Curtis v. InnerarityAnnotate this Case
47 U.S. 146 (1848)
U.S. Supreme Court
Curtis v. Innerarity, 47 U.S. 6 How. 146 146 (1848)
Curtis v. Innerarity
47 U.S. (6 How.) 146
APPEAL FROM THE COURT OF APPEALS
FOR THE TERRITORY OF FLORIDA
Where there was a sale of wild lands in Florida, occupied by Indians, and the purchasers gave a mortgage to secure the payment of some outstanding installments of the purchase money, the fact that the purchasers had not complete possession of the lands is not a sufficient objection to their being charged with interest from the time when the money was due.
They had paid a large part of the purchase money before the execution of the mortgage, without raising this objection, and the parties to the contract of sale knew that the Indians had possession of the lands as hunting grounds.
The purchasers in a former suit averred that they had peaceable possession, and the vendors cannot be held responsible for a subsequent disturbance.
The doctrine of the civil law, viz., "that the vendee is not liable for interest where he received no profits from the thing purchased," applies only to executory contracts where the price is contracted to be paid at some future day, and the contract is silent as to interest.
Nor is it an objection to the allowance of interest, that the purchaser was put to much trouble and expense to obtain a recognition of his title.
The claim to be released from interest, upon the ground that there was no person legally authorized to receive it, is not supported by the facts in this case.
Where the vendor gave a power of attorney to an agent to receive a payment from the purchasers on account, and the agent gave a receipt in full for certain balances by way of adjustment and compromise, and the vendor disapproved of the acts of the agent, the payment is not good, even on account, against the vendor.
The purchasers, by making a payment in this way, upon certain terms which were not within the power of attorney, constitute the agent their agent. For two years afterwards, they insisted upon the binding force of the acts of the agent to the extent to which he had given releases, and only claimed the payment to be on account when the agent became insolvent. It was then too late.
All the material facts in the case are set forth in the opinion of the court.
MR. JUSTICE GRIER delivered the opinion of the Court.
It would contribute nothing to a clear apprehension of the merits of this case to enumerate the various bills, answers, cross-bills &c., constituting the very voluminous and confused
mass of pleadings and documents spread upon our paper books. The pleadings have been consolidated, by agreement of the parties. We may therefore consider the case before us as a bill by John Innerarity, administrator of the estate of John Forbes, deceased, against the trustees of the Appalachicola Land Company for the foreclosure of a mortgage given under the following circumstances.
On 4 December, 1818, John Forbes, acting as the executor of William Panton and Thomas Forbes, and as agent of their respective heirs, covenanted to sell to Colin Mitchell
"two undivided thirds of a certain tract of land ceded by the Creek Indians unto the house of trade of which said Forbes was the principal partner, lying upon and between the Rivers Appalachicola and Appalachee, and containing about one million two hundred thousand acres, for the consideration of $66,666.66, to be paid in the following manner: one-fourth, or $16,666, on 1 May next, in the City of London, valuing the same at four shillings and six pence sterling each dollar; the remainder, or $50,000, in four equal yearly installments, reckoning from the date,"
This agreement was made and executed in the Island of Cuba, where John Forbes then resided. Colin Mitchell purchased for himself, Carnochan, and others, and subsequently took the title in his own name, and continued to hold it till 1820, when he transferred it to Octavius Mitchell, who held it as trustee for the company then or afterwards known as the Appalachicola Land Company. On 9 October, 1820, Octavius Mitchell executed a mortgage to John Forbes for the last two installments of $12,500 each, due, by the agreement, on 8 December, 1820, and 8 December, 1821, but further time appears to have been given in the mortgage for these two payments, as they are made payable on 9 March, 1821, and 9 March, 1822. This mortgage is on the undivided half of the land conveyed to Mitchell, and is the subject of the present suit.
John Forbes, the mortgagee, died in Cuba in May, 1822, having made a will and appointed executors, who qualified and acted as such in that place, but never proved the will nor obtained letters testamentary in Florida.
John Innerarity first obtained letters of administration in Florida, on the estate of John Forbes, on 5 July, 1836.
That there is a balance due and unpaid on this mortgage seems to be admitted, but the parties differ widely in their estimates of its amount. The Superior Court for the County of Escambia, where this case originated, adjudged the balance
due on the mortgage to be $50,159.60. On appeal to the court of errors of the territory, that court decreed the balance due to be $28,500. From that decree both parties have appealed. At present, we can notice only the exceptions taken by the mortgagors, whose appeal is now under consideration.
They have insisted on three several exceptions to the decree of the court of appeals, which will be noticed in their order.
1. Because interest was allowed from the time the money secured by the mortgage became payable, when it should have been allowed only from the time of filing the bill for foreclosure.
2. Because the court refused to allow a credit of 375, which John Forbes admitted should be deducted from the amount claimed.
3. Because a payment of $13,357.73, made to Thomas M. Blount, was not allowed as a credit.
We shall consider these exceptions in their order, stating the facts of the case bearing on each of them so far as may be necessary to their elucidation.
I. As to the interest.
As the contract for the purchase of these lands, and the mortgage given to secure the balance of the purchase money, were executed in the island of Cuba, the court below allowed the current and legal rate of interest of that place (five percent) from the time the respective payments became due.
It is a dictate of natural justice, and the law of every civilized country, that a man is bound in equity, not only to perform his engagements, but also to repair all the damages that accrue naturally from their breach. Hence, every nation, whether governed by the civil or common law, has established a certain common measure of reparation for the detention of money not paid according to contract, which is usually calculated at a certain and legal rate of interest. Everyone who contracts to pay money on a certain day knows that if he fails to fulfill his contract, he must pay the established rate of interest as damages for his nonperformance. Hence it may correctly be said, that such is the implied contract of the parties. See 2 Fonblanque, Eq. 423. 1 Domat, book 3, tit. 5. The appellants themselves seem to have been fully aware of the justice of this rule, as in all their communications with the mortgagees they have admitted their liability to pay interest, and in their bill, filed in 1837, to have satisfaction entered on the mortgage (which makes a part of the record of this case), they offer "to pay interest at five percent from 8 December, 1821." This may not of itself be a sufficient reason
for disallowing their present exception, if founded in justice, but it affords a strong presumption that it has no such foundation.
The reasons alleged in support of this exception are first that the mortgagors had not possession of the land, or at least received no profits from it, and that in either case, by the civil law, the purchaser is not bound to pay interest. But we are of opinion that this objection is founded on a mistake both of the law and the fact. The mortgage was given more than two years after the sale to the mortgagors and title executed to them. A large portion of the purchase money had been paid, and on objection made, that the purchasers had not all the possession of which the land was capable. Both parties knew that although the Indians had ceded their title, they still continued a transient occupancy of the lands for hunting grounds. They may have infested the lands, and rendered it dangerous for the owner to occupy them in time of war; but their possession was not what the law would term adverse, not being with claim of title. There was no covenant by the vendor to expel or exterminate the Indians; the purchasers received such possession of the land as could be given them, cum onere. It was not expected that the Indians should attorn to them or pay them rent. The purchasers of over a million of acres of wild lands did not expect to make profits by actual cultivation or reception of rents. Their expectation of profit was from the increase in value of the lands from efflux of time and the progress of improvement. These profits they have realized, doubtless to the amount of more than a thousand percent on their original investment. Moreover, the record of the Forbes case, decided in this Court (and read in evidence in this case, by consent), shows that in 1828, eleven years after the purchase, the appellants, or those under whom they claim, declared under oath that they had had "peaceable possession" of the land ever since their purchase. If, since that time, or before it, an actual pedis possessio of these lands may have proved difficult or dangerous, owing to Indian wars, it surely cannot be seriously argued, that any warranty, expressed or implied, either by the civil or the common law, makes the vendor liable for the acts of a public enemy, or for a detention or disturbance of the possession by the act of the sovereign power. The purchasers have received full seizin and possession of these lands in the year 1819, under a title proved to be good and indefeasible; the execution of this mortgage is an assertion of the fact; they have neglected to comply with their contract to pay the money secured by the mortgage for ten years, at least, without any apology; and it would be a strange doctrine indeed, and one
equally unknown to the civil as to the common law, that an accidental disturbance of the possession by the public enemy, happening so many years after such default of payment, could retroact to justify its previous detention, or operate as a defense to the payment either of principal or interest.
Besides, if it were true that, during all this time, the vendee was unable to have such a possession of his land as to receive profits from it, the doctrine of the civil law, as quoted by the learned counsel for the appellant -- "that the vendee is not liable for interest where he received no profits from the thing purchased" -- has no application to the present case. It applies only to executory contracts, where the price is contracted to be paid at some future day, and the contract is silent as to interest. In such a case, the civil law will allow interest from the date of the contract of sale, if the vendee has had possession and received profits from the thing purchased. In this it differs from the common law, which would not allow interest before the day fixed for payment, unless specially contracted for. But where the purchaser has contracted to pay on a given day, and neglects or refuses so to do, both law and equity subject him to interest as the measure of damages for the breach of his contract.
A second objection made to the payment of interest is that the purchasers incurred much trouble and expense in obtaining any acknowledgment of their title from the United States, and although it was finally decided by the Supreme Court of the United States that their title was valid, yet that the courts of Florida had declared it invalid, and thus caused a cloud to hang over it for two or three years, which hindered the settlement, improvement, and sale of the lands.
It is hard to conceive on what grounds these facts should constitute a defense to the payment of interest. The vendor did not, and no sane vendor would, covenant that his vendee should enjoy the property in all future time, free from unjust interruption or oppression either by the sovereign power of the state, the public enemy, or individual trespassers. At the time this company purchased this claim from Forbes, the United States and Spain were in treaty for the cession of Florida, and doubtless it was the prospect of this change of sovereign, and the anticipated increase in value in consequence thereof, that moved them to purchase this large claim on speculation, and to covenant to pay the money for it, without waiting to see whether the United States would confirm the title, or without exacting from the vendors any covenant for the payment of any expenses to be incurred in obtaining the confirmation of their title by the new sovereign.
It may be admitted, also, that a court of equity would have enjoined the vendor from enforcing the collection of the purchase money while the decree of the Florida court as to the title remained unreversed, from an apprehension of a total failure of consideration; yet as that judgment was reversed, and as the vendee was never evicted or put out of possession, he could have no claim to be released from paying interest, even during the time his title was thus unjustly subject to a cloud, much less for any term preceding its existence, or since its removal. As we have already said, there was no covenant in this sale, nor is there in this or in any sale, either of real or personal property, any implied warranty by the vendor that his vendee shall enjoy it forever free from all unjust or illegal interference either by the sovereign, or the citizen, or the public enemy.
If the money secured by this mortgage had been paid when it became due, the mortgagee could have retained it with good conscience, and the mortgagor could have shown no right to recover it back on the ground of failure of consideration; for the consideration has not failed, and the title to the lands sold is indefeasible. And such being the case, it is hard to perceive any reason why the mortgagor should not be liable to the legal damages for detaining money which he was bound to pay.
Another reason urged against the allowance of interest in this case is founded on the allegation that, from the death of Forbes in 1822 till 1836, when John Innerarity took out letters of administration in Florida, there was no person to whom the mortgagors could legally make payment. But this argument is founded on a mistake of facts, as it appears clearly by the record that whenever the mortgagors were ready or willing to pay, they found persons ready to receive and give them a good and sufficient acquittance.
John Forbes was a trustee, as to this money, for the heirs of Panton and Thomas Forbes. When the mortgagors called on the executors of John Forbes to make a partial payment on the mortgage, they declined to receive it, but directed the payment to be made to the cestui que trusts, which was accordingly done. In October, 1823, one-half of the first installment was paid to William H. Forbes, acting for himself and the other heirs of Thomas Forbes. In the same year, also, the mortgagors paid to James Innerarity, who represented the heirs of Panton, the sum of $2,680.81, and in February, 1825, the further sum of $2,080.87. There is no evidence of any tender of the balance, either to the executors of Forbes or to the cestui que trusts.
This objection is therefore without foundation, and this
exception to the decree of the court of Appeals is overruled.
II. The second exception is to the refusal of the court to allow a credit of