Court Opinion

ID: 8773020
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:51:33.938003+00
Date Added: 2024-06-11T17:02:21.018495
License: Public Domain

PHIBIPS, District Judge
(dissenting). A fter the best consideration I can give, I find myself unable to concur in so much of the foregoing opinion as affirms the action of the Circuit Court in rendering judgment for the defendants on the counterclaim. The sixth paragraph of the contract between the vendors and the vendee provided as follows:
‘•(G) The party of the second part [plaintiff in error] agrees that in ease of any ¿('fault of or failure to perform this agreement in whole or in part, either in the payment of installments recited or in any respect whatsoever, upon 10 days’ written notice sent through the United State's mail addressed to the parly of the second part, at Pueblo, Colo., this agreement shall bo void, and the party of the first part, its agents or representatives, may immediately thereafter resume possession of the premises herein described, retaining whatsoever sum may have, been paid hereunder, and any and all improvements which may have been made on the said premises, and all right, title, and interest, in law and in equity, of the party of the second pari, shall terminate, and the party of the second part shall ever be debarred from all rights, remedies, and actions, either in Jaw or in equity, founded upon or existing under this agreement; such sum and such improvements so retained by the party of the first part being considered the rental of said premises for the time of occupation thereof toy tiie party of the second part: all payments falling due subsequently to the peaceable delivery of the said premises to the party of the first part being canceled.'’
It will be observed that in case of any default or failure to perform the agreement in whole or in part, either in the payment of installments or in any other respect whatever, the option or right was given to the vendors, upon 10 days’ written notice, to declare the agreement void and to enter into possession. This election the pleadings and the proofs show the vendors exercised. The petition alleges;
“That on or about October 1, 1.003, the defendants served upon the plaintiff a written notice to give over and surrender possession of said premises, and declaring said contract repudiated and canceled, and alleging as a reason for said repudiation that plaintiff and the said the Colorado Carriage & Implement Company bad failed to make the payments required by said contract.”
This specific allegation was not denied in the answer. Both the pleadings as well as the evidence show* that the notice to the plaintiff to quit and .surrender possession was based entirely upon the ground that the vendee or its assignee had failed to make payment of install*104ments as required by the contract. Nowhere was the forfeiture declared placed upon any other ground; and no claim was ever asserted by the defendants respecting the contract being breached, by reason of the failure to keep the property in repair, until after this litigation arose between the parties. Having thus placed its right to declare the forfeiture upon said specific ground, and having retaken possession of the property under such declared forfeiture, the law declares that the defendants estopped themselves from afterwards asserting any other ground of default or dereliction on the part of the vendee or its assignee. In Railway Company v. McCarthy, 96 U. S. 267, 24 L. Ed. 693, the court laid down the following proposition:
“Where a party gives a reason for his conduct and decision touching anything involved in a controversy, he cannot, after litigation has begun, change his ground, and put his conduct upon another and different consideration. lie is not permitted thus to mend his hold. He is estopped from doing it by a settled principle of law.”
This court applied the same doctrine of the law in Kansas Union Life Insurance Co. v. Burman, 141 Fed. 835, 842, 73 C. C. A. 69, citing in support thereof a number of decisions to the effect that where the party, in taking action or asserting a right, bases it upon specific ground, he cannot, after litigation arises between the parties, assume another position. In the Burman Case, where the plaintiff sued for breach of contract with him as agent for the insurance company, in his letter of resignation or retirement from the agency he placed his action upon certain designated failures on the part of the insurance company in keeping the contract, and when litigation ensued undertook to rely upon other ground. This court said:
“This rule should have especial application to this case, for the palpable reason, that, had Burman assigned as a reason for resigning his agency the neglect to renew the license, he would have afforded the company an opportunity to remove the objection. By not assigning the delay or omission as a reason for his refusal to continue his agency, and malting no claim iii his letter of resignation that the insurance company was unwilling to go ahead with the salary contract, he' in effect said such ground is not relied' on.”
So here the presumption of law is that, if the vendors had, made the claim that thg contract was not being kept on account of failure to make repairs of the building, the assignee might have saved its rights by making the required repairs and prevented forfeiture therefor. The very provision requiring 10 days’ notice in the contract before such forfeiture was to secure to the vendee its locus pcenitentise.
More conclusively, yet, against the right to maintain the action set up in the counterclaim, are the express provisions of the contract that in the event of failure of the vendee to perform the agreement in whole or in part, either in the payment of installments recited or in any respect whatsoever, upon 10 days’ written notice, “this agreement shall be void.” It then proceeded to declare specifically what the results and liabilities of the vendee would be in such event: (1) The vendor could immediately resume possession of the premises; (2) retain whatever sums had been paid on the contract, and all improvements made on the premises; (3) all right, title, and interest, in law or in equity, of the vendee, should terminate, and the vendee should ever be debarred *105from all rights, remedies, and actions, either in law or equity, founded upon or existing under the agreement; (4) that such sum and the improvements so retained by the vendor should be considered as equivalent o E rental of the premises for the time the same were occupied by. the vendee or his assignee; and (5) that all subsequent maturing payments should be cancelled. From which it is clear that the parties to the contract, in its very inception, stipulated among themselves, under seal, what the forfeitures, losses, and rights of the respective parties should be in the event of the declared forfeiture and retaking possession by the vendor. They thus consented to put a certain and definite limit to what the rights and losses should be. Neither party could adrl to or subtract therefrom. Parties have the right to malee their own contracts, whether provident or improvident, and to affix the liabilities for a breach thereof. The vendors having made their election to retake the demised premises, with the advantages of the specified forfeitures, whereupon the agreement should become void, they were precluded from afterwards suing on the dead agreement to enforce other claimed liability under the contract.
In Seanor v. McLaughlin, 165 Pa. 150, 30 Atl. 717, 32 L. R. A. 467, the court, in discussing the question of the plaintiff’s right to remedies either to treat the contract as in existence and predicate action for damages for breach thereof or to declare forfeiture as therein provided, said the party could not do both, “for the contract or obligation to which the bond was collateral no longer existed.” So here the contract gave ilie vendor the option to declare it at an end for any breach thereof, and to enter and take possession, with an express enumeration of what the vendor in such instance could have or what the ven-dee should forfeit and lose. On the maxim “Facit cessare taciturn,” no further right of action or liability could be predicated upon the agreement, which had become void by the declared act of the party. The vendee may have been in arrears in the payment of accrued taxes or premiums on the insurance, or he might have paid one-half the purchase money. But, as the contract provided specifically what the consecjuenc.es of his derelictions might he in the event of the vendor declaring forfeiture and taking possession, he was in position to say: I will surrender the possession and submit to the specific consequences, as they are exclusive of any and all other liabilities.
‘•The established rights and remedies for the breach of an agreement are as effectually contracted for as the performance of the act stipulated.” Cress-well Ranch & Cattle Co. v. Martindale. 63 Fed. 87, U C. C. A. 33.
So in Warren-Scharf Asphalt Paving Co. v. Laclede Construction Co., 111 Fed. 695, 696, 49 C. C. A. 552, Judge Thayer, speaking of a cognate question, said:
“The parties -to the agreement had in mind both a temporary and a permanent suspension of the work, and. in language which cannot be misunderstood. stipulated that the defendant company might suspend operations, under the contract, either temporarily or permanently (that is, abrogate the contract altogether), on 10 days’ notice; and as if to make their purpose and intent more clear, and to put the matter beyond dispute, they further agreed that, if operations under the contract wore suspended, the party of the first part should not have any claim for damages. In other words, the right was reserved by the defendant company to put an end to the agreement at any time on 10 *106days’ notice, without liability for damages. It was entirely competent for the parties to enter into such an agreement.”
In Baltimore R. R. Co. v. Voigt, 176 U. S. 498, 20 Sup. Ct. 385, 44 L. Ed. 560, the court said:
“The right of private contract is no small part of the liberty of the citizen, and the usual and most important function of courts of justice is rather to maintain and enforce contracts than to enable parties thereto to escape from their obligation, etc., unless it clearly appear that they contravene public right or the public welfare.”
Some doubt is expressed in the majority opinion as to whether or not the questions above discussed are properly presented to this court for review. The reply of the plaintiff to the counterclaim is in effect a general denial. It specifically denies the allegations with respect to the alleged breach of the contract in not making repairs. It is now the well-recognized rule that matter of estoppel in such case need not be specifically pleaded, for the palpable reason that it is disclosed by the pleadings, the contract, and the evidence that the counterclaimant had made his election to demand and take possession because of express-claimed breach and no other. The counterclaim being based upon the contract alleged in plaintiff’s petition, and it appearing from the whole record and .evidence that the damage claimed was for failure to make improvements, it was a matter of law as to whether or not the plaintiff was entitled to recover; and these questions were sufficiently raised by the exceptions'taken to the charge of.the court, to wit:
“Plaintiff excepts to the instruction of the court, instructing the jury that a- personal judgment may be rendered against the plaintiff upon the covenant in the contract providing for the making of repairs.”
Among the assignments of error are the following:
“The court erred in receiving and entering the verdict of the jury upon the issues made by the defendants’ counterclaim and plaintiff’s replication, over plaintiff’s objection and exception.
■ “The court erred in instructing the jury that they should return a verdict against plaintiff on the issues presented by defendants’ counterclaim, and in not instructing them to return a verdict for the plaintiff thereon.”
It was a matter of substantive law, arising upon all the evidence before the court, that the defendant could not recover on the counterclaim. If so, it was error to instruct the jury that there might be a recovery. Therefore the exception to the charge and the assignment of error is broad enough to entitle the plaintiff in error to have the question of law reviewed.
• The judgment based on the counterclaim, in my opinion, should be reversed.