Court Opinion

ID: 8264146
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:58:48.593685+00
Date Added: 2024-06-11T16:43:17.120099
License: Public Domain

DISSENTING OPINION.
NORTONI, J.
Judge Bland held in the original opinion that because appellants had failed to tender or offer on the face of the bill, the amount of the costs expended by the railroad company in settlement of the several cases pending, that the allegation of the bill was insufficient for that reason to entitle the appellants to the relief prayed. I could not concur in that view after having examined the authorities.
I found, in the case of Jervis v. Berridge, 8 Oh. App. Oases 351, Lord Selborn, L. 0., at page 356, stated the question for decision thus:
“2. That they had not, by their bill, offered to repay to the demurring defendant certain sums paid by him to the Law Life Society, which they will be bound to repay if they succeed in obtaining the relief asked for.”
On the following page, 357, the learned chancellor said on this proposition as follows;
“Upon principle there appears to be no good reason why a plaintiff in equity, suing upon equitable grounds, should be required to offer, on the face of his bill, to submit to those terms which the court, at the hearing, may think it right to impose as the price of any relief to which he may be entitled. Such an offer, if made, might be rendered nugatory at, or at any time before, the hearing, by the plaintiff dismissing his own bill; and, if it were not made, the power and duty of the court to make the relief, if any, which it might grant at the hearing, conditional upon proper terms, would be exactly the samé; For this purpose, no submission on the part of the plain*106tiff is necessary, and if it were, it might properly he implied, if from no other part of the bill, from the ordinary prayer for general relief; which must at least mean that the. plaintiff is desirous that everything which is necessary for the purposes of relief which he expressly prays, may be done. A contrary view would be attended with many difficulties.”
And so the chancellor proceeds in discussing the question involved; and on page 358 says:
“The authorities appear to me to be consistent with this view. I confess I was surprised to hear the argument that in such a case as the present, an offer, upon the face of the bill, to repay the moneys expended by the demurring defendant, was necessary; my impression during many years of practice at the bar having always been to the contrary.”
This case is cited and followed in Brown v. Norman, 65 Miss. 1. c. 380, in which case Judge Cooper, at page 378, said (and the case is in point) :
“But in equity, the complainant does not necessarily rescind and sue; he may sue for rescission. He is required to restore the consideration, not, however, as a condition of acquiring the right to sue, but because of the equitable maxim that he who seeks equity must do equity.”
In Barker v. Walters, 8 Bevan’s Reps. 92, at page 96, the court, speaking of the alleged want of equity in the bill, says:
“The alleged want of equity is, that the plaintiffs have not, by their bill, offered to repay the money received by way of premiums on the policy.”
And in discussing the assignment, on the same page, it is said:
“First, it is to be observed that the prayer of the bill is, that the policy may be delivered up to be cancel-led, 'or that the plaintiff may be relieved in such manner as the court may think fit.’ The plaintiffs, therefore, have by their bill, in effect, asked for relief on such *107terms and in such manner as the court may see fit. . If it were necessary to make the offer, this, I own, seems to me to he sufficient. It is, in form, submitting to the judgment of the court the terms on which the relief is to be granted. I think that this is sufficient, and it is, therefore, unnecessary in this case, to make any observations on the general principle, which has been much discussed of late in cases on account, namely, as to the necessity of submitting by the bill to account. The demurrer for want of equity must consequently be overruled.”
These cases are quoted and followed by our Supreme Court in Paquin v. Milliken, 163 Mo. 79, 1. c. 104-105-106, 63 S. W. 417, 1092, where Judge Gantt, in a very able opinion, at page 105, quoting Lord Selborn, says:
“Upon principle, there appears to be no good reason why a plaintiff in equity, suing upon equitable grounds, should be required, on the face of his bill, to submit to those terms which the court at the hearing may think it right to impose as the price of any relief to which he may be entitled.”
In the case last cited, Judge Gantt also quoted approvingly Whalen v. Reilly, 61 Mo. 565, where Judge Sherwood, speaking of the rule pertaining to equitable relief, says: \
“Which finds its application, not in questions of pleading, nor by what the plaintiff offers to do therein, but in the form and frame of the orders and decrees, both interlocutory and final, whereby equitable terms are imposed as a condition precedent to equitable relief granted.”
And on page 571 in the same case, the. court, through Judge Sherwood, says:
“As the offer to pay was unnecessary, so> also was its accompanying incident, the payment itself into court. The foregoing considerations clearly indicate how widely variant equitable is from legal procedure, and induce the belief that whatever the necessity for bringing *108money into court on a technical plea of tender, where the action looks alone to the mere pecuniary recovery, such necessity has no existence and consequently furnishes no criterion in an instance like the present.”
[See, also, Kanppan v. Freeman, 47 Minn. 491; Coolbaugh v. Roemer, 32 Minn. 445; Hammond v. Pannock, 61 N. Y. 145; Irwin v. Blake, 33 U. S. 18; Hanson v. Keating, 4 Hare’s Rep. 1; Shuee v. Shuee, 100 Ind. 477; Could v. Cayuga Nat. Bank, 86 N. Y. 83, which cases sustain the views herein expressed.]
My opinion is, on this branch of the case, that it was not necessary for the appellants to offer, on the face of the bill, to return the costs paid out by the railroad company in settling the several cases mentioned, inasmuch as the bill sets up all the facts and seeks equitable relief on equitable terms, which evidence a willingness on the part of appellants to both do and accept equity and fully authorize the court to proceed, and upon the hearing, to impose upon' appellants the doing of such equities as may appear just as the price of the decree it gives.
I am therefore persuaded upon this proposition that a rehearing should be granted.
2. On the second proposition treated in the opinion by the learned presiding judge, my views are that equity will entertain a bill to cancel a contract for non-performance of its covenants in a proper case and declare a rescission of such contract for the violation of the dependent covenants therein contained when it would be against conscience to permit one party to violate a covenant on his part and still hold the other party to a compliance therewith. This proposition is supported by abundant authority and is the principle upon which the appellants predicate their right of recovery. [Lincoln Trust Co. v. Nathan, 175 Mo. 32-44, 74 S. W. 1007; Grand Haven v. Waterworks Co., 57 N. W. (Mich.) 1075-1077; Farmers, etc., Trust Co. v. Galesburg, 133 U. S. 156-179; Pironi v. Carrigan, 20 Atl. N. J. Eq. 218.]
*109It is well settled in the law that where the aets and conduct of one party evince an intention to no longer be bound by the contract, the other party is justified in treating it as wholly abandoned. [Freete v. Burr, 9 L. R. C. P. 208; Withers v. Reynolds, 2 B. & Ald. 882; Mersey Steel & Iron Co. v. Naylor, Benson & Co., 9. App. Cases 434; Lake Shore, etc., Ry. Co. v. Richards, 30 L. R. A. (Ill.) 33.] In my opinion, the correct principle applicable to such cases was stated with great perspicuity by a learned English judge in Mersey Steel & Iron Co. v. Naylor Benson & Co., 9 App. Cases 1. c. 443, where Lord Blackburn said:
“The rule of la,w, as I always understood it, is that where there is a contract in which there are two parties, each side having to do something (it is so laid down in the notes to Pordage v. Cole [4]) if you see that the failure to perform one part of it goes to the root of the contract, goes to the foundation of the whole, it is a good defense to say, ‘I am not going to perform my part of it when that which is- the root of the whole and the substantial consideration for my performance is defeated by your misconduct.’ ” And in determining whether the violated covenant or portion of the contract which a party has failed to perform goes to the foundation or root of the whole contract and pervades the entire consideration, it is (as said by the Supreme Court of Louisiana) “only necessary to consider whether the engagement is such that the contract would not have been entered into without it,” and if it is, then its violation authorizes a suit for the dissolution or rescission *of the contract. [Moreau v. Chauvin, 8 Rob. (La.) 1. c. 160.] This principle, however, is so well established in the law as to require no further citation of authority. [Lincoln Trust Co. v. Nathan, supra.]
It will appear by reference to the contract set out in the bill that the grant made therein to the railroad is coupled with the following limitation: “But with the distinct understanding that neither the milling com*110pany nor railroad company shall he permitted to use such switch in front of plaintiff’s property to stand cars thereon, hut that the switch in front of their said property shall be kept op.en and free from cars except when in actual use as aforesaid.” The precise language used in the contract, after reciting the settlement and payment of the $600 and costs of the several suits, is: “Said plaintiffs grant and convey to defendants full power and authority to use said switch freely in front of their said property for railroad and milling purposes, hut with the distinct understanding that neither the milling company nor railroad company shall he permitted to use such switch in front of plaintiff’s property to stand ears thereon, hut that the switch in front of their said property shall he kept open and free from cars except when in actual use as aforesaid.” This grant of the right to use the switch, coupled as it is with the limitation thereon contained in the words: “but with the distinct understanding” creates by its acceptance on the part of the railroad company a covenant which goes to the entire consideration of the contract and which covenant is dependent and without which the contract would not have been made nor the grant of authority therein contained, conferred. This appears quite clear to my mind from the reasoning of Judge Marshall in Lincoln Trust Co. v. Nathan, 175 Mo. 45-46-47, 24 S. W. 1007.
It is true that the case here under consideration is not as strong in the language employed, creating a dependent covenant, as the case last cited, but it certainly is in intention manifested, and such' manifested intention is the controlling principle in such cases; and it seems to me that there is sufficient here in language, when coupled with the manifest intent of the parties, to bring this case within the same controlling principle asserted in the case supra. I am therefore of the opinion that it is unconscionable to hold the appellants to the contract and let the railroad company violate the provisions of the covenant, without a “distinct understand*111ing” of which it would not have been made. It seems quite clear under the authorities that this “distinct understanding” enters into and pervades the entire agreement and goes to the root and foundation of the contract, and that without it, no grant to the railroad company to use the switch would have been therein conferred, and that inasmuch as it is in the form of a limitation, coupled, upon the grant itself, it thereby operates as a covenant on the part of the railroad on the good faith and fulfillment of which the entire agreement rested and that its continued and persistent violation by the railroad company in depositing cars on the switch in violation of its express terms, furnishes a proper cause for the appellants to come into this court and ask for a rescission of the whole contract upon equitable terms.
In a determination of this question, it is the duty of the court to place itself in the situation of the parties at the time and place the engagement was entered into and from the facts shown in the bill, indue itself with the facts and circumstances then within the contemplation of the parties. When we read the bill for this enlightenment, it seems to me that the facts there shown, clearly demonstrate that the grant contained in the contract would not have been made but for the covenant to so use the switch by not standing or storing cars thereon as to further reduce the value of appellants’ property than was actually necessary, and that this covenant or “distinct understanding” was one without which the grant would not have been made.
In conclusion, it appears to my mind that the covenant contained in the grant to use the switch, depended upon the covenant and mutual covenant therewith, to use the switch in accordance with the limitation imposed and coupled upon the wording of the grant itself, which was tantamount to saying that the railroad company, by accepting under the grant, covenanted on its part that it would have no rights thereunder except it fulfilled its *112part by keeping the covenant not to deposit cars on the switch track in violation thereof; therefore the covenant was concurrent and dependent, in such cases. The law is most tersely and accurately stated in 7 Amer. and Eng. Ency. Law (2 Ed.), 121, as follows:
“Concurrent or Dependent Covenant. — Where the conditions of a contract are such that the parties must perform their promises at the same time, they are known as conditions concurrent. Neither party is bound to do the first act, but each must be able and ready to perform his own, and the one who is ready and able to perform has a right of action against the one who is not. If the obligations of the parties are mutual and dependent, then the refusal of one to perform without sufficient excuse is equivalent to an abandonment of the contract and releases the other party from any duty to further recognize the obligations.” [See also cases in point cited in notes, same page.]
It appears that upon appellants making the grant, a corresponding duty thereby arose and thereafter rested upon respondent railroad company, and the parties were therefore to perform their promise within the language of. the text, supra, “at the same time,” therefore the covnant is dependent; that is,' every day the railroad company occupied the switch under the covenant of the appellants, it was to occupy it under its own covenant so as not to stand or store cars thereon, and in. event of the railroad company’s refusal to perform its covenant without sufficient excuse, under the language of the text, supra, it was “equivalent to an abandonment of the contract and releases the other party from any duty to further recognize the obligations.” The railroad company’s right to use the switch being concurrent with and dependent upon its covenant to keep it clear of standing-cars and not to use it in clear violation of the authority which it asserted for its occupancy thereof, clearly constitutes a covenant dependent and not independent in that sense in which an adequate remedy at law exists. *113But on the contrary, the two were mutual, concurrent and dependent covenants, the grant dependent upon the performance by the railroad company of its covenant to keep the track clear of standing cars, and the covenant of the railroad company so to do, dependent upon the covenant of the appellants contained in the grant to> it of the right to occupy the switch.
I am therefore of the opinion that inasmuch as the contract would not have been made but for the “distinct understanding” whereby these dependent covenants arose, that such “distinct understanding” goes to the root and foundation and prevades the entire consideration of the contract, and therefore a bill in equity for its rescission on the principle above stated is a proper remedy. My own mind is persuaded beyond the semblance of a doubt to this conclusion after a most careful and thoughtful examination of the following among the most ably considered cases on the question in this country. [Lincoln Trust Co. v. Nathan, 175 Mo. 32; Grand Haven v. Waterworks Co., 57 N. W. (Mich.) 1075; Farmers, etc., Trust Co. v. Galesburg, 133 U. S. 156; Pironi v. Carrigan, 20 Atl. N. J. Eq. 218; 7 Amer. and Eng. Ency. Law (2 Ed.), 121, and cases cited in notes therein.]
I am of the opinion that the bill states facts entitling the appellant to' equitable relief and therefore the motion for rehearing should be sustained.
It is proper to say that since preparing the' above and foregoing memorandum opinion, the learned presiding judge has further considered the question and modified his original opinion, agreeing with my views on the first question referred to: i. e., holding that it was unnecessary for the appellants to offer on the face of their bill, to repay the costs expended by the railroad company in the settlement of the several lawsuits theretofore compromised, inasmuch as the bill prays for equitable relief upon equitable terms, which is universally re*114garded as sufficient in such, cases. But he still adheres to the original opinion on the second question discussed : i. e., that the covenant is independent in its nature, on which adequate remedy at law exists and may be had, and therefore the bill is insufficient in failing to state a cause for equitable relief, and in this view the learned special judge concurs. In view of this concurrence of opinion, for which I entertain the very highest regard, emanating as it does from trained legal minds, and acumen, of such splendid accomplishments so far superior to my own, I have again considered the question and studied with care the very able opinion of our learned associate Judge Schnurmacher, who was called in under the provisions of the Constitution as final arbiter in view of the difference of opinion between the members of the court, and notwithstanding that opinion, I still find myself unable to recede from the views indicated in the above memorandum. Therefore, with a sense of the very highest respect for all, and to satisfy my own conscience only, I take the liberty of filing this memorandum of concurrence in the' first, and dissent from the second proposition involved.
I am persuaded that the decision of this court is in conflict with the doctrine of Lincoln Trust Co. v. Nathan, supra, and therefore request that the case be certified to the Supreme Court for final determination.