Case Name: A. C. BROWN and FRANCES BROWN, his Wife, v. THE CENTRAL LAND COMPANY, SHERMAN DAY, C. T. H. PALMER, CYRUS H. BRADLEY, FREDERICK B. HASWELL, EDWARD McLEAN, and JACOB HARDY
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1871-10
Citations: 42 Cal. 257
Docket Number: No. 2,442
Parties: A. C. BROWN and FRANCES BROWN, his Wife, v. THE CENTRAL LAND COMPANY, SHERMAN DAY, C. T. H. PALMER, CYRUS H. BRADLEY, FREDERICK B. HASWELL, EDWARD McLEAN, and JACOB HARDY.
Judges: 
Reporter: California Reports
Volume: 42
Pages: 257–269

Head Matter:
[No. 2,442.]
A. C. BROWN and FRANCES BROWN, his Wife, v. THE CENTRAL LAND COMPANY, SHERMAN DAY, C. T. H. PALMER, CYRUS H. BRADLEY, FREDERICK B. HASWELL, EDWARD McLEAN, and JACOB HARDY.
Per CROCKETT, J., SPRAGUE, J., concurring:
Power to Sell on Credit, when Time of Credit not Specified.— Where Brown and wife authorized Taylor to sell their land on credit, without specifying the time of such credit, and Taylor sold on a credit of seven years; held, that Taylor could only sell upon a reasonable credit, and that the question of the reasonableness of the credit was to be determined only after testimony heard.
Appeal Rom the District Court of the Third Judicial District, Alameda County.
This was an action to quiet title to certain lands in Oakland Township, Alameda County. The defendants Day, Palmer, Bradley, Haswell, McLean, and Hardy, disclaimed. To the answer of The Central Land Company, setting up the contract between Brown and wife and Taylor, the plaintiffs demurred. The demurrer having been sustained, and defendant declining to amend, there was a judgment for plaintiffs. The defendant appealed.
Charles A. Tuttle, for Appellant.
If the Central Land Company has an equitable interest in the land by virtue of the facts set out in the answer, the judgment is erroneous. The contract contemplates that Taylor might make sales, giving credit for a portion of the purchase money beyond September 12th, 1869, without limiting the time of the credit. As it is expressly provided that the sums on credit should bear interest after that date, the intention was that the length of credit might be whatever Taylor saw fit to give.
Again, the contract gave Taylor and his assigns an equitable interest in the land. It was an executory contract. There was no forfeiture provided for on it, except as to all lots not sold, or contracted to be sold, within two years from its date. Ho money was paid down, but there were mutual promises. “ A promise is a good consideration for a promise, and it is so previous to performance and without performance.” (1 Parsons on Con. 373, 400.)
The plaintiffs’ relation to the land after the contract was made, was an equitable lien upon the purchase money, holding the legal title as security for the enforcement of the lien. (Ellis v. Jeans, 7 Cal. 409.)
The plaintiffs come into a Court of equity seeking to set aside their own contract, but making no equitable averments in their complaint to authorize it to be set aside. They might have made averments (if any such existed), which, if proved, would have entitled them to equitable relief as against their own contract. But under the form of pleading which they have adopted they must rely on their title, and let us rest on our contracts as they stand. They knew of the existence of our contracts, and if any reasons existed why they were entitled to have them set aside or declared void or forfeited, they should have averred them.
Montgomery & Evans, for Respondents.
The contract cannot be treated as a sale vesting any present interest in Taylor, for the reason that there is no mutuality, inasmuch as Taylor does not agree nor in any manner Mud himself to take the property. (1 Parsons on Con. 373; 1 Bouvier’s Inst. 245.)
Taylor was not clothed with unlimited power to extend the time of credit. Whatever discretionary powers were intrusted to him for the extension of credit beyond the two years, were so intrusted, not in his capacity of purchaser, but in his character of agent of Brown and wife, to be exercised for their benefit when selling the premises for them to a third person. They might with safety have been willing to allow him, as their agent, to -fix the time of payment, when he was interested with them in fixing upon a reasonable time; but it does not follow, because they were willing to trust to his discretion while his interests were identical with their own, that they were equally willing to trust that discretion when his interests were in direct antagonism to theirs.
Considering Taylor in the light of an agent, the defendant acquired no interest in the property, because the one half of the purchase money was not paid within the two years, and because there was no power of substitution in the instrument under which Taylor derived his authority. He could neither sell his agency to Haswell, nor delegate it to Bradley. (2 Kent, 633; Smith’s Mer. Law, 147; 1 Parsons on Con. 71; Story on Agency, Secs. 13, 29; Sayre v. Michael, 7 Cal. 535.)
Again, at the time that Haswell and Bradley, the former as assignee, and the latter as sub-agent of Taylor, undertook to sell Brown’s land to The Central Land Company, they were simply selling to themselves, being stockholders in the company.

Opinion:
By Crockett, J., Sprague, J., concurring:
The substance and legal effect of the contract between Taylor and plaintiffs may be summed up as follows: That the plaintiffs agreed that at any time within the two years next ensuing, Taylor might purchase for himself, or sell to others, the whole or any portion of the land now in controversy, at a price not less than one thousand dollars in gold coin per acre; but if sold for a larger price, the excess over that sum should go to Taylor; and on receiving the said sum of one thousand dollars per acre in ready money they would surrender the possession and execute a conveyance to the purchaser; but Taylor was not limited to sales for ready money, and might sell on credit, the term of which is not specified in the contract; and the conditions on which credit sales could be made, were: First—That ten per cent of the purchase money should be paid to the plaintiffs in ready money at the time of sale; Second—That the notes or bonds of the purchaser for the remainder of the purchase money, bearing interest after the two years limited in the contract between Taylor and the plaintiffs, at the rate of one and a quarter per cent per month, should be assigned and delivered to the plaintiffs for their security; but they were not to be required to surrender the possession or to convey any title until the whole purchase money and interest were paid, except that, in case one half of the purchase money was paid within the two years next succeeding the date of the contract between Taylor and the plaintiffs, they would, in that event, surrender the possession and convey the title to the purchaser, taking from him a mortgage on the property sold, to secure the remainder of the purchase money with interest. This is the substance of the contract, as I interpret it, or of so much of it as it is necessary to recite.
It will be perceived that the duration of the credit, if sales of that character should be made by Taylor, is not expressly specified or limited in the contract, nevertheless, the law will presume in such cases that it was the intention of the parties that the time of credit should be reasonable, and such as was usual and customary on sales of real estate in that vicinity. The law will not impute to the plaintiffs the intention to enter into an absurd contract, whereby they delegate to another the authority to sell a valuable estate on credits to he absolutely fixed by the uncontrolled discretion of the agent, unless that intention is clearly expressed in the contract. When the plaintiffs entered into the contract with Taylor, it evidently never occurred to them that they were authorizing him to sell this valuable property on a credit of fifty or one hundred years, during all which time no interest was to he paid on the purchase money until the expiration of the credit. I think it is obvious that none of the parties could have understood the contract as conferring on Taylor an authority so absurd as this, under which he might, practically, have sequestered the property and withdrawn it from commerce for an unlimited period. But his discretion in this respect was either absolute and unlimited, or it was subject to the condition that the credit must be reasonable and such as was usual and customary on sales of real estate in that vicinity. The latter is clearly the correct construction of this branch of the contract. The answer avers that the sale to The Central Land Company was made within the two years, at a price exceeding one thousand dollars in gold coin per acre; that ten per cent of the purchase money was paid in cash, and promissory notes given for the remainder, payable seven years after date, with interest at one and a quarter per cent per month; and that the notes, properly indorsed, together with ten per cent of the purchase money, were tendered to the plaintiffs within the two years. The transaction appears to have been in strict accordance with the authority conferred upon Taylor, unless the term of credit was unreasonably long, and in excess of the time usually allowed on credit sales of real estate in that vicinity. Whether a credit of seven years was unusual, and contrary to the general custom in that vicinity, is a question of fact to be decided on the testimony; and whether it was unreasonable, under all the circumstances, is a mixed question of law and fact, to be determined after the testimony is heard.
There is nothing in the point that the contract was not mutual. Taylor covenanted to cause the property to be subdivided, and a map of it to be made and recorded, at his own expense, and that he would use his best efforts to effect sales within the two years. This was a sufficient consideration on his part to support the contract. Nor did the contract establish between Taylor and the plaintiffs a relation of personal trust and confidence which precluded him from executing the contract of sale to The Central Land Company by an attorney in fact. Taylor's powers were strictly defined by the contract. He had no discretion to exercise in respect to the plaintiffs' rights or interests, except in regard to the term of credit; and, as to that, the law restricts it to a reasonable period, with which the plaintiffs must be content, such being the legal effect of their contract. There was no relation of personal trust or confidence between them. The sale by Taylor to Haswell of one half his interest under the contract, cuts no figure in the case. They both united in the contract of sale to The Central Land Company, and it is immaterial whether Haswell had any interest in the contract or not.
As the facts are presented by this record, I think there is but one question in the case requiring a solution, to wit: Whether the credit allowed to The Central Land Company was in accordance with the usage and custom in that vicinity in credit sales of real estate, and was reasonable under all the circumstances. This question can only be decided after the testimony is heard.
Judgment reversed and cause remanded, with an order to the Court below to overrule the demurrer to the answer.
Rhodes, C. J., concurring:
I concur in the judgment.
Mr. Justice Temple did not participate in the decision.