Case ID: serg-rawl_11/html/0238-01.html
Source: Caselaw Access Project
Author: {"author": "Gibson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[Lancaster,
    June 7, 1824.]
    HUBER against BURKE.
    IN ERROR.
    in an action of debt for the penalty in articles of agreement, the plaintiff may recover damages for a breach, of the contract; and it is error to instruct the jury, that he must recover the whole of the purchase money or nothing.
    The vendee of land by articles of agreement, provided he has performed all the covenants which he has agreed to perform, may recover the purchase money in an action of debt for the penalty in the articles, although the contract has not been in part executed by the delivery of possession to the vendee; after which, the vendee is entitled to the land.
    Such an action is like a bill in equity, and the defendant may, under the plea of payment, give in evidence évery circumstance which would influence a Chancellor, on a' bill for specific performance.
    The penalty is merely a security for damages for a breach of contract; and the verdict is to be taken in debt for the whole penalty; but the sum actually to be recovered, is to be assessed as damages, on payment of which, the judgment for the penalty is to be released.
    The vendor, if he seeks to recover the purchase money, should count specifically for it, on the covenant to pay; setting out the covenant, performance on his part, and failure on the part of the vendee, and concluding in the usual form.
    But he is not entitled to recover the whole purchase money, where there are incumbrances not removed, when suit is brought. He must be m a condition to tender a good title, before the commencement of the suit, notwithstanding the vendee has refused to accept a deed.
    If the vendor, after the execution of the articles, mortgage the premises; it is so far an acquiescence in the determination of the vendee to rescind the contract, as to preclude him from demanding specific execution of it; though he may, perhaps, be entitled to damages x'or the loss of the bargain.
    On a writ pf error to the District Court for the city and county of Lancaster, the case appeared to be thus:
    The defendant in error, Peter Burke, declared m debt for the penalty of articles of agreement, éntered into between himself and John Huber, the plaintiff in error, on the 26th of February, 1817. By these articles Burke agreed, in consideration of the sum of 5,500 dollars, 3,500 dollars of which, were to be paid on the 1st of April next, ensuing the date of the articles, and the residue in one year from that day, to convey to Huber, on the 1st of April, 1817, a good title to the ten acres of land, situate in town of Millersburg, in Manor township, Lancaster county, on which a tavern and other buildings were erected, together with the stove in the bar room; the premises subject to the yearly ground rent of five shillings per acre. Burke reserved to himself the possession of the premises, until the day on which the deed was to be executed, when he covenanted to deliver peaceable possession to Huber. For the faithful performance of the covenants contained in the articles, the parties bound themselves in the penalty of 11000 dollars.
    The defendant pleaded payment and performance, with leave to give the special matters in evidence. The cause was tried on the 13th September, 1821.
    
      All the facts given in evidence on the trial, are embodied in the charge given by the court below to the jury, which was as follows:
    
      Charge. This is an action of debt to recover the first instalment upon articles of agreement, for the sale and conveyance of a tract of land. [His honour here read the articles of agreement.]
    The plaintiff has made out a good title in himself to the premises he covenanted to convey. He has proved the execution, and tender of a deed in due time, and an offer to deliver up the possession, all -which was refused by the defendant. It is in proof that the defendant, several weeks before the day on which the contract was to be executed, declared he would not comply with it; and on the day when the title was tendered to him, on the 1st of April, 1817, according to the terms of the articles, he immediately left the room, and said, “ I dont want your title or your property,” but assigned no reason for his conduct. The plaintiff has therefore done every thing which it was necesssary for him to do, to enable him to bring this action, and there is no difficulty in this part of the case.
    This being an action of debt for the recovery of the specific purchase money upon the contract, and not an action of covenant to recover mere damages for the breach of it, it is in the nature of a bill in equity to compel the specific execution of the agreement by the defendant, and if it be such a case, as under the circumstances, a court of chancery would decree the agreement to be completed, the plaintiff will recover his debt; but if there are circumstances of equity on the part of the defendant, which would excuse him from performance, or by reason of which chancery would not interfere to compel the execution of it, but would leave him to his remedy at law to recover mere damages, then the plaintiff can recover nothing in this suit, not even partial damages; the contract must be decreed entire or not at'all, and the plaintiff must fail.
    In England the remedy in this * case would properly be in a Court of Chancery. We have no such court in this state; but it has been long and well established, that equity is part of the law of Pennsylvania,- and lest there should be a failure of justice, our courts, blending the principles of equity with the dry rules of common law, with the aid of a jury, will do what a Court of Chancery would do; and .this practice is essential in many cases, to the due administration of justice.
    The defence now set up to a recovery in this case is this. That the plaintiff has covenanted to give a good title, which means a title free from all incumbrances; that he has not now a good title, and it is an executory contract.
    To support this defence they have proved:
    1st. That on the 24th April, 1815, one Kauffman obtained a judgment against Peter Burke, for 100 dollars, which does not appear to be satisfied.
    . 2d. On September 12th, the Bank of Pennsylvania obtained a judgment against Peler Burke, the plaintiff, for the sum of 468 dollars and 35 cents, which, though an incumbrance on the 1st April, 1817, was satisfied on the record on the 31st May, 1817.
    3d. On the 25th November■, 1816, the United States obtained a judgment against Peter Burke, the plaintiff, and others, for a penalty of 150 dollars, aild the real sum stated to be due is 37 dollars and 8 cents; a Ji.fa. issued on this, and personal property was levied on.
    These are all the judgments against Peter Burke, prior to the 1st of April, 1817, when the contract was to be carried into effect; and of these, only the judgment for the small sum of 100 dollars, and its interest appeal*, to be unsatisfied.
    They have cited the case of Jones v. Gardiner, 10 Johns. 266, in which it is said the title, means thelegal estate in fee, free and clear of all valid claims, liens and incumbrances whatsoever; and clearly the law is so, and that case was in a court of common law, in a state where they have also a Court of Chancery, and their rules of decision differ considerably from ours; but the defendant here would have had a right to have insisted that these incumbrances should be removed, and if refused he would not be compelled to have accepted the title, and the claim of the plaintiff for a specific execution, would have been put an end to. But no objection was made on that ground or any other, but there was an absolute refusal to complete the contract upon any terms, and a declaration before hand to that effect. If the objection had been made, it could have been removed immediately, or the judgments, being upon record, he might have insisted on their being discharged out of the purchase money, which was vastly more than the amount of all the incumbrances; besides, the second instalment of 2000 dollars remaining in his own hands. It is not uncommon for people possessed of real estate, but who are liable to judgments, to sell for the very purpose of disencumbering themselves from debt, and when they are willing that such incumbrances be paid in the first instance out of the purchase money, it would be a very unconcientious objection in the purchaser, to insist on the removal of them, before he pays, and thereby defeat the very object of the contract and sale, when he can suffer no disadvantage, and feel no inconvenience. It is a violation of the very spirit of the contract, and I do not think that any court of chancery would sanction such conduct, or support such an objection. It would be sufficient in that court if every objection could be removed at the time the contract is to be executed; and in many instances, even at the time of the decree, if a good title can be then made, they will execute the contract.
    It is further objected, that there is an incumbrance of an annual ground rent on this property. That is true, and it is so expressly stated in the contract, and the deed is to be made subject to that incumbrance.
    It is further objected, that the plaintiff has not shown that these payments havabeen annually made, and that there are no arrearages. No objection of the kind, appears by the evidence to have ever been made before the present trial. The defendant had an opportunity of inquiring into this fact, and as he has-not shown that there are any arrearages, we cannot presume, for him, that they have not regularly been paid. When a party raises objections to the execution of his contract, it lies upon him to show that such objections are well founded; and even if such arrearages should appear, there is a remedy for'that, also, in the power of the court.
    Another objection is, that by the agreement, the defendant was to have the stove in the bar-room, and that the plaintiff has not j>roved any tender of the stove. This scarcely deserves an answer; it is an appendage to the house, and if he had taken the possession of the house when it was offered to him, he would have received the stove in the house. It is not an article to be carried about in a cart or a wheel barrow, to be tendered.
    But anotherquestion of considerable importance is raised. Itis contended from what has been subsequently done, that the plaintiff cannot recover; that he has conveyed away his property, so that he cannot reclaim-it.
    If this be so, and the plaintiff cannot now make a title, he cannot recover in this action, however he might have been entitled to damages, in an action of a different nature.
    To support this ground of action they have proved,
    1st. A judgment, Hershey and Burke, (the plaintiff,) July 1st, 1S17, for 500 dollars. On this judgment a f. fa. issued, and personal property was levied on.
    2d. July 1st, 1817, Bank of Pennsylyvania and Burke, (the plaintiff,) judgment for 110 dollars,and 34 cents. A fi. fa. was issued on this judgment in 1819) but there is no evidence of what became of it.
    3d. In July, 1821, there are two judgments,' Sides-v. Burke, and Miller v. Burke, for 72 dollars and 25 cents, each, amounting together, to the sum of 145 dollars and 50 cents.
    4th. And on the 9th December, 1819, a mortgage of the premises to Ober and Kline, for the sum of 818 dollars and interest.
    Now with respect to such judgments as were entered since the 1st of April, 1817, and are now satisfied, no question can arise.
    If the defendant had complied with his contract on the 1st April, 1817, probably all these debts, if they even then existed, would have been discharged. Whether or not, no judgment for them could have affected the defendant. If the debts accrued subsequently, or judgments were entered subsequently, may it not justly be attributed to the conduct of the defendant, who refused to comply with his engagements? They did not exist at the time the deed ought to have been made; the defendant had tied up the plaintiff’s hands, and had deceived him. If the misfortunes of the plaintiff arise out of such conduct on the part of the defendant, is it right on an equitable defence, that he should set up his own misdeeds to protect himself, especially when.évery difficulty can be remedied by the payment of what is justly due from himself? It is to be considered, therefore, whether the defendant himself has not thrown all these difficulties upon the plaintiff, by not complying with his contract. If they were beyond the controul of the plaintiff, and can all be removed on payment of the purchase money, due from the defendant, is it equitable that he should shelter himself, in consequence of matters which have accrued from his own default?
    But it is said he has conveyed away the real estate and cannot reclaim it, and that the mortgagees have a right to the possession. Butit is not so. For even admitting, as is contended, that a mortgagee might bring an ejectment, which I am not at this day inclined to admit, as against the mortgage, (but it seems no part of this question,) yet such ejectment could be immediately defeated, upon payment of the debt, interest and costs. And so with respect to a sci-re facias on the mortgage. It is in substance no more than a judgment, and is not a parting with the absolute title; no reconveyance is ever required, but an entry of satisfaction on the margin of the record, puts an end to it. The mortgagor, to all intents and purposes, has the title, it is subject to subsequent judgments against him, to the dower of his wife, in this country, and to all other incidents of legal estates; and he is not thereby deprived of the power, by acts, to make a good title; he has not parted with it, so as to destroy his power over it. .
    I think, therefore, that upon equitable principles, the plaintiff ought to recover, and be compelled to complete his contract. The jury will, however, judge for themselves, and give such verdict as they think propel’.
    If the verdict shall be for the plaintiff, it will still be within the power of the court; they can direct the money to be brought into court, and the court will take care that all the judgments, liens, and incumbrances, even the arrears of ground rent, if any, shall be paid and discharged, at the expense of the plaintiff; so that the defendant can sustain no possible injury or disadvantage from them. I think this, in such cases, to be within the power of the court.
    The plaintiff has pressed for interest on the first instalment. Unless there are special circumstance to prevent it, in England the Chancellor would decree the purchase money to be paid with interest, and would direct an account to be taken of the rents and profits, to set off against the interest. We cannot direct such an account here; but it is in the breast of the jury how they will consider it; and if in their judgment, the rents and profits are equal to the interest, which in the absence of all proof is to be presumed, if the purchase was for a fair and reasonable price, they will find the principal sum without any interest.
    The jury found a verdict for the plaintiff, for 3500 dollars debt, with six cents damages and six cents costs.
    The counsel for the defendant, haying excepted to the charge of the court, removed the record by writ of error to this court, where eight specific errors were asssigned.
    1. The court erred in saying, that the plaintiff ought to recover and be compelled to complete his contract; whereas they should have instructed the jury, that under the evidence given in this cause, the verdict should be rendered in favour of the defendant. -
    2. The court also erred in that part of their charge containing the answer to the defendant’s defence, that the judgments or other incumbrances existing against Burke, the vendor, at the time of the tender of the deed, and before and after, were a bar to a recovery in this suit.
    3. The court erred in their- answer to the defence made, that Burke had conveyed away his .property subsequently to the tender of the deed, by mortgage to Ober and Kline, and that at the time of trial, the property was unincumbered in the hands' of Burke.
    
    
      4. There is error in stating, that this is a case in which the remedy would, in England, properly be in a court of chancery.
    5. There is error in that part of the charge which relates to the defence, that there were arrearages of ground rent on-the property sold.
    6. The court, erred also in saying, that the jury had a rightto judge, for themselves, a'nd give such verdict as they might think propel-.
    7. The cause was tried by talesmen, and no tales was prayed either by the plaintiff or the defendant. -
    8. There is error in the verdict of the jury, and rendition of judgment.
    The case was argued by Rogers and Buchanan, for the plaintiff in error,
    who cited Jones v. Gardner, 10 Johns. 266. 1 Fonb. 383. 2 Rowell, on Cont. 19. Ch. Ca. 302. 1 Ves. 87. Salle,112. 1 Cassell v. Cooke, 8 Serg. 4- Rawle, 268. 1 Binn. 15S. 3 Dali. 506. 1 Johns. 185. 3 Johns. Ca. 145. 1 Caines,’ll 1 Serg. 8? Rawle, 202. 1 Madd. Ch. 331, 341. Sugd. 162, 163, 180, 312. 1 P. Wms. 282. 1 Saund. 58. Seho. N. P. 518. 3 Chitty, on PI. 298.
    
      Fraser and Hopkins, contra,
    cited 4 Dali. 439. Jordan V. Cooper, 3 Serg. Rawle, 579, 584. 5 Mass. Rep. 67. 1 Madd. Ch. 332. Decamp v. Feay, 5 Serg. #• Rawle, 323. Bellas v. Hays, Id. 427. 2 Johns. 614. 5 Mass. Rep. 448.
    Tilghman, C. J. was’ absent during the argument and gave no opinion.
   The opinion of the court was delivered by

Gibson, J.

In this cause there are two points on which the matters in controvery so much depend, that I shall confine myself to the consideration of them. The plaintiff declared in debt for the penalty in the articles of agreement; and the jury were directed, that as this was not an action, of damages for a. breach of the contract, but an action of debt in the nature of a bill for specific performance, to recover the purchase money, the contract was to be carried into complete execution, by a recovery of the purchase money, or not at all: and that on the facts in evidence, the plaintiff was entitled to have the contract executed in specie.

The vendor, provided he has performed all the covenants which it was incumbent on him to perform, may, undoubtedly recover the purchase money, although the contract may not have been in part executed by delivery of the possession; after which, the vendee will be entitled to the land. Of this, where bond has been given for the purchase money, there cannot be a question; and where an action specifically for the purchase money, majr be brought on the articles, I do not see how the same result can be prevented. An action for the purchase money, produces the same fruit as a bill in equity; and we are compelled to resort to it, as a means of carrying the contract into full effect; permitting the defendant, under the plea of payment, to give in evidence every circumstance which would influence a Chancellor on a bill for specific performance. An action of covenant is essentially an action to recover damages for having disaffirmed the contract, and an election of that particular remedy, is a direct waiver of the plaintiff’s right to a specific performance, as well as an implied admission, that the defendant might disaffirm it on payment of a compensation in damages. The question then is simply, whether an action of debt for the penalty in articles of agreement, is an action for the purchase money. It is in form an action for a sum certain, undoubtedly: but what is the nature of such a penalty? It is not like a bond, conditioned for the payment of a debt, but for the performance of covenants, whether to pay money, or do any other actor thing; and it extends to all the covenants entered into by either party, being the security equally of both. In an action on it, the verdict is in debt for the whole penalty, but the sum actually to be recovered, is assessed as damages, on payment of which, the judgment for the penalty is to be released: and where judgment goes by default, no execution issues till a writ of inquiry of damages is executed. The vendee also, may have an action of debt on it, in which he may recover damages; but when he calls for specific performance of the contract, he does so by an action of ejectment for the land. It is then a security for damages for a breach of the contract, and for nothing else. So far did this notion prevail at one time, that in an old case, Bagg v. Foster, 1 Ch Ca. 188, where a husband on his marriage, entered into a bond for the settlement of certain lands on himself and his wife, and their heirs, the court inclined to think, the party had rested on the penalty, and refused, after a lapse of years, to decree a specific performance; and an application of someting like the same principle, is to be found in Collins v. Plummer, 1 P. Wins. 104. But at this day, the law undoubtedly is, that where specific performance is the principal object of the agreement, the penalty is only a collateral security, of which, in equity, neither can take advantage by paying the penalty, and refusing to perform the agreement. But though the penalty be no bar to a decree for specific performance, it cannot strengthen the right of either party to a decree, nor be used as a means to obtain it. It is not disputed, that in debt for the penalty, the vendor may go for damages only, and retain the land; in which case, the breach must be assigned exactly in the same way as where lie would go for the purchase money, if that were permitted him; but after recovery, it would be difficult to say, what he went for, or, where less than the whole purchase money was recovered, whether the purchaser should be entitled to the land, as the sum found might have been given either as damages for the breach of the contract, or as pur® chase money reduced to that sum by defalcation or payment: But to permit him to go either for damages or the purchase money, according to the case he might be able to make out, would involve the absurdity of an arbitrary discretion in the jury, to hold the vendee to the bargain, or absolve him from it, on payment of a compensation in damages; which it was determined in Witman v. Ely, 4 Serg. & Rawle, 266, they cannot exercise. The vendor ought, therefore, to count specifically for the purchase money as such. That may be done in an action of debt, directly on the covenant to pay, by setting out the covenant, performance on his own part, and failure on the part of the vendee; and concluding in the usual form, that by reason of the premises, action hath accrued to the plaintiff, to have and demand of the defendant, &c. Debt on covenant may be supported at the common law; and here, where we have no Court of Chancery, we ought to support it liberally. I know of no difficulty in the way of such an action, except that, perhaps, where the purchase money is payable by instalments, it might possibly admit of a doubt, whether the vendor, after having recovered one instalment, could bring a second action on the covenant; or whether he would have to wait till all the instalments should be due; a matter about which I intimate no opinion. To give effect to the principles of equity, in actions strictly according to common law forms, is no easy task; and technical rules, growing out of those forms, will often necessarily have to yield to the attainment of justice, which may require even new forms of action to be invented; as was done in Lang v. Keppele, 1 Binn. 123. Where the contract rests on the articles alone, and the vendee has not taken possession, I know of no way in which he can be held to the bargain, but by an action of debt on his covenant to pay. Where, however, the possession has been delivered, it is usual to recover the purchase money in an action of covenant, or of debt for the penalty; and to this I see no objection, for the damages can be nothing else than the amount of the purchase money due. There was error then in directing the jury, that nothing less than the purchase money could be given, when an action in this form could be maintained, only for damages for breach of the contract.

But if the plaintiff had declared for the price of the laud, could he have recovered ? There were incumbrances, which were not removed when the suit was brought. Although this may have been no objection to the action, with a view to damages, as there was some evidence of the defendant having discharged the plaintiff beforehand from tendering a title, or rather of his having waived it, which when properly pleaded, is an excuse for the want of actual performance; yet where the action is for the purchase money, the plaintiff should leave nothing undone, the omission of which, might be construed into an acquiescence in the defendant’s determination not to execute the contract in specie : and it would be inequitable, that the vendee should pay, without having received any title at all, or that the vendor should recover without having done all he could to make a good 'one. Chancery will not execute the contract before the vendee has had an opportunity to receive all he bargained for. The vendor should, therefore, complete the removal of incumbrances, so that he may be in a condition to tender a title, at least before suit is brought, notwithstanding he may have been discharged by the vendee. This I admit, is not the rule in Chancery ; but that court having a discretionary power over the costs, does complete justicé, by taking care, that the purchaser have a title before a decree is pronounced against him; and therefore, the contract will be enforced, where the vendor has a title, at any time before the decree. Indeed, where there has been a reference to a master, and a report in favour of the title, it is frequently referred back, with a view to the costs, to inquire whether a title could have been made at the filing of the bill. In this respect, however, we are controlled by the common law form of the action, costs being in all cases an incident of the judgment; and the vendor must, therefore, show that he was entitled to call for specific performance when the suit was brought. It is said, the object of the sdle may have been to raise- money to pay off these very incumbrances, and it would be hard to permit the. vendee to object, while he retains the means by which alone the ground of his objection can bo removed. But if such were the object, it should be provided for in the contract; for I can see no equity arising to a vendor, who covenants positively to make a good title, and cannot, because the vendee refuses, in the first instance, to receive a bad title. Where the contract has been in part executed by a delivery of the possession, this may be no bar to a demand for the purchase money, beyond what may be found necessary to be retained for the purpose of extinguishing incumbrances; but that presents a very different question, from that which arises where a vendee., who has already entered on the execution of the contract, objects to being held to the bargain, without having received what he bargained for.

But there is another objection, which would be decisive. The vendor, after the time when he was to have made the title, mortgaged the premises for a sum of money. By thus treating the property as his own, he acquiesced in the determination of the vendor to rescind the contract, so far as to preclude him from demanding the specific execution of it; and elected to rest on the covenant, or penalty, for damages. The act of disaffirmance of his right to call for specific performance, made the property his own. I see no difference, in this respect, between an absolute and a conditional sale; eaeh is equally a disposition of the property inconsistent with its being in equity the property of the vendee. Certainly after bill filed, chancery would restrain the vendor from mortgaging as readily as from selling. The hardship of the vendor being unable to raise money by any other means, is one with which the vendee has nothing to do. Backwardness, or trifling, is a good reason not to interfere in behalf of a party who has practiced it; and I can see no equity arising to a vendor, who instead of putting himself in a condition to make a title before bringing the suit voluntarily incumbers the property still further, and treats it in a manner inconsistent with his claim to hold the vendee to the contract. On all these grounds, therefore, I am of opinion there is error in this record. Whether the plaintiff may not still be able to recover damages in this suit for the loss of the bargain, will depend on the ease he may be able to lay before a jury: at present, all I say is, that damages, and not the price of the land, are the legitimate fruit of an action in this form.

Judgment reversed, and a venire de novo awarded.