Case ID: mass_13/html/0326-01.html
Source: Caselaw Access Project
Author: {"author": "* Parker, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thomas Tileston and Another versus Joseph Newell and Others.
    Where all' the individuals composing a corporation covenanted in behalf of such corporation, for themselves and their heirs, that the corporation should do certain acts, they were holden to be bound personally.
    Of covenants, dependent and independent.
    Debt on an obligation, dated February 5th, 1808, for $ 10,000, to be paid on demand.
    The defendants pleaded, 1st, non est factum; on which issue was joined.
    
      2. They pray oyer of the deed declared on ; — which purports to be an indenture made on the said 5th of February, 1808, by and between the defendants, Joseph Newell, Ebenezer Niles, and Abner Gardner, in behalf of The Commercial Point Bridge Corporation, of the one part, and the plaintiffs, Thomas Tileston and Ebenezer Tileston, of the other part; and, after reciting that the defendants and their associates, by an act of the General Court, passed the 19th day of June then last past, had been incorporated by the said name, for the purpose of building a bridge. over Smelt-brook creek, so called, in Dorchester ; — and that the said corporation had it in contemplation to obtain liberty from the General Court to build a dam, instead of a bridge, across the said creek, which, if granted, would be a detriment to the plaintiffs’ mills ; — and that the plaintiffs had agreed with the said corporation upon the terms, upon which they would release and convey all their right in the said mills to said corporation, and for ever relinquish all opposition to the proposed project; — witnesses, that, in case the General Court should authorize the corporation to build such dam, the plaintiffs, in consideration of five dollars paid them by the defendants, and of the covenants of the * defendants thereinafter contained, covenanted with the defendants, that they would sell and convey to the said corporation, on demand of the defendants, the said mills, with their appurtenances in fee, by a sufficient deed with covenants of warranty. And the defendants, in consideration of the premises, and of five dollars paid them by the plaintiffs, for themselves and their heirs, covenant with the plaintiffs, that the said corporation shall build a mill upon the contemplated dam, of certain dimensions, and with certain fixtures and appurtenances, the materials of the old mill to be used, as far as suitable, in building the new one, and shall convey the same to the plaintiffs on demand, with certain privileges', &c., and that the corporation shall put them in possession of such new mill in sixty da vs after the old mill shall be stopped from grinding, or sooner, if possible ; and that the dam, &c., shall be for ever kept in .epair; — and the parties bind themselves, each to the other, in the sum of ten thousand dollars, for the faithful performance of the indenture. Whereupon the defendants plead in bar, that they have faithfully kept and performed all the covenants, in the said indenture mentioned, on their part to be performed, &c.
    The plaintiffs reply, that the defendants, with their associates, obtained liberty from the General Court to build a dam, &c., and built such dam ; and have not built a mill upon the dam.
    To this replication the defendants demur ; assigning the following causes.
    1. That the covenant, of which the plaintiffs have assigned a breach, is a dependent one, and they have not averred, in their replication, that they had conveyed to the said corporation the plaintiffs’ mill, &c.
    2. That the plaintiffs have not alleged, in their replication, that their old mill had been stopped from grinding.
    3. That it is not alleged that the plaintiffs ever requested the said » corporation to build a mill upon the said dam, &c.
    * The. plaintiffs joined the demurrer.
    Under the general issue joined as aforesaid, the parties agreed upon the following facts ; namely, That the deed declared was. duly executed ; that, at the time of such execution, the defendants were the only members of the said corporation ; that before and at the time of commencing this suit, the plaintiff, Thomas Tileston, was a member of the said corporation, and, being so a member, on the 6th of September, 1809, was appointed one of a committee of five, by the corporation, for certain purposes expressed in their commission ; and that he, with all the others of the said committee, reported to the corporation, at a legal meeting thereof on the same day, that the corporation should “ adopt and ratify the contracts made between the plaintiffs and the defendants, on behalf of the said corporation, in said deed recited ”; and that the corporation, on the same day, voted to accept the report of said committee. The parties further agreed, that, under this issue, by leave of the Court, the question, whether the defendants were or were not bound by said deed in their private capacities, may be decided upon the foregoing facts, and an inspection of the said deed.
    
      Loud, for the defendants,
    contended, that, from the facts agreed under the first issue, and from an inspection of the indenture, the defendants acted solely as agents for the corporation, and did not intend to bind themselves personally by the covenants. It is true, that their heirs are mentioned, but, from the whole complexion of the instrument, it is evident that this was merely the blunder of the scrivener. This case is different from all the analogous cases in the books, in so far as the defendants constituted the whole corporation their authority to bind the corporation stands on the strongest ground. That this was also the understanding of the plaintiffs is conclusively pioved from the act of the corporation, after one of them had become a member, and from the part he took therein.  In Thatcher & al. vs. Dinsmore, 
       the defendant was held liable, on * the ground, that he could not bind the ward whom he represented ; but, in the case at bar, the defendants were clothed with the most ample authority to bind the corporation. That corporations may bind themselves by a vote, was established in the case of Hayden & al. vs. Middlesex Turnpike Corporation. 
       If it be allowed, that, in any case, principals are bound by the acts of their agents, it is difficult to imagine a stronger case than the present.
    But the defendants contend further, that no breach of their covenant is shown in this case. The only object of the contract was, to provide an indemnity for the plaintiffs, in case their mill should be stopped from grinding by the erection of the new dam. The mill was to become useless before the new one was to be built, and sixty days further were allowed. The plaintiffs have not shown that their mill has become useless, that they have conveyed it to the corporation, or that they have ever requested the corporation to build the new mill, or to convey it to them. 
    
    
      Danis (Solicitor-General) and Williams, for the plaintiffs,
    being directed by the Court to confine themselves to the point, whether the covenants of the two parties to the indenture were independent or not, contended, that, unless the covenant of the plaintiffs was the sole consideration for those of the defendants, the covenants of the two parties are not dependent on each other.  But, in this case, there were other considerations of value ; as five dollars paid, the inconvenience to the plaintiffs from the building of the proposed dam, the withdrawing their opposition to the defendants’ application for liberty to build the dam, and the granting to the defendants the materials of 'the old mill, to be used in the construction of the new one.
    Another rule on this subject is, that, where part of the consideration has been received, covenants are independent.
    
      
       1 D. & E. 172.— Tippets vs. Walker & al., 4 Mass. Rep. 595.— Unwin vs. Wolseley, 1 D. & E. 678.
    
    
      
       5 Mass Rep. 299.
    
    
      
       10 Mass. Rep. 397.
    
    
      
      
        Pordage vs. Cole, 1 Saund. 320, Williams’s note 4. — Duke of St. Albans vs. Shore, 1 H. Black. 270.
    
    
      
      
        Glazebrook vs Woodrow, 8 D. & E. 366. — Saund, ubi supra.
      
    
   The cause being continued for advisement, the opinion of the Court was delivered at this term by

* Parker, C. J.

The indenture, upon which this action is brought, must be considered as the deed of" the defendants ; it is sealed with their seals, and signed by them in their private capacity ; and it appears, from the tenor of the instrument, that they intended to covenant that the corporation should do the things set forth in the instrument.

Whether the replication is good or not, depends upon the nature of the covenants contained in the indenture, whether they are dependent or independent; and this must be determined according to the intent of the parties, to be collected from the indenture itself, and from a common sense view of the contract between the parties.

It appears, that the defendants contemplated an improvement of their estate, to which the plaintiffs might have made a reasonable ob jection, because the profits of their estate would be diminished thereby. They, therefore, in consideration of an equivalent, which the defendants stipulated to give them, covenanted to withdraw any opposition, and to sell to the defendants the estate which might be prejudiced by the projected improvement. This equivalent was to be a new mill, which was to be erected by the defendants and conveyed to the plaintiffs. The improvement has been made, to the prejudice of the plaintiffs’ estate ; but nothing has been done towards erecting the new mill. The plaintiffs’ estate is prejudiced by the erection of a dam, without a mill. The question is, whether the neglect of the defendants to build the mill, within a reasonable time after the erection of the dam, and thus to prepare themselves for executing the whole of their contract, is not a breach of their covenants, within a fair and equitable construction of them.

It is said, that the plaintiffs ought to have made a conveyance of the old mill, or to have tendered one, before they could demand a performance of the covenants by the defendants. This would have been necessary, if the defendants had done nothing in the premises, and the * plaintiffs had wished to compel them to a performance. If such conveyance had been necessary to the execution of the improvements intended by the defendants, an offer to convey would have been a necessary preliminary on the part of the plaintiffs. But it does not appear, nor is it probable, that a title to the old mill was at all essential to the defendants in the prosecution of their scheme. Their object was, to build a dam, which would necessarily diminish the profits of the old mill. The dam is built, and so far their object is accomplished. Now it would be unreasonable to require of the plaintiffs a tender of a conveyance of their title, when they saw the dam finished, without any preparation made by the defendants to provide the equivalent stipulated for the conveyance of their title, and the loss which would accrue to them in consequence of the erection of the dam. This would be to expose them to certain loss, in case the defendants should be unable to furnish them with a new mill, or pay to them the value of the old one in damages.

Upon these considerations, we are of opinion, that the covenant to build a new mill, on the dam which was to be erected, is an independent covenant. For it was necessary that so much should be done, in order to enable the defendants to execute the residue of the contract. That part of the covenant, which relates to the conveying of the new mill, might justly be considered as dependent upon the covenant of the other party to convey the old mill; so that the damages for this breach of covenant will be the diminution of the value of the old mill, by the erection of the dam ; leaving the estates of both parties as they were when the indenture was executed.

As to the want of an averment that the old mill was stopped from grinding, which the counsel for the defendants has contended to be necessary to entitle the plaintiffs to recover, because the stipulation was, to convey the new mill in sixty days after the old mill should stop ; in the view before given of the covenants, such averment is not necessary. The breach of the defendants’ covenant is, the * not building of the mill by which the old mill was to be stopped. The defendants have stopped at the threshold, and have chosen to withdraw from the contract ; and they must pay reasonable damages therefor. Besides, it may be said sufficiently to appear from the pleadings, that the old mill was stopped ; because it is averred that a dam was built below the old mill, and it is a necessary inference, that- the water was prevented from passing above it. If the dam is of a construction that would admit the water through it, so that the mill above could be wrought as it could before, the defendants might have denied the erection of the dam, such as was provided for in the indenture, or might have denied that the old mill had been stopped from grinding, or impeded by the erection of the new works. But it must be considered as admitted, that a perfect dam has been built ; and then it will follow, that the water has been entirely excluded from the mill above.

The result of this opinion upop the pleadings is, that the plaintiffs’ replication is adjudged good and sufficient; and, upon the facts agreed under the general issue, that the defendants Were bound by the deed declared on, in their private capacities ; and to ascertain the plaintiffs’ damages, there will be a hearing in chancery, upon the motion of the defendants.