Case Name: Smallwood v. Mercer & Hansborough
Court: Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1794-10
Citations: 1 Wash. 290
Docket Number: 
Parties: Smallwood v. Mercer & Hansborough.
Judges: 
Reporter: Virginia Reports
Volume: 1
Pages: 521–524

Head Matter:
Smallwood v. Mercer & Hansborough.
October Term, 1794.
Sale of Land upon Condition--Failure to Perform Condition -Effect upon Purchaser with Notice.- — A. agrees by an arbitration bond, to sell bis right to land in possession of 13., if three persons, named m the condition, shall by a certain day make an award in favour of his (A.'s title,) and fix the price which 15. shall pay for it. No award was made. C. a purchaser of the land from B., with full notice of the above bond and agreement, cannot compel A. in Equity to make a conveyance, nor to submit those points to any other mode of adjustment.
This was an appeal from the High Court of Chancery, dismissing the bill of the appellant. The case was as follows. — Mercer being in possession of a tract of land, to a part of which Hansborough was entitled as heir to his mother, (and which had been sold to the father of Mercer, by the father of Hansborough, without the privy examination of the mother) proposed selling it to Smallwood, who hearing of the title of Hansborough, objected thereto. Mercer, to remove this obstacle, applied to Hans-borough, and a bond dated March 26th 1783, was entered into, with a condition, the material parts of which are as follows, viz: “whereas certain matters of controversy now depend, and subsist between the above named Mercer, and the above bound Hansborough, that is to say, a claim which the said Hansborough pretends to have to 133% acres of land, now in the possession of the said Mercer, and which the said Hansborough claims as heir at law to his mother Lettice, whom the said Mercer admits to be one of the daughters and *co-heiresses of Joseph Sumner deceased ; and also admits the said land to be the same, which the late John Mercer, father of the said Mercer, purchased of the father of the said Hansborough, as, and for, the "reversion of one third of 400 acres, called the dower of the widow of the said Joseph Sumner; also a claim the said Mercer has, or may have against the said Hansborough, as executor of his father, for the value of the said land, in case the same shall be adjudged to the said Hans-borough, — he the said Hansborough, hereby acknowledging assets in his hands sufficient to make satisfaction for the said 133% acres, and also acknowledging the said Mercer to have all the right of his father, under the deed from the said Hansborough, which several disputes the said Mercer and the said Hansborough have agreed to submit to the arbitration &c. of Joseph Jones, Alexander Rose and Andrew Buchanan, or any two of them, to be adjudged &c. and in manner following, viz: if they shall adjudge the said Hansborough to be entitled to said land, they shall award the said Mercer to pay the said Hansborough, the value thereof in money, upon receiving a conveyance of the said land from said Hansborough; and as to the dispute between the said Mercer and the said Hans-borough, as executor of his father, it is agreed, the same shall be adjusted as follows, viz; if the said arbitrators shall adjudge the estate of the said Hansborough liable Jo make good the value of the said land, they shall adjudge what value shall be paid, and may allow the said Hans-borough to retain such value in his hands, in full, towards the consideration they shall adjudge to be paid for the said lands. The condition is, if the said Hansborough shall in all things do and perform the award &c. which the said arbitrators shall make touching the premises, (provided the same be made in writing ready to be delivered on or before the 30th of June next) then &c. &c. To which was annexed the following memorandum, viz: “It is agreed, if the legatees of the said J. Hansborough, (the father) shall dissent from the claim of the said Mercer, against the said Hansborough, on the covenants in the deed of the said J. Hansborough being arbitrated, then the arbitrators shall be discharged from that part of the business before submitted to them. And it is agreed, the said Hans-borough shall enter an appearance that the suit of the said Mercer, in an action of covenant in the General Court, and allow the same to go on with all legal dispatch to a judgment, ’till when, said Hansborough agrees to wait with said Mercer, for whatever *the said arbitrators shall adjudge the said Mercer to pay for the said 1333^ acres, and then to discount therefrom what may be recovered in the action of covenant; and further, the said Hansborough agrees that he will make the said Mercer deeds for the said lands, immediately upon payment of the value to be awarded, or upon receipt of a bond for the same, with such security as the said Hans-borough shall agree.”
This bond being shewed by Mercer to Smallwood, the latter after consulting counsel was induced to make the purchase, and paid the consideration money agreed upon. The award was never made, on account of the refusal of one of the arbitrators to act, because he had previously given in his opinion to Hansborough with respect to his title. Mercer offered to concede the title to be in Hansborough, and to give him bond and security to pay as much per acre for the 133% acres, as he was to receive from Smallwood for the whole tract, which offer was refused. Hansborough brought an ejectment against Smallwood, upon which Smallwood exhibited this bill praying for an injunction and conveyance. Upon the institution of this suit, Mercer brought an action of covenant against Hansborough as executor to his father.
Marshall for the appellant.
This bond contains a positive agreement on the part of Hansborough to sell the land in question, and the agreement as to the sale, could not be dependent upon the award, the object of which was, merely to decide upon the title of Hansborough, to fix the price of the land, and the damages to be paid by Hansborough out of the assets of his father, for the breach of his contract, in not warranting the title of the land. The circumstances which attended the giving of that bond, prove incontestibly, that this was the intention and design of the bond. Hansborough knew.of Smallwood’s intention to purchase, and his objection on acr> count of Hansborough’s claim to the land. To remove this objection, he gave the bond, which was shewn to Smallwood, and it had the expected effect. A third person paying his money in consequence of this agreement, ought not to be affected by the fault either of Hansborough, or of Mercer, in failing to adjust those other matters of dispute, which only concerned themselves. The proviso, that the award should be made, and delivered within a stated time, does not alter the case, because it could only relate to the matters submitted, which were the price and damages, not the sale, which is positively stipulated for, whatever might be the event of those subjects of dispute. But further; Hansborough, by appointing a *referee, who he knew could not act, committed a fraud, and he will therefore be bound to submit to some other equitable mode of adjusting the price.
Campbell for the appellee.
If this court be called upon to decree a specific execution of an agreement, it must be done in the way agreed upon by the parties, and in no other. For otherwise, it would be to make, not to execute an agreement; and if, from any circumstance, it cannot be executed in that way, this court must leave the parties to their legal remedy. It is to be observed, that Smallwood, knowing of Hansborough’s title, can stand in no better situation than Mercer would, if he were plaintiff. This obligation is to be binding in the whole, or not at all. Now what does Hansborough bind himself to perform? T'he award of the arbitrators. That is, if they say, he hath a title, they are to decide upon the price which Hansborough shall take for the land. But upon what condition is Hans-borough bound to sell for that price? That the decision be made Within a limited time. If this condition be not performed, he is not bound at law, and upon what principle can he be bound in equity? He might, for the purpose of putting an end to litigation, and with a view of receiving the value of the land within a short period, be disposed to sell his right, which otherwise he would not have been induced to do, if kept in sus-pence beyond that time. But after that time is passed, — litigation still hanging over him, — the purchase money at this day unpaid, and he forced at length to assert his right in a court of law: — after so great a lapse of time, and after he has been compelled to incur all the trouble and expence, which he so anxiously wished to avoid;— can it be just or equitable, that he should be still bound to sell, tho’ he agreed to do so upon a condition only, which has not been performed? It is impossible. But what can this court do? They cannot appoint referees; for they may not be agreeable to the parties. And if the court could appoint them, still the award cannot now be made within the time fixed upon by the parties, and consequently, the prayer of the bill which is for a specific execution of that agreement, cannot be decreed. The result of the whole is, that this court must remain neuter between the parties, and leave them to the'law.
Marshall in reply.
I yet insist, that the agreement to sell is absolute. The business of the arbitrators is stated in the preamble to the condition, namely, to decide the right of Hansborough to the land, the price to be paid by Mercer, and Mercer’s *claim to damages. But the arbitrators are not to decide, whether Hansborough is to sell, or not. If they were, then I admit the full operation oí the proviso. But that is not submitted: the bond itself is compleat evidence of a prior agreement to sell; for in all bargains, it is usual for the vendor to agree to sell, before the price is spoken of. This previous point being settled, the consideration and terms follow next, and is either fixed by the stipulation of the parties, or left to depend upon other modes of ascertainment. I admit, that the court cannot appoint referees ; but if it be clear, that a sale was agreed upon and that the award which was t„ fix the price, has been prevented by accident or fraud, this court may compel a specific performance as to the sale, and direct a jury to settle the price. In the case of Ross and Anderson in this court, asimilar decree was made transfering this power from arbitrators to a jury. With greater reason ought it to be done in this case, where the party himself prevented the award by appointing an arbitrator, who he knew could not, or ought not to act, and knowing too, that Mercer’s view in obtaining the bond was to enable him to sell to another.
Sate of Land upon Condition — Failure to Perform Condition — Effect,—The principal case is cited and approved in Jones v. Hubbard, 6 Call 217; Jones v. Hubard, 6 Muni. 264; Dandridge v. Harris, 1 Wash. 326. See monographic note on “Specific Performance” appended to Hanna v. Wilson, 3 Gratt. 243; “Arbitration and Award” appended to Bassett v. Cunningham, 9 Gratt. 684.

Opinion:
The PRESIDENT
delivered the opinion of the court.
The question is, whether a Court of Equity, upon the agreement, and the facts stated, will compelí Hansborough to convey his land, upon receiving the value thereof, to be ascertained either by the price which Smallwood gave Mercer; by appointing new valuers, or by a jury. — It is to be premised, that Smallwood, is in no better, or worse situation than Mercer, since he purchased with notice of the written agreement, without any further information, or promise from Hansborough, who is not bound by any mistaken opinion formed of that agreement, either by Smallwood, or by his counsel. He seems to have considered as fixed, sundry events, then contingent; namely, that the arbitrators would decide the title, and, if in favor of Hans-borough, that they would ascertain the price to be paid for the land, and that Mercer would, in case that price was not discounted by his claim, pay the value, or give bond with satisfactory security for ihe same. If all these things had been done Hansborough would indeed have been com-pellible in equity to convey. But Smallwood never could conceive, that Hansborough was to convey his land at all events, without even knowing the price he was to receive for it, or without having any satisfactory assurance, that he should ever get any thing. Such a *conveyance I believe no Court of Equity ever compelled a defendant to make.
It was contended by Mr. Marshall, that the sale was not refered to arbitration, but was made by the parties themselves, and that the arbitrators were only to settle the value. It would seem a strange sale, in which such necessary ingredients, as price, and the vendor's right to sell, were in sus-pence. It would be more properly described, by calling it an inchoate contract for a sale, provided the arbitrators determined in favor of the vendor's title, fixed the price, and that the other requisites were complied with, none of which were done, and consequently the contract never was compleated.
In cases of bonds to perform awards, there are two remedies, 1st, at law upon the bond, in which, a plea that the arbitrators made no award, would, if true, defeat the plaintiff's action. 2dly, If any act be awarded to be done, for which a compleat remedy cannot be had at law, such as to make a conveyance, a bill in equity for a specific performance of the award is common and proper. But how the Court can decree the specific performance of the condition of a bond to perform an award, when in fact no award has been or can be made, is not discernable. But the bond is relied upon, as containing an agreement to sell, which agreement is sought to be specifically executed. That agreement it has been shewn was only a treaty, never brought to perfection, for want of the award. And that this was the effect of the arbitrators refusing to act, seems to have been well understood, both by Mercer and Hansborough. The former makes new propositions which the other declines, and brings his ejectment, and Mercer brings his action of covenant, each pursuing his original remedy, as if no agreement had ever subsisted. It is true, if the agreement had been perfect, (since Smallwood purchased under it, and both'the defendants knew it,) and they had consented to dissolve it, it would have been a fraud upon the plaintiff, against which, a Court of Equity would have relieved. But'no such ingredient appears, and every thing depends upon the original agreement. That agreement never having been perfected, there is no foundation for the interposition of the Court of Equity, and therefore we affirm the decree.