Case ID: miss_15/html/0768-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Mr. Justice Clayton", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Richard Hester vs. Nathan Hooker.
    A bill for a specific performance or for the rescission of a contract is addressed to the sound discretion of the court: no certain, definite rule can be laid down, which would determine when a party was or was not entitled to such relief. Where a complainant seeking a rescission of a contract has not done all that he stipulated to do, or has not placed himself in a situation to be ready to do so, upon compliance on the other side, the court will not interpose in his behalf.
    On a bill for a rescission of a contract for the purchase of land, the mere fact of the complainant’s notes being outstanding, in the absence of fraud, does not, in this state, give right to a court of equity to interpose; in a state where notes are negotiable, in the mercantile sense of the term, a bill to restrain their transfer, and to compel their cancellation, might perhaps be maintained ; but here, where the consideration may be inquired into, as well after assignment as before, equity would not assume jurisdiction to inquire into their validity.
    Where a party sold land and gave a bond for title, and also stipulated to deliver possession of the land upon the payment of a portion of the purchase-money on a particular day; the purchaser failed to pay the money at the time specified, and the owner of the land subsequently sold it to a third person, and delivered possession to him ; the latter sale was rescinded, and the owner filed a bill to compel a specific performance of the first contract: Held, that by the latter sale the vendor placed himself in a situation, in which he was not entitled to a decree for a specific performance against the first purchaser.
    Hooker sold to Hester a tract of land and executed a title bond, in which he stipulated that he would surrender possession of the premises on the 1st day of September, 1838, upon the payment by Hester before that time of one of the notes given by him for the purchase-money, it being distinctly stated in the bond that the payment of the money should precede the delivery of possession ; Hester failed to pay the money, and in October, 1838, Hooker sold the same land to Young, and delivered possession of the premises to him; the sale to Young was rescinded, and Hester subsequently filed a bill for a rescission of his contract with Hooker, and for a cancellation of his notes which were still outstanding; Hooker filed a cross bill to compel a specific performance of the contract, alleging a readiness upon his part to comply with the terms of the contract: Held, that both the original bill and cross-bill should be dismissed, and the parties left to their legal remedies.
    
      ERROR from the district chancery court at Carrollton; Hon. Henry Dickinson, vice-chancellor.
    Richard Hester filed his bill in the district chancery court at Carrollton, against Nathan Hooker, charging, that on the 3d of April, 1838, he bargained with Hooker for a tract of land described in the bill, together with $250 worth of corn, for which he was to pay the sum of $11,000, to be paid as follows, to wit: $1000 cash in hand, $2666 66 on the 1st of September, 1838, $3666 66 on the 1st January, 1840, and $3666 66 on the 1st of January, 1841; he executed his three notes therefor, and he paid the $1000 down as agreed upon; that on the 1st Sep?-tember, 1838, he was to have possession of the premises, together with the corn; and in pursuance of the contract Hooker executed to him a title bond, which is referred to as exhibit A.
    The bill further stated that at the time of the contract complainant resided in Kentucky, and contemplated removing to Carroll county, Mississippi, where the land lies, and after the contract was made he returned to Kentucky, with the intention of bringing his family down to live on the place in Carroll county, Mississippi; but meeting with misfortunes in Kentucky, he found he would not be able to comply with his contract, and in the summer of 1838, he addressed a letter to Hooker, informing him of the facts, acknowledging his inability to perform his part of the contract, and requesting Hooker as a favor to rescind the same, and to pay over the thousand dollars paid thereon to several persons named in the letter. Hooker did not answer his letter, but shortly afterwards (and after Hooker had bargained the land again to one Thomas T. Young) one Mr. Ayres, who lived in Carroll county, and was then on a visit to Kentucky, called on complainant, and informed him that Hooker had instructed him to tell complainant that he (Hooker) was-willing to refund one-half of the one thousand dollars, and rescind the contract; but complainant declined accepting the proposition.
    The bill further charged that some time in the summer or fall of 1838, Hooker bargained and sold the same land to one Thomas T. Young for as large a price, or larger than complainant was to have paid, and he put Young into immediate possession of the premises, and Young has had possession ever since. That the sale to Young was a virtual rescission of the contract between complainant and Hooker; and complainant therefore rested contented about the matter, expecting that when he visited Mississippi, Hooker would of course refund him his thousand dollars. That untoward circumstances prevented him frofn visiting Mississippi until a few weeks past, and to his great surprise, on calling on Hooker for his thousand dollars, Hooker refused to pay the same, but told him if he came back to Carroll to live, he would give him a cow and a calf.
    The bill further stated that Hooker was seeking by bill in chancery to make void his sale to Young, and in contemplation thereof has bargained and sold the land again to his nephew, Nathan Hooker, jr. The bill prayed for a discovery from Hooker of the letter before referred to, and of the propositions he made through Ayers to rescind; and whether at that time he had not sold the land to Young; for a final rescission of the contract between Hooker and himself; that his notes be delivered up to be cancelled; and that his thousand dollars be refunded.
    To this bill the defendant demurred and assigned the following causes of demurrer. 1st. Because the bill does not show that complainant offered to comply with his part of the contract. 2d. It does not show that Hooker has been in default. 3d. That complainant has never put himself in a situation to demand a title. 4th. Because it is admitted that complainant has been in default.
    At the June term, 1843, the demurrer was overruled.
    Hooker then answered and admitted the contract as set forth in the bill, and in Exhibit A, and filed the notes he received for the purchase-money, as Exhibit 1, 2, 3. H. denied that complainant paid him a thousand dollars, and stated he received only nine hundred dollars in Brandon money; he denied that he agreed unconditionally to deliver possession on 1st Sept. 1838, as charged, but stated that he required payment of the first note prior to delivering possession; that the payment of that note was a condition precedent. Respondent admitted that sometime in the fall of 1838, he received a letter from complainant of the purport and tenor as set forth in the bill, which he produced, marked Exhibit 4. That soon after he received the letter he heard Mr. Ayres was going to Kentucky, and he sent by him his answer to complainant’s proposition. By Mr. Ayers he informed complainant that he could not agree to a rescission of their contract as proposed, but he reduced to writing a proposition which he required complainant to sign, and complainant refused todo so; and they could never agree upon the terms of a rescission. He charged that he had sustained great damage in consequence of complainant’s refusal to comply with his contract; that he never had at any time consented to rescind their contract. Respondent admitted that in the fall of 1838, when he ascertained complainant could not comply with his contract, he contracted to sell the land to Young, but never gave him a deed, and was not to give him one until the purchase-money was paid. That in selling to Young, his object was merely to raise the balance of the purchase-money due from complainant; and when he sold to Young, it was subject to the sale to complainant, and he so informed Young; that Young never paid him the purchase-money, and he rescinded the sale and obtained from Young rent for the term he occupied the premises.
    That after complainant’s default in making payment of the first note, due September, 1838, he let Young into possession of the land, and he remained until their contract was cancelled. He denied that he had ever conveyed the land since his sale to complainant, or made any other contract in regard to it than that with Young; and he made that only for the purpose of raising the balance due him by complainant. Respondent denied that he has been guilty of any breach of contract, or that complainant ever demanded possession of the premises, or performed or offered to perform his part of the contract. He charged that by complainant’s failure to comply with his contract, he had sustained a damage far greater than the sum complainant paid him. He stated that he was then ready and willing to perform his part of the contract.
    Respondent charged that complainant was indebted to him in the sum of $250 for negro hire, as appears by a note which he made Exhibit 15, and asked that if he had to refund, that the $>250 be allowed him. ' Hooker also filed a cross-bill setting forth the contract between himself and Hester, substantially as set forth in his answer to the original bill, averring that the land was unincumbered and his title to the same perfect; that he was ready and willing on his part to comply with the contract; and he prayed a specific performance.
    Hester answered the cross-bill, and admitted the allegations thereof as to the description of the land; the price at which he bought it; Hooker’s title, &c.; he admitted, also, that only $900 was paid by him instead of $1000, as set forth in the original bill, and he admitted he had paid no other portion of the purchase-money, or given any other security therefor than his notes ; that Hooker only gave his bond for title to be made when the purchase-money was paid; but he denied that the note for negro hire was due to Hooker as set forth in the cross-bill; he stated he informed Hooker he was about to trade for two notes of Hooker, due one O. H. King, and inquired whether they would be taken in discharge of the note for negro hire mentioned in the cross-bill; that Hooker agreed to take them ; and he therefore did trade for them, and now has them and tenders them in discharge of his note for negro hire. He denied that the $900 was paid in Brandon money, and stated that it was paid in good funds.
    Thomas T. Young, whose deposition was taken by the complainant, testified, that in August, 1838, he saw the land described in the original and cross-bills, and being pleased with he proposed to buy- it of the defendant; that defendant informed him the land had been sold to complainant, and stated the terms of sale, and said if it had not been sold to complainant he would let deponent have it. Sometime during the following, October, deponent received a note from defendant stating that complainant had failed to comply with his contract, and if deponent then wanted to buy the land he could get it; deponent immediately went to the house of defendant, where he saw complainant’s' letter saying -that in consequeuce of misfortunes and losses, he would be unable to comply with his contract; he then purchased Ihe land from the defendant for eleven thousand dollars; five thousand eight hundred dollars to be paid in floats issued under the 14th article of the treaty of Dancing Rabbit Creek, and the residue in three equal instalments, the first payable six months after the date of his purchase, and the others in one and two years; that no deed was given to him by the defendant, nor was a deed to be made until the purchase-money was paid; their contract was reduced to writing, and possession of the premises delivered to deponent, and he remained in possession until some time in the winter of 1842, when his contract with defendant was rescinded, and the land delivered up. He paid defendant the first instalment, amounting to about seventeen hundred and twenty-six dollars, and failing to pay the second instalment, defendant filed a bill against him praying the payment of the purchase-money, or a rescission of the contract; that pending the suit the matter was referred to their friends, compromised, and their contract rescinded. When deponent purchased the land, he understood defendant to say he would refund to complainant the money he received from him, and rescind their contract. William Cothran, whose deposition was also read by complainant, testified that in 1839, according to the best of his recollection, he called on defendant and told him the complainant had written to G. F. Neill and himself, informing them that he had proposed to rescind a contract entered into by the defendant and himself relative to the sale and purchase of some land, and had authorized Neill and deponent to receive the money defendant had been requested to refund, and the defendant then informed deponent that he proposed to pay back to the complainant one half of the money received from him, and complainant had not replied to his proposition, and he would therefore have nothing further to do with the matter. On cross-examination, he said complainant had not informed him by letter or otherwise that defendant had sold the land to Young before the expiration of the time within which complainant was to perform the contract on his part; complainant did not claim a rescission as a matter of right, but said be had proposed to the defendant to rescind the contract, and that defendant should return the money paid him by complainant; G. F. Neill and deponent were also informed by complainant’s letter, that defendant had proposed to pay back one half of the money he received, and rescind the contract, and complainant had refused to accept that proposition. J. B. Fort proved that the defendant informed him the sale to Young had been rescinded. James Wellons proved that a few days before the commencement of this suit, he went with complainant to the defendant to endeavor to settle the matter in dispute between them ; complainant said defendant sold the land before the time he was to have given possession to complainant, and defendant denied, and they could not agree on any terms of settlement. On cross-examination, he said defendant agreed if complainant would return to the country to reside he would give him corn, stock, &c. A. W. Ayres proved that he bore a letter from defendant to complainant, then in Kentucky, containing a proposition to refund to the complainant one half of the money he paid defendant and rescind the contract between them, and that complainant refused to accede to the terms proposed. Being cross-examined, he said complainant resided in Christian county, Kentucky, when he called on him with the letter from defendant ; and he believed defendant requested him, before ho started to Kentucky, not to say anything to complainant about the sale of the laudato Young. This was all the evidence adduced on either side. On the 17th day of December, 1844, the vice-chancellor dismissed the bill at the costs of the complainant, and the complainant removed the case to this court by writ of error.
    Brooke, for plaintiff in error.
    The same questions arise in this case on the final hearing, or bill, answer and proof, as were suggested by the demurrer, which was overruled. For the proof fully sustains every allegation of the bill. The deposition of Young proves that very soon after Hooker received Hester’s letter proposing a rescission of the contract between them, Hooker informed him (Young) that he was then prepared to sell the land, as Hester was not able to comply with his contract; that he would refund' to him the money he, Hester had paid him, and rescind the contract. Young further proves that Hooker acted on Hester’s letter by selling the land to him in Oct. 1838. This conduct of Hooker #is what we rely on as the basis of our claim to a complete rescission and the refunding of the money paid by us. Can equity grant us this relief? Most unquestionably, for a court of equity is the only tribunal that can do complete justice by decreeing a cancellation of the notes yet outstanding. This is the main object to be effected by the bill. Did we seek nothing else but the refunding of the money paid, perhaps a court of law would be the proper, if not the only tribunal; but a court of law could do nothing as to the said notes. Its remedy, therefore, would be incomplete.
    The rule that a party who seeks a rescission must show that he himself is ready and willing to perform his part, does hot apply in this case. The necessity of doing this has been dispensed with by Hooker, inasmuch as by his act of selling to Young, he by the strongest implication accepted Hester’s offer to rescind, and waived the payment of the first note, due in September, L838. For observe that Young states that some lime in that month Hooker informed him that he could then sell the place to him, and actually did sell it in the next month; would it not then be a mockery on the part of Hooker to require of Hester a tender of performance when he had at that time put it out of his power to accept it? This fact distinguishes this case from those cited by the other side, as will be seen by reference thereto. The cases cited by judge Shattuck, in his brief, are all-sufficient on this point.
    If the decree of the vice-chancellor'is right, we see no reason why the bill should not have been dismissed on demurrer, as the allegations thereof are entirely made out by the depositions. But they (particularly that of Young) show a course of double-dealing on the part of Hooker, that made a much stronger case against him on the'final hearing than was given by the bill alone, as admitted by the demurrer.
    
      As to the question of jurisdiction after answer, see Underhill v. Van Courilandl et al. 2 J. C. R. 339.
    
      Sheppard, for defendant in error.
    If it had been stated in the bill that the contract had been rescinded, it would not present a case for relief in equity for^ there would be a complete remedy at law.
    The bill, however, shows that the contract was not rescinded, and that the terms of rescission mutually proposed were not accepted.
    The agreement to sell to Young, made in October, 1838, vests in complainant no equity to insist on a rescission of his contract. It could do so only on the presumption that the vendor was not able to perform his part of the agreement; and for the vendee to avail himself of this ground of relief he must first put the vendor in default.
    The title-bond particularly stipulates that the payment of the first instalment, on 1st of September, 1838, was a condition precedent to giving possession, and payment of all the purchase-money was a condition precedent to the execution of a deed.
    The vendor should have first tendered a performance. Harris et al. v. Bolton et al. 7 How.
    The answer and proof show that the vendor can now make a perfect and unincumbered title.
    
      D. O. Shattuck, in reply.
    The first position taken by Mr, Sheppard, is, that this court has no jurisdiction of the case; that if the complainant has any remedy, it is at law.
    In answer to this, perhaps it would be sufficient to say, the question of jurisdiction has been raised and overruled upon demurrer to the bill. But apart from that decision, it will be seen that chancery is the only remedy. The only means by which the complainant can have his outstanding notes can-celled, which is one object to be effected by the bill, is by the aid of this court. And this is certainly his right, if he has any right in the case, and therefore a bill is the proper remedy. This makes the case different in fact from the cases cited by Sheppavd, (5 Johns. Ch. R. 193, and 4 Ibid. 569,) and makes those authorities inapplicable.
    2. Mr. Sheppard’s second argument is based upon the position that Hooker never abandoned his contract. Here we differ in the legal construction deducible from the debts of Hooker.
    We contend that when Hooker sold to Young he voluntarily abandoned his contract with Hester. What else can be made of it? Will it be said that he considered it'a contract when he pleased, and otherwise when he pleased. That to-day there is no contract, and I may sell to another, and that to-morrow I may enforce the specific performance. This cannot be. It is true that Mr. Hooker was not obliged to act upon the suggestion of Hester, and abandon the contract. He might have enforced it, but it suited his convenience best to sell to another; and he thereby released Hester from default, and from obligation to perform, and placed himself in a position not to comply on his part. “The production of a bad title, or a wrongful resale by the vendor, will render the preparation and tender of a conveyance by the purchaser unnecessary.” See Knight v. Crockford, 1 Esp. R. 187; Duke of St. Albans v. Shore, 1 H. Bla. 270; Newcomb v. Brackett, 16 Mass. R. 161; Eames v. Savage, 14 Ibid. 425; Chitty on Contracts, 308, Springfield edition, 1842. Now the question arises, was the resale of Hooker to Young a wrongful resale? If it was, then it comes within the above rules, and the contract stood abandoned by his wrongful act. If the act was not wrongful, then in the resale he accepted the terms offered by Hester in his letter, and the contract would be abandoned by consent. In either case we would be entitled to our money and our notes, outstanding.
    3. The point made that it would take a written agreement to rescind a contract, does not apply. This contract has been abandoned; abandoned by both parties, for lo! these many years. And after such abandonment a court can declare a rescission, and put the parties in statu quo.
    
   Mr. Justice Clayton

delivered the opinion of the Court.

This was a bill filed by Hester in the vice-chancery court at Carrollton, to rescind a contract for the sale of a tract of land, and to obtain a decree for the repayment of nine hundred dollars, paid by him when the contract was made, and for the can-celling of several notes which he executed for the balance of the purchase-money.

The title bond executed by Hooker bound him to give possession of the premises 1st September, 1838, upon the payment of one of the notes by-.Hester, but distinctly states the payment is to precede the surrender of possession. Hester then resided in the state of Kentucky. Before the time appointed for the delivery of possession Hester wrote to Hooker, that he was unable to comply with the contract, and asking for the repayment of the money paid, and for a rescission of the contract. Hooker refused to repay the whole amount, but offered to pay part and rescind ; this was declined by Hester. In October, 1838, Hooker sold the premises to one Thomas Young, and put him in possession. At a subsequent period, this contract was rescinded. Hester’s bill was filed, to which a demurrer was interposed, and overruled. Hooker then filed a cross-bill for a specific performance of the contract, alleging a readiness upon his part to comply. The vice-chancellor dismissed Hester’s bill with costs, but made no decree as to the cross-bill.

A bill for a specific performance, or for the rescission of a contract, is addressed to the sound discretion of the court. No certain, definite rule can be laid down, which would determine when a party was or was not entitled to such relief. Cases are numerous in which both bill and cross-bill have been dismissed, and the parties respectively left to their remedies at law. When the complainant has not done all that he stipulated to do, or has not placed himself in a situation to be ready to do so, upon compliance on the other side, the court will not interpose in his behalf. The complainant in the original bill stands here in that position. He not only has not performed his part of the contract, but he makes his own inability to perform in reality the ground of asking for a rescission. There is no pretence, that Hooker would not have complied punctually with his engagement, if the other party had performed his part. Hooker’s alleged breach of the contract was after the failure of the complainant to comply.

It is said in argument that Hester is entitled to the relief prayed for in chancery, because a court of law cannot compel a delivery of his notes which are now outstanding. This may be true, and yet a court of equity may not, on that account, be authorized or required to assume jurisdiction. If the outstanding of a complainant’s notes, in a case free from fraud, is a circumstance in itself and standing alone, which gives right to a court of equity to interpose, then the sphere of its jurisdiction will be greatly enlarged. The principle would be applicable to notes of every description, as well those given for personabas for real property. In a state where notes are negotiable, in the mercantile sense of the term, a bill to restrain their transfer, and to compel their cancellation, might perhaps be maintained. But here, where the consideration may be inquired into, as well after assignment as before, equity would not assume jurisdiction to inquire into their validity, in a case like this; but would leave the parties to settle the question at law.

From the conduct of Hooper in selling the land to Young, we think he has placed himself in a situation, in which he is not entitled to a decree for a specific performance. We shall therefore leave the parties to their legal remedies.

The decree of the court below dismissing the bill of Hester, is affirmed; the cross-bill of Hooker will likewise be dismissed at his (Hooker’s) costs. Hester to pay the costs of this court.

This decree to be without prejudice to any remedy at law which either party may think proper to pursue.