Case Name: Rice vs. Rawlings
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1838-01-25
Citations: 1 Meigs 496
Docket Number: 
Parties: Rice vs. Rawlings.
Judges: 
Reporter: Tennessee Reports
Volume: 19
Pages: 496–502

Head Matter:
Rice vs. Rawlings.
CHANCERY. Agreement — specific execution — award. Statute of Frauds. Á verbal agreement to receive real estate in discharge of a debt, will not be taken out of the statute of frauds by a submission to referees of the question — at what price it should be received — though the referees fix the price in writing under seal, in the shape of an award.
SAME. Same. If a creditor* having executed a mortgage or deed of trust, of certain town lots to secure the payment of a debt, refuse to acknowledge the execution of the deed so as toadmititto registration, and thereby extract from the creditor an agreement to receive the lots in payment, and a submission to referees of the question whether the creditor should receive the lots in payment at a price to be fixed by them, and an award be made accordingly, such agreement and award will not be specifically executed in chancery, because of the moral constraint under which the party acted in making the agreementand submission, and the violation of good faith whereby they were obtained.
The pleadings in this cause consisted of a bill filed by John Rice in the chancery court at McMinnville, on the 28tb of April, 1834, and subsequently amended, against Daniel R. Rawlings and John Rogers, administrators of Alexander Ferguson, and tbeir answers thereto; and of a cross bill filed by them against Rice at December Term, 1834, and his answer to it.
Rawlings and Rogers, as administrators of Ferguson, bad a demand against' Rice, to secure which he had given' them an imperfectly executed mortgage of certain lots in Jasper. He refused to perfect this security, however, so that it might be registered, and protect' the lots against his other debts, but proposed to transfer them in fee to the administrators in satisfaction of their demand. They assented to this proposal, but disagreeing with him as to the value of the lots, they referred it to two persons to value them, and empowered them, if they disagreed, to choose an umpire. The valuation was made, and a memorandum of it handed to Rice., but the administrators believing it excessive, declined taking the lots.
About a month after the valuation, Rice drew up a paper,— recited in the opinion of the court, — in the form of an award, which he procured the valuers to sign. He then tendered the administrators a deed for the lots, which they refused to accept, — whereupon he filed this bill to have the paper specifically executed, as an award, adjudging that the administrator should receive the Tots in payment of the debt.
The administrator answered, insisting that the paper in question was not, even in form, an award, as supposed in the bill; but if it was so in form, it was not in substance, because the persons by whom it purported to have been made, had not been authorised to adjudge the question, whether the lots should be accepted in payment, but only to value them.
And in their cross bill they prayed that the court would set up the imperfect mortgage and foreclose it.
The testimony of one of the valuers, who heard the conversation between Rawlings and Rice, which led to the valuation, was, that “Rawlings requested Rice to rectify the deed.. Rice said no, — he would convey the property to them to pay the debt. Rawlings said he would take the property at its value. Rice said he would choose one man, and Rawlings might another, and they should choose another if they did not agree." This was assented to, and Rice named the witness, and Rawlings another person, who proceeded to make the valuation as before stated.
The valuation was made on the 25th of June, 1833, at which time the' principal and interest of the demand of the administrators against Rice, was $140? 43 cents. The lots were valued at $1500,- — so that if the administrators should be compelled to take the lots, they would have to pay Rice $92 52 cents.
January 28.
His Honor, Chancellor Beamlitt, who heard the cause,: decreed that the notes held by the administrators against Rice should be delivered up to be cancelled; that they should pay Rice said sum of 92 dollars 52 cents, with interest from the 25th of June, 1833; that all the right and' title of Rice in the-lots be divested out of him, and vested in the administrators; that the crossbill be dismissed with costs, and that the parties each pay one half of the costs, &c. The administrators appealed in error.
Jas. Campbell, and Laughlin, for the complainant,
said the only question in-the cause is, as to the statute of frauds, which is relied upon by defendants. It is believed that this statute can have' no application. The award of the referees who valued the lots to defendants, was in writing; and the case is precisely similar in principle to that of the auctioneer, who makes out his list of sales under a verbal authority. The referees were the agents of the parties, and the award sets forth distinctly the agreement. But in addition to this — all that the Statute requires to be done by writing, has been done. Defendants agree to take the lots according to the award of referees. They make their award, and complainants thereupon executes the conveyance.
Meigs, for the appellants,
said that the decree was manifestly erroneous. The bill was founded upon the idea that the question — whether the administrators should take the lots in satisfaction of their notes, at a price to be fixed by refereesf was a matter of controversy between Rice and them, which,, having been submitted to a domestic tribunal, decided by it, and the decision reduced to writing, was res judicata, and a writing within the statute of frauds, and consequently ought to be carried into execution by this court. But he said that the question — “whether they should take the lots in discharge of the notes?” had not been a matter of dispute. The proposal to convey the lots in payment, was made by Rice, and accepted by Rawlings; but disagreeing as to the value, of the lots, that question was referred, — nothing more or less. If the referees had assumed, as in fact they had not, to award a conveyance of the lots and cancelling of the notes, that far their decision would have been corara non judice. The sole question was, whether a verbal agreement to accept land in payment of a debt was good under the statute of frauds, a question too plain to admit of argument. For it had only been feebly urged that the relation between these referees and the parties was the same as that between principal and agent, or that between the auctioneer and the proprietor, and purchaser of property sold under the hammer.
January 24, 25.

Opinion:
Turley J.,
delivered the opinion of the court.
John Rice, the complainant, was indebted to Alexander Ferguson, at the time of his death, in the sum of $1364. On the 11th day of September, 1828, he execcuted to the defendants, as Ferguson's administrators, a deed of trust on three lots in the town of Jasper, Marion county, Tennessee, conditioned, that if he paid said sum of money in three several annual instalments, viz. Dec. 28th, 1831, 1832 and 1833, they should reconvey to him the lots, and if not, that they might sell the same and make the money.
This deed was subscribed but by one witness, and Rice refused to acknowledge it in open court; so that it could not be registered.
The administrators becoming apprehensive that the debt might be lost for want of registration of the deed, and finding, after repeated attempts, that no satisfactory arrangement could be made, agreed to a proposal made by him, to take the lots absolutely in payment of the debt, at a fair valuation; but they, not being able to come to a mutual understanding, as to what that was, agreed that they would choose two persons to estimate it, with liberty for them to choose a third as umpire, provided they could not agree.
The two persons not agreeing, chose a third, and the three estimated the value oí the lots at $1500, when the proof shows that at the time they were worth not more, at the extent, than $ 1000. The defendants refused to receive a conveyance in fee, for the lots at the price assessed. This valuation was made on the 25th day of June, 1833; and on 26th day of July, the same year, the complainant, without the knowledge of the defendants, and in their absence, drew up a paper writing in the words following:
"We, the undersigned, being called upon by Daniel Rawl-ings, John Rodgers and John Rice, all of the county of Marion, state of Tennessee, for the purpose of valuing three town lots in the town of Jasper, containing one quarter of an acre each, known and distinguished in the plan of said town, by Nos. 84, 83, 75, against three notes of hand given by said Rice to said Rawlings and Rogers, administrators of the estate of Alexander Ferguson, deceased, amounting to upwards of $1300, and to better secure the payment'of said notes to said administrators as aforesaid, said Rice executed to them a deed of trust on said lots as above specified, bearing equal date with said notes, and to consummate and pay off said notes, agreeable to an understanding from each party, said notes, together with the deed of trust, was submitted to us on the 25th day of June, 1833, by said Rawlings and Rogers, and eacfi party agreeing that our valuation should be final and binding on them, in consideration of said Rice reserving his bark mill and loose plank to himself, and the possession of the premises, until the 25th ofDecember next, did then proceed and value said property to fifteen hundred dollars, on said 25th day of June, 1833."
This paper writing was signed and sealed by the persons who made the valuation on the day it was drawn up by the complainants, and it is how sought to be specifically executed as an arbitrament of the rights of the contending parties, by a decree compelling the defendants to receive the lots at the valuation of $1500..
If this were an arbitrament which could be specifically executed by this court, we would refuse to do so, because the complainant, by a violation of good faith in refusing to acknowledge the deed of trust, constrained the defendants, by a kind of moral duress, to agree to receive the property at a fair valuation in discharge of so much of the debt as it might pay, for fear that for want of registration the security to the deed of trust might be lost.
The specific execution of contracts are decreed at the sound discretion of the court, and a party to be entitled to it, must come in with clean hands; this, for the above reason, the complainant does not.
2. But this is no arbitrament of conflicting rights between contending parties, by which debts can be paid and property passed.
The defendants had agreed that they would receive the lots at their value, and not being able to agree with complainant as to what that was, chose to submit the estimate to persons indifferently chosen by them, nothing more; and this is all that "was done by them. They do not award, indeed they had no authority to do so, that the defendant should take the lots at $1500, and that the complainants should be satisfied, and the surplus paid to him. The agreement to receive the lots at value was in fieri and not executed. Then there was the locus penitenticc; and upon no principle can the defendants be compelled to perform it.
3. And if this were an arbitrament by which the parties would ordinarily be bound, yet still it would be inoperative in this case; because, by the act of 1801, cb. 25, commonly called the Statute of Frauds and Perjuries, it is enacted "that no action shall be brought upon any contract for the sale of lands, tenements or hereditaments, or the making any lease therefor for a longer term than one year, unless some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith."
That there is no note or memorandum of the agreement to receive the lots in part payment of the debt due by complainant, is certainly true; but it is contended that the person chosen to estimate the value of the lots were the agents of both the contending parties, and the parol memorandum made by them at the time is to be considered as such. If they were the agents of the parties, their agency was special, being limited to the assessment of the value of the lots, and they, therefore, had no power to make a contract, or to bind the parties by any memorandum of one previously made. In this respect they occupy very different grounds from an auctioneer or agent to sell, inasmuch as they possess the power to con tract for and bind their principal: provided they do not exceed their authority, and comply with the requisites and forms of law.
We are, therefore, of the opinion, that there is error in the decree of the Chancellor, and reverse it, and dismiss the bill.