Case Name: JOSEPH WEISMAN against PENELOPE SMITH AND OTHERS
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1860-12
Citations: 6 Jones Eq. 124
Docket Number: 
Parties: JOSEPH WEISMAN against PENELOPE SMITH AND OTHERS.
Judges: 
Reporter: North Carolina Reports
Volume: 59
Pages: 124–132

Head Matter:
JOSEPH WEISMAN against PENELOPE SMITH AND OTHERS.
Whether a court of equity would interfere to compel a specific performance of a contract between two joint owners of land that neither should sell without first giving the other the refusal of it. Quere ?
A sale of a part of the interest of one, by the consent of both of two joint owners of land, as to which there was a right of pre-emption, without any provision as to its future exercise, justifies the inference that such right was intended to be abandoned.
On the death of one of two joint, owners of land, between whom the right of pre-emption existed, it was held that such nght cannot be enforced specifically against his devisees.
Where the defendant has an distinct equity, he must set it up by a cross-bill or by an original bill; but he cannot have the benefit of it by an answer.
After the death of one of the members of a copartnership, the statute of limitations begins to run in favor of his personal representative against a claim to have an account of profits received by him.
Cause removed from the Court of Equity of Wake county.
The plaintiff, Weisman, and Bichard Smith, deceased, on 21st of January, 1843, entered into an agreement in writing, to purchase and work, in copartnership, black lead or plumbago mines in the county of Wake. Smith, by said agreement, was to advance the requisite funds to purchase the lands containing the mineral, to an amount not exceeding $10,000, and as soon as the lands jvere purchased, Smith was to convey one half thereof to Weisman in fee, and Weisman was to pay Smith $3,500 at the expiration of five years without interest, for his moiety, for which the plaintiff pledged his interest; and should the purchase of the necessary lands exceed $10,000, the excess should be a charge upon the profits of the concern. As soon as the purchases were made, the parties were to commence the business of raising, preparing for market, and selling the mineral under the name and style of “ Smith and Weisman,” and the plaintiff was to lend his constant attention to the business, personally. The covenant concludes thus, “ And it is further covenanted as follows, to wit, that if either party shall, at any time, wish to withdraw from the said concern, he shall not be at liberty to sell or convey his share or moiety, or any part or portion thereof to any other person, before he shall have given to his copartner at least twelve months notice thereof, and to whom the refusal to purchase shall always be given within that time. And the parties do severally bind themselves, their heirs, executors, administrators or assigns, to the strict performance of this last article.”
Smith, in pursuance of this contract, bought a large quantity of land lying mostly in separate and disconnected parcels for which he took deeds in fee simple to himself, for which he paid an excess over ten thousand dollars of about $6000, and the bill charges that he cut fife wood and received rents from the said land, up to the time of his death, in 1852, and after-wards, his devisees, the defendants, Penelope and Mary Ann5i did the same, until they sold the whole of their interest in the premises, in April, 1854. The plaintiff also charges that the said Smith obtained large quantities of the mineral, plumbago or black lead, which he sold in the northern markets, and for which he received the money, at high priees, but did not account with the plaintiff for any part of it.
In October, 1849, Weisman, with the consent of Smith, agreed to sell to one James Hepburn, one half of his interest in the said mines, to wit, one fourth part thereof, at the sum $10,000, and on receiving the sum of $3,500 in cash, and $6,500 in a note payable to Weisman, and endorsed by him to Smith, he, Smith, made to Weisman and Hepburn, a deed for one half of all the several tracts of land that had been purchased by him for the purposes of mining as stated, except two small tracts hereafter referred to, and took from them a mortgage of their interest to secure the said sum of §6.500. This latter sum, Smith claimed for advancements made by him, over and above the sum of §10.000 which he was bound by the contract to invest. This sum of §6.500 has since been paid by Hepburn to the assignees of Smith.
In the month of April, 1854, James Hepburn sold his interest in these mining lands to William H. Winder, of the city of Philadelphia, and subsequently, to wit, on 20th of April, 1854, Mrs. Penelope Smith and Miss Mary Ann Smith, the devisees of the said Richard Smith, sold their interest, to wit, one half of the said land to the said William II. Winder, and he took a deed in fee, for the same. Winder and others, obtained a charter from the Governor of the State in 1854-5, for an incorporated company, called the Herron Mining Company, and the lands and mines were worked afterwards by that company. The bill alledges that previously to the sale to Winder, the plaintiff proposed to Mrs. Smith and her daughter, to take their share of the lands and mines according to the provisions of the covenant, and offered them a full price for them, but they refused-to let them have them ; that he has made offers to Winder, and to the Herron Mining. Company to pay them what they gave for the premises, and take the whole property, but they have refused to comply With this request.
The bill was filed on 24th of September, 1857, and insists that the plaintiff is entitled, according to the terms of the contract of 1843, to have his election to take the whole of the lands, &c., purchased from the Smiths by Winder, and sold to the corporation at the prico,the latter gave for them; and he now elects, and prays the Court to decree him a conveyance of the premises by the said Herron Mining Company; also, an account from the executors of R. Smith, of his share of the rents and profits derived from the property by him in his life-time, and an account- of the same from Mrs. Smith and her daughter, while they had and used them; also, from Winder and the Herron Mining Company, since they have come into possession.
The answers of the several defendants were filed, but it is not necessary to notice more of their contents, than that they insist on the statute of limitations in bar of the accounts asked for, all the time pleading three years before the filing of the plaintiff’s bill. Also, Mrs. Smith and her daughter say that at the time of the sale to Hepburn, it was expressly agreed that the mill and mill-site should remain the property of Smith exclusively, and should be excepted from the conveyance by him to Weisman, and Hepburn, and that by the agreement of all parties, an instrument of writing was drawn up to that effect, which the plaintiff promised to sign, but that he suddenly left the city of Raleigh and returned to Philadelphia, and that another portion of four acres was td be exempted for a church.
Graham and G. W. Haywood, for the plaintiff.
Mason and B. F. Moore, for defendant Winder.
Miller, for the Smiths.

Opinion:
PeaesoN, C. J.
1. The plaintiff is not entitled to a specific performance of that part of the agreement executed by him and Richard Smith, on 21st of January, 1843, in which it is stipulated that if either party should wish to sell, he shall give the other " the refusal," or what was aptly called, on the the argument, " the right of pre-emption."
We are inclined to the opinion, that a court of equity would not have interfered to compel a specific performance between the original parties. Such stipulations are against public policy, and operate in restraint of alienation; for which reason, they are not favorites, either in courts of law or courts of equity. At law, an understanding of this nature is not treated as a grant of an easement or privilege, or as a condition, so as to be attached to the land, in respect to which it is made,' but merely as a collateral personal covenant, for a breach of which, the party may be entitled to an action for damages; Blownt v. Harvey, 6 Jones' Rep. 186; Keppel v. Bailey, 2 Mylne and Keene, 577, where it is said, £t incidents of a now el kind cannot be attached to property at the fancy or caprice of any owner," because "it is clearly inconvenient to the science of the law, that such a latitude should be given " great detriment would arise, and much confusion of rights, if parties were allowed to invent new modes of holding and enjoying real property, and to impress on their lands a peculiar character, which would follow them into all hands, however remote."
Considerations of this kind apply as forcibly in equity as at law; consequently, the Court should not treat such agreements as creating a trust, binding the parties and privies to a specific performance, but should leave the party aggrieved by breach thereof, to his remedy at law. If one takes land in fee simple, and covenants not to alien, a court of equity will not interfere by injunction to prevent him from doing so, but will leave the party to his remedy at law. This is clear. The covenant under consideration is, in effect, a modified agreement not to alien, and falls under the like reason.
We are also inclined to the opinion, that the effect of the sale by Weisman to ITepburn, with the concurrence of Smith, of one half of his interest in the lands, and of the deed executed by Smith to Weisman and Hepburn, vesting in them, as tenants in common, the legal right to one undivided moiety of the lands, made such a change in the relation of the parties, as to annul and supercede the stipulation which had been made between Weisman and Smith, in respect to the right of pre-emption. It was based on the footing of the copartnership, and was an emanation of the, idea entertained by the parties of a "grand monopoly" in respect to the mines, which suggested that if one of the parties should ever wish " to withdraw from the said concern," it was highly probable that the other party would desire to become the owner of the whole, and the stipulation was made to enable him to possess himself of the monopoly. The firm, which was known under the name and style of "Smith and Weisman," was dissolved by the transactions above referred to, and it is fair to infer that the- idea of a monopoly was abandoned and passed away when the firm ceased to exist; for no allusion is made to this stipulation in Smith's deed, and Hepburn is not required to become a party to it, although he acquired one-fourth of the land as a tenant, in common. All mutuality was in this way destroyed, and the fulfilment of the stipulation, was, in fact, rendered impracticable. Was Weisman, owning one-fourth, entitled to a pre-emption right in respect to the whole of Smith's half? Or only to one-half of that half? Did Weis-man communicate to Hepburn an interest in the pre-emption, so as to give him the right as to one-fourth, both in respect to Smith and Weisman? Was Smith bound to offer the refusal to Weisman alone ? • Or to Weisman and Hepburn jointly? Orto them severally, each one-fourth? And,per contra, had Smith a pre-emption right as against Weisman alone, or Weisman and Hepburn jointly? Or the two severally ? The parties have not enabled the Court to answer these questions. The absence of any provision for this new state of things raises a presumption that the stipulation in question was treated and considered by all parties as being defunct.
We are of opinion, that upon the death of Mr. Smith, the stipulation did not follow the land and bind his de^sees in respect to it, so as to entitle the plaintiff to enforce it against them or their assignees. It could only have this effect by giving to it the character of a trust. We can conceive of no ground to clothe it with this character. On the contrary, the considerations above suggested, tend to show that the Court would not allow it to be so treated, except as between the original parties, even if an intention to make it a trust, had been expressed by the terms of the agreement.
The clause, whereby the parties "bind themselves, their heirs, executors, administrators and assigns, to the strict observance of this article," has no further effect than the same words added to a bond for the payment of money. It may be that the plaintiff can maintain an action at law against the personal representatives of Smith or his real representatives— that is, his devisees, for breach of this covenant, but there is no ground on which he can treat a purchaser as holding in trust for him; because no trust was created in his favor by the original agreement.
2. The plaintiff is entitled to a declaration in the decree, that he owns one-fourth of the legal and equitable estate in all the lands set out in the deed executed by Smith to Weis-man and Hepburn, 1st of February, 1850, free from an in-cumbrance or lien, by reason of the mortgage executed by himself and Hepburn to Smith, and to a further declaration that the mortgage debt has been satisfied, and to a decree for a reconveyance. This equity was yielded by the defendants on the argument, except as to four acres of land which, it is alleged are given to the church, and four acres on which the mill is situated. In respect to which they allege a cross equity to have a specific performance of an agreement to convey the same to Smith, executed by Weisman and Hepburn.— Whether the defendants will be able to establish the cross equity, or whether it can be met by the plaintiff on the ground that it was obtained without consideration,, and by the undue exercise of the influence which Smith held over them by reason of his being a creditor, and having them in h-is power, or will,%t all events, be allowed only to the extent of giving a lien on the mill as a security for the amount expended by Smith in the erection of the mill, are questions into which we will not now enter, because they are not presented in a proper manner by the pleadings. Where the defendant has an equity, he must set it up by a cross bill. This is a well settled rule of the court. The decree, however, in this case will be so framed as to be without prej udice to this equity of the defendants, so as to enable them, if so advised, to seek to have it set up by an original bill, when the matter can be fully presented without being attended by the complication and confusion that a cross bill filed in this case would necessarily have produced, considering the very voluminous pleadings and exhibits relevant to the several equities which the plaintiff seeks to enforce.
3. The plaintiff's right to an account against the personal representatives of Smith, is barred by the statute of limita tions. It is true, that as between copartners and tenants in common, the statute of limitations does not run, until, as Henderson, C. J. expresses it in Wagstaff v. Smith, 2 Dev. Eq. 264, " there is a cesser of the privity or connection from which the accountability arises." In that case, and in Northcott v. Casper, 6 Ired. Eq. 303, the relation of the parties was not changed, but in our case, on the death of Smith, there was a change in the relation of the parties. Smiths of course, could no longer be a copartner, or a tenant in common, and, consequently, an action accrued for or against his personal representatives to have an account of the profits received, which action is barred by the statute; for, although his wife and daughter acquired his estate, as devisees, the estate passed to them as assignees, and the relation, which had previously existed between him and the plaintiff, was of course at an end. So, the right of action in respect to the profits accrued at that time; for there was "a cesser of his privity or connection as tenant in common," a new relation then commenced between him and the devisees, and the case is the same as if one tenant in common sells. That is, a cesser of his relation as tenant in common; and a cause of action then accrues to all of the tenants in respect to the arrearages of profits, and a new relation begins between the other tenants and the purchaser.
The bill was filed on 24th, Sept. 1857. Mrs. Smith and Miss Mary sold to Winder 20th of April, 1854, at which time there was a cesser of the connection with the plaintiff as tenant in common. So, the plaintiff's right to an account against them is barred, except from the 24th of Sept. 1854. Eor all profits or moneys received for, or on account of, or out of the the lands, after that date, he is entitled to an account as against Mrs. Smith and Miss Mary, and the defendant Winder, and the Herron Mining Company. How far the fact that the de-velopements of lead ore cropped out in so many places, and the quantity of wood was so great as to leave ample room for all the tenants in common to come and take their share, distinguishes that species of profits from the receipt of rent, either in money or produce paid by the lessees of the several bouses, and cleared pieces of ground in the many tracts of land, is a question which may be presented by exception to the account.
Pek Cukiam, Decree accordingly.