Excess of price over value, if the contract be free from
imposition, is not of itself sufficient to prevent a decree for a
specific performance. But though it will not, standing alone,
prevent a court of chancery's enforcing a contract, it is an
ingredient which, associated with others, will contribute to
prevent the interference of a Court of equity.
The difference between that degree of unfairness which will
induce a court of equity to interfere actively by setting aside a
contract and that which will induce a court to withhold its aid is
well settled. It is said that the plaintiff must come into court
with clean hands, and that a defendant may resist a bill for
specific performance by showing that under the circumstances, the
plaintiff is not entitled to the relief he asks. Omission or
mistake in the agreement, or that it is unconscientious or
unreasonable, or that there has been concealment,
misrepresentation, or any unfairness are enumerated among
the causes which will induce the court to refuse its aid. If to
any unfairness a great inequality between the price and value be
added, a court of chancery will not afford its aid.
The right of a vendor to come into a court of equity to enforce
a specific performance is unquestionable. Such subjects are within
the settled and common jurisdiction of the court. It is equally
well settled that if the jurisdiction attaches, the court will go
on to do complete justice, although in its progress it may decree
on a matter which was cognizable at law.
The contract between the parties contained a stipulation that
the payment of the purchase money of the property should be secured
by the execution of a deed of trust on the whole amount of a claim
the purchaser had on the United States. The penalty which was to be
paid on the nonperformance of the contract, being substituted for
the purchase money, it should retain the same. protection.
A conveyance of the whole of his property by a husband to
trustees for the benefit of his wife and his issue is a voluntary
conveyance, and is at this day held by the courts of England to be
absolutely void under the statute of the twenty-seventh of
Elizabeth against a subsequent purchaser, even although he
purchased with notice. These decisions do not maintain that a
transaction valid at the time is rendered invalid by the subsequent
act of the party. They do not maintain that the character of the
transaction is changed, but that testimony afterwards furnished may
prove its real character. The subsequent sale of the property is
carried back to the deed of settlement, and considered as proving
that deed to have been executed with a fraudulent intent to deceive
a subsequent purchaser.
The Statute of Elizabeth is in force in the District of
Columbia.
The rule which has been uniformly observed by this Court in
construing statutes is to adopt the construction made by the courts
of the country by whose
Page 30 U. S. 265
legislature the statute was enacted. This rule may be
susceptible of some modification when applied to British statutes
which are adopted in any of the states. By adopting them, they
become our own as entirely as if they had been enacted by the
Legislature of the state.
The construction which British statutes had received in England
at the time of their adoption in this country -- indeed, to the
time of the separation of this country from the British empire --
may very properly be considered as accompanying the statutes
themselves and forming an integral part of them. But however
subsequent decisions may be respected, and certainly they are
entitled to great respect, their absolute authority is not
admitted. If the English courts vary their construction of a
statute which is common to both countries, we do not hold ourselves
bound to fluctuate with them.
At the commencement of the American Revolution, the construction
of the Statute of Elizabeth seems to have been settled. The leaning
of the courts towards the opinion that every voluntary settlement
would be deemed void as to subsequent purchaser was very strong,
and few cases are to be found in which such conveyance has been
sustained. But those decisions seem to have been made on the
principle that such subsequent sale furnishes a strong presumption
of a fraudulent intent, which threw on the person claiming under
the settlement the burden of proving it from the settlement itself,
or from extrinsic circumstances to be made in good faith, rather
than as furnishing conclusive evidence not to be repelled by any
circumstances whatever.
There is some contrariety and some ambiguity in the old cases on
the subject, but this Court conceives that the modern decisions
establishing the absolute conclusiveness of a subsequent sale to
fix fraud on a family settlement, made without valuable
consideration -- fraud not to be repelled by any circumstances
whatever -- go beyond the construction which prevailed at the
American Revolution, and ought not to be followed.
A subsequent sale, without notice, by a person who had made a
settlement not on valuable consideration, was presumptive evidence
of fraud, which threw on those claiming under such settlement the
burden of proving that it was made
bona fide. This
principle, therefore, according to the uniform course of this
Court, must be adopted in construing the statute of 27 Eliz. as it
applies to this case.
In the Circuit Court for the County of Alexandria, the
appellant, William Robinson, filed a bill for the specific
execution of a contract entered into between him and Mr. James
Leander Cathcart on 10 September, 1822.
The bill was filed in March, 1829, and an injunction issued as
prayed. Afterwards, in July, 1829, the proceedings in the case were
removed to Washington by a bill filed there in which was
incorporated the former bill and other matters and introducing, as
parties, the trustee of Mrs. Cathcart, and praying
Page 30 U. S. 266
that the injunction may be extended to him, and to the cashier
of the Bank of the United States, and the officers of the Treasury,
to prevent the payment over of a fund alleged in the bill to the
pledged for the performance of the contract.
The circuit court gave a decree in favor of the complainant, and
Mr. Cathcart appealed to this Court.
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court.
This is a suit in chancery brought by the appellee in the Court
of the United States for the District of Columbia, to enforce the
specific performance of a contract entered into between him and
James L. Cathcart, one of the appellants, for the sale and purchase
of a tract of land called Howard lying in the County of Alexandria,
and also to subject a claim of the said Cathcart on the United
States under the provisions of the eleventh article of the Treaty
with Spain signed at Washington on 22 February, 1819, to the
payment of the purchase money.
The agreement, which was executed on 10 September, 1822,
stipulated that Robinson should convey to Cathcart the place called
Howard as soon as a proper deed could be made; that Cathcart should
pay therefor the sum of $8,000 by installments; the first payment
of $5,000 to be made on 1 January, 1825, and the residue in three
equal annual payments, to commence from that time. To secure these
payments, Cathcart agreed to execute four bonds, bearing interest
from the 1 January, 1825, and as a further security to execute a
deed of trust, with his wife's relinquishment of dower, upon Howard
and likewise on the total amount of his claim on the United States,
under the provisions of the eleventh article of the Treaty with
Spain signed at Washington on 22 February, 1819, and the contract
concluded with the following words: "In further confirmation of the
said agreement, the parties bind themselves, each to the other in
the penal sum of $1,000."
Page 30 U. S. 267
At the date of this agreement, Howard was in possession of a
tenant, John T. O. Wilbar, who had a right to hold the premises
till the end of the year. Under an arrangement with Cathcart, he
surrendered possession of the place soon after the purchase was
made.
Previous to the contract of 10 September, 1822, on 10 November,
1818, James L. Cathcart executed a deed conveying to John Woodside,
the father of Mrs. Cathcart, for her benefit, all his property,
including his claim under the Spanish treaty. This deed conveying
wills is recorded in the proper office for the recording of deeds
conveying lands in the City of Washington.
The answer of Cathcart resists the claim for the performance of
the contract on three grounds.
1. That he was induced to enter it by the fraudulent
misrepresentations of the plaintiff.
2. That the price was excessive.
3. That he executed the contract under an impression, sanctioned
by the conduct of the plaintiff, that at any time before its
completion, he might release himself from it by paying the penalty
of $1,000.
The answer of Woodside claims the Spanish fund as trustee for
Mrs. Cathcart, denies being consulted about the purchase of Howard
or that he was party or privy to the contract, and avers that he
never assented to any appropriation of that fund to purchase any
estate from Robinson.
The misrepresentations alleged in the answer respect the
boundaries of Howard, its value, and its fitness for an academy,
the purpose for which it was avowedly purchased.
At the date of the contract, Mr. Robinson was in possession of a
small adjoining tract called Riddle's, his title to which was
incomplete, a part of which, comprehending a peach orchard, was
within the fence that enclosed Howard. The answer charges that Mr.
Robinson represented all the land within this fence as being part
of the Howard tract.
As this allegation avers new matter, not responsive to the bill,
it cannot be regarded unless it be proved. Miss Amelia H. Cathcart
deposes to the truth of the statements of conversations when the
agreement was executed, which are contained in an affidavit
previously made by James Hutton. She adds,
"I
Page 30 U. S. 268
likewise am willing to declare on oath that William Robinson
stated that Howard was a beautiful place, that it was remarkably
healthy, that it had a great deal of fruit on it and a fine peach
orchard up by the fence or near the fence that divided Howard from
Riddle's place."
She adds that the family believed that the peach orchard was on
Howard and that the fence which Mr. Robinson referred to was the
division line between the Howard estate and Riddle's place.
The peculiar language of the witness that she "is willing to
declare on oath" what William Robinson stated, instead of declaring
expressly what he did state, may be an accidental form of
expression not entitled to much attention. If we understand the
deponent as averring on oath what she declares she is willing to
aver on oath, she represents Mr. Robinson as saying that Howard had
on it a fine peach orchard near the fence that divided it from
Riddle's place. This implies that the fence was the dividing line
between the two places, which would be a misrepresentation of
boundary.
It is difficult to assign a reason for this voluntary and
useless misrepresentation. It is understood to have been made on
the day on which the contract was signed. It could not be as an
inducement to the contract, because that was formed previously. In
a letter of 9 September, addressed to Wilbar the tenant, Robinson
informs him that the farm is sold to Cathcart, who was extremely
desirous to take immediate possession, and he had assured him that
Wilbar was willing to accommodate him immediately; he therefore
requests Wilbar to deliver possession. The misrepresentation,
therefore, at that time could be of no avail. Mr. Cathcart in his
answer does not aver that it was made at that time. He says that,
having advertised his desire to purchase a small farm, where he
might establish a boarding school, the defendant offered him Howard
as a place adapted to his purpose. The complainant afterwards
visited this place, but did not see the defendant, who resided at a
considerable distance from it. The farm was occupied by a tenant.
Mr. Cathcart says that, after this visit, Mr. Robinson informed him
that all the land, between the fence near the brick house (on the
place called Riddle's) and the house on Howard belonged to Howard
place. He does not say when this communication was made.
Page 30 U. S. 269
James Hutton, one of the witnesses to the contract, was
examined. He deposes expressly and particularly to the conversation
respecting the penalty of $1,000, but is silent as to that
respecting the boundary of Howard.
In his letter of 17 August, 1822, in which Mr. Robinson states
the terms on which he will sell Howard, he says, "The forty acres
adjoining I would sell to you for $2,000," &c. "This is the
place whereon the brick house, built for a wagon tavern, stands. It
has a good well of water at the door and orchard of fine fruit."
That part of the letter which respects Howard is silent respecting
fruit.
On 29 October, Robinson addressed a letter to Cathcart, stating
that he had performed his part of the agreement and requesting
Cathcart to call on Mr. Jones who would deliver him a deed
regularly executed for Howard on receiving the papers which were to
be executed on the part of Cathcart. This letter was answered on 14
December. Mr. Cathcart expresses his willingness to give the
security proposed, but objects to incurring any expense in the
preparation of the papers. It is answered more particularly on 8
February, 1823. In this letter, he says he had called twice on Mr.
Jones, but had found that gentleman too much occupied to attend to
the business in question. He adds, "I am in no hurry for the deed,
although the plot of the land would be of service, and would
indicate what part of the land appertains to Howard." "The land" is
a term which must apply to Howard and Riddle's place, because both
were the property of Mr. Robinson and had been occupied by Wilbar.
The expression is with difficulty to be reconciled to an opinion
that the fence was the dividing line between them. The same
inference may be drawn from Mr. Cathcart's letter of 24 August,
1822, announcing his determination to make an offer for Howard not
differing essentially from the proposals of Mr. Robinson. After
expressing his expectation of being permitted to hold Riddle's
place as Wilbar held it, and that he should be preferred as a
purchaser, on the same terms, to any other person when Mr. Robinson
should complete his title to it, he adds, as a proviso to his
offer, "that if I do not purchase it, I shall not be put to any
expense in the division and fencing off the said." The word "said"
must refer to Howard place, and
Page 30 U. S. 270
indicates a knowledge at that time that it was not divided from
Riddle's by the fence.
In the early part of June, 1823, Mr. Thompson F. Mason on the
part of Mr. Robinson waited on Mr. Cathcart to complete the
transaction by obtaining his signature to the necessary papers. Mr.
Cathcart declined signing them, and declared his determination to
relinquish the purchase and pay the penalty. He said nothing to Mr.
Nason of any misrepresentation made by Mr. Robinson. In a letter to
Mr. Mason written soon afterwards, he enumerates all his objections
to the conduct of Mr. Robinson and does not include his
misrepresentation respecting the boundary of Howard among them,
although he does complain of not having Riddle's place. He also
says
"In one of my letters, I requested Mr. Robinson to send me the
deed of Howard. The reason is explained in another letter, 'as I
wished to know the boundaries, for as yet I know not its
extent.'"
On 21 April, 1824, Mr. Cathcart wrote again to Mr. Mason. In
this letter, after professing to take a brief retrospect of the
premises, he again enumerates his causes of complaint against Mr.
Robinson and does not place the misrepresentation of boundary among
them.
Upon this review of the testimony in the cause, the Court is of
opinion that the charge of misrepresentation respecting the
boundary of Howard is not supported. It is quite probable, as the
views of the appellant and of his family were directed to the
adjoining place called Riddle's as well as to Howard places then
occupied by the same tenant, that the witness might not have
distinguished exactly between the places, and might have applied to
one, expressions intended for the other. Mr. Cathcart himself may
also have confounded the conversations with each other.
The answer also charges the complainant with misrepresentation
as to the fitness of Howard for an academy, and as to the value of
the property.
So far as its fitness for an academy depended on situation or on
the buildings, Mr. Cathcart was capable of deciding for himself,
and must have acted on his own judgment -- so far as it depended on
health, the testimony in the cause proves that general reputation
was in its favor, and that
Page 30 U. S. 271
families from the city sometimes repaired to it for the sake of
health. Mr. Robinson's representation was mere matter of opinion,
and the record affords no reason for believing it was not his real
opinion. It is true that Mr. Cathcart's family, after settling on
the place, was sickly, but this circumstance may have been produced
by other causes, and is not certainly attributable to the
place.
On the subject of value, the answer charges Mr. Robinson not
with any positive assertion that the property was worth a specific
sum, but that it had cost him more than $8,000, and that he had
held it at $10,000. The assertion that the property cost him more
than $8,000 is proved, and that he had held the property at $10,000
is not disproved. Mr. Peake deposes that he, sometime in 1822, was
engaged in a negotiation with Mr. Robinson the object of which was
the exchange of some property in Alexandria for Howard. He has an
indistinct impression that the cash value set upon Howard at that
time was $5,000, but does not know that it was derived from Mr.
Robinson. This witness certainly does not prove at what price Mr.
Robinson had held Howard; and we think that misrepresentation is
not justly imputable to him.
The second objection to a specific performance is the excessive
price at which it was sold.
Without recapitulating the testimony on this point, we can say
it proves quite satisfactorily that Howard was sold beyond its real
value at the time. If the witnesses are to be believed, and there
is no reason to doubt them, $5,000 would have been a full price for
it. But Mr. Robinson had given more for it and might estimate it
himself higher than it was estimated by others. The value of real
property had fallen. Its future fluctuation was matter of
speculation. At any rate, this excess of price over value, if the
contract be free from imposition, is not in itself sufficient to
prevent a decree for a specific performance.
But, though it will not, standing alone, prevent a court of
chancery from enforcing a contract, it is an ingredient which,
associated with others, will contribute to prevent the interference
of a court of equity. We must bear it in mind while
Page 30 U. S. 272
considering the next objection made by the plaintiffs in error
to the decree of the circuit court.
Mr. Cathcart alleges in his answer that at the time of executing
the articles of agreement, he explicitly and peremptorily refused
to insert the sum of $20,000, which the complainant had proposed as
a penalty for the nonfulfillment of the agreement, and also the sum
of $10,000 which was afterwards proposed; that he then refused to
agree to any large penalty, assigning as his reason that he had
been long in the service of government, and was then an applicant
for an appointment, that he might be sent abroad or to some other
part of the United States, when it would be more for his interest
to pay the forfeiture than to comply with the contract.
"And he positively avers that the sum of $1,000 was inserted
with the full belief on his part that he might either take the
property at the stipulated price or pay the said sum, at his
option; and that the agreement was executed by said complainant
with full knowledge that such was the belief and understanding of
this defendant."
Mr. Cathcart has been uniform in declaring that this was the
understanding with which he executed the agreement.
James Hutton, a subscribing witness, deposes
"That while Cathcart was drawing the articles in form from notes
which had been prepared by Robinson, he was interrupted by a remark
made by one of the parties, the deponent does not recollect which,
suggesting the propriety of providing for the payment of a
pecuniary forfeiture in the event of a nonperformance of the
stipulations of the agreement by either of the parties. The said
Cathcart referred to the said Robinson to say how much the said
penalty should be, to which the said Robinson answered he did not
care how much, it made no difference to him, or words to that
amount, and added $20,000. To this the said Cathcart decidedly and
promptly objected and refused to accede to, declaring it to be
entirely too much, and assigned as the reason for his objection
that he had passed a large part of his life in the public service,
was then endeavoring to, and had expectation of being again
employed, in which case it might become more to his advantage to
give up the place; that the expected employment
Page 30 U. S. 273
might be such as indeed to justify and enable him to pay the
smaller penalty if he found it necessary or expedient to violate
the agreement, though it should not be such as to enable him to pay
the larger one. He then stipulated $1,000 as the amount of the
penalty, to which the said Robinson acceded, under (as it clearly
appeared to the witness) a full understanding of the privilege of
relinquishment reserved by the said Cathcart on the payment of the
penalty of $1,000 as aforesaid; which said sum of $1,000 was
inserted as the amount of the penalty in the articles of agreement,
which were then and there (as before declared) made out in
duplicates and signed by the said Cathcart and Robinson as parties
thereto, and by myself and another person (now deceased) as
witnesses thereto."
This testimony was first given by Hutton in July, 1824, in the
form of an
ex parte affidavit, and was afterwards verified
by a deposition.
Miss Amelia H. Cathcart deposes to the truth of the statement
made in the affidavit of James Hutton.
Charles William Cathcart was passing sometimes in and sometimes
out of the room, while the parties were reducing the agreement to
form, but recollects perfectly that J. L. Cathcart, Sr. objected to
the penalty of $20,000, and said if the penalty was more than
$1,000 he would not make any agreement with Mr. Robinson.
James L. Cathcart, Jr., deposes to the declaration of his father
that unless the penalty was made small, and such as he could pay,
he would make no agreement whatever, because he expected to get
some appointment soon, and if in that case he relinquished the
agreement, Mr. Robinson would receive at the rate of $500 a year
for his place. He would agree to pay a penalty of $1,000, but
nothing more, and if Mr. Robinson did not agree to this sum, he
would break off the negotiation. Mr. Robinson then agreed to this
proposal.
If these witnesses are entitled to any credit, if they have not
concurred in fabricating conversations which never took place, Mr.
Cathcart signed the agreement in the full belief that he might
relieve himself from it by paying the penalty. This belief was
openly expressed, was communicated to Mr.
Page 30 U. S. 274
Robinson and the penalty was reduced, by consent, to $1,000, on
the condition on which alone Mr. Cathcart would agree to sign the
contract.
The credibility of this testimony has been attacked, and it must
be admitted that it appears under circumstances not entirely free
from suspicion. It would have been more satisfactory had the
depositions been all taken in the usual manner, but the reputation
of all the witnesses stands unimpeached, and the conduct of Mr.
Robinson has no tendency to discredit them.
Mr. Cathcart's refusal to execute the contract was founded in
part on the alleged misrepresentations of Mr. Robinson, but chiefly
on the right, reserved expressly when he signed the agreement, of
relieving himself from it by the payment of the penalty. This right
was asserted in terms, and accompanied by a statement of
circumstances, which might be expected to induce Mr. Robinson to
controvert the fact if it was untrue. It does not appear that he
has ever controverted it.
In the conversation which took place with Mr. Mason when, as the
attorney of Mr. Robinson, he called on Mr. Cathcart to complete the
transaction by executing the papers which had been prepared for the
purpose, this objection was fully and strongly stated, and the
answer of Mr. Mason was that he mistook the law, and that it was
advisable for him to consult counsel upon the subject. After
consulting counsel, Mr. Cathcart addressed a letter to Mr. Mason as
the agent of Mr. Robinson. In this letter, he states at large his
objections to the completion of the contract. On this subject he
says
"When the penalty of the agreement was in discussion, Mr.
Robinson proposed to make it double the amount of the purchase,
i.e. $16,000. This I objected to
in toto, and
before the subscribing witnesses and a number of the members of my
family, for the agreement was made in my house; I assigned as my
reason for objecting to so heavy a penalty that I had been in
public service for many years, and was a candidate for an
appointment under government. That it might happen that I would be
sent abroad, or to some other part of the country, when, in that
case, it would be more to my interest to forfeit the penalty than
to comply with the terms of the agreement, and under the impression
that Mr. Robinson might either reassume possession or that I might
cancel the
Page 30 U. S. 275
agreement by paying the penalty, it was agreed to make it $1,00,
and the last time Mr. Robinson was at my house, he acknowledged
that he verily believed that I was under the above impression when
I signed the agreement. Does, then, Mr. Robinson really wish to
take advantage of my supposed ignorance, knowing it at the time? I
trust not."
This letter was, of course, transmitted to Mr. Robinson and
returned by him to Mr. Mason with some remarks on it respecting the
price at which Howard had been sold and respecting his own
propositions to Mr. Cathcart. No notice is taken of what is said
respecting the penalty. A charge, which might be expected to be
repelled with some indignation if untrue, is passed over in total
silence. The letter, with the remarks of Mr. Robinson is annexed to
the deposition of Mr. Mason.
John B. B. Carden, to a question propounded by the plaintiff in
error, answers that in the latter end of June, or beginning of
July, 1824, he met Mr. Robinson near Alexandria, and was informed
by him that he had secured all the money Mr. Cathcart had in the
Treasury; but as that was not enough, he would have it, Howard put
up to sale and buy it in himself.
"I suggested to Mr. Robinson (continues the witness) the
difficulty on account of the conveyance to Mrs. Cathcart and
children, to which Mr. Robinson replied, that he had it safe
enough, that he had not seen the thousand dollars, but that he knew
how to manage it."
These circumstances, taken together, satisfy the Court not only
that Mr. Cathcart signed the agreement believing that it left him
at liberty to relieve himself from it by paying the penalty, but
that Mr. Robinson knew how he understood it. Mr. Cathcart insisted,
on reducing the penalty to $1,000, that, should a change of
circumstances make it advantageous, he might be enabled to relieve
himself from it by the payment of a sum he thought within his
resources. He insisted on this as the condition on which alone he
would sign the agreement. He stated the object for which the
condition was demanded. Mr. Robinson without hinting that the
object would not be obtained by the condition, assented to it, and
the agreement was signed.
If this be a correct view of the transaction, it is not
simply
Page 30 U. S. 276
an instrument executed by a person who mistakes its legal
effect, as it would have been had it been prepared with a penalty
of $1,000, and silently executed by Mr. Cathcart in the full
conviction that it left him the option to perform the contract or
to pay the penalty. It is something more. The assent of Mr.
Robinson to this reduction of the penalty, when demanded avowedly
for the purpose of enabling Mr. Cathcart to terminate his
obligation by paying it, is doing something active on his part to
give effect to the mistake, and turn it to his advantage. It is in
some measure cooperating with Mr. Cathcart in the imposition he was
practicing on himself.
Had Mr. Robinson induced Mr. Cathcart to sign this agreement by
suggesting that in point of law he might relieve himself from it by
paying the penalty, a court of equity would not aid him in an
attempt to avail himself of the imposition. The actual case is
undoubtedly not of so strong a character. No untruth has been
suggested, but if Mr. Robinson knew that Mr. Cathcart was mistaken,
knew that he was entering into obligations much more onerous than
he intended, that gentleman is not entirely exempt from the
imputation of suppressing the truth.
This is not a bill to set aside the contract. Mr. Cathcart does
not ask the aid of equity. He asks that the parties may be left to
their legal rights, or that the contract shall be enforced no
further than as avowedly understood at the time of its
signature.
The difference between that degree of unfairness which will
induce a court of equity to interfere actively by setting aside a
contract, and that which will induce a court to withhold its aid is
well settled. 10 Ves. 292; 2 Coxe's Cases in chancery 77. It is
said that the plaintiff must come into court with clean hands and
that a defendant may resist a bill for specific performance by
showing that under the circumstances the plaintiff is not entitled
to the relief he asks. Omission or mistake in the agreement, or
that it is unconscientious or unreasonable, or that there has been
concealment, misrepresentation, or any unfairness are enumerated
among the causes which will induce the court to refuse its aid. 1
Mad. Chancery 405. If to any unfairness a great inequality
Page 30 U. S. 277
between price and value be added, a court of chancery will not
afford its aid. 2 Coxe's Cases in chancery 77. In the case at bar,
this inequality is very considerable. This inequality gives
importance to the mistake under which the purchaser executed the
agreement -- a mistake to which the vendor contributed by
consenting to reduce the penalty to the sum which the vendee said
he could pay should circumstances make it his interest to absolve
himself from the contract by its payment.
But as the plaintiff in error has entirely failed in supporting
that part of his answer which alleges such misrepresentation on the
part of the vendor as would turn him out of court; as his whole
equity consists in a right to surrender the land and pay the
stipulated penalty, instead of performing the whole agreement by
receiving the land and paying the purchase money; as he insists
upon this as being the true spirit of the contract, according to
his understanding of it, which understanding was countenanced by
the conduct of the vendor at the time, every principle of equity
and fair dealing requires that he should do what he claims the
right to do in order to relieve himself from the still more onerous
pressure of a contract into which he has voluntarily entered. He
ought to pay the penalty, as the equitable condition on which alone
he can be permitted to resist a decree for a specific performance
of the whole.
It has been argued by the defendant in error that the subsequent
conduct of Mr. Cathcart -- his eagerness to take possession of the
property; his apparent satisfaction with it; his willingness to
complete the transaction by executing the necessary papers, and
receiving the deeds, as was manifested in his conversations with
Mr. Jones; his entire silence on the subject of relinquishing the
contract and paying the penalty until June, 1823, when his scheme
of an academy had failed and when he communicated this intention to
Mr. Mason the attorney of Mr. Robinson; his failure even then to
tender the penalty -- are circumstances which ought to deprive him
of this defense.
We do not attach quite so much importance to these circumstances
as is attached to them by the defendant in error.
Undoubtedly Mr. Cathcart was satisfied with his contract on 10
September, 1822, or he would not have entered
Page 30 U. S. 278
into it. Yet at this time he stipulated, as he supposed, for the
right to relieve himself from it on the payment of $1,000. The time
during which this privilege should continue was not fixed. By what
is it to be limited? The mind can prescribe no other limitation
than while the contract continued executory. Had the parties
executed the contract without inserting this privilege, it must
have been terminated; but while the contract remained executory, it
retained its original force unless expressly or impliedly released.
The failure of Mr. Cathcart to tender the penalty would have some
weight was it not accounted for by the circumstances of the case.
It was perfectly understood that Mr. Robinson would not receive it,
and the only fund from which it could have been raised, the Spanish
claim, was bound to him. The Court therefore does not perceive in
this conduct of Mr. Cathcart sufficient cause to overrule his
defense.
It has been urged by his counsel that if the penalty only can be
decreed, this bill ought to be dismissed because the penalty might
have been recovered at law.
We do not think so. The right of a vendor to come in to a court
of equity to enforce a specific performance is unquestionable. Such
subjects are within the settled and common jurisdiction of the
court. It is equally well settled that if the jurisdiction
attaches, the court will go on to do complete justice, although in
its progress it may decree on a matter which was cognizable at law.
Mr. Robinson could not have sued for the penalty at law without
abandoning his right to enforce the contract of sale. He could not
be required or expected to do this. Consequently he came properly
into a court of equity, and the court ought to do him justice. It
ought to direct Mr. Cathcart to pay that which he says was to be,
according to his understanding, a substitute for the principal
subject of the contract. In addition to these considerations, the
application to this Court to subject the Spanish fund to the claim
is unquestionably proper.
Mr. Cathcart also attempts to oppose some equitable setoff to
this penalty, the money he paid to Wilbar to obtain immediate
possession, and the expenses incurred for repairs which Wilbar
ought to have made.
Mr. Robinson did not undertake to deliver possession until
Page 30 U. S. 279
1 January, 1823. The right of Wilber to retain the premises to
that time was perfectly understood. If Mr. Cathcart's impatience to
obtain immediate possession induced him to make a very improvident
and losing contract with Wilbar, it furnishes no pretext for
throwing that loss on Mr. Robinson.
If, then, Mr. Cathcart ought not to be coerced to receive the
deed for Howard and to pay the purchase money because he believed
and was encouraged by Mr. Robinson to believe that he had
introduced a clause into the agreement which would permit him to
abandon the contract on the payment of $1,000, he cannot be
permitted to abandon it, but on the payment of that sum, and the
court ought, when it refuses to compel him to pay the purchase
money to decree him to pay the penalty if Mr. Robinson shall prefer
receiving it to a resort to his remedy at law.
A point of considerable importance to the parties remains to be
considered.
Mr. Cathcart, in the contract of 10 September, 1822, agreed to
secure the payment of the purchase money for Howard by the
execution of a deed of trust "on the total amount of his claim on
the United States, under the provisions of the 11th article of the
treaty with Spain." If the penalty be substituted for the purchase
money, it should certainly retain the protection of the same
security. But the plaintiff in error alleges that he had disabled
himself from complying with this part of the contract by his
previous conveyance of this fund to John Woodside in trust for Mrs.
Cathcart and her issue.
This being a voluntary conveyance is, at this day, held by the
courts of England to be absolutely void under the statute of 27
Elizabeth against a subsequent purchaser, even although he
purchased with notice, 1 Mad.Ch. 271; 18 Ves. 110; 2 Taunton 523.
Their decisions do not maintain that a transaction, valid at the
time, is rendered invalid by the subsequent act of the party. They
do not maintain that the character of the transaction is changed,
but that testimony afterwards furnished may prove its real
character. The subsequent sale of the property is carried back to
the deed of settlement, and considered as proving that deed to have
been executed with a fraudulent intent to deceive a subsequent
purchaser.
Page 30 U. S. 280
The Statute of Elizabeth is in force in this District. The rule,
which has been uniformly observed by this Court in construing
statutes, is to adopt the construction made by the courts of the
country by whose legislature the statute was enacted. This rule may
be susceptible of some modification when applied to British
statutes which are adopted in any of these states. By adopting
them, they become our own as entirely as if they had been enacted
by the legislature of the state. The received construction in
England at the time they are admitted to operate in this country,
indeed to the time of our separation from the British empire, may
very properly be considered as accompanying the statutes
themselves, and forming an integral part of them. But however we
may respect subsequent decisions, and certainly they are entitled
to great respect, we do not admit their absolute authority. If the
English courts vary their construction of a statute which is common
to the two countries, we do not hold ourselves bound to fluctuate
with them.
At the commencement of the American Revolution, the construction
of the statute of 27 Elizabeth seems not to have been settled. The
leaning of the courts towards the opinion that every voluntary
settlement would be deemed void as to a subsequent purchaser was
very strong, and few cases are to be found in which such conveyance
has been sustained. But these decisions seem to have made on the
principle that such subsequent sale furnished a strong presumption
of a fraudulent intent; which threw on the person claiming under
the settlement the burden of proving it from the settlement itself
or from extrinsic circumstances to be made in good faith, rather
than as furnishing conclusive evidence not to be repelled by any
circumstances whatever.
There is some contrariety and some ambiguity in the old cases on
the subject, but this Court conceives that the modern decisions
establishing the absolute conclusiveness of a subsequent sale to
fix fraud on a family settlement, made without valuable
consideration, fraud not to be repelled by any circumstances
whatever, go beyond the construction which prevailed at the
American Revolution, and ought not to be followed.
The universally received doctrine of that day unquestionably
Page 30 U. S. 281
went as far as this. A subsequent sale without notice by a
person who had made a settlement not on valuable consideration was
presumptive evidence of fraud which threw on those claiming under
such settlement the burden of proving that it was made
bona
fide. This principle, therefore, according to the uniform
course of this Court, must be adopted in construing the statute of
27 Elizabeth as it applies to this case.
The strong presumption of fraud arising from the subsequent
conveyance to Mr. Robinson is not repelled by a single
circumstance. On the contrary, all the circumstances which can be
collected from the record come in aid of it.
The conveyance to Mr. Woodside, so far as we can judge from the
evidence in the cause, contained all or nearly all the property of
Mr. Cathcart. He continued to act as the owner of it. His
correspondence shows that he offered even the lots in Washington
for sale, and he undoubtedly appeared as the absolute owner of this
Spanish claim. His negotiations with Mr. Robinson respecting it
appear to have been carried on openly, and there is no reason to
believe that they were unknown to his family or his trustee. The
agreement by which he bound it to Mr. Robinson was signed at his
own house, in the midst of his family, and his want of power over
the subject was never suggested. It is also worthy of observation
that Mrs. Cathcart, in January, 1824, after the determination to
relinquish the contract for Howard addressed a letter to the
trustee requesting him to make an assignment of this claim for the
purpose of paying debts contracted by Cathcart. We think,
therefore, that under all the circumstances of this case, the
conveyance to John Woodside on 10 November, 1818, in trust for Mrs.
Cathcart and her children does not withdraw the property in
question from the claim of Mr. Robinson, he being a subsequent
purchaser without notice.
It is the opinion of this Court that the circuit court erred in
decreeing the defendant in that court to receive a conveyance for
the tract of land in the proceedings mentioned, called Howard, and
to pay therefor the purchase money stipulated in the contract dated
10 September, 1822, and that so much
Page 30 U. S. 282
of the said decree ought to be reversed, and that the cause be
remanded to that court with instructions to reform the said decree
so far as to direct the defendant to pay the penalty of $1,000 with
interest thereon from the time the money due from the government,
and enjoined by order of that court, was directed to be placed out
at interest, and to direct the title papers filed in the cause by
the complainant to be redelivered to him. But if the complainant
shall prefer to pursue his remedy at law, he is to be at liberty to
dismiss his bill without costs and without prejudice.
MR. JUSTICE BALDWIN dissented as to the construction of the
statute of 27 Elizabeth. On the other points he agreed with the
Court.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Columbia holden in and for the County of Washington and was argued
by counsel, on consideration whereof it is the opinion of this
Court that the circuit court erred in decreeing the defendant in
that court to receive a conveyance for the tract of land in the
proceedings mentioned, called Howard, and to pay therefor the
purchase money stipulated in the contract dated 10 September, 1822,
and that so much of the said decree ought to be reversed, and that
the cause be remanded to that court with instructions to reform the
said decree so far as to direct the defendant to pay the penalty of
$1,000 with interest thereon from the time the money due from the
government and enjoined by order of that court was directed to be
placed out at interest, and to direct the title papers filed in the
cause by the complainant to be redelivered to him. But if the
complainant shall prefer to pursue his remedy at law, he is to be
at liberty to dismiss his bill without costs and without prejudice.
Whereupon it is ordered, adjudged, and decreed by this Court that
the circuit court erred in decreeing the defendant in that court to
receive a conveyance for the tract of land in the proceedings
mentioned, called Howard, and to pay therefor the purchase money
stipulated in the contract dated 10 September, 1822, and that so
much of the said decree be and the same is hereby reversed, and
that this cause be, and the same is hereby remanded to the said
circuit court with instructions to reform the said
Page 30 U. S. 283
decree so far as to direct the defendant to pay the penalty of
$1,000 with interest thereon from the time the money due from the
government, and enjoined by order of that court, was directed to be
placed out at interest, and to direct the title papers filed in the
cause by the complainant to be redelivered to him. But if the
complainant shall prefer to pursue his remedy at law, he is to be
at liberty to dismiss his bill without costs and without
prejudice.