Court Opinion

ID: 6949117
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:29:08.699231+00
Date Added: 2024-06-11T16:08:01.240690
License: Public Domain

Breese, J. The questions in this case arise out of the refusal of the court below to give the third instruction asked by the plaintiff, and giving the instructions asked by the defendant. To determine these correctly, the facts must be understood. The action was replevin for the brig Lowell, in which the right of possession was the controlling question. The plaintiff claimed the right to the immediate possession of the brig, in virtue of a chattel mortgage, executed by the defendant to him on the 3rd day of March, 1854, to secure certain notes. One of these notes, for $1,200, payable six months after date, having become due, the defendant, on the 4th December, 1854, wrote as follows to the plaintiff: “ We are under the necessity of asking an extension of time on each of our notes for six months. The last two notes we could meet if we could get eighteen months on the one due.” On the 22nd December, the plaintiff replies: “ If I extend the time on the note past due, you must give mo a new note, with good indorsers on it.” On the 23rd of December, a note, with two indorsers, was sent by mail to the plaintiff, but not in conformity with the proposals in defendant’s letter of the 4th December. In that letter, he asks for eighteen «months on the note past due, to which plaintiff assented as above. Now, the note executed and sent by mail was payable some days beyond the eighteen months, but as no point is made on that by the plaintiff, it will not be considered. The indorsers were shown to be good, though, perhaps, not satisfactory to the plaintiff. On the 22nd February, 1855, the plaintiff undertook to sell the brig, she being in the waters of the State of Michigan, under his chattel mortgage, whereupon the defendant obtained an injunction in the Circuit Court of St. Clair county, in that State, to prevent the sale. While matters were in this condition, a proposition for a settlement of their differences was entertained by the parties, which resulted in the following letter from the plaintiff to the attorney of the defendant: Buffalo, May 19, 1855. A. Van Buken, Esq., Attorney for Charles G. Kitton, St. Clair. Bear Sir: I acknowledge the receipt of your letter of the 17th inst. Charles G. Kitton is owing me some $4,500 on his and Baby’s paper, secured by a mortgage, made by Kitton to me, upon the brig Lowell, which amount he has neglected and refused to pay. In February last, H. N. Farnham, at that time an assignee of said mortgage, commenced a foreclosure of the same. Said Kitton served an injunction upon Farnham and myself, and stopped the sale. In March last, said Kitton, at great expense, and in defiance of all law, undertook to deprive me of my legal rights, and to prejudice my interest in said vessel, by cutting her through the ice, and taking her into a foreign country, since which time he has had a full crew on board, at a very heavy expense, which either he or myself, has got to pay, as you have informed me the vessel now lies in Canada, where, you say, she shall remain the balance of the season, unless I comply with his unreasonable and dictatorial requests. 1 have, for one year, been very lenient to Mr. Kitton, and don’t like much to have favors extorted from me. Mr. Kitton honestly owes me this debt, and all I want is my pay. Either Mr. Kitton or myself is losing money by allowing the vessel to remain so long idle, unemployed and under expense, which must be heavy. Taking all the circumstances into consideration, I will consent to the following terms of settlement: The suit commenced by Mr. Kitton against Mr. Farnham and myself, in St. Clair county, Michigan, shall be immediately discontinued, without costs to me; or, if the suit cannot be discontinued until your next term of court, that it shall be on that day; and that Mr. Kitton, to execute a stipulation at once, which he is to send to me, giving me notice that the suit has been discontinued; The brig Lowell is to bo engaged until my mortgage, Kitton’s and Baby’s indebtedness to me, is paid, running between Buffalo and Chicago, and that she is not to bo engaged in any other trade without my knowledge or consent. The net earnings of said brig are to be paid over to me as fast as earned, which amounts are to apply towards the liquidation of Kitton’s and Baby’s indebtedness to me. If, at any time, Kitton and Baby desire to give me satisfactory paper, I will extend a portion of my mortgage, if the vessel cannot pay all this season. I will extend the time upon my mortgage upon the brig Lowell under the foregoing conditions. The suits were discontinued as proposed. The mortgage of the brig contains this clause: “ But if default be made in such payment, or if the said party of the second part shall, at any time, deem himself in danger of losing the said debt, or any part thereof, by delaying the collection, thereof until the expiration of the time above limited for the paymént thereof, the said party of the second part is authorized to take possession of the said brig Lowell, or vessel, etc., and to sell and convey the same, or so much thereof as may be necessary to satisfy the said debt, interest and reasonable expenses,” etc. It is insisted by the defendant that this agreement of 19th May, 1855, is a new contract, abrogating, proprio vigore, this stipulation in the mortgage, and his counsel argue, with much apparent confidence and great ingenuity, that such, and no less, is the effect of this letter ; that it was a compromise grounded on their mutual fears, and so long as the defendant complied with the conditions prescribed in that letter, the plaintiff could not take possession of the brig. We must suppose that the plaintiff is a man of at least ordinary sense and intelligence, having tolerable knowledge of his rights, and a desire to protect them. Being such a man, it is scarcely probable he would give up the best kind of security for that of an inferior nature. The power to sell under the mortgage, for the reason therein stated, imparted the highest value to it, and that the plaintiff should surrender it, without some equivalent, is not reasonable, and he cannot be held so to have done, except upon satisfactory proof. If the letter of May 19th is to be considered a contract, it must have, like other contracts, a reasonable construction, according to the intention of the parties, to be gathered from the instrument itself, and manifested by the words used, keeping in view, all the time, the subject matter of the contract. What was the subject matter of this contract ? What most engaged the minds of the parties ? An extension of time of payment, and the security to be given, if the extension was allowed, and as incidental, the employment of the vessel and the appropriation of her earnings. Not the most remote allusion is made to a release of any higher security the plaintiff possessed, or even to a relaxation of the power he held over the vessel by the mortgage. Had it been in the contemplation of the parties that this valuable power was to be relinquished by the plaintiff, it is incomprehensible that business men — for such the parties appear to be — should not have distinctly provided for it, and not left it to mere inference. “ The brig Lowell is to be engaged, until my mortgage, Kit-ton’s and Baby’s indebtedness to me, is paid, running between Buffalo and Chicago, and she is not to be engaged in any other trade without my knowledge or consent.” This is a very clear stipulation, and shows, that the plaintiff, notwithstanding additional security was given, on the time being extended, claimed the benefit of his whole mortgage, and as a further precaution, the plaintiff, living at Buffalo, and his agent, Yan Inwazen, in Chicago, admonished by the attempt to which the plaintiff alludes in his letter of May nineteenth, of the defendant to deprive him, in March preceding, of this property, by cutting her out of the ice, and taking her to a foreign jurisdiction, to remain idle, with a full crew on board, at a heavy expense, for which the vessel was liable, he expressly stipulates that she shall remain, until his debt is paid, under his own eye, in a particular trade, and her net earnings paid over to him as fast as earned. He engages, further, to extend the time on the mortgage, if satisfactory paper was given him in lieu of -that which he then held, given him by the defendant, and which he could not have deemed satisfactory, provided the vessel could not pay all that season. Great indulgence and liberality seem to have been extended towards the defendant, notwithstanding the conduct with which the plaintiff had reproached him, and the unfair treatment he complains he had received at the hands of the defendant. Recurring to the terms of the mortgage, it provides for taking possession, not only on default of payment, but if the plaintiff shall, at any time, deem himself in danger of losing the debt, or any part of it, by delaying its collection until the expiration of the time limited for its payment. The object of both parties being, the one to give, and the other to possess, the highest security for the payment of the money, and mutual confidence then existing between them, the plaintiff was constituted the sole judge of the crisis in which he could act, and however long the time may have been extended within which to pay the debt, or whatever additional personal security may have been asked and given, they necessarily come under the stipulations in the mortgage, and are to be governed and controlled by them. If default was made on the new security, it is not doubted that the plaintiff could take possession and sell; equally so, if at any time after the extension and new security given, he should judge he was in danger, notwithstanding all his caution, of losing the debt thus attempted to be secured; it is so “ nominated in the bond.” There is nothing in the whole transaction of May nineteenth, manifesting an intention, by either party, to abridge the power the plaintiff had acquired by his mortgage ; that was to remain in full force, and if the plaintiff shall, in the language of defendant’s counsel, demand his “ pound of flesh,” the court cannot refuse to award it. We do not think, with defendant’s counsel, that it was necessary, in this new arrangement of May nineteenth, “to reserve” this power. The question is, does that arrangement take it away expressly, or by any reasonable implication ? No argument can be drawn from the supposed hardship of the case, as parties of full age are supposed capable of making their own contracts, and when made, if they are not unconscionable, originating in fraud, or prohibited by law, they must bo bound by them. Such stipulations are understood to be the common rule of such sales, and why, in this case, it should be stigmatized as arbitrary and tyrannical, not to be sanctioned by the court, and to be considered, against the facts of the case, as waived, it is unnecessary to conjecture. Considering the many vicissitudes of fortune to which the vessels navigating our seas and lakes and great rivers, are subject, it is but a mark of ordinary prudence that the vendor of a ship should fully protect himself, so far as he can, against them, especially where the sale is made to the captain, whose powers over it are so much without control, and so extensive. But, it is urged, the agreement to run the vessel between Buffalo and Chicago, superseding, as it did, this stipulation in the mortgage, has been performed, and the casus belli has not yet arisen. We have endeavored to show that this arrangement surrenders none of the plaintiff’s rights under the mortgage, and that danger of loss was sufficient to prompt the party to act, though the time of payment had been extended. The views we have presented disapprove of the ruling of the court, in refusing the third instruction asked by the plaintiff; those of the defendant which were given, present his view of the case, which we will consider. A recurrence to the testimony will show the grounds on which the plaintiff’s agent at Chicago, Van Inwazen, acted in taking possession of the vessel by a writ of replevin; and the question arises, do the declarations and conduct of the defendant ón that occasion amount to a renunciation of the agreement of May nineteenth ? The defendant’s counsel insist, that his declarations that he did not y¿sh to go to Buffalo, that he thought he would go in another direction, for a load of lumber — that he did not want to go where the plaintiff was — were but air, and as they wore unaccompanied by any act, manifest nothing; that he had a right to his own thoughts, and to utter his own opinions, he occupying a locus panitentice, and only to be concluded by actually sailing his vessel to some port or place other than Buffalo. These wishes and opinions, they urge, might change with the passing hour, and from his refusing to accept the services of the plaintiff’s agent, to procure a cargo for Buffalo, nothing can be inferred, as he was not required to consult him on that subject, and that they all do not make up a contingency on which the plaintiff was authorized to act. It is on this view the first instruction asked by defendant is based, and which, it is insisted, was properly allowed by the court. It is said this is an executed, not an executory, contract, the terms of which cannot be broken by mere declarations — that they cannot constitute a breach. A contract is said to be executed when nothing remains to be done by either party. Whilst any act remains to be done, the contract is understood to be executory, and the rules of law governing these two descriptions of contract are, necessarily, different. Examples and illustrations are unnecessary, as we are all familiar with the distinction. In this case, a part, at least, of the consideration of this new contract was executed; the chancery suits were dismissed; the credit was extended, and the possession of the vessel remained with the defendant; but the condition on which these provisions depended left something remaining to be done by the defendant, lie was to employ the vessel in a particular trade, and pay over the net earnings as they accrued to the plaintiff. The contract for extension of time was executory as to these conditions, and necessarily so remained. The right of the defendant to use the vessel was upon condition that he run her in the trade between Buffalo and Chicago, and paid over the not earnings to the plaintiff. A condition in a contract does not depend upon any formal arrangements of the words, but, as we have said of contracts generally, upon the intention of the parties as collected, in each particular case, from the terms of the contract itself, and from the subject matter to which it relates. These clauses, going to the whole of the consideration, must therefore be road as a condition; and as it covers the whole ground of the contract, and cannot be severed from it, or from any part of it, it follows, necessarily, that a breach of the condition is such a breach of the whole contract as to give the other party the right of avoiding or rescinding it altogether. We are disposed to attach more importance, under the circurnstances of this case, to the conduct and declarations of the de-; fendant at Chicago than his counsel seem to do, and are disposed to regard them as affording good grounds for prompt action on the part of the plaintiff, and as conferring the right upon him of avoiding the contract altogether. The defendant had agreed, for the season ensuing the 19th of May, to run the vessel in the Buffalo and Chicago trade, and pay over the net earnings as fast as earned, to the plaintiff. His undertaking, it seems to us, is of that description and falls within that class of cases to which we have been referred, where a party agreeing to do an act at a future day, and before the day arrives, declares he will not keep his contract or do the act, that the other party may act on the declaration and bring an action before the day arrives. There is, really, no conflict between the cases cited, on this principle;' they all turn on the fact, whether the party acted or not, on the declaration. Pabke Babón, in the case of Phillpotts v. Evans, 5 Meeson & Welsby, 477, the case principally relied on by the defendant’s counsel, says: “ The notice (that he will not receive the wheat) amounts to nothing, until the time when the buyer ought to receive the goods, unless the seller acts on it inthemean time, and rescinds the contract,” by selling to another person, or otherwise. This is in strict accordance with the principle recognized in the leading case relied on by the plaintiff: Hochsta v. De Latour, 20 Eng. L. and E. Rep. 157. Lord Chief Justice Campbell says, in this case: “It cannot be laid down as a universal rule, that where, by agreement, an act is to be done on a future day, no action can be brought for a breach of the agreement till the day for doing the act has arrived.” We think the declarations of the defendant, and his refusal, at Chicago, to accept the services of plaintiff’s agent to procure a cargo for Buffalo, gave the plaintiff a right to consider the new contract as repudiated, and justified him in taking possession. He acted promptly on the defendant’s declarations. In such a case it would be idle to wait until the vessel was loaded for a different port, and it would make the case no stronger, for, after setting sail for such port, there was the physical possibility that he might change his course, and the same if laden for Buffalo. The plaintiff had a right to take him at Ms word, and act accordingly. The conduct of the defendant at Chicago was such as to create a well founded belief on the part of the plaintiff, taken in connection with his removal of the vessel in March preceding to a foreign jurisdiction, threatening to leave her there, unemployed, with a full crew, at a heav}*- expense, that his debt was in danger, and warranted him in taking instant possession of the vessel, and exercising over it the rights secured to him by the mortgage. The first three instructions on the part of the defendant should not have been given. The judgment of the court below is reversed, and the cause remanded to the Cook county Court of Common Pleas for further proceedings not inconsistent with this opinion. Judgment reversed.