Case ID: va_33/html/0357-01.html
Source: Caselaw Access Project
Author: {"author": "BROCKEEBROUGH, J. CARR, J. TUCKER, P.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Tait’s Adm’r v. Tait.
    March, 1835,
    Richmond.
    (Absent Bbookis, J.)
    Covenant — Construction of
      
       — Case at Bar. — Covenant between A. and B. that the parties should build merchant mills on a stream on A.’s land, A. contributing' one third, and B. two thirds of the expenses, and then should work the mills on joint account, for a term of seventeen years; at the end of wlicl term, if rebuilding of the mills should he necessary, they should he rebuilt at joint expense, contributed in the same proportion, and the mills should remain the sole property of A. the owner of the mill seat, or his heirs, and B.’s proportion of expenditures in the original building, as well as of any such rebuilding, should be reimbursed by A. to B.— a mill dam and mill house were accord ingly built, but within a year afterwards, the mill dam was broken, and the mill house entirely carried away, by a fresh; upon which the parties abandoned the enterprise, in consequence; it seemed, of B. refusing to contribute to the expense of rebuilding, except on terms with which A. was not bound to comply; and then, by another covenant, A. bound himself to pay B. the amount of his expenditures on the mill destroyed, when the same should be ascertained, within ten years: Held, onabillbyB.’s administrator against A. for an account to ascertain the amount of B.’s expen. ditures.
    1. Same — Same.—That by the terms of the first covenant, notwithstanding the destruction of the mill and the abandonment of the work, A. was bound to reimburse to B. his expenditures on the mill which was destroyed by the fresh; dissentiente Brookenbrough, J.
    2. Same — Same.—That the covenants in the first covenant, were independent; and if B. refused to rebuild, he was yet entitled to an action for the amount of his expenditures on the mill destroyed, without shewing performance of his covenant to contribute to the expense of rebuilding; per Tucker, P.
    3. Same — Same.—And per tot. cur. whatever might have been the just construction of the first covenant, A.’s last covenant settled all controversy, and bound him to pay B. the amount of his expenditure, when ascertained.
    Edmund Tait, being' the owner of lands on Blackwater creek in Campbell county, on which it was supposed there were several valuable mill seats, and having made *a dam across the stream, and commenced other works and collected materials for building mills thereon, — by articles of agreement, dated the 15th January 1813, between him, Edmund Tait, his brother Caleb Tait, and Charles Deison, it was covenanted and agreed, 1. That the parties should build three merchant mills on Edmund’s land, if leave of court could be obtained for building three, if not, then one mill on the main stream, with as many pair of stones as the stream would suffice to work, and that the parties should contribute, each, one third of the expense of building the mill or mills, and when completed, should work the same jointly, and receive, each, one third of the profits, for the term of seventeen years from the date of the articles; provided, that Edmund Tait should have the whole profits of the grist mill for grinding indian corn. 2. That the parties should also, upon the same terms, erect a distillery or distilleries at the mills. 3. That Edmund Tait should be allowed the full value of all the work he had already done, and of all the materials he had collected for building a mill, which were to be used for building the mills on joint account; and should provide and furnish timber and stone from his lands for completing these mills, at certain rates specified in the articles. 4. That at the expiration of the term of seventeen years, if rebuilding of the mills should be necessarjq it should be done at joint expense of the parties, and the mills should be delivered to Edmund Tait or his heirs, and the other two parties should be allowed a credit on final settlement of accounts for two thirds of the expense of such buildings; and also, on such final settlement, Edmund Tait should refund to the other two parties, two thirds of the expense of the buildings in the first instance. And by another agreement dated the 12th January 1814, Deison, with the consent of Edmund Tait, transferred all his interest to Caleb Tait, who undertook to reimburse to Deison what *he had already contributed, and to perform all his engagements ¡for the future; so that Caleb was now entitled to two thirds of the benefit, and subject to two thirds of the burden, and Edmund to the other third.
    The parties commenced the buildings, according to the articles, and built one merchant mill house at the lower seat where Edmund had previously made the dam. But in the spring or summer of 1814, there was a fresh in the creek, which broke the dam, and carried the mill house entirely away. The work, and the business of the partnership, were then abandoned, but whether owing to the fault of Caleb Tait or Edmund, was a controverted point in this cause.
    Shortly after the mill house had been carried away, Edmund Tait executed the following covenant to Caleb — “I Edmund Tait have agreed to pay Caleb Tait the amount of his expenditures on the mills when the same is ascertained, within ten years from the present time. In witness whereof I have hereto set my hand and seal this 1st August 1814.”
    Before the expiration of the ten years mentioned in this covenant of the 1st August 1814, Caleb Tait died, and his administrator exhibited a bill against Edmund Tait, in the superiour court of chancery of Eynchburg, setting forth the facts above stated ; and charging, that upon the destruction of the mill house by the fresh in 1814, his intestate, Caleb Tait, was desirous, and proposed, to rebuild the mill house, and proceed in the joint business, according to the articles of January 1813; but Edmund Tait refused to contribute to the rebuilding of the house, and the business was therefore abandoned; in consequence of which Edmund Tait executed the covenant to Caleb, of August 1814, binding himself to pay Caleb the amount of his expenditures on the mill, when the same should ibe ascertained, within ten years: that, in order to ascertain the amount of Caleb Tait’s expenditures, which would be payable to *him according to the last mentioned covenant, the plaintiff had endeavoured to procure a settlement of the joint accounts of expenses, while the witnesses and evidence were in existence, by which the items of the accounts, on both sides, could be proved and ascertained; but Edmund Tait refused to make any settlement of the accounts; and now denied, that he was bound to reimburse to the estate of Caleb, the amount of expenditures contributed by him to the building- of the mill. The bill, therefore, prayed an account of Caleb Tait’s expenses incurred in the joint or partnership business, so as to ascertain the sum which would be due to his estate from Edmund Tait, under Edmund’s covenant of August 1814.
    Edmund Tait, in his answer, said, That upon the destruction of the mill house by the fresh in 1814, he earnestly insisted on rebuilding the house, and proceeding in the partnership business according to the articles of January 1813, and that Caleb Tait refused to contribute his proportion of the expense of rebuilding, and to proceed in the execution of the contract, unless Edmund would give him ample real security to reimburse to him his proportion of such expenditures, at the expiration of the term of seventeen years; that he, Edmund Tait, being nowise bound by the articles to give any such security to Caleb, refused lo comply with this unreasonable demand; and thereupon Caleb refused to contribute any portion of the expense of rebuilding the mill, and abandoned the contract. And the defendant insisted, that, under these circumstances, he was not bound by the articles of January 1813, to reimburse to Caleb Tait’s estate, any part of the expenses contributed by him in building the mill'which had been destroyed, and thus wholly lost to both parties; but that the joint accounts ought to be settled, each party credited for his advances, and each charged with his proportion of the burden. As to the covenant of 1814, the defendant alleged, *that that covenant had been obtained from him by Caleb Tait, by fraudulent concealment and misrepresentation; that Caleb Tait had the articles of January 1813 in his possession, and falsely represented to Edmund, that he was bound by the terms thereof, to pay Caleb the amount of his expenditure in building the mill house, though the house was destroyed immediately after it was erected, and though Caleb refused to join in rebuilding it without real security for ultimately reimbursing him his proportion of the expenditure; and, therefore, that Caleb’s administrator was not entitled, in equity, to avail himself of the covenant of August 1814.
    There were depositions taken and filed to prove, that, upon the destruction of the mill house by the fresh in 1814, Edmund Tait was desirous to rebuild it, and to proceed in the execution of the articles, and required of Caleb, that he should contribute his proportion of the expense of rebuilding ; but this Caleb refused to do, unless Edmund would give him real security for the reimbursement to him, at the expiration of the term of partnership, of the amount of his expenditures; and Edmund refusing to comply' with this demand for security, the contract and the joint business was abandoned. But there was, in the opinion of this court, no' proof of any fraudulent concealment or misrepresentation on the part of Caleb Tait, to procure from Edmund the covenant of August 1814; and so far from the fact being that Caleb had pos'session of the articles of January 1813 (as alleged in the answer),' it appeared, that those articles had been deposited in the clerk’s office of the county court of Campbell, and so were equally open to the inspection of both parties.
    The chancellor made an interlocutory decree, declaring, that, under the circumstances of the case, as disclosed by the evidence, Edmund Tait was not further or otherwise bound by the covenant of August 1814, than he was by the terms of the articles of January *1813; and referring the accounts between the parties to a commissioner, to be settled and adjusted according to those articles.
    There were three reports made by the commissioner. Upon exceptions taken to the first and second, they were successively recommitted. In the third report, the commissioner first ascertained the amount of the advances and expenditures of each party, in the business of building the mills; and then charged Caleb Tait with two thirds of Edmund’s advances, and credited him with one third of his own: and it resulted from the accounts, stated on this principle, that Caleb Tait’s estate was indebted to Edmund Tait, in a balance of 80 dollars. There were many exceptions to the details of the account, and the principle was earnestly contested.
    The chancellor approved the report; and the defendant waiving an account of the assets of Caleb Tait’s estate, in order to ascertain whether the plaintiff, his administrator, should be charged with the balance reported against him, and being willing to accept a decree for his costs only, the bill was, therefore, dismissed with costs. Erom this decree, the plaintiff applied, by petition to this court, for an appeal, which was allowed.
    Johnson, for the appellant.
    Leigh, for the appellee.
    
      
      See monographic note on “Covenants" appended to Todd v. Summers, 2 Gratt. 167.
    
   BROCKEEBROUGH, J.

The first question is as to the proper construction of the articles. Caleb Tait and Charles Deison were to unite with Edmund Tait in erecting mills on the land and stream of the latter; when built, they were to share equally the profits for seventeen years; at the end of which term, the mills were, if necessary, to be rebuilt at their equal and joint expense, and delivered to Edmund Tait; and he was then bound to refund to the other two, the two thirds of the whole expense incurred in rebuilding them, and two *thirds of the expense of the original building. The parties did not provide for the event which subsequently occurred, of the destruction of the building by the flood. Soon after these articles were executed, Deison transferred all his interest in the subject to Caleb Tait. And after the destruction of the mill which was built, the two brothers were each bound to the other, to put up the buildings, and to have them there at the end of the seventeen years, then to be delivered into the exclusive possession of Edmund Tait.

It seems to me, that, according to the plain meaning of these articles, the right of Caleb Tait to reimbursement of the two thirds of the expense incurred in erecting, and in renewing the buildings, did not attach till the end of the term; and not then, unless the buildings should be delivered to Edmund Tait, or unless Caleb being willing and offering to rebuild, should be prevented by Edmund from rebuilding. The object of Edmund was to have the mills built on his land, by the joint contribution of the other two and himself, to have a partnership in the milling business for the specified term, and, at the end of it, to have the exclusive interest and possession of the mills in himself. As he was then to have such exclusive possession, he was bound by the contract to pay to his brother the two thirds of the whole expense of erecting, and re-erecting them. But if, from any cause, the exclusive possession of the mills should not be given to him at the end of the term, why should he pay for more than his own share of the expense of the first, or any other erection? In the event that the mills should be delivered to him at the end of the term, each party would be benefited according to the original ihtention of the contracting parties; he would have his mills, and they would have their share of the price of erecting them. In the event of the destruction of the mills, and the abandonment of the intention of rebuilding them, the loss Of each would be equal: each would *lose the sum advanced for the erection. At the end of .the term, Edmund would lose his own share of the expense of erection, and the advantage of the use of a mill in operation; Caleb would lose his share of the labour and materials employed in the erection. But if the articles are so construed, that Caleb shall be paid for his labour and materials, although the mills are not rebuilt then the whole loss would fall on Edmund, the other sustaining no part of it. This would be unequal and unjust.

Although such is my construction of the articles, in which, it seems, I differ from my brethren, yet I am satisfied that it was competent for these parties, after the loss happened, to make a compromise, to construe the contract in their own way, and adjust the loss according to their own ideas of right. It appears that this was done. Edmund Tait agreed, by solemn instrument, to pay to Caleb the amount of his expenditures, when the same should be ascertained, within ten years from the time of the agreement. The. bill alleges, that Caleb, after the loss, offered to proceed with the rebuilding, but that Edmund, being much discouraged by the loss, refused to proceed any further, and on thus abandoning the contract, promised to repay him his expenditures, and in compliance with that promise, executed the instrument of August 1814. The answer positively denies, that Edmund Tait refused to proceed with the building; and, on the contrary, avers, that Edmund required Caleb to go on with the buildings, which Caleb refused, except on inadmissible terms. There is some evidence to support this allegation of the answer, but I think it is not sufficient to outweigh the evidence of Edmund’s own solemn obligation, unless indeed that obligation can be impeached. This is attempted by the defendant; for, in his answer, he charges, that the bond was obtained by false and fraudulent misrepresentations; but in the proof of this charge he has totally *failed; there is not the slightest evidence to prove that it was so procured. The bond then being unimpeached, I hold it to be satisfactory evidence to prove, either that Edmund construed the articles as imposing on him the duty of repaying to his brother his expenditures on the erection, or that he had determined to abandon the milling project, and would not permit the building to go on. In the first alternatives, if he gave a wrong construction to the articles, as I suppose, he is still found by his obligation, for it was founded on a mistake of the law, and not of the factsin the other alternative, that of abandonment, he was clearly liable. I am, therefore, of opinion, that the decree should be reversed, and the cause remanded, for further proceedings.

CARR, J.

I differ entirely from the chancellor on the main points in the cause. It seems to me, that by the articles between the parties, of January 1813, it was intended, that the partnership, as to joint profit, should commence with the grinding of the mills; the building and the expenses thereon incurred, were mere preparation for this. The land and mill seat belonging to Edmund, the other parties were to share the profits with him for seventeen years, and then the concern was to cease; the property to remain with the owner, and the other partners to receive the moneys they had expended, whether in the original erection or subsequent rebuilding of the mills. The same, I presume, would have been the consequences, if the parties, before the end of the term, had at any time dissolved the partnership, without making a particular provision for them. A fresh swept away their mill house as soon as it was completed. This seems to have been an accident unprovided for in the articles. Whose should be the loss? His, I think, who owned the property. Every man is the insurer of his own houses, unless he gets them insured. I do not think these articles made the partners the insurers. i;'The risk was one to which the mills were known to be liable, and no provision is made against it. This it seems to me is the fail-construction of the contract. If when the house was destroyed, Edmund insisted on rebuilding, and a continuance of the adventure, and Caleb refused, an action for damages, or a bill for specific execution,, was the course. Neither of these was taken; but instead of this, the brothers agree to adjust the matter by abandoning the scheme, and Edmund executes to Caleb his obligation to repay him the amount of his expenditures on the mills, when the same are ascertained, within ten years. Here, then, is to my mind, a clear construction given to the articles by the parties themselves, who must have understood, better than all the world besides, what they themselves meant in the contract; and unless this obligation be impeached in some way, I hold that no human tribunal can touch it. The answer states, that it was obtained by fraudulent contrivance and imposition, Caleb withholding the articles, and .misrepresenting them to Edmund. This is a charge which would require strong proof to sustain it: The record furnishes none; not the slightest. We do not find even, that Caleb had possession of the articles; they seem to have been in the clerk’s office of the county court, equally accessible to both parties. This view of the case seems to me decisive. I think the decree should be reversed, and the cause remanded.

CABELL, J., concurred.

TUCKER, P.

The appellee in this case, being' the owner of a mill seat, entered into a contract with his brother, the appellant’s intestate, and another person, for the erection of mills and other water works. By this agreement, each party was to advance one third of the expenses of erection, and they were then to hold the property in partnership for seventeen years, receiving *equal portions of the profits. At the end of that period, the property was to be given up to the appellee, who was to refund to the other parties, all these advances for the original erection, or for any re-erection which might be rendered necessary; the parties distinctly engaging, that at the expiration of the term, if rebuilding should be necessary it should be done at their joint expense. In pursuance of this contract, one mill was erected, but it was swept off by a fresh within a short time ; which seems to have discouraged the parties, and to have suspended further operations. Caleb Tait, the intestate of the appellant, had bought out the interest of the third party .Deison; and the appellee contends, and I think it is proved, that he refused to make advances for the rebuilding, except upon condition of receiving security to refund; a term which he certainly had no right to introduce into the contract. It is now contended, that he is not entitled to recover his advances for the original building, but that in consequence of the abandonment of the contract, he must now be considered as a partner in the original erection, absolutely bound for one third of the expenses, and without a right to reclamation, except for any excess he may have advanced, over and above his own proportion, and that of Deison whose interest he had bought out. I cannot perceive any foundation for this pretension.

It cannot be denied, that if Caleb Tait had strictly complied with his engagements, and had advanced two thirds of the funds for the rebuilding, he would, at the end of seventeen years, have been entitled to recover back not only those two thirds, but two thirds also of the expenses of the original contruction of the mill that was swept away; thus clearly shewing, that losses by flood or otherwise, were to fall upon Edmund Tait, the owner of the estate, and not upon the other partner; except that he would lose the profits of his adventure, and receive no interest on his advances for seventeen x'years. Now, if this was the character of the original contract, it surely cannot be contended, that, by a failure to fulfil it on the part of Caleb Tait, this whole character was changed, and he was made liable to bear a loss which never was contemplated to be borne by him. If he broke his contract, he was liable to the action of Edmund Tait, who might recover such damages as he could shew he had sustained ; but it does not follow that, by the reach, he is to forfeit his right to recover back those advances, to which he would have had an unquestionable right, if he had fulfilled his contract. The case is, in this regard, precisely within the principle of Pordage v. Cole, 1 Saund. 320, c.; Lewis v. Weldon, 3 Rand. 71, and Bream v. Marsh, 4 Leigh 21. If it were otherwise, —if the recovery of the first advances was to depend upon the complete fulfilment of the engagement to make the further advance,^ — then the failure to the amount of one dollar, would exclude Caleb Tait from a right to recover back any thing; and thus, the penalty on him might be thousands of dollars, while the loss to Edward Tait would have been only the loss of the use of one dollar. To avoid such flagrant injustice, these covenants would have been construed independent, even if they had been otherwise in form. But, in truth, they are not dependant even in form ; and if at the end of seventeen years, Caleb Tait had sued for his original advances, it would not have been necessary that he should have averred a fulfilment of the contract for advances for the rebuilding of the mill. In this view of the case, it is obvious, that, whether the subsequent bond had been given by Edward Tait or not, Caleb Tait would have been entitled to recover back his original advances. But this bond, which appears to me entirely free from the imputation of fraud or circumvention, has definitely settled the rights of the parties. The difference between them under the original articles, was terminated by it; Edward Tait '^agreeing to pay to Caleb the amount of his expenditures on the mills (when the same should be ascertained) within ten years, without any stipulation for interest in the mean time. By this obligation, Edward became no farther bound than he was before, except in so far as the repayment of the advances is accelerated by it. Of this acceleration, Edward does not complain. He complains of being bound to pay at all. The motives for fixing upon ten years, we cannot penetrate, nor is it necessary. It was, probably, a compromise between the brothers, Edward insisting on further advances, and Caleb refusing to make, them without security. In this state of things, they seem to have abandoned the scheme, and to have fixed upon the terms of adjustment evidenced by the bond. It must, therefore, be respected as a settlement of their differences, and its terms must be enforced accordingly. At first, I doubted, hovrever, whether the bill was not prematurely filed, as the ten years had not expired at the commencement of the suit. But on reflection, I think the reasons assigned in the bill, and the terms of the bond, are sufficient to justify the proceeding. The bond contains an implied promise to account, at a period anterior to the expiration of the ten years, which may properly be enforced in equity.

Upon the whole, I am of opinion that the decree should be reversed, and the cause sent back for further proceedings.

Decree reversed, and cause remanded.