A court of equity will in general decree a specific performance
of an agreement for the sale of lands if the vendor is able to make
a good title at any time before the decree is pronounced, but the
dismission of a bill brought by the vendor to enforce a specific
performance, on account of a defect in the title, is a perpetual
bar to a new bill brought for the same object, unless perhaps in a
case where an original bill in the nature of a bill of review might
be entertained.
The inability of the vendor to make a good title at the time the
decree is pronounced, though it forms a sufficient ground for
refusing a specific performance, will not authorize a court of
equity to rescind the agreement in a case where the parties have an
adequate remedy at law for its breach.
The alienage of the vendee is an insufficient ground to entitle
the vendor to a decree fair rescinding a contract for the sale of
lands, though it may afford a reason for refusing a specific
performance as against the vendee.
But if the parties have not an adequate remedy at law, the
vendor may be considered as a trustee for whoever may become
purchasers under a sale by order of the court, for the benefit of
the vendee.
Where the vendor is indebted to the vendee and the sale is made
in order to pay the debt, the vendor must pay interest from the
time the debt is liquidated until he makes a good title, and the
vendee is accountable for the rents and profits from the time the
title is perfected until the contract is specifically
performed.
The facts are stated in the opinion of the court, and the
controversy is the
Page 14 U. S. 180
same as in the suits between the same parties reported in
5 U. S. 1 Cranch
321, and
9 U. S. 5 Cranch
262.
WASHINGTON, J., delivered the opinion of the Court.
The material facts upon which the questions now to be decided
arise are as follows:
Hepburn and Dundas being indebted to John Dunlop & Co., of
Great Britain, on account of certain mercantile dealings which had
taken place between those parties, the precise amount whereof was
disputed, an agreement in writing was entered into on 27 September,
1799, between the said Hepburn and Dundas and Colin Auld, the
attorney in fact of John Dunlop & Co., whereby it was
stipulated that the parties mutually agreed to submit all matters
in dispute respecting the demand of Dunlop & Co. to certain
arbitrators named in the agreement whose award should be made on or
before 1 January following. That Auld, as the agent of Dunlop &
Co., would on the next day, to-wit, 2 January, 1800, accept from
Hepburn and Dundas the sum which should be awarded to Dunlop &
Co. in bills of exchange or in Virginia currency at the par of
exchange, and upon such payment being made in either way, that Auld
would give to Hepburn and Dundas a full receipt and
Page 14 U. S. 181
discharge of all the claims and demands of Dunlop & Co.
against them; that in case Hepburn and Dundas should not on the
said 2 January pay the amount of the said award either in bills of
exchange or money, they should on that day assign to Auld, as
attorney of Dunlop & Co., in the fullest manner a contract
entered into in the year 1796 by Hepburn and Dundas with a certain
William Graham for the sale of 6,000 acres of land lying on the
River Ohio, for the recovery of which, on account of the nonpayment
of the purchase money by Graham, Hepburn and Dundas had brought an
ejectment, which was then depending; that this assignment should be
accompanied by a power of attorney irrevocable to enable the said
Auld to pursue all legal means to recover the possession of the
land, or to enforce the payment of $18,000, the amount of the
purchase money, whichever of these measures Auld might prefer.
Dundas further stipulated not to interfere with the measures which
Auld might choose to pursue for the recovery of the land or the
purchase money, and further that whenever any suit brought or to be
brought for the land should be judicially determined or otherwise
settled by an amicable compromise, Hepburn and Dundas would convey
the same to the person who by such determination or compromise
should be acknowledged to be entitled to it in the manner expressed
in the contract with Graham. It was also stipulated that if the
purchase money for the said land, with interest thereon to 2
January, 1800, should be insufficient to discharge the sum which
might be
Page 14 U. S. 182
awarded to Dunlop & Co., Hepburn and Dundas should on that
day pay to Auld as much money as should make up the deficiency, and
if, on the other hand, the said purchase money and interest should
fall short of the sum awarded, that Auld would on the same day pay
to Hepburn and Dundas the excess over and above the sum
awarded.
Lastly it was stipulated that if Auld should recover the land
and be enabled to sell the same for more than was allowed to
Hepburn and Dundas by the said agreement, together with the costs
and expenses attending the recovery, Auld should pay to Hepburn and
Dundas the expenses incurred in prosecuting the suit commenced by
them for the recovery of this land.
In pursuance of these articles, an award was made by the day
mentioned in the submission, which award stated that the sum of
�4,379 9s. 034d., sterling, including interest, would be due to
Dunlop & Co. on 1 January, 1800. This sum fell short of the
purchase money and interest, due by Graham to the same period, the
sum of �494 6s. 8d, Virginia currency. Hepburn and Dundas, having
prepared a deed of assignment of Graham's contract and a power of
attorney as stipulated in the above-mentioned agreement, offered to
deliver the same to Auld on 2 January, 1800, which he refused to
accept because the deed recited, as a part of the consideration,
that a release had been executed by Auld of all the claims and
demands whatsoever of Dunlop & Co. against Hepburn and Dundas,
and because, as is asserted by Auld, Hepburn and Dundas required
Auld to execute such a release prior to the
Page 14 U. S. 183
delivery of the deed of assignment. The suit of Hepburn and
Dundas against Graham for the recovery of the 6,000 acres of land
was prosecuted against his heirs, and in May, 1801, by a compromise
between Hepburn and Dundas and the defendants in the ejectment,
judgment was rendered in favor of Hepburn and Dundas.
Without noticing particularly the conduct of those parties
subsequent to the transactions of 2 January, 1800, as well as on
that day, it may be sufficient to say that if the tender made by
Hepburn and Dundas was upon the condition asserted by Auld to have
been annexed to it and if, in consequence thereof, any legal
advantage accrued to him, it was waived by his subsequent conduct.
As late as February, 1807, Auld made a tender of the difference
between the sum awarded to Dunlop & Co. and the purchase money
and interest due upon Graham's contract and demanded a deed, but
this demand was made in a manner and under circumstances which this
Court, upon a former occasion, deemed unreasonable.
Things remained in this situation until sometime about April,
1801, when Hepburn and Dundas instituted a suit at law against Auld
for the difference between the sum awarded to Dunlop & Co. and
the amount of the purchase money and interest due by Graham's
contract on 2 January, 1800. About the same time, a suit at law was
commenced by Auld against Hepburn and Dundas upon the agreement of
27 September, 1799, to recover the whole sum awarded. In the first
case,
Page 14 U. S. 184
this Court, upon a writ of error, decided upon the pleadings
(which were so drawn as to present the point) that Hepburn and
Dundas had no right to demand of Auld a release of all claims and
demands against Dunlop & Co., to be executed as a precedent act
to the assignment of Graham's contract, and the delivery of the
power of attorney, and on that ground judgment was rendered against
Hepburn and Dundas.
5 U. S. 1 Cranch
321.
In the other case, the pleadings presented the question whether
the recital of such a release in the deed of assignment offered to
be delivered by Hepburn and Dundas invalidated the tender. Upon a
writ of error it was decided by this Court that the recital of the
release could not impair the rights of Dunlop & Co., under the
agreement of September, 1799, and that it formed no objection to
the assignment; consequently, that the tender and refusal amounted
to a performance in like manner as if Auld had accepted the
assignment, but that Hepburn and Dundas would still be obliged to
execute a proper deed of assignment and a conveyance of the land
whenever they should be required to do so. Judgment was accordingly
rendered in this suit against Auld.
9
U. S. 5 Cranch 262.
Hepburn and Dundas having been thus defeated in their attempt at
law to enforce a performance of the agreement, filed a bill in
equity praying for a specific performance. The answer of Auld
contained, amongst other objections to a specific performance, an
allegation that the title of Hepburn and Dundas
Page 14 U. S. 185
to the land was defective. Hepburn and Dundas then set forth
their title in a supplemental bill. This suit came on to be heard
upon an appeal to this Court at the same time that Auld's suit at
law against Hepburn and Dundas, above mentioned, was decided. This
Court determined
1st. That since Auld had by his conduct subsequent to 2 January,
1800, waived all objections to the tender of the assignment of
Graham's contract on that day, and did not refuse to receive a
conveyance which was offered to be made by Hepburn and Dundas in
June, 1801, on account of any defect in the title, but for other
reasons which would equally have operated with him had there been
no such defect, Hepburn and Dundas would still be entitled to a
specific performance if they could then make a good title.
2d. That the title appeared by the bills to be defective as to
20 acres, being Thomas West's part of Mrs. Bronaugh's 1,000 acres,
and also his part of Francina Turner's interest in the same tract,
and also on account of the failure to record Thomas West's deed to
Hepburn and Dundas for 1,000 acres. For these defects in the title,
the bill was dismissed.
9 U. S. 5 Cranch
262.
Presuming that the decree, which seemed to close forever the
doors of a court of equity against Hepburn and Dundas, opened them
to Dunlop & Co. to get rid of the contract altogether, Auld
filed the bill which is now under consideration, stating, amongst
other things, the previous and present inability of Hepburn and
Dundas to make a good title to this
Page 14 U. S. 186
land and praying that the agreement may be set aside and the
debt awarded to Dunlop & Co., with the interest thereon, to be
decreed, or that if the court should consider Dunlop & Co.
under an obligation to accept of the land, that only the reasonable
value of the land at the time when Hepburn and Dundas' title to it
was perfected should be allowed. The bill also contains the general
prayer for such relief as is consistent with equity.
Hepburn and Dundas seem to have given a very different
construction to the above decree, and supposing that if, within a
reasonable time after it was pronounced, they could remove the
objections to their title which were pointed out in the decree,
they might still call for a specific performance, they soon
obtained a conveyance from the heirs of Thomas West of all their
right, title, and interest in and to this land, and on 27 March,
1809, less than a month after the decree of dismission by this
Court, they offered to convey to Auld a good and sufficient title.
This offer being refused, Hepburn and Dundas filed a bill against
Colin Auld, as attorney of Dunlop & Co., setting forth their
ability and readiness to convey an unexceptionable title to this
land and praying that Auld, or Dunlop & Co., might be compelled
to accept of a conveyance and to pay the difference between the
agreed value of the land and the sum awarded.
These suits came on to be heard at the same time. In the suit
brought by Dunlop & Co. against Hepburn and Dundas, it was
decreed by the court below that Hepburn and the heirs of Dundas
should pay to Dunlop & Co., or their agent, the sum of
$33,060.37, being the amount of the sum awarded,
Page 14 U. S. 187
with interest thereon at five percent, from 1 January, 1800,
till the time of rendering the decree, but that the sum of $21,112,
part thereof, might be discharged by a conveyance, within a certain
time of the above land to Auld in trust for Dunlop & Co. From
this decree an appeal was prayed by both parties.
In the other suit, brought by Hepburn and Dundas against Auld, a
decree was made that upon the complainant's paying to Auld, as
attorney of Dunlop & Co., the sum of $11,966.37 and conveying
to the said Auld, in trust for Dunlop & Co., on or before a
certain day, the above-mentioned land, the said Auld, as attorney
of said Dunlop & Co., should execute and deliver to Hepburn and
Dundas such a receipt and discharge of all the claims and demands
of Dunlop & Co. against them as the court might approve. From
this decree both sides again appealed.
Against so much of these decrees as compel Auld to accept of a
conveyance in trust for Dunlop & Co. in part discharge of the
debt decreed to be paid by Hepburn and Dundas to Dunlop & Co.,
the following objections have been made and are now to be
considered:
1st. That Hepburn and Dundas were guilty of a fraudulent
misrepresentation of the value of this land, and also of a willful
concealment of the defects in the title, whereby Auld was induced
to enter into the agreement of September, 1799.
2d. A want of authority in Colin Auld to enter into an agreement
for taking a conveyance of land in discharge of the debt due to
Dunlop & Co.
Page 14 U. S. 188
3d. The refusal of Hepburn and Dundas to assign Graham's
contract, on 2 January, 1800, except upon a condition which they
had no right to exact, and their interference in the suit with
Graham's heirs and the compromise made with them whereby (it is
contended) they disabled themselves from executing the agreement of
September, 1799.
4th. That the title to the land is yet defective.
5th. That the former decree dismissing Hepburn and Dundas' bill
for a specific performance is a perpetual bar to the relief sought
by their present bill.
6th. That Dunlop & Co. being aliens and incapable of holding
lands in Virginia, a court of equity will not compel them to
execute their agreement, even if Hepburn and Dundas had been always
in a condition to perform it on their part.
1. The first objection appears to be unsupported by the
evidence. In respect to the value of the land, the representations
made of it in the letters of Hepburn and Dundas to Dunlop & Co.
and to Colin Auld affirm no fact which is proved to be untrue.
Those letters contain expressions of the opinion of Hepburn and
Dundas that the land was an ample security for the debt due to
Dunlop & Co., and it must be admitted that in their letter to
Colin Auld of 6 September, 1799, they seem to have indulged
themselves in very extravagant notions of its value. But it is to
be remarked that the grounds of this calculation are fairly stated
in the letter, and an opportunity is afforded to Auld to inquire
into them and to judge for himself, besides which it should be
recollected that, Auld having agreed in his letter
Page 14 U. S. 189
of 4 September, two days before the date of this letter, to
submit to the award of arbitrators and to receive an assignment of
Graham's contract at the stipulated sum to be paid by Graham,
Hepburn and Dundas could have had no motive at that time to make an
untrue representation of the value of the land. At no antecedent
period does it appear that they had made an uncandid statement upon
this subject to Dunlop & Co. or to Auld. Their opinion of the
real value of the property might be incorrect, but a mistaken
opinion of the value of the property, if honestly entertained and
stated as opinion merely, unaccompanied by an assertion or
statement untrue in fact, can never be considered as a fraudulent
misrepresentation. That Hepburn and Dundas intended no deception is
evident from the following considerations:
1. That the offer made by them to Colin Auld of this land was
that of a security only, for the debt due to Dunlop & Co.,
which was declined by Auld, upon the ground that if payment of the
debt to Dunlop & Co. was to be postponed until the suit with
Graham should be concluded, Dunlop & Co. ought to be entitled
to all the benefit of the contract with Graham, and for this reason
a proposition was made by him to accept an assignment of that
contract and to pay the difference between the purchase money and
interest thereon and the sum which might be awarded in case the
latter should fall short of the former.
2. That Hepburn and Dundas had, in the year 1796, sold this land
to Graham for the sum at which Auld agreed to take it, and as
evidence of their opinion that the
Page 14 U. S. 190
land had since that sale risen in value, they had instituted a
suit at law against Graham in order to avoid the sale and to
recover back the land. If any further answer to this objection be
necessary, it may be sufficient to add that the fraud now charged
against Hepburn and Dundas was not thought of, and certainly not
imputed to them, when the former suit of Hepburn and Dundas for a
specific performance was depending.
As to the alleged concealment by Hepburn and Dundas of defects
in their title, there is every reason to believe that they were
unknown to them until sometime in the year 1805, when they
endeavored to remove them, and supposed they had done so. The only
objection suggested by the special verdict in the ejectment was the
want of a partition deed between the original grantees of this
land, which objection this Court has declared to be insufficient to
bar Hepburn and Dundas from asking for a specific performance of
the agreement.
2. The next objection to the decree below is that Auld had no
authority, in virtue of the power of attorney from Dunlop &
Co., to enter into an agreement to receive land in discharge of the
debt due by Hepburn and Dundas.
This, like the former, is a new objection, not thought of or
argued as a reason against a specific performance in the former
suit. It is unnecessary to examine with critical nicety the import
of the expressions used in the power of attorney to Auld. He was
empowered to sue for, and to compound and agree for all debts due
to Dunlop & Co. and in
Page 14 U. S. 191
general to do all other lawful acts needful for those purposes
as fully as Dunlop & Co. could do. Under this authority, he
entered into the agreement with Hepburn and Dundas which there is
no reason to doubt he communicated in due time to his constituents,
and it is perfectly fair to consider their acquiescence in that
agreement as amounting to a ratification of it. It would be most
inequitable to permit Dunlop & Co., at the distance of many
years after this agreement was made, to controvert the authority of
their agent and to say they are not bound to perform it, although
it must be admitted that during all that time it was in their power
to enforce it against Hepburn and Dundas, had it been their wish or
interest to do so.
3. The third objection to the decrees below is the refusal of
Hepburn and Dundas to assign Graham's contract on 2 January, 1800,
except upon a condition which he had no right to exact, and their
interference in the suit with Graham's heirs, and the compromise
made with them. In answer to the different parts of this objection
it might be sufficient to remark that they were urged by Colin Auld
in his answer to Hepburn and Dundas' former bill; that they were
considered by this Court and decided to be insufficient to deprive
Hepburn and Dundas of the relief prayed for. However true the
allegation may be that Hepburn and Dundas refused to assign
Graham's contract and to deliver the power of attorney to Auld on 2
January, 1800, unless Auld would first execute a release of all
claims and demands of Dunlop & Co. against Hepburn and Dundas,
yet the subsequent
Page 14 U. S. 192
conduct of Auld amounted to a waiver of all objections on that
account; his and his counsel's letters to Edward Graham, in which
he was asserted to be the assignee of the contract with Graham; his
instructions to Cook to attend to the ejectment and to get it
brought to a speedy decision; his engaging counsel in that suit;
and, in short, his whole conduct throughout the year 1800 all tend
to prove that the transaction of 2 January, 1800, had not in any
manner impaired the rights of the parties under the agreement now
alleged to have been violated by Hepburn and Dundas.
As to the compromise said to have been made by Hepburn and
Dundas with the claimants under Graham, their conduct upon that
occasion appears to have been unexceptionable. That a judgment
against those claimants at an early day was anxiously desired by
Auld, and the assistance of Hepburn and Dundas to effect that
object was expected and required by him is apparent from the above
letters from him to Edward Graham and from many other facts proved
in the former suit. The endeavors of Auld to hasten the decision of
the ejectment and to obtain a judgment for the land seem to have
been unremitting until sometime in December, 1800, when he declined
interfering any further in the business; but neither then nor at
any subsequent period did he express to Hepburn and Dundas a
disinclination to obtain a judgment, nor did he forbid them from
proceeding to effect it. It is objected under this head that
Hepburn and Dundas, contrary to an express stipulation in the
agreement with Auld, released
Page 14 U. S. 193
to the defendants in the ejectment the right which, as trustee
for Auld, they had to demand mesne profits during the time that
Hepburn and Dundas had been out of possession of the land, and
further that they consented to permit those defendants to retain
possession of the premises for a year after the judgment was
rendered. Neither of these allegations is supported by the evidence
in the cause. The agreement made by Hepburn and Dundas with the
heirs of Graham in relation to the costs of the suit and the mesne
profits disavows in the most explicit terms all power in them and
all intention to release either of those claims, but stipulates to
indemnify those defendants against these claims in case they should
be made and enforced by Auld, who is declared to be alone entitled
to make them. This contract of indemnity, therefore, did not amount
to a release, nor did it impair the rights of Dunlop & Co.
under their agreement with Hepburn and Dundas. As to the remainder
of this objection, it is founded altogether upon the deposition of
Mr. Sheffey, the counsel for Graham's heirs, which, as it is
explained by the same witness in a subsequent deposition, proves no
more than that such a proposition had been made by Edward Graham to
Mr. Hepburn. That it was not accepted by him is manifest by the
judgment itself, which is unconditional, as well as by an agreement
made between Hepburn and Dundas and Edward Graham the day after the
judgment was entered.
4. The next objection is that the title of Hepburn
Page 14 U. S. 194
and Dundas to this land or to some part thereof is still
defective.
In the opinion given by this Court at February term, 1809, in
the suit brought by Hepburn and Dundas for a specific performance,
the title was declared to be unexceptionable except, 1st, as to 208
acres, being the part of Sarah Bronaugh's 1,000 acres, to which
Thomas West was entitled as one of the heirs of Mrs. Bronaugh, and
of Francina Turner, and 2d, as to 1,000 acres, the original share
of Thomas West, which had been conveyed by him to Hepburn and
Dundas by a deed which had not been recorded. These defects have
since been cured by a conveyance to Hepburn and Dundas by the heirs
of Thomas West bearing date 20 March 1809, of all their title to
the aforesaid parcels of land.
It is nevertheless contended that this conveyance is
insufficient to pass a clear and undisputed title inasmuch as the
land may be bound by the claims of creditors or of purchasers
subsequent to the deed from Thomas West to Hepburn and Dundas. The
answer given at the bar to these suggestions is entirely
satisfactory to the Court. If the land be exposed to the claims of
subsequent purchasers or mortgagees under West, to be effectual
against Hepburn and Dundas, the deeds must have been recorded
within eight months after the death of West, at the latest period,
either in the general court or in the district or county court
where the land lies. Had any such deeds been so recorded, it was in
the power of Auld to have proved the fact by the records
Page 14 U. S. 195
of some one of those courts, and the want of such proof destroys
all presumption that any such conveyances were made.
As to judgments against West, they too must be of record, and
after a lapse of 10 years since his death, the Court cannot presume
the existence of such judgments. As to specialties in which the
heirs of West are bound, if there be such, which is not proved,
they cannot affect this land in the hands of a
bona fide
purchaser under those heirs.
5. The next objection made to the decrees below is that the
dismission of the former bill of Hepburn and Dundas for a specific
performance is a bar to their present bill for the same object.
This objection is well founded. If a bill by the vendor of land
seeking a specific performance of the contract be dismissed on
account of a defect in the title, the doors of a court of equity
are and ought to be forever closed against him, notwithstanding he
should afterwards have it in his power to make a good title, unless
perhaps in a case where an original bill in the nature of a bill of
review might be entertained. But the present bill is not founded
upon new matter, discovered since the hearing of the former cause
and which it was not in the power of Hepburn and Dundas to produce
at that time. It is not pretended that he was ignorant who were the
heirs of Thomas West or that he could not as well have procured a
deed from them before as after the former decree. His ignorance was
not of a matter of fact, but of law. He erroneously supposed that
his title was good, and on account of the defects existing
Page 14 U. S. 196
in it at the time of the decree, his bill was dismissed. The
rule of the court of equity to decree a specific performance if the
vendor is able to make a good title before the decree is pronounced
is an indulgence which he is not entitled to by the terms of his
contract. A majority of this Court approves of the rule as a
general one, but is not disposed to extend it as such. If, in a
case peculiarly circumstanced, an extension of the time for
completing the title would be proposed and should be intended to be
granted, the court would either continue the cause in order to give
the vendor time to perfect his title or would dismiss the bill
without prejudice.
The questions, then, which remain to be decided are 1st, whether
Dunlop & Co. are entitled to the relief for which they
specifically prayed, and if not, then 2d, are they entitled to any
other, and what relief, under the general prayer in their bill?
1st. The relief specifically prayed for consists of two parts --
1st, that the agreement of September, 1799, may be rescinded and
the sum awarded, with interest decreed to be paid; if this should
be denied and Dunlop & Co. be compelled to receive a conveyance
of the land, then 2d, that the reasonable value only of the land at
the time when the title was perfected should be allowed.
As to the 1st. Most of the objections which have been urged
against the decree of the court below for a specific performance
were relied upon by the counsel for Dunlop & Co., as sufficient
to set aside the contract. These have already been considered, and
the result has been shown to be that if the bill
Page 14 U. S. 197
of Hepburn and Dundas for a specific performance were unaffected
by the dismission of their former bill, none of these objections
would be sufficient to preclude them from the relief sought by
their present bill. If so, they are insufficient to enable Dunlop
& Co. to obtain a decree to rescind the contract. There are
many cases in which a court of equity, although it would not decree
a specific performance, will yet refuse to order a contract to be
cancelled. The inability of the vendor to make a good title at the
time the decree is to be pronounced furnishes a very good reason
for excluding him from relief in a court of equity, and yet it does
not follow that the court will, for this reason merely, set aside
the contract. Generally speaking, a court of law is competent to
afford an adequate remedy to either party for a breach of the
contract by the other from whatever cause it may have proceeded,
and whenever this is the case, a resort to a court of equity is
improper.
But if the contract ought not, in conscience, to bind one of the
parties, as if he had acted under a mistake, or was imposed upon by
the other party or the like, a court of equity will interpose and
afford a relief, which a court of common law cannot, by setting
aside the contract, and having thus obtained jurisdiction of the
principal question, that court will proceed to make such other
decree as the justice and equity of the case may require. Whether
inability in the vendor to make a title is of itself unattended by
some peculiar circumstances of hardship sufficient to justify the
court in setting aside
Page 14 U. S. 198
the contract need not now be decided. This is certainly not a
case where the exercise of this branch of equity jurisdiction can
be fairly demanded by Dunlop & Co. Within a month after the
recovery of the judgment against the heirs of Graham, Hepburn and
Dundas tendered to Colin Auld a conveyance of the land, which was
refused not on account of any defect in the title, but for reasons
which would equally have operated with him had there been no such
defect. Immediately after the defects in the title were pointed out
by this Court, they were removed, and the conveyance of an
unexceptionable title was tendered and refused. Had Hepburn and
Dundas been in a condition to make such a title a month sooner,
this Court, instead of dismissing their bill, would have decreed a
specific performance. Under such circumstances, it would be
inequitable to set aside the contract. The alienage of the
complainants is urged as an additional reason for setting aside
this contract. Although the incapacity of the purchaser to hold
land might afford a reason for denying a specific performance upon
the prayer of Hepburn and Dundas (a point, however, not intended to
be decided), it is certainly insufficient to entitle the vendor,
under the circumstances of this case, to a decree to rescind the
contract. But the Court does not mean to intimate an opinion that
the terms of this contract did expose this land to the danger which
is apprehended.
It appears by the contract and the previous correspondence
between these parties that they contemplated a sale of this land in
the event of the contract
Page 14 U. S. 199
with Graham being rescinded, and that the proceeds thereof
should be paid over to Auld, in discharge of so much of the debt
due by Hepburn and Dundas to Dunlop & Co., as the purchase
money due by Graham, with interest thereon to 1 January, 1800,
would amount to, and this whether the land should sell for more or
less than that sum. In this view of the case, the land was
considered as a security for a stipulated sum, and Hepburn and
Dundas were constituted trustees for whoever might become the
purchasers of it. A conveyance to Auld or to Dunlop & Co. does
not appear to have been contemplated. But if in point of law it
should be true that Auld, by neglecting to proceed against Graham's
representatives for the recovery of the land in the name of Hepburn
and Dundas, separated the interests of his constituents, this can
surely afford no sound reason for setting aside the contract. It is
sufficient if Hepburn & Dundas are able and ready to make a
conveyance when they shall be required to do so.
2d. The other specific relief prayed for is that Hepburn and
Dundas may be credited on account of the land for no more than its
real value in March, 1809, when a conveyance was tendered and
refused. A decree of this sort would be an anomaly in the
jurisprudence of a court of equity. It would be an affectation of
decreeing a specific performance contrary to the terms of the
contract upon which the decree is to operate. It would be in fact
to make a contract for the parties altogether different from what
they had made for themselves, and hen to decree
Page 14 U. S. 200
an execution of it. There is no precedent, and certainly no
principle of equity to sanction such a decree. Either the contract
of the parties must be executed according to the terms of it or it
cannot be executed at all.
The only remaining question, then, is whether, under the general
prayer, the court can grant any, and what, relief?
There can be no question but that it is competent to Dunlop
& Co. to ask for a specific performance of the agreement so far
as it can now be performed, although the Court cannot listen to a
similar prayer from Hepburn and Dundas. But this is not the relief
specifically stated in this bill, and it is supposed to be
unreasonable to compel a specific performance under the general
prayer for relief in opposition to the specific prayer that the
contract may be set aside. To this objection it may well be
answered that if it be improper to rescind or to modify the
contract, nothing remains to be done under the general prayer but
to dismiss the bill or to decree an execution of the contract. But
as the former cannot be presumed to be the object of the general
prayer, it would seem to follow that an execution of the contract
was intended to be asked for in case the specific relief should be
denied.
For these reasons, the Court will decree a specific performance,
so far as it is practicable, and considering Hepburn and Dundas as
trustees for the person or persons to whom this land may be sold,
the conveyance will be decreed to be made to such persons
Page 14 U. S. 201
as may become the purchasers of the land under the decree of
this Court.
The residue of the decree below, which allows to the
complainants, Dunlop & Co., interest upon the sum awarded from
1 January, 1800, to the time of the decree is objected to by
Hepburn and Dundas upon the ground that the purchaser of land to
whom neither a conveyance has been made or possession delivered is
to be considered in equity as the owner, and of course entitled to
the rents and profits, and that the right of the vendor to the
purchase money draws after it a correspondent right to demand
interest upon the same until it is paid. This, it must be
acknowledged, is the general principle which prevails in the courts
of equity.
But it would seem to be inequitable to apply it to a case like
the present. Here, the purchase money was in the hands of the
vendor at the time the contract was made. It consisted of a debt
due by the vendor to the purchaser, which the former bound himself,
by his agreement, to discharge by bills of exchange or cash, or by
an assignment of a contract for land and a conveyance of a good
title to it, and with money to make up any deficiency which might
arise by the agreed price of the land falling short of the debt.
Neither bills nor cash were paid, nor was the contract assigned or
a conveyance made, for it turned out that the vendor could not make
a good title to the whole of the land until March, 1809. They have
always retained possession, and the land is in reality unproductive
of profits in any measure equal to the interest on the
Page 14 U. S. 202
debt. This debt unquestionably bore interest from the moment it
was ascertained and agreed to be paid, and not having been paid nor
a tender of a good title to the land made until March, 1809, it
would be highly unjust to stop interest on the debt until that
period.
The written arguments of the counsel, which have been sent to
the Court, present two questions in relation to interest which
remain to be noticed. It is contended by the counsel for Dunlop
& Co. that interest ought to be calculated upon the sum
composed of principal and interest, stated by the arbitrators to be
due on 1 January, 1800, at the rate of 6 percent per annum from
that day. On the other side it is insisted that no more than 5
percent per annum should be allowed, and this not on the sun found
by the arbitrators to be due, but upon the principal sum only.
The Court is of opinion that although the award does not direct
the sum which is found to be due by Hepburn and Dundas to be paid
to Dunlop & Co., yet it ascertains the sum which was due on 1
January, 1800, and the agreement upon which the submission was made
bound Hepburn and Dundas to pay that sum when it should be so
ascertained. The two instruments, taken together, amount to a
contract to pay a specific sum, and are clearly within the words as
well as the fair interpretation of the law of Virginia passed in
the year 1796, which fixed the rate of interest at 6 percent per
annum. This principle being settled, it follows that the interest
must be calculated upon the sum
Page 14 U. S. 203
ascertained by the award to be due on 1 January, 1810. To
separate the principal from the interest, even if the award
furnished materials for such an operation, would be in effect to
set aside the award and to vary the agreement with which it is
intimately connected.
It is therefore the opinion of the Court that Hepburn and Dundas
ought to pay interest upon the sum awarded by the arbitrators,
after the rate of 6 percent per annum, from 1 January, 1800, to 27
March, 1809, when they were able to make, and did in fact tender, a
good and sufficient conveyance to the agent of Dunlop & Co.
From 27 March, 1809, interest ought to stop, but Hepburn and Dundas
ought to account with Dunlop & Co. for the rents and profits of
the 6,000 acres of land from that period to the time of rendering
this decree.
Page 14 U. S. 204
DECREE. These causes came on to be heard this 8 February, 1816,
on the transcript of the
Page 14 U. S. 205
records and were argued by counsel, whereupon, it is decreed and
ordered that the decree of the Circuit Court of the District of
Columbia for the County of Alexandria, in the suit of William
Hepburn and the heirs and executors of John Dundas against Colin
Auld, agent and attorney in fact for John Dunlop & Co., be
reversed and annulled and this Court, proceeding to give such
decree as the said circuit court ought to have given, it is further
ordered and decreed that the said bill be dismissed.
And it is further decreed and ordered that the decree in the
suit of John Dunlop & Co. against William Hepburn and the heirs
and executors of John Dundas be reversed, each party paying his own
costs in this Court. And this Court, proceeding to give such decree
in the said suit as the said circuit court ought to have given, it
is decreed and ordered that the defendants, William Hepburn and the
executors and executrix of John Dundas, do, on or before 1 April
next, pay to the complainants, John Dunlop & Co. or to their
agent or attorney, duly authorized to receive the
Page 14 U. S. 206
same, the sum of $9,143.72, being the difference between the sum
of $19,464.24, the value in current money at the par of exchange of
the sterling debt stated in the award of William Hartshorne,
William Herbert, and William Hodgson, to be due by Hepburn and
Dundas to John Dunlop, with interest thereon after the rate of 6
percentum per annum from 1 January, 1800, to 27 March, 1809, and
$21,112, the sum due upon William Graham's contract on 1 January,
1800.
It is further decreed and ordered that the 6,000 acres of land
in the proceedings mentioned be sold at public auction to the
highest bidder at such times, in such proportions, and upon such
terms as John Dunlop & Co., or their agent or attorney in fact
may direct, and that the proceeds of such sales be paid over to the
said John Dunlop & Co. or their agent or attorney as aforesaid,
and upon such sale or sales being made, it is decreed and ordered
that the said William Hepburn or his legal representatives and the
legal representatives of John Dundas, deceased, do, by good and
sufficient deed or deeds in law, to be prepared at the expense of
John Dunlop & Co., convey the aforesaid land to the purchaser
or purchasers thereof in fee simple, with a general warranty, and
free from all encumbrances. And it is further ordered and decreed
that the sales of the aforesaid land be made under the
superintendence
Page 14 U. S. 207
of Colin Auld, the attorney in fact of John Dunlop & Co., or
of such other person or persons as the said circuit court may
appoint in case the said Colin Auld should decline to serve, or the
said circuit court should see good cause to make such other
appointment.
And it is further ordered and decreed that the defendants
William Hepburn and the executors and executrix of John Dundas,
deceased, do make up, state, and settle before a commissioner or
commissioners to be appointed by the said circuit court an account
of the rents and profits of the said 6,000 acres of land since 27
March, 1809, and that they pay over the same to the complainants,
John Dunlop & Co., or to their lawful agent or attorney.
And this cause is remanded to the said circuit court for such
proceedings to be had therein, for carrying into execution the
decree of this Court in the premises.