Case Name: Gleason F. Lewis v. John E. White
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1866-12
Citations: 16 Ohio St. 444
Docket Number: 
Parties: Gleason F. Lewis v. John E. White.
Judges: Scott, C. J., and Day, White, and Welch, JJ., concurred.
Reporter: Ohio State Reports, New Service
Volume: 16
Pages: 404–414

Head Matter:
Gleason F. Lewis v. John E. White.
Where, in a contract for the sale of real estate, the vendor agrees to have in readiness, on a given day, a deed, conveying to the vendee “a perfect title tothe premises” sold, and which is to be delivered to the vendee on his paying a specified sum of the purchase money, and giving his bond and mortgage, on time, for the balance: Held—
1. The vendee may well refuse to accept any conveyance of the premises while there remains a subsisting mortgage incumbrance thereon.
2. A provision in the contract of sale, that in case the vendee shall be com pelled to extinguish any lien upon the premises, the amount expended for this purpose shall be deducted from the amount secured by the bond, being for the benefit of the vendee, does not absolve the vendor from his obligation to make, at first, “ a perfect title to the premises.”
3. Where the premises are purchased subject to an outstanding lease, and the vendee obtains possession of the premises, and holds the same only by the purchase of the outstanding term of the lessee, such possession is no obstacle in the way of the right of the vendee to rescind the contract for good cause.
4. Generally, in contracts of this kind, the parties being free by mutual consent to enter into them, they are, by like mutual consent, free to rescind them. And where the vendor, by reason of an outstanding incumbrance, is unable, for more than two weeks after the time fixed by the contract, to convey the “ perfect title ” which he was bound to furnish; and the vendee then demands from the vendor such conveyance, and offers to perform the stipulations of the contract on his part; and then, on the failure of the vendor to comply with such demand, notifies him that he rescinds the contract, and thereafter treats the same as rescinded, and the vendor remains delinquent for an unreasonable time thereafter, his consent to a rescission of the contract is conclusively presumed from his delinquency.
5. In the case above supposed, the right of the vendee to treat the contract as rescinded, does not depend on the good faith of his offer to perform the stipulations of the contract on his part, but rather on his consent to a rescission, and the like consent of the vendor, presumed from his delinquency.
Error to the district court of Cuyahoga county.
*The original action was brought by White against Lewis, in the court of common pleas of Cuyahoga county, to recover damages for the non-fulfillment of a'contract of purchase, by Lewis of White, of certain premises situate in the city of Cleveland. The contract was made April 19, 1856.
White agreed to make a deed of the premises to Lewis and send it to Mr. Stetson, of Cleveland, on the 21st of that month. Lewis paid to White, when the contract was made, $1,000 on the purchase money; and on his paying $2,000 more, and executing a bond and mortgage to White or his wife for $7,000, with interest, payable $1,000 annually, the deed, “ conveying a perfect title to the premises,” was to be delivered to him. The bond was to provide, that if Lewis was compelled to pay any liens on the property, he was to deduct the amount from the bond. The contract was written on the back of an outstanding lease of the premises to one Chapin. White’s interest in the lease was assigned to Lewis.
The case went to the district court by appeal, and was therein tried to a jury, at the September term, 1860, on petition, answer1, reply, and testimony.
It appears from the record that, previous to the execution of the contract on which the action was brought, and until July 17, 1856, there was an outstanding mortgage on the property to one Mellen for $3,500, and an admitted lien thereon.
White introduced evidence tending to show that, in performance of the contract on his part, on April 25th and 26th, and again on May 8,1856, he offered, through Stetson, his agent, to deliver to Lewis a deed in due form for the premises.
Lewis, on May 8,1856, offered to pay Stetson the $2,000, and execute the bond and mortgage, as required by the contract (but did not actually tender the money or bond or mortgage), on the deliv ery of a dood conveying to him a perfect title to the premisos, but declined to accept the deed then offered to him, because of the mortgage to Mellen, and declined to pay the $2,000, and execute the bond and mortgage for the $7,000; but on the same day mailed a letter at Cleveland, directed to White at New York city, where he then resided, *and which was duly received by him, to the effect that he, Lewis, by reason of White’s inability and neglect to convey to him a perfect title to the premises, abandoned the contract, and required the repayment of the $1,000 advanced on it, and other damages.
In White’s reply to Lewis’ answer, he states that, having procured a release of the Mellen mortgage, he, on the 26 th day of July 1856, notified Lewis of it, and tendered him a deed for the premises, and requested the payment of the $2,000 and the execution of the bond and mortgage according to the contract, and that Lewis refused.
The petition states that, on the execution of the original contract, Lewis took possession of the premises and continued in possession until September 1, 1856.
In his answer, Lewis says that, relying upon the fulfillment of the contract by White, he made preparations to take possession of the premises, and paid a sub-tenant, under the lease to Chapin, sixty dollars for his right to remain in possession of the premises until the ensuing fall; and also incurred expense in getting plans drawn for the repair and improvement of the buildings, and in setting out shade-trees on the outside of the walk adjoining the lot. He denies that he took possession otherwise than this, or that he had any possession, or anything to do with the premises since May 8; 1856.
After Lewis abandoned the premises and declared himself absolved from the contract, White sold the premises at auction, for $7,000, and brought suit for the difference, $3,000, giving credit for the $1,000 paid down.
Lewis set up a counter-claim for the $1,000, and other damages.
The testimony being closed, Lewis asked the court to charge the jury, among other things:
1. That by reason of the subsequent sale and. conveyance of the premises by White to a third person, he had disabled himself to maintain a suit on the contract.
2. That if, at the time a deed was called for by Lewis, on May 8, 1856, the mortgage to Mellen was a lien on the premises, and which was admitted to be so, White could not recover.
*3. That by reason of such inability of White, to perform the contract on his paid, when so required by Lewis to perform, a tender of the §2,000, and the bond and mortgage required by the contract to be paid and executed, and delivered on the delivery of the deed, was unnecessary, and that Lewis had the right, therefore, to abandon the contract and recover back the money he had paid on it to White.
The court charged the jury that if White, by selling the premises, had put it out of his power to fulfill the contract, and if this was the whole case, Lewis could recover back the §1,000 advanced and interest. That, by the terms of the contract, White was bound to send a deed to Cleveland, as agreed in the contract, and be in condition, whenever Lewis should call for it, to give him a deed conveying a perfect title—a title free from the incumbrance of the Mellen mortgage. That the mere existence of the incumbrance would not absolve Lewis from his contract, or authorize him to abandon it, but it was the duty of Lewis to offer to fulfill the contract on his part by offering to execute the bond and mortgage, and pay the §2,000. That it was not necessary when Lewis called on White’s agent for the deed, that he should tender cither the bond and mortgage, or the money, or that he should have even executed the papers, but that all that was necessary was, that Lewis should offer, in good faith, to perform on his part, in case he found the ihcumbrance removed, and that he was able and ready to do so. That, in such case, Lewis would have the right, if the incumbrance was not removed, to abandon the contract and recover of White the §1,000 and interest. But if the jury should find that Lewis did not make the offer in good faith, or was not able and willing to perform on his part, and did not, in good faith, intend to perform, and went there merely to make a show of performing, and demanded the deed merely for the purpose of getting rid of the contract, if White was not prepared to perform; and if the jury should find that White paid off said incumbrance, and that, after he had done so, he, on or about the 25th July, 1856, tendered the deed to Lewis conveying a perfect title, and Lewis refused to fulfill Lewis was thereby in default, and White would be entitled to a verdict for the difference between the contract *price and the actual value of the premises at the time of such tender, deducting from the difference the amount already paid on the contract.
To this charge as given, and to the refusal of the court to charge . as requested, Lewis excepted.
The verdict was for the plaintiff, White—damages ten cents.
The defendant, Lewis, moved to set aside the verdict and for a new trial, on the grounds: 1. The verdict is not sustained by sufficient evidence ; 2. It is contrary to the charge of the court; 3. It should have been for the defendant instead of the plaintiff.
This motion was overruled and judgment entered on the verdict, and defendant excepted.
To reverse this judgment of the district court, Lewis filed his petition in error in this court.
It is claimed -the district court erred in refusing to charge the jury, as requested by the counsel for Lewis, and in the charge as given.
F. T. Backus, for plaintiff in error, argued:
1. A suit can not be maintained on a contract for the sale of real estate by the vendor, after he has put it out of his power to fulfill on his part, by a subsequent sale and conveyance to a third party, of the premises contracted to be sold. The charge of the court upon this point is erroneous.
2. When the vendor, in a contract for the sale of real estate, is unable to fulfill his contract to deliver “ a deed conveying a perfect title ” at the time stipulated in the contract, by reason of the existence of an incumbrance, and the vendee offers to fulfill on his part, by the payment of the money and the execution of the assurances called for by the terms of the contract, the good faith of such offer can not be inquired into by the jury, and his right to abandon the contract be made to depend upon his establishing, to the satisfaction of the jury, notwithstanding the inability of the vendor to perform, that he did not go to him merely to make a show of performing, and demand the deed, merely for the purpose of getting rid of the contract, if the plaintiff was not prepared to perform. Holmes v. Holmes, 12 *Barb. 137; Lawrence v. Taylor, 5 Hill, 107; Morange v. Morris, 34 Barb. 311; Fletcher v. Button, 4 Comst. 396; Judson v. Wass, 11 Johns. 525 ; Tucker v. Woods, 12 Johns. 190; Freiss v. Rider, 24 N. Y. 367; Remington v. Kelly, 7 Ohio (pt. 2), 97; House v. Beatty, 7 Ohio, 84; Dustin v. Newcomer, 8 Ohio, 49 ; Fetter v. Waybright, Ib. 167; Campbell v. Gittings, 19 Ohio, 347.
3. After notice of abandonment of the contract was given, it was out of the power of the vendor, some three months subsequently, to remove the incumbrance of $3,500, and then, by a tender of a deed to the vendee, put him in default, and thus lay the foundation for a recovery against him, of the difference between the contract price and the actual value of the land at the time.
8. B. Prentiss & Baldioin, for defendant in error, argued:
1. A vendor can maintain a suit for non-performance of the contract by the vendee, after he, the vendor, has sold at auction the premises and conveyed them away. Sugden on Vendors (9 Am. ed.), 261, 300 (8 ed.), 225, 227; 2 Chitty’s Pl. 291; 3 East, 410 ; 6 East, 555 ; 2 H. Bla. 123; 3 You. & Jerv. 123; 1 H. Bla. 270; 2 Weston, 91, 105; Dougl. 534; Chitty’s Contr. (6 Am. ed.) 306, 307; 1 Swan’s Pra. & Pre. 332; 2 Story’s Eq. Jurisp., sec. 749 ; 2 Hilliard on Vendors, 106 ; Sedgw. Meas. Dam. 196 (marg. 190).
2. It is not to be inferred that the court charged the jury that the burden of proof rested upon Lewis to make out that the tender was in good faith. The charge itself shows that there was no such idea.
If any tender was necessary, it was necessary to be in good faith —an honest tender and not a mere show or sham.
This question is, however, wholly unimportant in this case. It appears that Lewis had not executed, and was not ready and willing to deliver to White the securities required by the contract. There was no tender at all. Campbell v. Gittings, 19 Ohio, 347.
• Any lien on the premises which Lewis was compelled to pay, he might, by the terms of the contract, deduct from the amount of the bond, which was to contain an express provision *to that effeet, and would not be negotiable. Nor did any of the payments from Lewis become due until after the Mellen mortgage. So that the deed would convey to Lewis what was to him, under the contract, a perfect title; that is, he was sure to receive under it a title free from all defects, with no danger of any loss from any incumbrance. It seems to us that the contract made provision for such a lien as the Mellen mortgage, and its terms were, as they were intended to be, a waiver of that incumbrance upon the title.
The cases upon the general right of a vendee in a land contract to rescind without tender of performance on his part, can not all bo reconciled, but we think that the Ohio authority is all against it, as well as the weight of other authorities. Stauffer v. Eaton et al., 13 Ohio, 332; Campbell v. Gittings, 19 Ohio, 347; Dustin v. Newcomer, 8 Ohio, 49; Magaw v. Lothrop, 4 Watts & Serg. 316; Wells v. Smith, 7 Paige, 22; Kane v. Wood, 13 Pick. 281; Williams v. Healy, 3 Donio, 363; Robb v. Montgomery, 20 Johns. 15; Green v. Green, 9 Cowen, 40; Hilliard on Vendors, 218, sec. 27.
In the present case it will clearly appear that, by the contract itself., the tender by Lewis was a condition precedent. The deed was to lie in Mr. Stetson’s hands until Lewis performed his part of the contract.
3. Lewis was put in possession of the promises under the contract, and continued in possession thereof until the 1st day of September, 1856, or more than a month after the tender of the deed was made after the removal of the mortgage lien.
Ho could not rescind without surrendering the possession. 1 Hilliard on Vendors, 224; Tompkins v. Hyatt et al., 28 N. Y. 347; Piper v. Slonaker, 2 Grant’s (Penn.) Cases, 173 ; Abbot v. Draper, 4 Denio, 81; Brinley v. Tibbets, 7 Grcenl. 70; Smith v. Doleman, 6 Bro. P. C. 219.

Opinion:
Brinkerhoee J.
Before proceeding to what we regard as the ruling question in this ease, it may be well to dispose of ,two minor points outside of that, made by the record and noticed by counsel in argument. They are :
1. In the contract between the parties it'was stipulated that the bond to be given by the vendee for the deferred payments of the ^purchase money, should provide that if the vendee were compelled to pay any lien on the premises, he was to be allowed to deduct the same from the amount secured by the bond. And it has been suggested that this provision in the contract would, to some extent, absolve the vendor from the letter of his obligation to furnish the vendee with " a perfect title to the premises ' ' sold. We are clear in the opinion that this is not so. This stipulation was not intended for the benefit of the vendor, but for the benefit of the vendee ; and to shield him from the consequences of possible oversight, neglect, inability, or fraudulent concealment on the part of the vendor, and leaving his obligation to make " a perfect title to the premises " sold, intact and absolute.
2. It seems from the record that Lewis, the vendee, was for a time in possession of the premises sold. But this possession did not arise from any right conferred upon the vendee by the contract between the parties. The premises which were the subject-matter of the contract were sold, subject to a subsisting lease to one Chapin; and the only possession which the vendee had, was derived from the purchase by him of the right of jiossession from a sub-lessee of Chapin. The vendee, therefore, while in the possession of the premises bought by him, was not in possession under the contract with his vendor, but under a lease outstanding and subsisting at the time of his purchase, and subject to which his purchase was made. And it follows from this, that the temporary possession of the vendee presents no obstacle to a rescinding of the contract by him by reason of inability on his part to leave the vendor in statu quo. In case of a rescission of the contract between the parties, the vendor is left as he would be on the expiration of the lease subject to which the vendee purchased.
We come now to the controlling question in the case, which is: Had the vendee a right to rescind the contract at the time when he assumed to rescind it ? The court below, in its charge to the jury, seems to have proceeded on the idea that the right of a party to rescind a contract, and the right of the same party to maintain an action on a contract, were necessarily co-existent; that the right of a party to rescind *could not exist except under circumstances and conditions in which, he would be entitled to maintain an action on, and enforce the contract, if he chose to do so. But this we think was a mistake; and it is important to bear in mind this distinction.
By the terms of the contract between the parties, the vendee was to pay to the vendor §1,000 in hand. This was done. The other stipulations in the contract between the parties were mutual and dependent. They were to be performed respectively at the same time. But a readiness on the part of the vendor to perform was, by the terms of the contract, to precede, and such readiness was a condition precedent to the arising of any obligation on the vendee to perform on his part.
By the terms of the contract, the vendor was to send to his agent at Cleveland a deed conveying " a perfect title to the promises," by the 21st of April, 1856. Then, on the payment by the vendee of §2,000 more, and the execution by him of a bond for the deferred payments, the deed was to be delivered by the agent of the vendor to the vendee. A warranty deed of the premises was accordingly lodged with the vendor's agent, and on the 25th and 26th of April, 1856, the same was offered by the agent of the vendor to the vendee. The latter declined to receive it, as he might well do, for the reason that there remained an unquestioned mortgage incumbrance on the premises. It does not appear that the vendee, thus far, made any demand, or offer, or took any other step indicating to the vendor or his agent a purpose to insist on a strict adherence to the contract in respect to time. Thus matters remained until the 8th of the following month, when the vendee formally offered to the vendor's agent to pay the money and execute the bond stipulated to be paid and executed by him, and demanded a deed conveying " a perfect title to the premises." The mortgage incumbrance still remaining on the premises, this demand was not, as it could not be, complied with. The vendee thereupon immediately notified the vendor that he rescinded the contract; and from thence forward the vendee abandoned such possession of the premises as he had, and continued to treat the contract as being %t end. And from this time also (8th May, 1856), until the 26th of July following, the vendor still remained delinquent, and unable to make the " the perfect title to the premises " which he was bound to make. Then, having succeeded in removing the mortgage incumbrance, he tendered performance on his part and demanded it on the part of the vendee ; and the latter insisting that the contract was rescinded, and refusing to recognize it as a subsisting obligation, the vendor sold the premises at auction, and brough this suit to recover his loss on that sale. We think he was too late.
The distinction between the right of a party to sue upon a contract, and the right of the same party to rescind it, must not be ignored. Lot it be conceded that the vendee could not himself maintain an action on the contract until he had tendered performance, or offered, in good faith, to perform on his part. And let it be conceded, further, that the vendee's offer of performance on the 8th of May was not made in good faith; that he had then determined to get rid of the contract if he could; and that the offer was made simply with a view to do something to justify him in rescinding it. It will follow from this, as I suppose no one will controvert, that the vendee was not in a position to enforce the contract by action upon it; but it does not follow that he was not in a position authorizing him to declare and treat it as rescinded. His demand for a title such as the vendor was bound to furnish, his hypocritical offer of performance, and his notice of a recission by him-, were at least a sufficient showing of his unwillingness to consent to a further waiver or extension of the time fixed by the contract for performance by the vendor, and of his wish and determination 'to rescind the contract if he could. That he consented on the 8th of May, and continuously thereafter, to a rescission of the contract; that he was anxious to rescind it, and that this anxiety was the prompting motive of his sham offers of performance on the 8th of May, there can be no doubt. Indeed, it is a leading element in the vendor's case as presented in argument. And from this 8th of May until the 26th of July following, the vendor continued delinquent by reason of inability to perform on his part.
*Now, these parties were free, by mutual consent, to enter ' into this contract; and they were as free, by like mutual consent, to rescind it. On the 8th of May, and from thence forward, the vendee actually and in terms consented to its rescission. And the vendor, by a delinquency on his part unwaived by the vendee, and unreasonable in itself, is conclusively presumed to have given a like consent. And such is the doctrine of the books. Parsons on Contracts, 677, et seq., says: " Generally, as a contract can be made only by the consent of all the contracting parties, it can be rescinded only by the consent of all. But this consent need not he expressed as an agreement. If either party, without right, claims to rescind the contract, the other .party need not object, and if he permit it to be rescinded, it will be done by mutual consent. Nor need this purpose of rescinding be expressly declared by the one party, in order to give to the other the right of consenting, and so rescinding. There may be many acts from which the opposite party has a right to infer that the party doing them would rescind; and generally where one fails to perform his part of the contract, or disables himself from performing it, the other party may treat the contract as rescinded."
"We are of opinion, therefore, that the court below erred in charging that "if the jury should find that Lewis did not make the offer in good faith, or was not able and willing to perform on his part, and did not, in good faith, intend to perform, and went there merely to make a show of performing, and demanded the deed merely for the purpose of getting rid of the contract, if White was not prepared to perform; and if the jury should find that White paid off said incumbrance, and that, after he had done so, he, on or about the 25th July, 1856, tendered the deed to Lewis conveying a perfect title, and Lewis refused to fulfill, Lewis was thereby in default, and White would be entitled to a verdict for the difference between the contract price and the actual value of the promises at the time of such tender, deducting from the difference the amount already paid on the contract." And for this reason the judgment will be reversed and the cause remanded.
And we can see no reason why, on the facts assumed, the vendee has not a right, under his cross-petition, to recover *baek the money paid in hand by him on the making of the contract of sale.
Judgment accordingly.
Scott, C. J., and Day, White, and Welch, JJ., concurred.