Court Opinion

ID: 6952564
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:33:52.233467+00
Date Added: 2024-06-11T16:08:07.938309
License: Public Domain

Mr. Chief Justice Walker delivered the opinion of the Court; Appellants insist upon a reversal in this case on several grounds, but, after the most careful examination of the facts in the case, and after an attentive consideration of the elaborate arguments and petition for a rehearing, we are unable to see but one question requiring consideration. The whole controversy turns upon the question whether the agreement for the sale of the land by appellee and Boggess to appellants had been fully terminated for all purposes when the land was sold by the master under the Alexander decree. As a general rule, a breach of contract by one party absolves the other from a performance of its terms and conditions. When such a breach occurs, the other party is at liberty to rescind the agreement. And he may manifest such an intention in a variety of modes, one of which is by suing and recovering damages sustained by the breach. It then follows, that, when appellants sued for and recovered damages for a failure to convey, they thereby rescinded the contract of purchase. They, by suing upon the covenants contained in the bond, precluded themselves, until the contract was renewed, from insisting upon any of its terms or conditions. It is, however, true, that such an agreement may, like all others not prohibited by law, be renewed, and thenceforth it would be restored to its former vigor. And such a renewal may be evinced by an express agreement of the parties, or by acts which establish an intention to give it new force and effect. Every day’s observation teaches us that such renewal or waiver of the breaches of contracts, by one or both parties, are of frequent occurrence. And when such breaches are waived or the contract is renewed, it is then enforced precisely as if it had never ceased to be obligatory. This is so plain a rule of law, that a reference to authority is unnecessary to sustain the principle. We see in this case, that, after Alexander had filed his bill to subject the land to the payment of the balance of the purchase money due him, appellants filed a cross-bill asking relief. In it they set up and relied upon their purchase from appellee and Boggess; that they had paid the purchase money in full; had entered into possession of the land as purchasers, and had made valuable improvements, and claimed equitable relief as purchasers. They prayed that time be given appellee and Boggess to pay the money, and, upon their paying it, that the premises be conveyed to them in fee. This equity they claimed as purchasers, and not as judgment creditors. It seems they could not have successfully claimed, in the latter capacity, as a large number of others were judgment creditors, having prior liens, and who had also been made parties to the bill. This clearly and unmistakably manifested an intention on their part to claim as purchasers and not as creditors. Had they claimed in the latter right, they would not have asked that the land be conveyed to them in fee. And had they regarded the contract rescinded, for all purposes, they would not have claimed the land in fee subject only to Alexander’s lien. They would have been compelled to admit that their co-defendants had prior judgment liens, entitled to preference in the fund arising from the sale of the land. Appellee and Boggess, in their answer to the cross-bill, insisted that the contract was rescinded, and that appellants only had the rights of judgment creditors. But, on the hearing in Alexander’s suit, the court recognized the existence of the contract of purchase, by decreeing, that, in case appellee and Boggess should pay Alexander, or if appellants should pay him. and would release their judgment, except such sum as they might pay Alexander, then the land should be conveyed to them in fee. This undeniably established their rights as purchasers, and concluded all parties to that record from controverting it. It is urged, however, with great apparent earnestness, that, notwithstanding the contract had been rescinded and merged in a judgment, appellants still retained an equitable lien as purchasers of the premises; that they had this special lien by virtue of their former contract of purchase, and were thus connected with the land by that link, and had, therefore, an equitable right to have their judgment satisfied out of the pro.ceeds against senior judgment creditors, by reason of the nonperformance of the contract by appellee and Boggess. This seems to be the basis of all that appellants now claim for a reversal. This does not seem to consist with the prayer of their cross-bill, in which they claimed the fee to the land, and prayed a conveyance after Alexander should be paid. Dor does it accord with the decree which the court then rendered. They have acquiesced in the decree, having, so far as this record discloses, never sought to have it reversed, and we may conclude that they regarded it to their interest to permit it to remain in force. It will hardly be contended that, if appellee and Boggess had paid Alexander, and he had conveyed to appellee, they could still have proceeded to collect their judgment. That would have violated every principle of equity and common justice, and yet they asked for and obtained a decree for such a conveyance, in case the money was so paid. We can hardly suppose that they believed, when they asked such a decree, that if they thus obtained the title, they could still proceed to collect their judgment. We are at a loss to comprehend how a party may claim as a purchaser, and insist upon such a relation at one time, and for one purpose, and at another time and for another purpose ignore the relation of vendor and vendee, and claim the rights of a judgment creditor. But it is insisted, that, although that relation had ceased, although the contract was at an end and merged in a judgment, still they were purchasers in equity so far as to follow their money into the land, and obtain it in preference to the claims of others doubtless as legal and just as theirs. While their claim is just, we do not understand, that, because their judgment was for money paid for the land, it thereby is any more equitable, that they should be preferred, after abandoning the agreement, than other legal demands which had been reduced to judgments and become prior liens upon the land. We are aware of no principle in equity which gives a purchaser priority, who has' abandoned his contract of purchase, and resorted to his remedy at law, for a breach of the agreement, over other judgment creditors of a prior date. If such an equity exists, it can only be because the relation of vendor and vendee exists. And when they claim and obtain all of the benefits incident to the relation of vendees, they are compelled to extend the same rights to their adversary. Appellants said, in their cross-bill, “We are purchasers of appellee and Boggess, we have paid the purchase money, and are therefore entitled to the land when the prior incumbrance is removed; ” and the chancellor recognized and established that claim. How then can they now say, they were not entitled to those rights, but to other and different rights % How can they say they were strangers to the property, and may so deal with it % It is urged that appellants had a right to insist that the judgment should be satisfied out of the sale of the land in preference to all others but Alexander. They so insisted in their cross-bill, but it was not recognized by the decree. It found that they had the rights of purchasers, and that, if they obtained the land without further expenditure of money, their judgment should be satisfied. They have obtained the land, and the amount paid by them to extinguish Alexander’s lien has, with interest, been brought into court, and awaits their receipt. They then have the land at precisely what they paid for it,—no more, no less. In what, then, does their right consist, to prevent them from being compelled to satisfy their judgment ? The decree in the Alexander suit authorized them to use their judgment on their bid, if they should become the purchasers, beyond the amount of Alexander’s decree. They had the legal right to bid and become the purchasers at the master’s sale, but did not have the right to apply their judgment in paying the master, unless authorized to do so by the court. And the decree further required, that, if they should purchase, the master should bring the deed into court. Why this requirement? Evidently, that they might be compelled to satisfy so much of their judgment as remained over the sum they should pay to extinguish Alexander’s lien. The chancellor could never have intended, when he required the master to receive their bid over and above the amount of Alexander’s decree, to give them the benefit of their judgment in paying for the land, and still to permit them to collect their judgment. That would be inequitable and unjust. Had they become the open and visible purchasers of the land, equity would have required them to satisfy their judgment, for the sum above the amount necessary to extinguish the prior lien, as we have seen. And, as a person is not permitted by indirection to do that which the law forbids him to do directly, they obtained no advantage by employing Lafferty to purchase the land, at the master’s sale, in his own name, but on a secret trust for them. They could not, in that manner, evade the decree. Had they purchased in their own names, it would have been subject to the terms of the decree. This they seem to have understood, and hence the apparent effort to evade it, by having a secret agent to purchase for them. They are as fully estopped from denying that they purchased under the decree, as they would have been had they bid in person. Nor did the conveyance by Lafferty to Moir, to hold for them, in the least change the relation or rights of the parties. Again, appellants were in possession of the land, having entered under their contract of purchase from appellee and Boggess. They do not seem to have offered to restore it to their vendors, when they sued on the bond for a conveyance. They, no doubt, desired to hold and enjoy the benefits of the purchase, so far as was necessary to protect their interests, and, this being so, they must extend to their vendors corresponding rights. In other words, if they claim the benefits of the agreement, they must extend to their vendors the benefits of the contract. As a general rule, a party who elects to rescind an agreement, must restore to the other what he has received under it; especially so, when he relies upon compensation in damages for a breach of the contract. Had they restored the possession of the property, appellee and Boggess would then have had it in their power to have disposed of it to relieve themselves from the judgment appellants had recovered, to the extent of the surplus over Alexander’s lien. But its value would have been depressed in market, had they offered it for sale, from the fact, that appellants were holding it under their purchase. It would be highly inequitable to permit appellants to hold the property and all the benefits resulting from the agreement when in force, and at the same time exclude appellee from all of its benefits,—to treat them for some purposes as vendees, and for other purposes as strangers to the transaction. They have obtained the land at the price at which they purchased, and we cannot perceive in what respect they have been deprived of any right, or have sustained any loss; and, without one or the other, it is difficult to comprehend in what their equity consists. To permit them to enforce their judgment, they would obtain the land at about $3,000, not exceeding one-third they paid for it, and collect back the purchase money, equal to the entire amount which they have expended. But, appellants having procured the decree under their cross-bill, and it still remaining in full force, and having purchased under it, they must be bound by it. Appellants having failed to enter satisfaction of their judgment, upon appellees bringing the money into court necessary to reimburse them, the court below did right in rendering the decree appealed from, and it must be affirmed. Decree affirmed. Mr. Justice Lawrence, having heard the case in the court below, took no part in this decision.