Court Opinion

ID: 8756202
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:47:28.242852+00
Date Added: 2024-06-11T17:01:16.266376
License: Public Domain

SANBORN, Circuit Judge.
A motion for a rehearing of this case has been made, based upon the conceded rule that where a contract to convey land and a promise to pay for it are entire, and each is the consideration for the other, and the defendant has received no benefits from the contract, it is a complete defense to an action upon either that the other has not been and cannot be completely performed. Manitoba Fish Co. v. Booth, 109 Fed. 594, 48 C. C. A. 564; Griffin v. American *42Gold Min. Co., 114 Fed. 887, 52 C. C. A. 507; Bank of Columbia v. Hagner, 1 Pet. 455, 465, 7 L. Ed. 219; Telfener v. Russ, 162 U. S. 170, 175, 16 Sup. Ct. 695, 40 L. Ed. 930; Tyler v. Young, 2 Scam. (Ill.) 444, 35 Am. Dec. 116. But the complaint in this action presents no such case. It discloses the facts that the plaintiff’s original contract was made on January 20, 1892, and was for the purchase of all lands, rights, and privileges pertaining to the Lake Miriam Ditch, and all reservoirs connected therewith, in'addition to the specific lots and lands described in this complaint, for the sum of $35,437.22; that the plaintiff paid $4,437.22 in cash, and gave his notes for $15,000 and $16,000, respectively, for the balance of the.purchase price; that prior to January 29, 1896, he had paid the note for $15,000; that on that day an agreement was made between him and the bank that he should pay to it $10,000 principal and $800 interest upon his note for $16,000, that the time of payment of the remaining $6,000 should be extended until June 24, 1897, that the bank should immediately convey to him all the property described in the contract, except the lots and lands specified in the complaint, and that the bank would convey these lands upon the payment of the $6,000 on June 24, 1897; that the plaintiff paid the $10,800; that the bank conveyed all the property covered by the contract, save that thus expressly excepted; that it lost title to this excepted property; that it then sued the plaintiff in a court in Wisconsin for the $6,000 remaining unpaid upon his note for $16,-000; that he answered that the bank could not convey the excepted property; and that the court in Wisconsin in that action, among other things, so adjudicated that this excepted property which has not been conveyed was worth $25,000; that that fact is now res adjudicata between the parties to this action.
It is conceded that if on January 29, 1896, the plaintiff had derived no benefit from his purchase, he might then have defeated a recovery upon his note for $6,000, and might have recovered back the purchase price which he had paid, if he had insisted that his contract of purchase was entire, and that the bank was entitled to none of the purchase money because it could not completely perform its agreement. When, however, he consented to a partial performance of the contract, he waived this defense. After he had accepted the conveyance of the ditch, its reservoirs, and other property, which constituted a part of the consideration for his note for $16,000, upon which $6,000 still remained unpaid, he could no longer successfully defeat an action for the collection of this balance upon the ground that the note which evidenced it was without consideration, or for the reason 'that the bank was unable to convey all the property described in its contract. By his acceptance and retention of a part of the property, he had estopped himself from any such defense. The only defense remaining to him. was that the consideration of his notes had partially failed, and that to the extent to which it had failed he was entitled to be relieved from the payment of his obligation. If the property omitted from the bank’s conveyance in 1896 was worth $1,000, and if the failure of the bank to convey it entailed damages to the plaintiff to that amount, that fact was a defense to the action upon his note to that extent, and to that extent only. *43The complaint in the action before us contains an averment that the fact that this unconveyed property was worth $25,000 was so adjudicated in the action in Wisconsin that it is now res adjudicata between these parties. From this averment the inference was drawn, and the statement was made in the opinion in this case, that the plaintiff answered in the case in Wisconsin that this was the value of the excepted property and that this and other averments of that answer were denied by a reply. These facts do not otherwise appear in the complaint before us, and it is immaterial to the decision in this case in what way this issue was framed. However it may have been presented to the court in Wisconsin, the averment in the complaint in hand establishes the fact that the question of the value of this property in some way became a material issue in the action in Wisconsin, for the decision of that question could not have rendered that issue res adjudicata unless its adjudication had been necessary to the decision of that case. Its adjudication could not have been necessary to the decision in that case, unless the mere failure to convey the excepted property was not in itself a good defense to that action, unless the failure to convey it constituted a defense to the action upon the note to the extent of the value of the property which the plaintiff failed to receive only, and for that reason that value became material. The result is that, both by virtue of the general principles of the law and by virtue of the express averments of the complaint in this action, the failure of the bank to convey the excepted property was a defense to the plaintiff’s note to the extent of the damages entailed upon him by such failure, to the extent of the value of the property only, and that, since the plaintiff used a part of his claim for these damages to defeat the action upon the note, he cannot now maintain an action for the remainder of his claim.
The motion for a rehearing must be denied, and it is so ordered.
HOOK, Circuit Judge, dissents.