Case ID: ohio-st_26/html/0334-01.html
Source: Caselaw Access Project
Author: {"author": "Welch, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Joseph Longworth and Larz Anderson, Executors of Nicholas Longworth, and others v. John Mitchell.
    1. Where a party makes an offer to sell on specified terms, giving the proposed purchaser the option to accept the terms within a limited period, time is to be regarded as of the essence of the offer, and an acceptance of the terms after the period limited will not be binding.
    2. United States treasury notes are a lawful tender upon contracts stipulating for the payment of money generally, whether made before or after the date of the law under which the notes were issued; and this rule applies as well in equity as at law, and as well where by the contract the payment is optional with the party and his rights made to depend upon it, as where the payment is required by the contract.
    3. Where a tenant in common of land contracts for the sale and conveyance of the entire land, with a purchaser who in good faith believes him to be the sole owner, on a bill filed by such purchaser for a specific execution of the contract, equity will decree a conveyance by the vendor, of his interest in the land, and a compensation in money for the value of the outstanding interest.
    Error to the Superior Court of Cincinnati.
    On the 1st of August, 1857, Nicholas Longworth, the testator, being seized in fee of the undivided half of a lot in city of Cincinnati, by Ms deed of that date leased the entire lot to the defendant, Mitchell, for the term of fourteen years, reserving an annual rent of fifteen dollars per “ front foot ” for the first seven years; of eighteen dollars per front foot for the last seven years. The lease contained a covenant for quiet enjoyment, and Mitchell believed at the time of' its execution that Longworth was the owner of the entire lot. The lease also contained a provision that Mitchell might elect to become the purchaser of the lot, and have a general warranty deed therefor, at any time within the first seven years, at the rate.of $250 per front foot, or at any time within the last seven years, at the rate of $300 per front foot, with interest from the date of the lease, and that, in ease of such election, the ground rent paid should be deducted from the interest.
    Just before the close of the first seven years, Mitchell ■elected to become the purchaser of the lot, and tendered to the executors of Longworth the stipulated $250 per front foot, together with some $400 of ground rent then due, and demanded a deed for the lot, the executors being authorized and required by the will of the testator to execute and fullfil all his real estate contracts. The tender was made in United States treasury notes, and the executors refused to make a deed, but made no objection to the kind of money tendered, placing their refusal on other grounds; and the ease below was an action brought by Mitchell against the executors to compel a specific execution of the contract by conveyance of the lot agreeably to the stipulations of the lease.
    To this action the executors set up three several grounds of defense:
    1. That the testator owned only a moiety of the lot, and the contract could not therefore be specifically executed.
    2. That the tender should have been made in gold, the contract having been made prior to the passage of the legal tender act.
    3. That prior to the making of the tender, the executors being in negotiation with the Cincinnati and Indiana Railroad Company for the sale of- the lot to that company, Mitchell, who was aware- of said negotiation, agreed with-the executors that he would surrender his lease to them if they would pay him $2,000 and receipt for the rent due, and gave them two weeks in which to accept and comply with the offer; that the executors, relying upon the faith of said agreement or offer, verbally contracted to sell the lot to the railroad company, and within said period of two weeks, to wit, on the 29th of May, 1864, accepted said offer, and demanded of Mitchell a surrender of his lease, tendering him at the same time said sum of $2,000 and a receipt for the rent; but that Mitchell refused to accept the tender, or to surrender the lease; and the executors say that they have since conveyed all their interest in the lot to said railroad company, in pursuance of their said verbal contract with the company.
    Mitchell replied, denying that he ever made “ any agreement” with the executors to surrender the lease, and alleging that his “ offer ” to do so was obtained by misrepresentations as to the value of the lot, and the price which the railroad company were to pay therefor.
    Subsequently, the railroad company, and also the heirs of Nicholas Longworth, were made parties defendant, and the company filed an answer, insisting that the company was a bona fide purchaser without notice of Mitchell’s alleged .rights.
    At the hearing, it was proven that Mitchell, at the time of these negotiations, was in possession of the lot. The fact that Mitchell made the offer to surrender the lease, on the terms set up in the answer of the executors, and that they accepted the offer, and offered to comply therewith on the said 29th of May, was also proven, or admitted; but there was a conflict of evidence as to whether this acceptance and offer by the executors was made within the two weeks allowed. The court found that the offer was made on the 13th of May, sixteen days before it was accepted by the executors, and thereupon rendered a judgment in favor of Mitchell, ordering a specific execution of the contract as to one moiety of the lot, with a release of title by the railroad company, and a compensation in money by the executors for the value of the other moiety. The record sets forth all the evidence in the case, and shows that a motion for a new trial was made by the plaintiffs in error, and overruled by the court.
    The plaintiffs in error now seek to reverse the judgment of the Superior Court, assigning the following as grounds of error:
    1. The finding of the court, that the offer of Mitchell was not accepted by the executors within the two weeks allowed, is contrary to the. evidence.
    2. The time allowed for acceptance of the offer was not material, and its acceptance two days after the expiration of the two weeks was sufficient.
    3. Treasury, notes were not a lawful tender in the ease; and if the tender of gold was waived, or can be excused, still the decree should have been for payment of the purchase money in gold, or its equivalent, and for payment of costs by Mitchell.
    4. The contract was impossible of execution, and no case-was made for decreeing compensation.
    5. The railroad company was a bona fide purchaser without notice, and should not have been compelled to release its title.
    
      Uoadly, Johnson $ Golston, for plaintiffs in error :
    I. The first question in this case is: Whether a tender of greenbacks in 1864 is a valid tender under a privilege of purchase contained in a lease made and executed in 1857?'
    On this question we refer the court to U. S. statute, February 25,-1862 (12 IJ. S. St. 345). Hepburn v. Griswold, 8 Wall. 603; Bronson v. Bodes, 7 Wall. 229; Willard v. Taylor, 8 Wall. 557, 52 Pa. St. 1; Phillips v. Dugan, 21 Ohio St. 466.
    II. The Cincinnati and Indiana Railroad Company is the purchaser in good faith, for value, without notice of the claim of the plaintiff', at least of the east fifty feet of the premises, and therefore so much of the judgment of the Superior Court of Cincinnati as directed the conveyance of the Nicholas Longworth undivided half of the whole lot was erroneous, and should be reversed.
    Upon the testimony, we claim that the railroad company had no knowledge of Mitchell’s claim; that the burden of proof was upon the plaintiff" to charge constructive notice by possession, so open and visible as to lead to the conclusion of negligence by the purchaser; that the east half of the lot was vacant, and entirely unoccupied; and therefore, that constructive notice was not shown, at least as to that part of the premises, and that the judgment ordering the execution of a deed should have been limited to the undivided half of the west fifty feet. Williams v. Spriqq, 6 Ohio St. 585.
    It would have been neither honest nor wise, therefore, for Lord or Longworth to make the dispute under consideration. The transaction was very large, and doubtless considered by both advantageous. Before Mr. Longworth made the proposition, he had secured what he supposed to be the right to cancel Mitchell’s lease. He agreed and bound the estate which he represented to the railroad company, and could not, in foro conscientiaz, withdraw from his bargain. The statute of frauds is one of evidence, not of rights. Spurrier v. Fitzgerald, 6 Yes. 548; 20 Ohio St. 68; Minns v. Morse, 15 Ohio, 571.
    III. In Bell v. Howard, et al., 9 Mod., on page 305, Lord Hardwicke says:
    “ There is another objection against decreeing an execution of these articles, which is, that Mr. Bell has waived these articles. Now, it is certain that an interest -in land ■can not be parted with or waived by naked parol, without writing; yet articles may, by parol, be so far waived that if the party came into this court to have a specific execution of them, such parol waiver will rebut the equity which the party before had, and prevent the court from executing them specifically.”
    
      This principle of equity is confirmed by many other decisions, and all the text-books. Adams on Equity, *84; 1 Story Eq. Jur., sec. 770, and note; 1 Hilliard on Vendors, 174; 1 Sugden on Vendors, 7 Am. ed. *170; 1 Greenl. Ev. see. 302; Goman v. Salisbury, 1 Vern. 240; Davis v. Symonds, 1 Cox Ch. 406; Inge v. Lippingwell, 2 Dickens, 469; Degal v. Miller, 2 Ves. Sen. 299; Pitcairn v. Ogbourne, 2 lb. ■375; Marquis Townshend v. Stangroom, 6 Ves. Jr. 328; Price v. Dyer, 17 lb. 357; Goss v. Lord Nugent, 5 B. & Adol. •64, 65 ; Very v. Levy, 13 How. 345, 357 ; Thurston $• Hays v. Ludwig, 6 Ohio St. 1; Cummings et al. v. Arnold et al., 3 Met. 486, 489 ; Stearns v. Hall, 9 Cush. 31; Stevens et al. v. Cooper et al., 1 Johns. Ch. 429 ; Botsford v. Burr, 2 lb. 404.
    Our contention is, that the dealings between Mitchell and -Joseph Longworth come within this rule, and that the court below should have dismissed Mitchell’s petition, because, though seeking equity, he is unwilling to do equity.
    What is the evidence that time was here made of the essence of the contract to cancel the lease ? It was not so made “ by the express terms of the contract,” nor was it so -“treated by the parties,” nor was it “necessarily so from the nature of the contract.” Brock et al. v. Hidy et al., 13 Ohio St. 306.
    “ Time is held to be of the essence of the contract in •equity only in eases of direct stipulation, or of necessary • implication.” Parkin v. Thorold, 16 Beavan, 59, 65.
    
      D. Them Wright and Nicholas Longworth, also for plaintiffs in error, respectively filed briefs covering the same ground as their associate counsel, Hoadly, Johnson § Colston.
    
    
      Lincoln, Smith &; Stephens, for defendant in error:
    I. The tender of Hnited States legal tender notes was a valid tender. Hepburn v. Griswold, 8 Wall. 626 ; 12 lb. 544, 553; 13 lb. 606; 14 lb. 307 ; 7 lb. 251; lb. 260.
    II. Nor was any tender necessary ; the parties had given notice that they would not make a deed in accordance with the privilege found in the lease, and had purposely put it out of their power to do so, and, therefore, no tender whatsoever was important. The nature of their defense makes any tender wholly unimportant. Lovelock v. Franklyn, 8 Ad. El. N. S. 378 ; Brock et al. v. Hid,y et al., 13 Ohio St. 310 ; Kirby v. Harrison, 2 Ohio St. 332; Crary v. Smith, 2' Corns. 65; Hunter v. JDanial, 4 Hare Eng. Ch. 433; Irvin v. Gregory, 13 Gray, 218.
    III. A tender in current bank-notes is good unless such notes are specially objected to. Wright v. Beed, 3 T. R. 554; Snow v. Berry, 9 Pick. 542; Willard v. Taylor, 8-Wall. 569.
    At the time the tender of greenbacks was made, Long-worth refused to make a deed, but made no special objections to the character of the money.
    IV. There was never any agreement to cancel the lease, and it never was canceled.
    Mitchell’s lease was an interest in land.
    The privilege of purchase therein was also an interest in land.
    And a valid agreement to cancel the lease is an agreement to give up or convey an interest in land, and it must be in writing. Kelly et al. v. Stanbury, 13 Ohio, 426.
    The learned counsel continually assume that the proposition of Mitchell, not accepted by Longworth, to cancel his lease for $2,000 and back rents, and to give Longworth two weeks to consider whether he would accept it, was a contract.
    The whole force of their argument rests upon this assumption.
    Now, the assumption is false in law, as the authorities show. See Bean v. Burbank, 16 Maine, 460 ; Cooke v. Oxby, 3 T. R. 653; Boston $ Maine B. B. Co. v. Babcock, 3 Cush. 227.
    
      These authorities clearly show that such a proposition is not a contract; that it is at most but .a continuing offer which may at any time be withdrawn before accepted, and which, if accepted, must be accepted within the time and in accord•Anee with the terms of the proposition. Boston $ Maine R. R. Go. v. Babcock, 3 Cush. 227.
    V. Time was of the essence of the contract of release. 3 Cush. 227; 56 111. 207; 2 Md. 309; 14 Peters, 82; 5 Barr, 342; 1 Parsons on Contracts, 404.
    VI. There was no want of equity that should prevent •specific performance. 13 Ohio St. 549.
    VII. The Cincinnati and Indiana Railroad Company was not a bona fide purchaser for value without notice.
    “ To sustain the plea of bona fide purchaser for valuable consideration without notice, the defendant must aver that the vendor was or pretended to be seized, and that he was ■in possession.” 16 Ves. 253.
    The plea of bona fide purchaser for value requires several ■things to be set out.
    1. Possession of the property by the vendor at the time •of the purchase. Ringold v. Bryan, 3 Md. Ch. 493; Bay■nard v. Norris, 5 Grill. 482; Boone v. Chilles, 10 Pets. 211; Daniel v. David, 16 Ves. 252.
    2. The payment of the purchase-money before any notice •of adverse title, or notice of such facts as should put the •purchaser on enquiry. Boone v. Chilles, 10 Pets. 211, 212; Baynard v. Norris, 5 Grill. 481, 482.
    The answer of the Cincinnati and Indiana Railroad Company is singularly free from any of these allegations.
    They are not there because they could not be there.
    
      First. Mitchell was in the open and visible possession of this property, as the court has found, and as the evidence fully shows.' He had a house on it, and a large amount of ■lumber, and was in ■ the constant use of it by himself or his tenants.
    This put the defendant upon notice. Ringold v. Bryan, 3 Md. Ch. 493; Moore v. Pierson, 6 Clarke, 300; Johnson ■v. Clancy, 4 Blackf. 96 ; Mooreland v. Laineson, 4 Blackf. 384, 385 ; Minor v. 'Willoughby, 3 Minn. 238 ; Daniels v. Davidson, 16 Ves. 219.
    
      C. D. Coffin, also for defendant in error, filed a separate brief, urging substantially tñe same points as his associate-counsel.
   Welch, C. J.

As to the question whether the finding of' the-court, that the offer of Mitchell was not accepted within-the two weeks, is supported by the evidence, it need only be said that a majority of us can not answer the question in the negative, with that certainty which would justify us-in reversing the judgment, and granting a new trial.

Nor do we think that the ground assumed by counsel for the plaintiffs in error, that time was not of the essence of Mitchell’s offer, is maintainable. The rule frequently adopted in a court of equity, that time is not of the essence-of a contract, does not apply, as we understand the law, to a mere offer to make a contract. The offer rests upon no consideration, and may be withdrawn at any time before-acceptance. An offer without time given for its acceptance-must be accepted immediately, or not at all; and a limitation of time for which a standing offer is to run is equivalent to-the withdrawal of the offer at the end of the time named. A standing offer is in the nature of a favor granted to the opposite party, and can not on any just principle be made-available after the time limited has expired.

We are unanimous in the opinion that the tender by Mitchell of treasury notes was a sufficient tender, and all-that in law or equity he was bound by his contract to make; and that the court did not err in refusing to require-payment of the purchase money in gold. If Mitchell was-bound to pay this purchase money in gold, he was bound also to pay the stipulated annual rents in gold; both were-provided for in the same contract. That such is not the law of the contract, we think ought to be considered as settled by the late decisions of the Supreme Court of the United States. 12 Wall. 457; 13 id. 604; 14 id. 307. In the cases in 12 Wall. (Legal Tender cases) the second proposition of the syllabus is as follows:

“ The acts of Congress known as the legal tender acts-are constitutional when applied to contracts made before their passage.”

At page 449, in delivering its opinion in the same case, the court says:

“ Every contract for the payment of money simply is necessarily subject to the constitutional power of the government over the currency, . . . and the obligation of the parties is, therefore, assumed with reference to that power . . . “ They (engagements made before the passage of the acts) are engagements to pay with lawful money of the United States.” Chief Justice Chase, in delivering the opinion of the court in Butler v. Howittz, 7 Wall. 260, says: ‘‘ The absence of any express stipulation, as to description, in contracts for the payment of money generally, warrants the inference of an understanding between the parties, that such contracts may be satisfied ... by the tender of any lawful money.”

Under these adjudications, it is useless to contend that the legal tender acts apply only to “ debt,” in the strict technical sense of that term, and do not apply to a voluntary or optional payment as in the present case. It is equally useless to contend that the acts do not apply to and govern the rights of parties in equity, equally as at law. The language of the legal tender act is, not merely that these notes shall be “a legal tender in payment of all debts,” etc., but that they shall be “ lawful money, and a legal tender in payment of all debts,” etc.

The highest tribunal of the -country having settled it that these acts are constitutional, and that they enter into and form part of all contracts for money, how can it be denied that in equity as well as at law, and in cases of optional payment, equally as in cases of compulsory payment, such notes are to be regarded as money, and a lawful tender. Surely contracts made before the passage of the legal tender acts are not to receive one construction in a court of law, and another construction in a court of equity; and surely both courts alike will endeavor to carry into effect the contract of the parties, as they in law are supposed to have “ understood ” and intended it. That there is no ground for any such discrimination between equitable and legal rights, or between optional and compulsory payments, seems to be settled in the cases of Dooley v. Smith, 13 Wall. 604, and 14 id. 307. Both these cases were bills in equity to redeem mortgaged premises ; in both the money tendered was for the amount equitably due on the mortgage, and was made 'in treasury notes; and in both cases the tender was held sufficient.

We also unite in the opinion that the court did not err in decreeing a compensation to Mitchell for the moiety of the property not owned by the testator. As lessor, the testator assumed to be the sole owner, and Mitchell dealt with him in the faith that he was such owner, and never' knew the contrary, as the evidence shows, until after he had made the offer to surrender his lease. To hold, under such circumstances, that he was not entitled to specific performance, including compensation for the outstanding moiety of the property, would be to hold that the lessor and vendor should profit by his own wrong.

As to the claim set up on behalf of the railroad company, that it is a bona 'fide purchaser without notice, it is perhaps enough to say, that Mitchell was in possession of the lot at the time the company made its contract for purchase, which fact is in equity equivalent to notice of all the rights which Mitchell had in the property. Had Mitchell’s offer been accepted within the time limited, the verbal contract of sale to the railroad company, made on the faith of that offer, although it would by no means constitute the company a bona fide purchaser without notice, in the ordinary meaning of those words, would doubtless have been a good bar to Mitchell’s right to a specific execution of his contract, notwithstanding the fact that the offer was not reduced to writing. And we suppose that this defense would have been equally available to the company as to the executors. But the answer to all this is, that the offer never ripened into a contract, and that Mitchell stands just as he would have stood had the offer never been made.

A majority of us, therefore, fail to see any error in the record.

Judgment affirmed,.

"White, Rex, Gilmore, and MoIlvaine, JJ., concurred.