Swain v. Seamens - 76 U.S. 254 (1869)
U.S. Supreme Court
Swain v. Seamens, 76 U.S. 9 Wall. 254 254 (1869)
Swain v. Seamens
76 U.S. (9 Wall.) 254
1. A contract to build, on a lot sold upon mortgage, a mill fifty feet wide by one hundred and fifty long is not, as a proposition of law, substantially complied with by building one that is seventy-eight feet wide by a hundred long, even though the purpose of the contract was to give the vendor security for the purchase money of the lot, and though the mill of the latter dimensions have cost more and be better adapted to the purposes intended than such a one as was contracted for.
2. But if the vendor, having made an agreement that upon a mill of the former dimensions being built on the lot sold, he will accept policies of insurance on it for the amount of another mortgage collateral to one given on the property sold, and he does accept such policies, he cannot decline to enter satisfaction on such other mortgage because the mill was not of the dimensions contracted for. He waives by such acceptance of the policies all right to object to the variation in the construction.
3. Where a person tacitly encourages an act to be done, he cannot afterwards exercise his legal right in opposition to such consent if his conduct or acts of encouragement induced the other party to change his position so that he will be pecuniarily prejudiced by the assertion of such adversary claim.
4. The statute of frauds cannot be set up as a defense to the performance of one formal item of an agreement where the contract has been fully performed by the party asking such performance and, except as to such remaining formal item, by the other party also.
Appeal from the Circuit Court for Wisconsin, in which court Seamens and others filed a bill against Swain praying that a mortgage executed to him, Swain, by Medbery and wife, on certain lots of which he, Seamens, and the others were now owners, in Wisconsin, might be cancelled.
It appeared that in 1855, Swain sold to Medbery and
one Aldrich real estate in Michigan for $52,400, of which $10,000 was paid in cash and the balance, $42,400, secured by a mortgage on the lands, payable in installments at different times, and that on this Michigan land foundations had been made in the previous autumn by driving piles for the erection of a saw mill fifty by one hundred and fifty feet in size that Medbery was then the owner of certain lots in Wisconsin, and that on the same day and in pursuance of articles of agreement preceding the sale to give additional security to the extent of $6666.66, he and his wife executed to Swain a mortgage on these lots as additional security.
On the Wisconsin mortgage, Swain, on the same day that it was given, endorsed the following stipulation, which gave rise to this suit:
"It is hereby agreed that if within two years from this date the large saw mill, fifty by one hundred and fifty feet in size, shall be properly built and completed upon the foundation commenced last fall by driving piles, to accept in place of the within mortgage security in proper fire insurance policy or policies on said large saw mill, and thereupon to discharge the within mortgage."
The stipulation above made was in pursuance of a contract made by the purchasers in the previous articles of agreement to keep the buildings erected, and the large saw mill to be erected upon the premises insured in some safely reputed fire insurance company or companies against fire, and that they should assign the policy or policies to Swain, and that in default thereof it should be lawful for him, Swain, to effect the insurance himself, and that the premiums and the costs and charges of his doing so should be a lien on the mortgaged premises.
The bill alleged that subsequently to the execution of the agreement endorsed by Swain on the mortgage, and within the two years, there was built and completed upon the Michigan lands and upon the foundation referred to in the said agreement a large saw mill, not of 50 by 150 feet, but of 78 by 100; this mill, however, being larger and of greater value and better adapted to the purposes intended than one of the
dimensions originally contemplated, and that the said mill, as built and completed, was assented to and accepted by Swain as a compliance with the said written agreement endorsed on the Wisconsin mortgage; that in May, 1856, Medbery and Aldrich caused the new saw mill to be insured in different companies named, to the extent of $6,000; and that these policies of insurance were duly transferred and delivered to Swain, and accepted and assented to by him as a compliance with the agreement, and that he had them in possession; that in October, 1857, Swain caused the new mill to be further insured for one year in the name of Medbery & Aldrich for his own use and benefit; that in September, 1858, he again caused the new saw mill and other buildings on the premises to be again insured for one year in the name of Medbery & Aldrich, but for his own security, and paid out for premium $210; that all these insurances mentioned were obtained at the request of Swain, with the consent of Medbery & Aldrich, and upon the understanding that they should reimburse him the premiums; that in November, 1858, Swain and Medbery & Aldrich accounted respecting the amount due upon the mortgage, and that Medbery & Aldrich then paid him $15,236.06, in which sum was included, as paid by Swain during 1857 and 1858 for premiums on the new saw mill and other property mentioned in the mortgage, the sum of $446.50 and interest.
"during the building and erection of the said large saw mill upon the premises referred to in the written agreement aforesaid by said Medbery & Aldrich, the said defendant, Swain, was present at different times and was informed by said Medbery & Aldrich, or one of them, of the intended or the then variation in the dimensions of said saw mill from 50 by 150 feet, as specified in said written agreement, and that the said mill, as was then being built or was then completed, would be of greater value and better adapted for the uses and purposes intended than it would be if built of said dimensions as specified in said written agreement, and that the said defendant was then and there asked by said Medbery & Aldrich, or one of them, to consent to
such alteration and accept the mill as then being built, and since completed, in lieu of the one mentioned in said written agreement, and that the said defendant did then and there agree to accept and did accept the said mill so being built and afterwards completed in lieu of the one mentioned in said written agreement and as a compliance on the part of said Medbery & Aldrich with the said written agreement on his or their part."
The mortgage on the Michigan property not being paid, Swain foreclosed it, and on a decree, finding $22,464 due, sold and purchased the premises for $19,600.
The answer denied that Medbery & Aldrich completed the mill substantially according to the agreement, denied that Swain consented to or acquiesced in the departure from the plan for constructing the mill, and, admitting that Swain did accept policies of insurance upon the mill which was built, denied that he did so in pursuance of the agreement or that he accepted the policies as a compliance on the part of Medbery & Aldrich.
The statute of frauds of Wisconsin, it may be necessary here to state, enacts [Footnote 1] that
"No estate, or interest in lands, . . . nor any power over or concerning lands or in any manner relating thereto shall be created or surrendered . . . unless by deed or conveyance in writing"
&c., and that "the term lands," shall be construed as coextensive in meaning with "lands, tenements, and hereditaments," and the terms "estate and interest in lands" to embrace every estate and interest, freehold and chattel, legal and equitable, present and future, vested and contingent in lands as above defined.
The right to have the cancellation prayed for depended therefore upon the following questions:
1. Was the mill constructed in substantial conformity with the agreement?
2. If constructed differently, did Swain consent to or acquiesce in the departure from the original plan, or
3. Did Swain, after its construction, accept policies on the mill in pursuance of the agreement?
If any one of these questions were answered in the affirmative, then obviously the mortgage was to be cancelled.
4. Unless indeed there was something in the statute of frauds, as above quoted, which interfered with such a conclusion.
The second and third questions were obviously questions of pure fact, and the court below, which decreed the cancellation, considered, as this Court (on appeal from that decree) also considered, that the evidence made it clear, on direct proofs, that Swain had in fact acquiesced in the departure in the building of the mill, and moreover that after its construction, he had accepted policies, by this means also waiving any objection to such variation.