Court Opinion

ID: 6416331
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:56:26.722785+00
Date Added: 2024-06-11T15:51:34.242730
License: Public Domain

Wells, J.
It is settled, with little or no conflict of authority, that when a defendant in a bill in equity disenables himself, pending the suit, to comply with an order for specific relief, the court will proceed to afford relief by way of compelling compensation to be made ; and for this purpose will retain the bill, and determine the amount of such compensation, although its nature and measure are precisely the same as the party would otherwise recover as damages in an action at law. The character of the investigation is, therefore, not an insuperable objection to this mode of proceeding.
There is also authority, though apparently questioned in the English decisions, for the application of the same rule when the disability was caused before suit, but after the date of the agreement relied on. In this country it seems to be generally accepted as the rule, provided the plaintiff brought his bill without knowledge of the disability, in good faith seeking equitable relief, supposing and having reason to suppose himself entitled to such equitable relief.
In the opinion of a majority of this court, there is equal ground in equity for applying the same rule, with the same qualifications, to all cases where a defect of title, right or capacity in *254the defendant to fulfil his contract is developed by his answer, or in the course of the hearing, or upon reference of his title or capacity, after an order of fulfilment.
The rule assumes, of course, a sufficient contract, performance or an offer to perform by the plaintiff, and every other element requisite, on his part, to the cognizance of his case in chancery 5 and that the special relief sought is defeated, not by any defence or counter-equities, but simply because an order therefor would be fruitless, from the inability of the defendant to comply. The jurisdiction is fixed by establishing the equitable right of the plaintiff. Relief might then be given by a decree in the alternative, awarding damages unless the defendant should secure the specific performance sought. In many cases, this would be an effective and proper course ; inasmuch as the defendant, although not having himself, at the time, the title or capacity requisite for such performance, might be able to procure it • otherwise. The jurisdiction is not lost, when the court, instead of such" alternative decree, determines to proceed directly to an award of damages or compensation. The peculiar province of a court of chancery is, to adapt its remedies to the circumstances of each case as developed by the trial. It is acting within that province when it administers a remedy in damages merely, in favor of a plaintiff who fails of other equitable relief, to which he is entitled, without fault on his own part. The diversity of practice in this respect, and the doubt as to the jurisdiction, we think must_ have arisen less from the nature of the relief to be afforded than from the character of the means for determining the amount of compensation to be rendered.
The usual mode of determining such questions in chancery is by reference to a master. If however the case be such as to require a jury to assess the damages, or to make that the more appropriate reference, it is then a matter of convenience and discretion only, whether to order such an assessment, upon an issue of quantum damnifieatus, or to dismiss the bill and remit the parties to a trial in an action at law. The reason, from convenience, for sending such cases to an action at law, which often prevailed in the disposition made of them in the English practice, does not *255exist under the system in use in this Commonwealth, by which chancery powers are vested in the same court which exercises jurisdiction at law. See Cory v. Thames Iron Works Shipbuilding Co. 8 Law Times (N. S.) 237; Nelson v. Bridges, 2 Beav. 239. So also of the doubt arising from the different nature of the two jurisdictions, and their comparative fitness for such investigations. Bovill v. Hitchcock, Law Rep. 3 Ch. 417. The objections to the trial of such questions in chancery proceedings are still further removed in this Commonwealth, by the recent provision introduced by the practice act, Gen. Sts. c. 131, § 60, that “ in proceedings in equity the evidence shall be taken in the same manner as in suits at law, unless the court, for special reasons, otherwise directs; ” as well as by the provision giving authority to order issues of fact to be tried by a jury either at the bar of the supreme judicial court or of the superior court. Gen. Sts. e. 113, § 22.
The cases of Denton v. Stewart, 1 Cox Ch. 258, and Greenaway v. Adams, 12 Ves. 395, which assert doctrines substantially like the propositions above stated, are supposed to have been overruled by Lord Eldon in Todd v. Gee, 17 Ves. 273. It is so distinctly declared by Lord Cottenham in Sainsbury v. Jones, 5 Myl. & Cr. 1. The opinions in the two latter cases do indeed restrict the right to have damages assessed in equity, to cases where the defendant has become disabled pendente lite. Lord Eldon in Todd v. Gee indicates that Denton v. Stewart decided nothing more than that. But, in a note to the report of the defendants’ argument in the case, Denton v. Stewart is cited from the note of Sir Samuel Romilly as a case where the defendant had assigned his title after the agreement with the plaintiff; and in Greenaway v. Adams, Sir William Grant says of Denton v. Stewart,, “for in that the inability of the party to perform the contract grew out of an act done by the party after the contract had been entered into.”
In Sainsbury v. Jones, Lord Cottenham speaks of Sir William Grant’s case, Gwillim v. Stone, 14 Ves. 128, as one in which he refused to follow his own previous decision in Greenaway v. Adams. But in Gwillim v. Stone Sir William Grant says, after referring to Denton v. Stewart and Greenaway v. Adams : “ This *256bill is of a different nature, asserting from the first that the defendant cannot make a good title.” So far from refusing to follow his previous decision, he appears to us not only to affirm both decisions referred to, but to indicate where the true line of distinction is to be found. That distinction turns upon the character of the claim which the plaintiff establishes, and not upon the time or mode in which the defendant became unable to respond to a decree of the court for specific relief.
If, at the time the bill is filed, the plaintiff is aware that the defendant is unable to fulfil his contract, and that he can therefore have no equitable relief, “ it is then reduced to the case of a bill filed for the sole purpose of assessing damages for a breach of contract.” Per Kent, C., in Kempshall v. Stone, 5 Johns. Ch. 193. Chancellor Kent regarded “ such knowledge a material circumstance in the case.” The same consideration is mentioned in Hatch v.Cobb, 4 Johns. Ch. 559. See also McQueen v. Chouteau, 20 Missouri, 222. In Phillips v. Thompson, 1 Johns. Ch. 131, and Parkhurst v. Van Cortlandt, Ib. 273, the bill was retained for assessment of damages only, upon the principle of the decision in Denton v. Stewart; and the authority of that case was distinctly recognized. The same eminent chancellor, in the case of Woodcock v. Bennet, 1 Cowen, 711, ordered a reference to a master to assess damages, because, since the execution of the. agreement, the defendant had disenabled himself to perform it. In the court of errors, the bill was dismissed upon other grounds; but the opinion delivered by Woodworth, J., approves of the doctrine of Denton v. Stewart, upon which the reference was ordered. In Morss v. Elmendorf, 11 Paige, 277, the principle is suggested as broadly, and substantially in the terms and with the limitations, as we have stated it; arid again in Wiswall v. McGowan, Hoffm. Ch. 125, where it is ably discussed, and the authorities, particularly those in New York, collated. This last decision was reversed by the supreme court in 2 Barb. 270 ; but, upon appeal, the case was disposed of ultimately upon other grounds, (see 6 Selden, 465,) and the principle of Denton v. Stewart and Woodcock v. Bennet was soon after asserted in the supreme court. Woodward v. Harris, 2 Barb. 439. *257The case of Denton v. Stewart is not without support from early English authorities. See Hedges v. Everard, 1 Eq. Cas. Ab. 18, pl. 7 ; Cud v. Rutter, 1 P. W. 570 ; Wilkinson v. Torkington, 2 Y. & Col. Exch. 726.
Its doctrine is fully adopted in Massachusetts: Peabody v. Tarbell 2 Cush. 226 ; Andrews v. Brown, 3 Cush. 130 ; Pingree v. Coffin, 12 Gray, 288, 305; Attorney General v. Deerfield River Bridge Proprietors, 105 Mass. 1; and by other courts in this country: Rees v. Smith, 1 Ohio, 124; Gibbs v. Champion, 3 Ohio, 335; Jones v. Shackleford, 2 Bibb, 410; Fisher v. Kay, Ib. 434; Slaughter v. Tindle, 1 Littell, 358; Rankin v. Maxwell, 2 A. K. Marshall, 488; Copper v. Wells, Saxton, 10; Berry v. Van Winkle, 1 Green Ch. 269.
In England, authority to the full extent which we have maintained in this opinion has been recently conferred upon courts of chancery, or declared to belong to them, by St. 21 & 22 Vict. c. 27. This statute was rendered necessary by the doubts as to that authority, which have been entertained in consequence of the opinion of Lord Eldon as expressed in Todd v. Gee. We do not regard the statute as necessary for that purpose, except by reason of such doubts; being satisfied that the authority belongs to the court as incident to its chancery jurisdiction, and essential to the complete exercise of that jurisdiction. The second section of the statute is as follows : “ In all cases in which the court of chancery has jurisdiction to entertain an application for an injunction against a breach of any covenant, contract or agreement, or against the commission or continuance of any wrongful act, or for the specific performance of any covenant, contract or agreement, it shall be lawful for the same court, if it shall think fit, to awari damages to the party injured, either in addition to or in substitution for such injunction or specific performance; and such damages may be assessed in such manner as the court shall direct.” This statute is held to apply only to cases which are of equitable cognizance in their essential character. Durell v. Pritchard, Law Rep. 1 Ch. 244.
In New York, the right of a plaintiff in a bill in equity to have damages assessed, instead of specific relief, is now held to be even *258much more extensive, under the code of practice in force there. Barlow v. Scott, 24 N. Y. 40. Genet v. Howland, 45 Barb. 560, The plaintiffs in this case base their claim upon a written mem orandum, the two parts of which, signed respectively by Mrs. Milkman and the Ordways, together with the facts and circumstances stated in the report, sufficiently establish an agreement for the occupation by her of the premises which she claims. No question is raised as to the sufficiency of the proof of the agreement under the statute of frauds. The agreement contemplates a period of eight years. The stipulation that Mrs. Milkman is to have the store by promptly paying $200 on the first day of each month,” has no force or significance unless it extends to the whole time so contemplated. Mutuality is secured by the provision that the repayment of the difference or excess of the monthly payments, over the rent, taxes and expenses, is to be postponed to the expiration of the eight years, and made conditional upon the continuance of occupation and fulfilment of the obligations on her part during that whole period.
The plaintiffs claim that the defendants Ordway held their lease from Cumston upon the trust to serve this right of occupa tian by Mrs. Milkman; and therefore that she had such an interest in their lease as to give her the right, in equity, to prevent its surrender and the consequent defeat of her right of occupation, This claim is supported by the established or admitted facts, that Mrs. Milkman was previously in the occupation of the premises as tenant at will of Cumston; that there had been negotiations between her and Cumston for a lease for eight years, and consent of Cumston that she should have it for that term at the annual rent of $1800 and taxes, with security; that she applied to the Ordways to become sureties for her; that, after some negotiations with Cumston for a lease to themselves, they made the arrangement with her as set forth in the duplicate writing relied on; that after the execution and delivery of this writing they.took their lease from Cumston; that Mrs. Milkman’s occupation was continued without interruption until suit brought, the only change being that from September 1864 she occupied in pursuance of and in accordance with the written memorandum between her and *259the Ordways; that this occupation was apparently with the full knowledge, assent and approval of Cumston; and that Mrs. Milkman supposed in fact, and had reason to suppose, that the lease was taken by the Ordways in her behalf and for her benefit.
Upon this statement of her case, she had clear grounds for proceeding in equity:
1. In the alternative, set forth in the bill, that the defendants the Ordways were about to surrender their lease and thus defeat her occupancy under them; to prevent them from so doing, and also to prevent them from ejecting her in violation of their agreement.
2. In the other alternative set forth, to wit, that the lease had already been cancelled; to charge them with the trust alleged, and Cumston with notice of that trust, and thus compel both to preserve her interest, notwithstanding such surrender and cancellation of the lease.
Upon the first ground, the bill was defeated, in its purpose of specific relief, simply by the fact, developed in the answers and established by the testimony of the defendants, that the lease had already been surrendered three days before the bill was filed, two days before it was sworn to. Nevertheless this would not have defeated specific relief upon the second ground, but for two facts, developed by the answer of Cumston only, to wit: First, the clause against underletting; and Second, that Cumston was ignorant of the written agreement, and supposed Mrs. Milkman to be tenant at will only, until after the agreement for cancellation.
The bill was therefore dismissed as against Cumston. But the grounds on which this was done were personal to Cumston. The Ordways did not set up either in their answer, nor were they entitled to avail themselves of either as a defence or excuse for nonperformance by them. Their lease was not terminated by reason of the clause against underletting; nor does it appear that it would have prevented the complete fulfilment of their agreement. On the contrary, the circumstances afford strong ground on which to maintain an equitable waiver of the clause in favor of the *260plaintiffs. As a forfeiture, we think it must be held to have been waived. But Cumston had, without notice of the extent ol Mrs. Milkman’s interest, changed his situation by accepting the surrender of another unprofitable lease as consideration for the cancellation of this; and thereby acquired new rights, and established counter-equities in his own favor.
As against the Ordways, specific relief is defeated, not by any failure of the plaintiffs to establish their title to equitable consideration ; not by any counter-equities set up or maintained by the Ordways; but simply by the incapacity on their part, thus developed in the course of the hearing, to comply with an order for specific relief, to which the plaintiffs would be entitled but for such incapacity.
The bill is clearly brought in good faith, seeking specific relief, with reasonable grounds to suppose that such relief was attainable by its means. The case does not show that Mrs. Milkman was aware, when the bill was brought, that the lease had been actually surrendered. She had indeed, in December, notice of some such purpose on the part of the Ordways ; but on the first of February they received the monthly rent from her; so that the condition of the facts amply justifies the alternative allegations of the bill in this respect. But even if she had knowledge of the surrender, she had also reason to believe that Cumston knew of her interest in the lease, and would in equity stand chargeable for its preservation.
As to the other ground of alleged disability, namely, the clause against underletting; if that had been pleaded, which is not the case; and if it were in itself inconsistent with any decree to enforce the equitable right of Mrs. Milkman to the enjoyment of the premises during the full period of eight years, which is at least questionable; yet it would be no defen ee for the Ordways. They might still be enjoined from ejecting her, and from defeating her rights by a surrender of their lease. If not waived by Cumston, the clause has never been enforced by him; and it is not for the Ordways to set it up for their own advantage, to escape from their agreement with Mrs. Milkman. Blake v. Sanderson, 1 Gray, 332. Shattuck v. Lovejoy, 8 Gray, 204.
*261Even if the case had been otherwise in this respect, and the right of occupation of Mrs. Milkman had been terminated by means of this clause alone, enforced against both her and the Ordways by Cumston before reaching a decree, and her specific relief had been thus wholly defeated, still, as she had no notice of this defeat in the title and capacity of the Ordways, when she commenced her suit, and her bill in equity was brought in good faith, in the opinion of the majority of the court it might be maintained for the purpose of awarding compensation.
In any view of the facts, therefore, the decree for compensation was rightly made.
The court are all satisfied that the conclusions of the justice who heard the case, in regard to the alleged contemporaneous oral agreements, were correct. Decree affirmed.