Case ID: ill_5/html/0580-02.html
Source: Caselaw Access Project
Author: {"author": "Shields, Justice,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Joseph Duncan et al. v. George A. Charles.
    
      Error to Henderson.
    
    I. Promissory note — and bond, one contract. Where notes for the consideration money agreed to be paid upon the purchase of property, and a bond for the conveyance of the same, are executed on the same day, they both constitute one contract. 
    
    
      2. Contract — intent to govern. The rule universally adopted in the construction of contracts is, that the intent of the parties, at the time the instruments are executed, as collected from their language, shall prevail. By this rule it is determined whether covenants are dependent or in dependen t. But á covenant cannot be at one time independent, and at another time dependent.
    3.' COVENANT — independent and dependent. . An action on an independent covenant, in an obligation, may doubless be defeated by a cause of defence arising after the cause of action first accrued ; but in no imaginable case can an independent covenant, which has been once broken, and upon which a cause of action has consequently accrued, be converted into a dependent covenant.
    4. Same — same, instance. Where, upon the sale of a lot of land, abond isexecuted for a warranty deed, upon the payment of the purchase money, which is secured to be paid by notes payable in one, two, and three years, if the first two notes are paid, the payment of the last note and the conveyance of the land are mutual and dependent acts. But the agreement to pay the first two notes is an independent undertaking, and a plea to an action upon the three notes, after the last became due, which avers either a want of title in the plaintiff, when the contract was made, or when the notes fell due, or a failure to tender or deliver a deed, is not a defence to the action ; but a plea averrirg a want of title in the vendor at the time the notes fell due, and at the time of the commencement of the suit, it seems would be. An action can be maintained upon the first two notes without a tender of the deed, but not upon the last, 
    
    5. Same — same. In a contract some of the covenants may be independent and others dependent.
    6. Same — recission. A vendee cannot resist the payment of the purchase money agreed to be paid for a tract of land, on the ground that his bond for a conveyance of the land provided that he should forfeit all claims to the same, and whatever payments he m ght have made thereon, by failing to make any of the payments for the same. lie cannot take advantage of his own default to rescind the contract.
    7. Same — same. Whether the neglect of a vendee to enforce payment of a promissory note given for the purchase money agreed to be paid for a tract of land, where he had the option to rescind the contract upon a failure of the vendee to make the payments, is to be considered an election to rescind the contract or not, isnot a proper subject of inquiry in a court of law.
    8. Same — statute construed. The fifth section of the statute in relation to promissory notes gives the defendant a right to interpose any defence which may exist at the time of the commencement of the action, on the ground of a total want, or an entire or partial failure of consideration, in every case where an action is brought on a note or other instrument in writing for the payment of money or property, or the performance of covenants or conditions by the obligee, or payee. This defence is an equitable one, and intended principally to prevent a multiplicity of actions, and, when confined to defences which exist at the time of the commencement of the action, will tend to further the ends of justice. 
    
    9. Jurisdiction of person — appearance and plea. After the defendant has appeared and pleaded in a suit, it is too late to object to the jurisdiction of the court over his person, where it has jurisdiction of the subject matter of the suit.
    The decision in this cause, in the court below, was made at the October term, 1842, by the Hon. Stephen A. Douglass. Judgment was rendered for the defendant, and the plaintiffs brought the cause to this court by writ of error. The facts of the case are fully stated in the opinion of the court.
    [*562] O. H. BROWNING, for the plaintiffs in error:
    The question in this .case is whether the covenants are dependent or independent, and. whether the tendering a conveyance for the land was a condition precedent to be performed by the plaintiffs before they could proceed for a recovery of the money.
    In agreements for purchase, the covenants are construed according to the intent of the parties, and must depend on the good sense of the case, and on the order in which the several things are to be done. 1 Sug. Vend. 244; Platt on Cov. 126-7; Robb v. Montgomery, 20 Johns. 15; Morton v. Lamb, 7 Term R. 72. And this intention is to be derived from the contract itself, and not from anything extrinsic to it, or happening in pais after the execution of the contract. Platt on Cov. 144.
    If a day be appointed for the payment of money, or part of it, or for doing any other act, and the day is to happen, or may happen, before the tiling which is the consideration of the money, or other act, is to be performed, an action may be brought for the money, or for not doing such other act before performance; for it appears that the party relied upon his remedy, and did not intend to make the performance a condition precedent; and so it is where no time is fixed for performance of that which is the consideration of the money. Platt on Cov. 96-8 ; Pordage v. Cole, 1 Saund. 819 h., 320 n. 4; Thorpe v. Thorpe, 1 Salk. 171; Seers v. Fowle.r, 2 Johns. 272 ; Havens v. Bush, 2 Johns. 887; Close v. Miller, 10 Johns. 90; Couch v. Ingersoll, 2 Pick, 300; Éorthrup v. Northrup, 6 Cowen 296.
    And if .a party execute a distinct instrument whereby he promises to pay a part of the purchase money on a particular day, he must pay the money at all events. Spiller v. Westlake, 2 Barn. & Adolph. 155.
    It is a rule long established, in the construction of covenants, that if any money is to be paid before the thing is done, the covenants are mutual and independent. Terry v. Duntze, 2 H. Blac. 390 ; Craddock v. Aldridge, 2 Bibb 16.
    
      And wliere the contract is entire, and the performance of one side constitutes the whole consideration of the performance on the other, if one side is to perform a small part first, however small, it is evidence that he meant to waive the security of retaining his own performance, and rest upon his action. Mason v. Chambers, 4 Littell, 255.
    Where a covenant goes only to part of the consideration on both sides, and a breach of such covenant may be paid for in damages, it is an independent covenant, and an action may be maintained for a breach of the covenant on the part of the defendant, without averring performance in the declaration. 1 Saund. 320, n. 4.
    And where there are mutual and independent covenants, it is not the performance of the thing covenanted to be done on the one side, but the covenant itself, which is the con.- [* 563] sideration of the covenant on the other side; and therefore the failure to perform the one covenant is no failure of the consideration of the other. Saunders v. Beall’s admr’s 1 Bibb 453; Pike v. Thomas, 2 Bibb 447; Reed’s exor’s v. Harrison, 4 Bibb 487 ; McCampbell v. Miller,' 4 Bibb 234.
    And when covenants are once established to be mutual and independent, they continue so throughout. Wilcox v. Ten Eyck, 5 Johns, 78; Dox v. Dey, 3 Wend. 356.
    C. K. Harvey and Geo. C. Dixoím, for the defendant in error:
    I. The notes and bond constitute one contract, and will be construed as one and the same transaction. 4 Blackf. 343-4; 5 Pick. 395; 11 Johns. 527; 5 J. J. Marsh. 298.
    II. The plea o‘f no title is good; the contract requires a “ good and sufficient warrantee deed to the same lot.” 10 Johns. 269 ; 11 Johns. 50, 527-8; 4 Paige 637-8; 1 Peters 467; 1 Blackf. 172; 4 Blackf. 249-52,
    III. The plaintiffs, by not tendering a deed on the day when the whole money became due, have lost their right of action;
    1. By not collecting the installments which were precedent before 1 he time fixed for the conveyance of the property. Chit, on Cont. 572; 3 Scam. 284; 3 Wend. 356-62; 5 Gill & Johns. 239, 254, 262; 4 Wend. 48; 17 Wend. 376; 1 Blackf. 175; and 4 Blackf. 342-3.
    2. By not tendering a deed on the day when the last installment became due. 1 Caines 47; 2 Johns. 209 ; 21 Wend. 233; 11 Johns. & Gill 152; 4 Phil. Ev., App. 172; 1 Sug. on. Vend. 291-3; 1 Peters 460-7; 2 Scam. 444.
    • 3. The not tendering a deed on the day is undoubtedly a bar to the recovery of the last installment; and a contract cannot be abandoned in part but must be abandoned in-toto. 6 Cowen 449; 14 Maine 364, 369, 870.
    
      IY. The circumstances of this ease show that the plaintiffs have elected to consider the contract abandoned ;
    1. By not collecting the precedent installment.
    2. By not tendering a deed on the day.
    8. By not suing until several years after the right of action accrued. 15 Maine 353 ; 3 Johns. Cas. 60.
    4. This is a question of law, and the court will decide it from the record. 15 Maine 353.
    Y. The contract itself precludes the idea of a right of action in the plaintiffs. The non-payment worked a forfeiture of the first payment and nothing further. This appears from the agreement itself. 36 Eng. Com. Law R. 187 ; 23 Pick. 464.
    
      Remarks on eases cited by the plaintiffs. 1. Northrop ['*" 564] v. Northrop, 6 Cowen 296. This was payment to a third person. See 11 Wend. 18, where this case is distinguished.
    2. Pordage v. Cole, 1 Saund. 319. This case is overruled. See 4 Term R. 418.
    3. Terry v, Duntze, 2 H. Blac. 390. This case is overruled. See 5 Johns. & Gill 254-65, and cases cited.
    4. Seers v. Fowler, 2 Johns. 272; Havens v. Bush, Ibid. 387. These cases are restricted in their application, if their doctrine is not essentially overthrown. See 10 Johns. 204.
    5. Cases of 1 Bibb 453, and 4 Bibb 342, are cited.
    We object to the force of Kentucky decisions on real estate as safe precedents;
    1. Because no authorities are cited in the above cases.
    2. Because English decisions, since July 4th, 1776, are net allowed to be read as law in Kentucky. Hardin 364-5.
    3. Because their land law and its incidents are sui generis, and therefore unsafe to rely upon as safe precedents. Stoiy’s Miscel. Works, 422-3.
    
      
       Cases Citing Text. Dteed and bond for re-purchase, being parts of same transaction should be construed together. Dolano v. Rood, 1 Gilm. 690, 694.
      Contract to convey and notes for purchase money, executed belween’same parties, at same time, and concerning same subject matter, form one contract. Davis v. McVickers, 11 Ill. 327, 328. Foster v. Jared, 12 Ill. 451, 454.
    
    
      
       Action on note, consideration for which is bond to convey land before note falls due, is barred by proof that conveyance has not been made. Hall v. Perkins, ante 548.
      Upon sale of land, true consideration is estate agreed to be conveyed; it is not bond for conveyance or covenant to convey. Davis v. McVickers, 11 Ill. 327, 329.
      In action on note given in consideration that payee shall plant hedge so as to become complete within given period, expiring several years after suit brought, it is valid defence that plaintiff has not power to perform, i. e„ to plant in time. Edwards v. Pyle, 23 Ill. 354, 356.
      Vendor of land in order to recover last of several installments of purchase money must tender conveyance, although vendee has made default in payment of earlier installments. Headley v. Shaw, 39 Ill. 354, 365.
      Where vendee of land gives notes for purchase money falling due at different dates and vendor agrees to convey upon payment of all the notes, vendor cannot recover on last note without tendering deed, but he may on earlier notes, although he does not sue until after maturity of last note. Sheeren v. Moses, 84 Ill. 448 451.
      In action by vehdor of land on note given him for the purchase money, if time fixed for conveyance has passed and he has not power to convey the title he contracted to convey he cannot recover, although vendee was first in default. Denby v. Graff, 10 Bradw. 195, 199.
    
    
      
      
         See R. 3., 1874, Negotiable In- p. 1661 ; Cothran’s Stats. (1885) p. 1004. strtjments, ch. 98 § 9; S. & C.’s Stats.
    
   Shields, Justice,

delivered the opinion of the court: Joseph Duncan, Stephen S. Phelps, and Alexis Phelps brought an action of debt, in the Henderson circuit court, against George A. Charles. The declaration contained three counts, founded on three sealed notes. The writing obligatory set forth in the first count was as follows: “One year after date, I promise to pay Joseph Duncan, S. S. Phelps, and Alexis Phelps, or either of them, or order, one hundred and thirty-eight dollars 75-100 cents, together with six per cent, per annum interest from date; and in case of a failure to pay the note when due, I promise to pay twelve per cent, interest per annum on it from date, value rec’d in lot No. 8, in block No. 24, in the town of Oquawka. July 20th, 1836.” This note was signed and sealed by the defendant. The note set forth in the second is, in all respects, the same as to date, amount, etc., except that it is payable in two years after date ; anti the one upon which the third count is founded is exactly similar, except in being payable in three years after date. To this declaration the defendant pleaded several pleas, amounting in all to eleven in number. An issue of fact was joined on the first plea, and issues of law on the others. The court overruled the demurrer as to the second, third, fourth, fifth, and sixth pleas, and sustained it as to the seventh, eighth, ninth, tenth, and eleventh pleas ; and the plaintiffs choosing to stand by their demurrer, judgment for costs was given against them below. To reverse this judgment the plaintiffs prosecute their writ of error, and assign for error the decision of the [* 565] court in overruling the demurrer to the second, third, fourth, fifth, and sixth pleas.

The second plea, which is a plea of total failure of consideration, avers that the sealed notes in the plaintiff’s declaration mentioned were executed as part of the consideration for the execution of a certain penal bond by the plaintiffs to the said defendant, in the penalty of $1110, bearing even date with the said sealed notes, and subject to the following condition: “ Whereas the said George A. Charles purchased of the said Duncan and Phelps, lot No. 8, in block No. 24, in the town of Oquawka, in the said county of Warren, for the sum of $555, one fourth part of which has been paid, and the said Geoi’ge A. Charles having executed to the said Duncan and Phelps, his notes for the payment of the remainder in three equal annual payments, the said Duncan and Phelps are therefore bound, in the aforesaid sum of $1310, to execute or cause to be executed to the said George A. Charles, a good and sufficient warranty deed to the said lot, upon the payment of the full amount of said notes and interest; but in case of failure in the payments, or any of them, the said George A. Charles forfeits all-claim, right and title to the said lot, and also all money that he may have paid in.” The plea further avers a failure on the part of the plaintiffs, either to deliver or tender a good and sufficient warranty deed to the defendant, either at the time the said notes became due, to wit, July 20th, 1839, or since, and therein avers a failure of consideration.

The third plea only differs from the second, in averring that at the time appointed for the full payment of the money, the said plaintiffs neglected to tender or deliver a deed to the defendant.

The fourth plea only differs from the second in averring a failure in the payments of the said notes, whereby all claim to the lot was forfeited, and also to the money paid in, and a failure on the part of the plaintiffs to deliver or tender a deed, whereby the contract became rescinded.

The fifth plea avers a failure to execute, or cause to be executed, a good and sufficient warranty deed at the time the payments became due. And,

The sixth plea is also a plea of total failure of consideration, and differs from the others in averring that neither at the time the said writings obligatory were executed, nor at any time before the same became due and payable, did the said plaintiffs have a good title to the said lot. These pleas go tp the whole declaration.

First. Are the notes and title bond in this case to be considered as oné contract ? They were made between the same parties at the same time, and relative to the same subject matter. The whole constituted but one single contract.

The same-point has been decided Ly this-court, in the [*566] case of Bailey v. Cromwell et al. 3 Scam. 72. It is there laid down that a note and agreement made at the same time mustbe taken together as forming one entire contract; so in the case of Jackson v. McKinney, 3 Wend. 234, the court says, “ It has been repeatedly held that when two instruments are executed at the same time, between the same parties, and relating to the same subject matter, they are to be construed together, and considered as forming but one contract.” This point is therefore to be regarded now as settled. The next which arises in considering the sufficiency of these-pleas is this: are the plaintiffs entitled to recover in this action without having first conveyed or offered to convey the lot mentioned in the agreement to the defendant? The answer to this question depends upon the character of the contract, and whether the stipulations of the parties are dependent or independent, or whether some ai-e dependent and some independent. The note set forth in the first count became due and payable on the 20th day of July, 1837; that set forth in the second count became payable on the 20th day of July, 1838,; and that set forth in the third count, on the 20th day of July, 1839. A right of action accrued on each of these notes when the same became due, and the plaintiffs were not required by the agreement, to make a deed, until payment of the whole amount-. The obligation, therefore, to pay the two first notes was independent of any act to be performed previous to, or at that time, by the plaintiffs. It is contended, however, that though the obligation of the defendant to pay the two first notes was to be considered an independent covenant in the first instance, yet by neglecting to enforce payment of the notes when they became due, and by waiting until the time -of performance on the part of the plaintiffs had elapsed, their covenants, once absolute and independent, became mutual and dependent; and to recover upon any of them, the plaintiffs must have conveyed, or tendered a conveyance to the defendant, previous to the commencement of this action. The rule universally adopted in the construction of contracts is the intention of parties at the time, as collected from the language of the contract. By this rule we determine whether the stipulations in a contract are dependent or independent; but there is no rule which can regard covenants as one day independent and the next dependent.

The case of Johnson v. Wygart, 11 Wend. 50, was somewhat relied on in argument as an authority in support of this position ; but the decision in that case, when properly apprehended, is very different. The action was covenant. The defendant covenanted to pay the plaintiff for a certain tract of land $ 155, in three equal annual installments; and the plaintiff covenanted, upon payment thereof, to make a good warranty deed of said land. The breach in the declaration was for the non-payment of the whole consideration, and not for the non-payment of the installments, and as payment of the last installment was dependent, and [*567] there being but' one breach for the whole, to sustain the action an averment of performance or an offer to perform was necessary. This was the reason assigned by the court for that decision; whereas it is not only intimated, but it is evident, that it would have been otherwise if the non-payment of each installment had been assigned in a separate breach. A case in 4 Blacbf. 342 is also relied upon as deciding that an independent covenant may, by delay, transmute itself into a dependent covenant. The reasoning of the case, if taken in extenso, would certainly warrant this position ; but this reasoning is nowhere else, that we can find, sustained by authority. An action on an independent covenant' may doubtless be defeated by a cause of defence arising after the cause of aetio'n first accrued; but in no imaginable case can an independent covenant, which has been once broken, and upon which a cause of action has consequently accrued, be converted .or shifted into a dependent covenant. The plaintiffs in this case were bound to' convey a good title to the defendant upon full payment of the notes; that is, upon full payment of the whole consideration money. The construction of the contract, so far as it relates to the third note, is this: If the two previous notes'had been paid by the defendant, the pay-, ment of the third note and the conveyance of the land would have been mutual and dependent acts; but while the two first notes continued unpaid, neither payment, nor an offer to pay the third note would entitle the defendant to a conveyance. The obligation to convey depended upon the payment of the whole consideration, and not upon the payment of any part thereof. 1 Bibb 453; 4 Bibb 342; 4 Littell 255.

The obligation of the defendant to pay the two first notes was absolute and independent, and a cause of action accrued upon each note as soon as it became payable, and a cause of action having once accrued upon the note, by force and virtue of the contract, there is nothing to be found in the contract itself to defeat the right of action afterwards. The whole contract taken and construed together contained both independent and dependent stipulations. The following authorities sustain this position. Couch v. Ingersoll, 2 Pick. 300. In an action of covenant the court determined that, as the first act was to be done by the defendant, and nothing was to be done by the plaintiff until after that time, such covenant was independent; and the other act and the covenant of conveyance were mutual and dependent covenants, aud the right to enforce performance of one depended upon the performance, or offer to perform, the other.

In Kane v. Rood, 13 Pick. 281, the plaintiff declared in assump-sit on a written agreement to pay 1700 in three installments, the deed to be executed at the completing of the last payment. The court decided that the stipulations to pay the two first [*568] installments were independent acts, and the stipulation to pay the third installment a dependent act. The chief justice in that case says: “ The only question which would seem to be presented by the facts is, whether, in a contract between parties relative to the same subject matter, some stipulations may be mutual and independent and others dependent and mutually conditional. The question was settled in the case of Couch v. Ingersoll, 2 Pick. 292. Indeed, the point in question constituted distinctly the ground of decision in that case, because the plaintiff, without having tendered performance on his part, recovered on a breach of covenant, because it was independent,' and failed upon another, because, by the construction put upon it by the court, it was dependent.” This is a ease exactly in point. The action, like the present, was an action of assumpsit, and the court held that the two first installments were recoverable, but the third not, without a tender of performance. The two first notes, in the present case, are recoverable without a tender of a conveyance ; and as the two first counts are founded upon these notes, and the second, third, and fifth pleas goto the whole declaration, they are defective.

• The fourth plea avers a failure on the part of the defendant to pay the said notes, whereby all claim to the lot and money paid in became forfeited, and also a failure on the part of the plaintiffs to deliver or tender a deed, whereby the contract became rescinded.

The defendant is not allowed to take advantage of his own default to rescind the contract, and whether the neglect of the plaintiffs to enforce payment of the notes when they became due is to be considered an election on the part of the plaintiffs to rescind the contract is not a proper subject of enquiry in a court of law.' 1 Sug. on Vend. 25.9; 2 Pere Wms. 191.

The sixth plea avers a failure of consideration, for the reason that the plaintiffs had no title to the said lot, either at the time of the execution of said notes or before or at the time the said notes became due. This plea only avers a want of title at and before the notes fell due, and for anything contained in it, non constat but that the plaintiffs afterwards acquired title, before the commencement of this action. The defendant being in default iu consequence of his failure to make the previous payments is not entitled to a conveyance or tender of a conveyance upon the falling due of the third note, without first tendering all the money, nor are the plaintiffs entitled to recover upon the last note, the payment of which and the conveyance of the lot being dependent and concurrent conditions, without a previous performance or offer to perform on their part. The sixth plea is therefore bad in not averring a want of title at the commencement of the suit.

This view of the case does not, in any sense, deprive the defendant of any defence given him by the statute relative to promissory notes. The 5th section of that act [*569] gives the defendant a right to interpose any defence which may exist at the time of the commencement of the action, on the ground of either a total want, or an entire or partial failure, of consideration in every case when an action is brought on a note, bond, bill, or other instrument in writing, for the payment of-money or property, or the performance of covenants, or conditions by the obligee or payee. This statutory defence is an equitable one, and intended principally to prevent a multiplicity of actions, and, when confined to defences which exist at the time of the commencement of the action, will tend to further the ends of justice ; but if applied in a loose, crude manner, to change the terms of contracts, or vary the stipulations of parties, principles established by the wisdom of centuries will be overthrown, and in the construction of contracts, we will be once more cast afloat on a sea of uncertainties. It is said the demurrer goes back to the declaration, and that it is defective in not showing that all the plaintiffs were, at the” time of bringing the action, residents of Henderson county, as the defendant was a resident of a different county. After the defendant appeared and pleaded, it was too late to make this objection.

The court erred in overruling the demurrer to the second, third, fourth, fifth and sixth pleas. The judgment below is therefore reversed, at the costs of the appellee, and a repleader ordered.

Judgment reversed.