Case ID: sc-eq_27/html/0324-01.html
Source: Caselaw Access Project
Author: {"author": "Wardlaw, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

N. B. Prothro vs. R. F. Smith.
    
    Where a vendee made claims under the contract to a right of way, &e., which were unfounded in its terms, he was held, under the circumstances, not to have forfeited his right to a specific performance of the canfcracfc according to its terms.
    The rule that a party asking the specific performance of a contract, must show that he has performed all that on his part he is bound to perform, is not to he pushed in any case so as to work groat injustice, and has feebler application to the case of a purchaser who merely has money to pay, where delay of payment may be usually compensated by interest, than to the case of a vendor.
    Where no time is fixed for the performance of the contract, and a party who is in no default himself and who tenders a present performance of the stipulations on his side, gives notice of his intention to abandon it unless it be performed within a reasonable time, and the other party does not proceed promptly in the assertion of his rights after such notice, he will be held to have acquiesced in the notice and abandoned his right to a specific performance.
    Vendor gave notice that unless the contract was completed by 25th January, he would consider it as abandoned. A correspondence., ensued between tbe solicitors of the parties in relation to the terms of the contract, which was closed on the 5th February, by vendor’s insisting upon immediate performance. Vendee held to have proceeded with reasonable promptitude, his bill having been filed on the 4th March.
    That the vendor’s title was encumbered by a mortgage, and that he made no offer to remove it or indemnify the vendee against it, h&ld to furnish a reasonable excuse for the vendee’s forbearance to pay the purchase money.
    In the absence of countervailing stipulation or evidence, an agreement to sell implies an agreement to convey a good and unencumbered title.
    Though in England the rule is that the vendee shall prepare and tender the conveyance, with us, it seems, that it is the duty of the vendor to make and tender the conveyance, as well as to remove all encumbrances*/
    Where a party seeks to abandon a contract containing mutual and dependent covenants or promises, lie must shew performance of the stipulations on his side, equally with a party who invokes the aid of the Court to enforce a contract.
    
      Before Waudlaw, Cb., at Charleston, June, 1853.
    On the 10th of July, 1850, Richard F. Smith purchased from Bishop Gadsden a low water-lot, for $10,000, payable as follows: the interest semi-annually, the principal in five instal-ments — the first, on the 1st day of July, 1855, and the others on the 1st day of July, 1856, ’57, ’58 and ’59; and to secure the purchase money, he mortgaged the premises, which mortgage is duly recorded.
    After making considerable improvements on it, he let a part of the premises to his brother B. F. Smith and N. B. Prothro, as partners under the name of Smith & Prothro, at a rent of $1,000 per annum; and covenanted, among other things, to open a water communication with the premises, and to open and keep in order, a communication, by road or roads between the premises, which were entirely surrounded by his land, and the neighboring wharves, and to allow the lessees the privilege of shipping their lumber from his wharf, and of removing their buildings at the expiration of the lease.
    On the 11th March, 1852, the lessees agreed to purchase of the lessor, all the lot from Washington-street to the channel of Cooper river, including the premises demised to them, being a moiety of the purchase from the Bishop, at $7,500. The agreement was reduced to writing, and it was thereby stipulated that the existing lease should be cancelled, and the conditions of non-effect from that date, and that the purchase money should bear interest from 1st January, 1852, and that the payments of interest and principal should correspond in time with the payments of the purchase money, to Bishop Gadsden. And it was verbally understood that Smith <fc Prothro might use R. F. Smith’s wharf for the present.
    Instructions were given by the purchasers, and a conveyance drawn in conformity with this agreement; but before it was executed on the 2nd August, 1852, they dissolved their partnership, and signed certain articles of dissolution, by which they agreed that, in consideration of $6,250, to be paid by Pro-thro, Smith would release to him all his interest in the partnership, except the money owing to the firm then due, and the planed lumber on hand; and that Prothro would pay the debts of the concern, and secure to Smith $6,200 by a mortgage of half the lot, and execute the mortgage as soon as R. F. Smith should make a good title to the premises, or in case he could not make a good title, as soon as he would make a conveyance and fully indemnify Prothro against any defect. The agreement for this dissolution was made with the assent of R. F. Smith. B. F. Smith retired, and Prothro remained in full possession of the premises, and had permission to use the wharf as heretofore till the end of the year.
    No steps were taken by him to complete his purchase till the lOth January, 1853, when R. F. Smith called upon him to pay the interest in arrear, and execute the bond and mortgage which would be ready for his signature, offering to execute a conveyance prepared by Prothro, whenever tendered with the money, giving time till the 25th of the same month to comply, and giving notice that if not complied with by that time, he would treat the contract as rescinded. Prothro answered on 24th of January, by his solicitor, that according to the agreement he was entitled to a right of way over the wharf of Smith ; that the price of the purchase was only $7,000; that the additional $500 was for a wharf head, which had not been built, and that Smith had agreed to indemnify him against Bishop Gadsden’s mortgáge, and that he would comply on these terms and no other.
    These terms were rejected by Smith, who persisted in his notice to repudiate the contract of sale unless Prothro would comply by the 25th January.
    On the 7th of February, notice to remove his lumber from the wharf was given, and disregarded, and the use of the wharf maintained by force.
    On the 26th February, 1853, R. F. Smith commenced an action of trespass to try title. And on the 4th March, 1853, this bill was filed, claiming a conveyance of the premises, with the grant of a right of way; the reduction of .the purchase money, and a guarantee against Bishop Gadsden’s mortgage, not alleging want of notice of said mortgage at the time of purchase.
    The case was heard on the 17th June, 1853.
    
      W. H. Houston, examined for complainant, proved the cost of improvements made by Prothro, under $500. The lot, without the mill, is worth 7 or $8,000. Now accessible only by Smith’s wharf. The value of the land depends on filling ; and when filled, the owner will have no need of Smith’s wharf for a way to his premises.
    
      
      L. T. Potter — Said that Smith & Prothro did an unsuccessful business. In 1852, the lot was worth 7 or $8,000, and much more now.
    
      E. Horlbeck — Thought the present value of the two lots, 15 or $20,000.
    For the defence, were produced Bishop Gadsden’s title, and the writ of trespass to try litle.
    
      FI C. King. — Prothro called to give instructions for a deed for the lot from R. F. Smith to him. It was drawn according to his directions, and charged to him; no right of way mentioned.
    Wardlaw, Oh. N. B. Prothro and Benjamin F. Smith formed a. partnership with the style of Smith & Prothro, for the purchase, manufacture and sale of lumber and boards, and in furtherance of their business, leased a water lot, lately Bishop Gadsden’s, from R. F. Smith, for ten years, at an annual rent of $1,000, payable semi-annually on 1st April and 1st October, upon stipulations which appear in the lease. The partners entered upon the premises leased, erected a steam mill for planing boards, and occupied the premises as lessees until March 11, 1852, when they contracted with R. F. Smith for the purchase absolutely of a parcel of land including the portion leased, on the following terms: — “I hereby agree to sell to Smith & Prothro a water lot on Washington-street, 122 feet on said street, and running down the same width to the channel of Cooper river — the planing mill now on this lot being situated on the Southern line — for the sum of $7,500, payable with interest, at the same time and in the same manner as my payments for the purchase of this property become due to Bishop Gadsden by my bond to him. The purchase to date from January 1, 1852. By the above sale, I reserve the right of making a street, parallel to Washington-street, about forty feet wide, and nearly opposite to Marsh-street, through the above named lot; my decision to be made at any time prior to March 1,1861. The lease now existing between Smith & Prothro and myself to be cancelled, and the conditions of the same to be of non-effect from the date thereof. Done in duplicate, this, 11th March, 1852. Charleston, S. C. R. F. SMITH.”
    “ We hereby agree to buy the above lot, on the terms and conditions stated by R. F. Smith, in his offer above.
    SMITH & PROTHRO.
    Witness, R. C. Smith.
    On August 2,1852, Smith & Prothro agreed to dissolve their partnership, on terms which appear in a written memorandum thereof: of which it seems only necessary to mention for present purposes, that Prothro was to become owner of the water lot, mill and appurtenances.
    R. F. Smith agreed to accept Prothro as purchaser of said lot, in place of Smith & Prothro, on the terms of the contract for sale to Smith &, Prothro. Prothro has since occupied the premises, in the same business for which they were used by the firm.
    In January and February, 1853, there was a correspondence between Messrs. Petigru & King, solicitors for R. F. Smith, and Mr. B. Whaley, solicitor of N. B. Prothro, concerning the agreement. On January 10, Messrs. P. & K. wrote to Prothro, calling his attention to the contract, and asking to hear from him, or to be referred to his solicitor. In this note they say: “As the payments stipulated to be made by Smith & Prothro have been neglected, and the whole subject has been transferred by your late partner to you with the consent of the seller, a compliance with the articles of agreement will embrace the payment of all arrears of interest and taxes, and the execution of a bond and mortgage. But we have it in charge to say, that Mr. Smith is ready to make a title as stipulated, and to request you to prepare such a title as you require, and pay the interest in arrear, and execute a proper bond and mortgage, which will be ready for your signature. In case of your declining to comply with this request, Mr. R. F. Smith will consider the contract at an end, and will expect to hear from you what your decision is by 25th instant: after which time, if not otherwise informed, he will regard the contract as abandoned by you: and if not promptly complied with, will treat the same as rescinded.”
    On January 24, the solicitor of Prothro replied: “ Mr. Pro-thro not having in his possession an abstract of the title of the land bought by Mr. R. F. Smith from the late Bishop Gadsden, nor any plat relating thereto, and not having the written agreement or a copy thereof between R. F. Smith, and B. F. Smith and himself, cannot convey an idea of his rights more definitely than is herein set forth.” He then proceeds to give Mr. P.’s version of the contract, in the course of which he insists on a right of way over the present bridge, or over the intermediate space between the mill and the bridge — that Smith agreed to extend the wharf-head from P.’s wharf-head to the edge of the canal on the Northern side of the lot, in consideration of which P. agreed to give Smith $500, in addition to $7,000, the price of the lot — and that Smith agreed to give P. a good title or indemnity against Bishop Gadsden’s mortgage. He concludes: " Mr. P. instructs me to say, he is ready to complete the agreement according to the terms of the contract.”
    In a letter of January 29, Messrs. P. & K. furnish a copy of the agreement, and refer to it for explanation of Mr. Smith’s views. They mention Mr. S.’s denial of any agreement for a right of way over his bridge or any part of his land, and of any agreement concerning the wharf head, and of the price of the lot being less than $7,500. They conclude: “ We beg to refer to our letter of 10th inst. to Mr. Prothro. He has not paid the purchase money, nor tendered a conveyance, in pursuance of the contract, but set up a different contract: from all which, Mr. Smith infers that he does not mean to comply with his purchase ; and unless a tender is made of the money in arrear, and a draft deed in pursuance of the contract, Mr. Smith will be confirmed in that opinion and proceed accordingly. If the want of an abstract is all that is in the way of Mr. Prothro’s compliance with his contract, a copy of that which has been seen by you will be submitted whenever demanded.”
    Mr. Whaley, in a letter of February 1, says in substance, that Mr. Prothro, while insisting that the writing did not contain a full expression of the agreement of the parties, would be content to take Mr. Smith’s conveyance with warranty, and waive other indemnity, provided a right of way to his wharf be conceded : and if this be not agreable to Mr. Smith, then, as a final proposal, Mr. Prothro proposes to submit all the matters in difference between Mr. Smith and himself to the decision of arbitrators.
    Messrs. P. & K. closed the correspondence by a letter of February 5, stating that Mr. Smith adheres to his denial of the right of way, suggesting that if Mr. Prothro founds his claim on the terms of the lease, these were expressly abrogated by the contract for sale : and that Mr. S. declines the proposal for arbitration, regarding it as a mere offer to make a new bargain. “ We repeat, that unless Mr. P. at once tenders a draft deed for Mr. S.’s signature, and pays up the interest in arrear on the purchase money, and refunds the taxes which Mr. S. has had to pay, he will consider that he has refused to comply with his purchase, and take measures accordingly.”
    On February 7,1853, defendant gave written notice to plaintiff, having previously given verbal notice to the same effect, to remove his lumber from defendant’s wharf within a reasonable tinte, and .to place no more there at the risk of being treated as a trespasser: further notifying plaintiff that the license which had been extended to him as an accommodation to use defendant’s wharf (including the use of the bridge) until January 1, 1853, was now formally withdrawn. Prothro persisted in his use of the bridge, &c., and on February 26, Smith instituted an action of trespass to try title against him. On July 30, 1852, a draft of a conveyance of the water lot from R. F. Smith, to Smith & Prothro, was written by H. King, Esq., from instructions of Prothro, in the course of which nothing was said about a right of way. This paper was not executed, as in a day or two afterwards, Benj. F. Smith ceased to be a party of the contract.
    The plaintiff, in his bill, filed March 4, 1853, seeks that defendant may specifically perform said contract of sale, by making a good title to the premises, and indemnifying plaintiif against incumbrances : that the contract be re-formed so as to give plaintiff a right of way over the bridge: and that the defendant be enjoined from prosecuting his action of trespass to try title.
    The defendant, in his answer, insists that plaintiff has forfeited all benefit from the contract of sale, especially any right to a specific performance of it, by his acts of retaining possession of the lot without paying or securing the purchase money, of forcibly using defendant’s bridge after the expiration of the license, and notice that it,had been withdrawn, of refusing to comply with the agreement within a- reasonable time after notice of defendant’s purpose to consider it at an end, and of setting up unfounded claims of right of way over the other lands of defendant, and of indemnity against Bishop Gadsden’s mortgage.
    It appears by the evidence, that the improvements erected upon the lot which are fixtures, do not exceed in value $500. It also appears, that the lot has considerably risen in market value since the agreement, from general appreciation of estate in the city, and not from circumstances peculiarly affecting this lot or its ownership.
    The claim of plaintiff of a right of way over defendant’s bridge, is clearly unsupported by the terms of the contract for sale, and no attempt was made to show that such right was omitted from the agreement by mistake. Plaintiff’s counsel properly abandoned this claim at the hearing ; but defendant urges that the persistence of plaintiff in this unfounded claim, in the correspondence between the solicitors and in' the bill, and especially in the tortious use of the bridge, is such error of conduct on his part as excludes him from the extraordinary remedy of this Court of specific performance. The discretion of this Court in granting or refusing specific performance, is a judicial discretion governed by the principles and procedure of the tribunal. The plaintiff, in asserting this right of way, has committed error, but it is not in relation to the subject really included in the contract, and it is some palliation of his wrong, that the bridge being the only means of communication, was indispensable to the use of his mill, until he constructed a causeway for himself, which required some time after the sudden termination of his license to use the bridge. Besides, the defendant has selected the Court of Law for redress of his injuries in this particular, and he is not entitled to double redress. As a point of pleading, a party is not ousted from the relief to which he is entitled, because in his bill or preliminary proceedings, he may claim more than his equitable interests. It is quite clear that the plaintiff never meant to abandon the contract according to its terms, although he may have sought larger interests under it than could be justified by its proper construction.
    In general, a party asking the specific performance of a contract, must show that he has performed all that on his part he is bound to perform ; but this doctrine is not to be pushed in any case so as to work great injustice, and it has feebler application to the case of a purchaser who merely has money to pay, where delay of payment may be usually compensated by interest than to the case of a vendor. In this Court, time is not usually of the essence of the contract, although it may be made so by express stipulations of the parties in the contract itself, which is not the case here, or by the act of one of the parties fixing a reasonable time for the completion of the contract, and giving notice to the other party of intention to abandon the contract unless it be completed within the time fixed. When this latter course is pursued by a party who is in no default himself, and who tenders a present performance of the stipulations on his side, it will be prima facie a bar to demand for specific performance by the other party made after the time limited. If the other party do not proceed in the assertion of his rights promptly after such notice, heis considered as acquiescing in his notice, and abandoning his right to the equitable remedy. Langworih vs. Taylor, 14 Pet. 375; Thompson vs. Dullest (5 Rich. Eq. 370;) iSeton vs. Slade, White and T. L. C. and notes En. and Am., vol. 2, part 2, 3.
    
      In the present case, the defendant has given notice of his purpose to abandon the contract, and the plaintiff has proceeded with reasonable promptitude, after such notice, to seek specific performance. The party seeking specific performance, forfeits the relief if he has been guilty of serious misconduct concerning the subject. It is imputed to the plaintiff here that he is in that category, because he has not paid nor offered to pay the money due on the purchase, and yet has remained in possession of the lot. But a reasonable excuse for his forbearance to pay the money is afforded by the fact that defendant’s title to the lot is encumbered by a mortgage to Bishop Gadsden, and that defendant has made no offer to remove the incumbrance, or to indemnify the plaintiff on account thereof. It is alleged in the answer, that plaintiff was well aware of defendant’s mortgage at the time of the contract for sale, as the contract itself shows; yet the contract makes no mention of such mortgage, nor is the existence of a mortgage to be inferred from the mention of a bond. No proof outside of the agreement is offered of plaintiff’s knowledge, at the time, of the existence of the mortgage, unless it may be inferred from the terms of the memorandum of dissolution of partnership between Smith and Prothro; and that, if it proves knowledge of the incumbrance, equally proves his determination to insist upon indemnity. The terms of that instrument on this point are: “ upon R. F. Smith’s executing a good title to the land agreed to be purchased formerly by Smith & Prothro, to N. B. Prothro, or in case a good title cannot be made, upon the said R. F. Smith’s conveying the said land to said N. B. Prothro, and indemnifying him fully against any defect in the title thereto, and upon the said N. B. Prothro performing the said agreement on his part, the said B. F. Smith will release to the said N. B. Prothro, all his interest in the said Mill, &c.”
    It is probable from R. F. Smith’s accepting Prothro as purchaser, in place of Smith & Prothro, that he was aware of this memorandum; but the fact is not absolutely proved. But in the absence of countervailing stipulation or evidence, defendant’s agreement to sell implies an agreement to convey a good and unencumbered title. Again, defendant furnished to plaintiff no abstract of his title to the lot, and it is at least doubtful whether defendant was not bound to prepare and tender a conveyance before he had title to the purchase money. In England the rule is that the vendee shall prepare and tender the conveyance, but it has not been adopted generally in the United States: Langwortli vs. Taylor ; Dubignon vs. Loud, 5 Rich. 251. Where a purchaser enters into possession of land under agreement to purchase, and continues long afterwards iu possession, he may be considered as waiving his right to investigate the title, and to have a tender of the conveyance; but the principle does not apply to this case where the purchaser was previously in possession under lease, and has not formally waived objection to the title. Palmer vs. Richardson, 3 Strob. Eq. 16; Smith vs. Smith, 1 Rich. Eq. 130. Where a party seeks to abandon a contract containing mutual and dependent covenants or promises, he must show performance of the stipulations on his side, equally with a party who invokes the aid of the Court to enforce a contract. Kinloch vs. Hamlin, 2 Hill, Ch. 19. If an agreement to pay money at future dates, involves an agreement give bond and mortgage, as the defendant, in the correspondence of his solicitors, insists; an agreement to sell with stronger reason, involves an agreement to make and tender conveyance, and to remove incumbrances. To refuse relief to the plaintiff altogether, would bring upon him great and irremediable loss, while all the injury that defendant has suffered in the matter of the contract is detention of his money which may be compensated by interest. The plaintiff would have acted more properly, if he had brought into Court with his bill, the money for which he is in arrear, but he may be sufficiently punished for this by making him pay costs. Vendors have been sometimes allowed further time after report of the Master upon title, to perfect their titles ; and want of punctuality in purchasers should not be treated more harshly.
    It is ordered and decreed that, upon plaintiff’s paying .into Court the money in arrear upon the contract of sale, the defendant execute to the plaintiff a conveyance for the lot described in the contract, and give the plaintiff indemnity against Bishop Gadsden’s mortgage, by bond and sureties to be . approved by one of the- Masters, or remove said incumbrance, and that thereupon, plaintiff execute to the defendant bond with mortgage of the premises to secure the balance of the purchase money. It is further ordered that defendant be enjoined, until the further order of the Court, from prosecuting his suit at law for recovery of the Jot aforesaid, with leave to him to prosecute said suit for recovery of damages from plaintiff for any tress-pass upon his bridge or other lands not embraced in said lot. .
    It is further ordered that the plaintiff pay the costs to the time of the hearing, and that’the question as to the subsequent costs be reserved.
    The defendant, it. F. Smith, appealed on the grounds :
    1. That N. B. Prothro purchased with notice of Bishop Gadsden’s mortgage, and is entitled to no other indemnity than the warranty of the vendor: that his pretensions to have an additional indemnity against that mortgage, and to have a right; of way over Smith’s wharf, and to have a wharf-head built for him, are fallacious. And his refusal to comply with his purchase unless these terms are conceded, is the same as a positive and wilful refusal.
    2. That there is no equity for a purchaser, who, without cause,refuses to comply with his contract; and such a purchaser cannot have any more relief in this Court than at Law.
    For these reasons, it was submitted, that the decree should be reversed, and the bill dismissed ; but if not dismissed, then the vendor prayed that the same may be modified, and that a day may be fixed for the complainant to pay the money, and to tender a conveyance at his own expense for the signature of the vendor; otherwise, to forfeit the benefit of the decree. And that the decree be altered as to the action at Law, which is an action of trespass to try title.
    
      Petigru, for appellants.
    
      B. I Whaley, contra.
   The opinion of the Court was delivered by

Wardlaw, Ch.

This Court is content with the general conclusion of the circuit decree.

The brief prepared by defendant’s counsel, after reciting the substance of the stipulation in the agreement to dissolve the partnership of Smith & Prothro, that R. P. Smith should make a good title to the premises described in the contract of sale or fully indemnify Prothro against any defect of title, states that “ the agreement for this dissolution was made with the assent of R. F. Smith.” The defect of title thus intimated must be the incumbrance of Bishop Gadsden’s mortgage. In the letter of plaintiff’s solicitor, dated January 24, 1853, it is stated that “ Smith agreed to give Prothro a good title, or to indemnify him against the incumbrance of Bishop Gadsden’s mortgage;” in the reply this statement is not controverted, while other statements are stoutly denied. In the defendant’s answer, too, he says, that he was willing to remove the mortgage for the purchase money, if plaintiff would comply with his contract, which he has deliberately refused to do.” We concur with the Chancellor that the plaintiff never intended deliberately to repudiate the contract according to its terms; although he claimed to have a wharf-head built for him, and a right of way over defendant’s bridge, under cover of the contract and without foundation in its terms. He had the right to require, and he required, with defendant’s acquiescénce, the removal of this incumbrance of Bishop Gadsden’s mortgage or indemnity against it. It may be that he acquired knowledge of this incumbrance in the interval between the contract for sale on March 11, 1852. and the dissolution of the partnership of Smith & Prothro on August 2, 1852. But granting that he had notice of the mortgage at the time of sale, if then or afterwards it was agreed that he should be protected against this defect of title — and such agreement maybe fairly deduced from the evidence and the admission of counsel — such notice does not impair his right or defendant’s duty as to indemnity.

The plaintiff, by his misconduct, almost deserves to be deprived of the extraordinary remedy of this Court, but our refusal to extend this remedy to him would work such injury as to amount to injustice.

The Chancellor, from inadvertence, fixed no time in the de-cretal order for the performance of the plaintiff’s stipulations in their nature precedent to anything to be done by defendant. This defect must be supplied. In England, counsel usually attend to settle the minutes of the decree, when the Equity Judge announces his opinion. This precise course is impracticable under our procedure ; birt it would greatly aid the Court, if counsel at the hearing would prepare and submit projets of decretal orders suited to the contingent determination of the Chancellor.

It is ordered and decreed, that the decretal order in this case be so modified, that the plaintiff, within thirty days from the filing of this decree, pay into Court the moneys in arrear upon the contract of sale, and all sums paid by defendant for the State and City taxes since January 1,1852; or that the bill be dismissed. In all other particulars the decree is affirmed and the appeal dismissed.

Johnston, DuNKiNand Dargan,.CC., concurred.

Appeal dismissed.