    The bill further charges, that the $210 were paid at the time, and that complainant executed and delivered to Wheatly his note for the balance of the purchase money, to wit, the sum of $75. The bill further charges, that after the 20th of April, 1837, he procured a deed from said Wheatly to himself for the land to be written in accordance with the bond for title, and tendered the balance due said Wheatly and the deed, with a request, that he receive the money and sign the deed, but that Wheatly refused to execute the contract. The bill prays, that the contract may be specifically executed in accordance with the bond, &c.
    On the 20th May, 1838, the defendant Wheatly filed his answer. He admits the contract was made as set forth in the bill of complainant, but alledges that in some short time after the period arrived at which the balance of the purchase money was to be paid and the deed made, complainant “took it into his head,” that the title of respondent to the land was defective, and was unwilling to take a deed from respondent, but proposed to rescind the contract. This, respondent finally agreed to do: that it was then agreed that respondent should deliver up the $75 note, which he held, to a third person, and that he should execute his note to complainant for the $210 which he had paid respondent, with interest from the 1st of March, 1838, and complainant should deposit - the title bond with such person; that complainant did deposit the title bond; and he delivered up the $75 note in accordance with this contract of recision; that complainant hearing that respondent had a bond on A. O. P. Nicholson for $200, payable in cash notes, and being desirous of having Nicholson as his paymaster, proposed that Nicholson’s note should be deposited in the hands of the same third person, to which respondent assented, and deposited the Nicholson bond with this mutual depository, together with ten dollars to make out the amount respondent had received; that respondent then considered the contract at an end, and that he accordingly rented out the premises; that after the lapse of a considerable time, complainant applied to Nicholson for payment, and that Nicholson offered to pay in cash notes according to the terms of his bond, and that complainant refused to take them, withdrew the title bond and .demanded a deed, which respondent then declined doing, considering the contract as rescinded.
    At the October rules, 1838, the complainant filed a general replication to the answer of defendant. There was but three depositions taken in the cause. Holcomb testified that he applied to complainant in 1S37 to rent the tract of land in controversy, and that he informed him that Wheatly and himself had rescinded their contract, and that if he wanted to rent the land he must go to Wheatly. He did go to Wheatly and rented the land from him.
    Dale testified, that some time in the year 1837, complainant and defendant came to him and informed him that they were about rescinding a contract for land formerly sold-by defendant to complainant, and requested him to draw two notes, one for one hundred dollars, and the other for one hundred and ten dollars, payable in March, that the notes were drawn but not signed, and were left in his hands until complainant should deposit with him the title bond of defendant, and the defendant the note of complainant; that the title bond and note were deposited accordingly, but defendant declined signing the notes, saying he had a claim of two hundred dollars on A. O. P. Nicholson, which he would give in lieu of his own notes, and at the same time handed him ten dollars, directing that it should be paid over to complainant when Nicholson should discharge the bond; that the note, money and title bond remained in his possession till after March, 1838* and that defendant frequently inquired if Nicholson had paid the two hundred dollars.
    Nicholson testified, that during the pending óf the negotiation in regard to the recision of the contract, complainant and defendant applied to him to know if he was willing to become paymaster to Walker on the bond held by Wheatly,- to which- Nicholson replied that he was willing to pay to either according to the terms of his obligation; that at a subsequent- period Walker applied to him for the payment of the bond, and demanded money, that witness declared himself in readiness to discharge the bond according to its tenor, in cash notes, but refused to pay money therefor; that the bond had not been discharged, and he did not know which of the parties held it.
    The cause came on for hearing at the September term, 1839, on the bill, answer, replication and proof. Bramlett, the presiding chancellor, dismissed the bill. Complainant appealed.
    
      Frierson, for complainant.
    Admitting that a parol discharge of a written contract, may be set up in bar of á bill filed for a specific performance, still it is contended for the complainant that this is not such a case as comes within the meaning of the decisions upon this subject. The waiver spoken of in the cases is an entire abandonment and dissolution of the contract, restoring the parties to their former condition. Price vs. Walker, 17 Ves. 354. The abandonment or recision of the contract in this case has not been executed. The money paid by Walker has never been repaid to him. This alledged recision was an executory agreement to rescind, the terms of which the defendant did not comply with, Sugden (V. & P. 180,) uses the following language, “Whether an “ absolute parol discharge of a written agreement, not followed by “ any other agreement upon which the parties have acted, can be “ set up as a defence in equity, seems questionable.” The proof under such circumstances should be very satisfactory, both as to the fact of the discharge, and the subsequent execution of the terms of such discharge.
    
      J. It. Dew, for the defendant.
    Is parol evidence admissible in a suit in chancery for a specific performance to show a rescisión or waiver of a written agreement sought to be specifically executed? The authorities are very numerous in England and America on this point. The rule of law is well settled, that when a court of equity is called upon to exercise its peculiar jurisdiction, by decreeing a specific performance, the party to be charged is to be let in to show by parol, that under the circumstances of the case the complainant is not entitled m equity and good conscience to have the written ‘agreement specifically performed. Sugden’s law of vendors, 101 and references, note k: 7 Yes. Jun. 219: Me Meen vs. Owen, 1 Yates, 135: S. C. 2 Dali. 171-3: Field, et al, vs. Biddle, 1 Yates 132: Walker vs. Walker, 2 Atk. 98: 6 Ves. Jun. 337, n. Joynes Statham, 3 Atk. 388: Wollam vs. Hearn, 7 Ves. Jun. 211: Marquis of Townsend vs. Stangroom, 6 Ves. Jun. 328: Clark vs. Grant, 14 Ves. Jun. 519: Clowes vs. Higginson, 15 Ves. Jun. 523: Winch.vs. Winchester, 1 Ves. & B. 375: Ramsbottom vs. Gorden, 1 Ves. & B. 165 : Hurst lessee vs. Eirkbridge, 1 Bin. 616: Harvey vs. Harvey, 2 Chan. Ca. 180: Price vs. Dyer, 17 Ves, 356 : Clowes vs. Higginson, 1 Ves. & B. 524: Washburn vs. Merrills, 1 Day, 139: Backhouse vs. Crosby, 2 Eq. Ca. Ab. 32, 44: Has-brouck vs. Tappan, 15 John. Rep. 2Q0; Gillespie vs. Moon, 2 John. Chan. Rep. 585, 595 : Benedict vs. Lynch, 1 John Chan. Rep. 370 to 382: Kesselbrack vs. Livingston, 4 John. Chan. Rep. 144,149: 1 Story’s Eq, 173 to 185, and the numerous references in notes: 1 Peters’ Dig. 458,462, cases there referred to: 2 Analytical Dig. R. of New York, 483 to 485: Stephens et al vs. Cooper et al. 1 John, Chan. Rep. 425 to 431: The Hiram, 1 Wheat. 444: Hunt vs. Rous-manier, 8 Wheat. Rep. 211: Hagan vs. Delaware Insurance Co. 1 Wheat. Rep. 422: Vandevort vs. Smith, 2 Cain’s Rep. 155: Davis vs. Simmons, 1 Cox’s Rep. 402-4: Hepburn vs. Dunlap, 1 Wheat. Rep. 197, Jeremy’s Eq. Jur. 432: Harris vs. Knickerbocker, Cowen’s Rep. 638: 1 Maddock’s Chan. 406-7, and references to adjudged cases. QCjPI particularly refer the court to the case of Gillespie vs. Moon, 2 John. Chan. Rep. 585, Chancellor Kent’s remarks upon Lord Resdale’s dictum in Clinaw vs. Cooke, 1 Scho. & Lef. 39: also the case of McMeen vs. Owen, 1 Yates, 135: Field, et al. vs. Biddle, 1 Yates, 132: S. C. 2 Dal. 171-3: Clowes vs. Higginson, 1 Yes. & Beams, 524.
    The result of the numerous decisions in England and America upon the question, whether a court of chancery, in the exercise of a sound and reasonable discretion, will refuse to decree a specific execution of a written contract, may be reduced to this: the complainant must come into court with clean hands and prepared to show that he has done or is ready and desirous to do all things fairly and honestly on his part connected with the transaction, and his testimony must establish satisfactorily the allegations in his bill. And the defendant may by parol proof, disprove the allegations and charges in the complainant’s bill — first, by his answer; and, secondly, by disinterested and creditable persons, that the first contract has been rescinded or waived by a subsequent parol agreement or waiver; such parol recision or waiver by well settled rules of chancery practice, renders the first contract null and void, and a court of chancery will unhesitatingly refuse to decree a specific performance. The defendant may show any facts and circumstances independent of the written contract, such as fraud, concealment, misrepresentation, mistake, undue advantage, inadequacy of consideration, defect of title, recision or parol waiver, and every other kind of unfairness, or any fact or circumstances making the enforcement of the written agreement inequitable, unconscientious, unreasonable and unjust. The proof here shows beyond all doubt, that the contract was rescinded, that Walker so regarded it, that he refused to rent the land to Holcomb, and referred him to Wheatly, and that Wheatly rented the land to him, and that Wheatly had done every thing that he was bound to do by the strictest terms of the contract towards a compliance therewith.
    The decree of the court of chancery was therefore correct, and should be affirmed.
   Tubeey, J.

delivered the opinion of the court.

On the 1st day of March, 1837, the defendant sold to complainant one hundred and fifty acres of land for two hundred and eighty-five dollars, and executed his bond, binding himself to convey to the complainant a good and valid title in fee-simple to the same by the 20th day of April, 1837. Complainant has paid $210 of the purchase money, leaving a balance of $75 due, for which he gave defendant his note. Defendant having failed to convey to the complainant at the time specified, this bill is filed for a specific execution of contract. This, defendant resists upon the ground as al-ledged in his answer, that after the making of the contract it was rescinded by parol, by the mutual agreement of the parties. The question of law, that is argued mainly in the case, is, whether a parol recision of a contract can be set up in equity to defeat an application for a specific performance. That it can be done when the parol recision is clearly and satisfactorily established, is certain. See. Sugden on vendors, 101, and references. But the principal question in this case, and the one on which it turns is, whether there is any satisfactory proof that the contract has been rescinded : .and we are most clearly of the opinion, that there is none. The defendant’s answer itself, makes out nothing more, when properly examined, than an executory contract to rescind, the condition of which on his part he never performed. He says in substance, that after the contract to sell the land was made, and the $210 were paid, the complainant became doubtful of his title to the premises, and they mutually agreed that the contract should be rescinded upon his paying him back the money he had received, and delivering up the note which he held upon complainant for the balance of the purchase money; that he was to execute to complainant his note for the payment received with interest, and was to deliver up to a third person, the note for the balance of $75: that he did deliver up to the third person the note specified, and was about to execute his own notes as agreed upon, when complainant learning that he held a claim upon A. O. P. Nicholson for a sum nearly equal to the amount to be paid, was anxious to have said Nicholson for his paymaster, to which ‘ he agreed: that complainant called upon Nicholson, who promised to pay him, with which complainant expressed himself satisfied, and told him that he need put himself to no further trouble about it, whereupon he deposited $10, the balance to make Nicholson’s note equal to the demand of the complainant’s, together with the seventy-five dollar note in the hands of the third person referred to, and [the complainant at the same time deposited in the hands of the same persón the bond fot the title, and he considered the contract rescinded. Whether this contract of rescission was executed or not, depends upon the question of who was to be responsible for Nicholson’s failure to pay his note, the complainant or defendant; if the complainant took it in absolute discharge of so much of his debt, agreeing to risk the payment, then the contract was executed, there remaining no more to be done; but if he took it only as a means through which he might get the money due by the defendant, and the defendant was to be responsible for Nicholson’s payment, then the contract was not executed until the money was paid, which having never been done, the contract would remain executory; and that the defendant was to remain responsible, his answer clearly shows. If the complain-1 ant agreed to take Nicholson’s note in absolute discharge of so much of his demand, why the necessity of depositing the $10, the $75 note and the bond for title in the hands of the third person? if there were nothing more to be done, if the defendant was not to remain responsible, why not have paid the ten dollars to the plaintiff, delivered up to him his note, and taken up his own bond ? The transaction between them would have been at an end; but if we were left doubtful from the answer, that this is the true state of the case, all doubt will be removed by the examination of the testimony of E. W. Dale, the third person spoken of in the answer, with whom the deposit was made. He says, that some time in the year 1837, complainant and defendant came to him and informed him, that they were about rescinding a contract for land previously sold by the defendant to the complainant, and requested him to draw two notes, one for one hundred dollars, the other for one hundred and ten dollars, payable in March,* that the notes were drawn, but not signed, and were left in his hands until the complainant should deposit with him the title bond of defendant, and the defendant the note of the complainant; that the title bond and note were deposited accordingly, but the defendant declined signing the notes, stating that he had a claim of two hundred dollars on A. O. P. Nicholson, which he would give in lieu of the notes to complainant, and at the same time handed him ten dollars in money, which he directed him to pay over to complainant when Mr. Nicholson should have paid the two hundred dollars; that the money, title bond and note remained in his possession after March, 1838, during which time defendant frequently called and enquired if Nicholson had settled the two hundred dollars with complainant. -

There can be no doubt then left, that defendant was liable for Nicholson’s defalcation; the money has never been paid him; the defendant has always refused to pay it to him himself. Then here is a contract to rescind upon the repayment of the purchase money, or the execution of notes by the defendant therefor, neither of which has ever been done; the contract then is not executed, but execu-tory, and as such no bar to the complainant’s right to relief.

The decree of the chancellor will be reversed, and a specific execution of the contract decreed here.