Where there was a contract for the sale of a lot of ground,
partly on time, and the vendee entered into possession, and the
vendor did not formally demand the payment of the balance when due,
but merely said be was ready to make a deed when the money was
paid, and after the time of payment had elapsed, the vendee made a
tender of the sum due, which the vendor refused to receive, these
and other circumstances show that time was not of the essence of
the contract, and the vendee was entitled to relief upon a bill for
a specific performance of the contract.
This was a bill filed by Ahl under the circumstances stated in
the opinion of the Court.
Page 61 U. S. 512
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
This is an appeal from the Supreme Court of the Territory of
Minnesota, in a suit in chancery to compel a specific performance
of a written contract to convey a certain parcel of land described
in the bill of complaint, and situated in the Village of Stillwater
and County of Washington in that territory. The bill was presented
to the district judge at chambers in the first place, where an
order was passed for an injunction, and it was then duly filed in
the office of the clerk of the district court, and on the same day
the writ of injunction was issued, returnable to the district court
at the May term next ensuing, and was duly served on the
respondent. On the 29th day of November, 1851, the respondent, by
his solicitors, filed his answer to the bill of complaint, and on
the 30th day of June, 1852, the complainant filed the general
replication, and testimony was subsequently taken by both parties,
under a regular commission issued in pursuance of the order of the
court. After the testimony was taken, the temporary injunction
was
Page 61 U. S. 513
dissolved, and the cause was set down for hearing on the 6th day
of October, 1853, upon bill, answer, replication, and proofs, and
after the hearing, the district court decided in favor of the
complainant and entered a final decree against the respondent for a
specific performance of the agreement set forth in the bill of
complaint. An appeal was taken by the respondent to the supreme
court of the territory, and the supreme court, at the January term,
1856, reversed the decree of the district court and entered a final
decree against the complainant dismissing the bill with costs,
whereupon the complainant appealed to this Court.
A brief statement of the pleadings will be sufficient to give a
clear view of the nature of the controversy between the parties to
the suit. On the part of the complainant it is alleged that the
respondent, being seized in fee simple of the parcel of land
described in the bill of complaint, entered into a treaty with the
complainant for the purchase of the same on the 15th day of June,
1850, for the price of one hundred and ninety dollars, with
interest, to be paid on the 1st day of May, 1851, and that he
agreed to accept that sum for the consideration, and that an
agreement in writing was entered into between them to that effect,
and the bill of complaint sets forth the agreement, which is of
that date, and is signed and sealed by the parties. By that
agreement, the respondent contracted to sell and convey the
premises by deed of warranty, provided the complainant should pay
him the sum of one hundred and sixty-five dollars on the 1st day of
October then next, or the sum of one hundred and ninety dollars by
the 1st day of May, 1851, and the complainant agreed to purchase
and pay for the premises in the manner and to the amount specified.
They also thereby mutually agreed to build a wharf suitable for a
steamboat landing -- the complainant on the land contracted for and
the respondent on his lot adjoining -- and it was stipulated
between them that either party was to be at liberty to commence the
building of the wharf on his own lot, but neither was to be obliged
to continue or complete it unless the other, upon notice, did the
same in a reasonable time. And the complainant further alleges that
the respondent delivered up the possession of the premises to him
about the time of the execution of the agreement, and that he has
ever since remained in the occupation of the same; that he paid the
respondent sixty dollars on the 2d day of July, 1850, in part
performance of the agreement, and the respondent, on the 7th day of
September, 1850, endorsed on the agreement thirty dollars and
thirty-three cents more, in part performance of the same, being the
amount awarded to him as damages under a reference between the
Page 61 U. S. 514
parties of a claim he presented against the respondent on
account of a misrepresentation made by him, at the time of the
execution of the agreement, in respect to the western boundary of
the land, and that since he entered into the possession of the
premises under the agreement, he has laid out large sums of money
upon the land in erecting a valuable dwelling house and in making
other improvements thereon, and that he has tendered to the
respondent the whole sum of the balance of the purchase money, with
the interest, and has always been ready and willing to perform the
agreement on his part according to its terms, upon having a proper
title made out and a proper conveyance executed to him of the
premises therein described, and that he has demanded the deed of
the respondent, and he had hoped that he would specifically perform
his part of the agreement, as in justice and equity he ought to do.
And the bill of complaint charges that the respondent, combining
and confederating with persons unknown, refuses to perform his part
of the agreement, and at times falsely pretends that he is entitled
to more than the sum stipulated between the parties, and at other
times that the complainant had not performed his part of the
agreement, whereas it is alleged he has performed his part of the
agreement and that the respondent is entitled to no more than the
balance due and unpaid of the sum stipulated and the interest
thereon, and that the whole of that sum, with interest, is now
ready and unproductive in the hands of the complainant, and that he
is seriously embarrassed and injured by reason of not having a good
and sufficient title to the premises, which is contrary to equity,
and the complainant prays for discovery and general relief and that
the respondent may be decreed specifically to perform the agreement
upon being paid the balance so due, with interest, and for an
injunction to restrain the respondent from conveying, transferring,
or in any manner disposing of the title to the premises.
The answer admits that the fee simple title was in the
respondent at the time mentioned, and that there was a negotiation
between the parties respecting the purchase and sale of the
premises, and that the agreement was made and executed at the time
it bears date, and that the complainant paid the sum of sixty
dollars, as alleged in the bill of complaint, but expressly denies
that the respondent delivered the possession of the same to the
complainant, or that he ever consented to his taking the possession
in any manner, as is stated, unless he should pay the purchase
money, with interest, except and save for the purpose of building
the wharf, and the answer also denies that any misrepresentation
was made respecting the
Page 61 U. S. 515
western boundary of the lot, or that the respondent ever
admitted that he made it, as is charged in the bill, or that the
complainant was ever injured by any representation made by him in
that behalf, though the answer admits that the complainant did
express some dissatisfaction with that boundary, and that for the
purpose of cultivating and sustaining friendly relations with him,
as a citizen and neighbor, in the same community where they
resided, he did agree to refer the matter, whether he ought to make
any deduction from the price agreed, and that the referees did
determine that he should deduct the sum of thirty dollars and
thirty-three cents from the same; and he further admits, that the
complainant has made improvements upon the premises by erecting a
dwelling house thereon, which has greatly enhanced the value of the
same, but he denies that any improvements were ever made by his
consent, or that the complainant had any right to make them, and
also denies every allegation in the bill that the complainant was
ever ready and willing to perform his part of the agreement or that
he has performed or ever offered to perform the same. On the
contrary, the answer avers the fact to be that at the time the
purchase money became due and payable, he called upon the
complainant and demanded of him the sum due, and told him he was
ready and willing to execute and deliver to him the deed, upon
being paid the balance of the money, which he refused to pay,
alleging as an excuse that he had not the means. And it is further
averred that the respondent at different times afterwards called
upon the complainant and informed him of his ability and readiness
to deliver the deed upon being so paid, and urged the payment,
which was refused on every occasion when the demand was made; and
the respondent says he has suffered great pecuniary embarrassment
and injury in his business from the refusal of the complainant to
perform his part of the agreement. He admits, however, that the
solicitor of the complainant, on or about the first day of
November, 1851, did demand the deed of him and offered to pay him a
sum of money which the solicitor informed him was the balance of
the sum of one hundred and ninety dollars and interest at seven
percent, but what sum of money was so offered he does not know, nor
whether that money is now ready in the hands of the complainant and
unproductive, but he does not believe such to be the fact, and he
denies all manner of fraud, combination, and confederacy.
There is not much dispute about the facts of the case, whether
we look to the testimony on the one side of the other. The
agreement was admitted in the answer, and was made, as is alleged
in the bill, on the fifteenth day of June, 1850, and it is
Page 61 U. S. 516
fully proved that the complainant shortly after entered into the
possession of the premises, and has continued in the possession of
the same to the present time, and there is not an intimation in the
proofs exhibited in the case that the respondent ever demanded the
surrender of the premises or that he ever manifested any intention
to rescind the agreement, except so far as it arises from his
refusal on the first day of November, 1851, to accept the balance
remaining unpaid when it was tendered to him by the solicitor of
the complainant. On the contrary, it appears from his own witness,
William H. Morse, that in the fall of 1851 he requested payment of
the balance then due and unpaid, and when the complainant replied
to his request that he had a good many debts out, and as soon as he
could collect the money he would settle up with him, he told the
complainant he was ready to make him a deed whenever he was paid
the balance due on the lot. The precise time when this conversation
took place does not appear, but the witness says he was in the
employment of the respondent from the twentieth day of October to
the eighteenth day of November, 1851, and that within that time he
heard the respondent ask the complainant two or three times for the
balance due on that lot, and it was in some one of those
conversations that he told the complainant that he was ready to
make the deed whenever the balance was paid, and we infer from the
testimony of the witness, though it is not very clearly expressed
in the deposition, that the last interview between the parties when
that remark was repeated must have taken place only a few days
before the tender was made by the solicitor of the complainant.
Whether so or not, it is plain, as well from the language of the
request as from that employed by the respondent in reply to the
reasons assigned by the complainant why he could not make the
payment as requested, that the object of the respondent on the
occasion was more to hasten the action of the complainant and
prompt him to an early compliance than to make any formal demand of
the money with the view to terminate the agreement or to impair the
right of the complainant to make the payment at a future time. Such
unquestionably was the impression that the conversation at the
interview was calculated to produce upon the mind of the
complainant, and considering all the circumstances under which the
interview took place and the relation of the parties to each other
in respect to the matter now in controversy, we think it was the
only reasonable construction which could be put upon the language
used by the respondent, consistent with fair dealing on his part
and rectitude of intention, and that view of the conversation
derives strong confirmation in the fact that
Page 61 U. S. 517
the deed subsequently tendered to the complainant had not then
been prepared, and no allusion was made to a conveyance on the part
of the respondent except in connection with the promise of the
complainant to settle and make the payment as soon as he could
collect the means.
Nothing further transpired between the parties in respect to the
subject matter of the controversy till after the tender was made by
the solicitor of the complainant. There is not a word of proof,
other than what has been mentioned, that has the least tendency to
show that the respondent, prior to the tender made by the
complainant, ever formally demanded the payment of the sum due as
is alleged in the answer or ever notified the complainant, or even
intimated to him that he should insist upon a rescission of the
agreement, unless the payment was made at the time or in the manner
specified, or that he ever expressed so much as a wish that the
possession of the premises should be surrendered up because the
payment had not been made, or in any manner signified to the
complainant that he was unwilling that he should remain in
possession and continue his occupation and improvement of the same,
as he had done throughout nearly the whole period after the
agreement was made. The proofs are clear and full that the
complainant entered into the possession shortly after the agreement
was made, and that he had built a valuable dwelling house on the
premises, and if the wharf was not completed, he had at least
commenced the building, and made considerable progress in the work,
and had otherwise made expenditures in leveling and grading the
grounds, and in various ways had greatly improved the premises and
enhanced their value, and that all these improvements had been
carried forward at large expense, while the respondent resided in
the same village, and under circumstances which show beyond
controversy that he must have had full knowledge of their progress
and daily opportunities to have manifested his dissent if he had
desired to do so or if such had been his intention, and yet he
never expressed the slightest dissatisfaction while the works were
progressing or intimated to the complainant, so far as appears,
that in case he failed to make the payment at the time specified in
the agreement, he should claim that the improvements had been made
of his own wrong, and at his own risk, and without any liability on
his part to allow any compensation either for the labor, materials,
or money expended in making them. On the contrary, he suffered the
improvements to go on, silently acquiescing in the right of the
complainant to make them until they were nearly completed, and when
the tender was made by the solicitor of the complainant and he
found he
Page 61 U. S. 518
could no longer conceal his real position with respect to the
failure to make the payment at the time specified in the agreement,
he then declined to accept the money and refused to execute the
deed.
The tender on the part of the complainant was made by Frederick
R. Bartlett, his solicitor, on the 1st day of November, 1851, at
Stillwater, where the land is situated, and in the office of H.L.
Morse, the solicitor of the respondent. A sum sufficient to pay the
whole balance due, with interest, was formally tendered on the
occasion, and the deed demanded and the respondent notified that
the sum so tendered would be always in readiness to be paid by the
solicitor, at his dwelling house in Stillwater, where both parties
resided. According to the testimony of the solicitor, the
respondent refused to accept the money, and got up and went out of
the office, and did not take it, and did not offer to execute a
deed, and it does not appear that he gave any explanation whatever
as to the grounds of his refusal. His omission to explain why he
refused to accept the money which not many days before he had
requested the complainant to pay indicates an inconsistency in his
acts not altogether reconcilable with the idea that the previous
request for payment had been made in good faith or at a time and
under circumstances when he either anticipated or desired that the
complainant might be able to obtain the money to comply with the
request, and it is calculated also to throw some light upon his
subsequent conduct in selecting a moment to demand the money and
tender the deed to the complainant when there is much reason to
think that he must have known that a compliance could not be
expected on account of the absence of the solicitor in whose hands
the money was deposited. He was then reminded by the complainant
that the money had been deposited with his solicitor, and informed
that he was absent, and told that he must wait until the solicitor
returned. These facts are established by the testimony of several
witnesses introduced by the respondent, and it is worthy of remark
that this attempt to demand the money and tender the deed was not
made till more than a year after the bill was filed and nearly six
months after the respondent had formally answered to the suit. It
occurred at the dwelling house of the complainant on the premises,
and it appears from the testimony of Elijah A. Bissell that the
respondent called upon the complainant at the time mentioned and
told him that he understood that he, the complainant, had a sum of
money for him on the account of the lot and that he was ready to
give him a deed of the premises upon the receipt of the money which
he then demanded, and called the witness
Page 61 U. S. 519
to notice the same, and the witness put a private mark on the
deed, which is annexed to his deposition and makes a part of the
case. According to the testimony of that witness, the complainant
said that the money which he was supposed to have had been paid
away, but the witness admits that he referred to the money
deposited with his solicitor as that which was designed to pay the
respondent.
Three days afterwards, the same thing was repeated when the
complainant was called into the office of the solicitor of the
respondent, unattended by any friend or legal adviser, and a second
demand was made of him for the money, and the same deed was again
tendered. His explanation on this last occasion, as given in the
testimony produced by the respondent, is full and satisfactory, and
we refer to it as affording a perfect solution of the whole
transaction. After the demand was made, he replied that he could
not pay the money, as he had not enough to pay his taxes; that he
had left the money with his solicitor, who had once tendered it to
the respondent, and that he ought then to have taken it; that his
solicitor was now away from home, and the respondent must wait
until he returned. Three depositions were taken by the respondent
to establish this last demand, and each of the witnesses proves the
substance of this explanation, and we think it is not of a
character to require any extended comment, as the transaction
speaks its own construction. More than a year before that demand
was made, the complainant had tendered the money to the respondent,
and deposited it in the hands of his solicitor, and notified the
respondent that it would always be in readiness to be paid whenever
he would accept it, and he well knew that he had never asked for it
or in any manner signified his willingness either to receive the
money or to execute the deed. These considerations furnish a
complete answer to any supposed defense upon that ground, wholly
irrespective of any question which might otherwise arise, involving
the rectitude of the transaction or the motives of those who were
concerned in making the demand, and consequently remove all
necessity for any farther remarks upon this branch of the case.
Looking to the whole evidence, we think it is satisfactorily proved
that more than half of the consideration was paid in advance of the
time when it fell due, that valuable improvements were made on the
premises by the complainant under the agreement, and that the
possession of the premises was continued by him after the time
elapsed for payment, with the knowledge and approbation of the
respondent, which, in some cases, has been held sufficient of
itself to entitle the party to relief where in all other respects
it
Page 61 U. S. 520
appeared that he was without fault.
Waters v. Travis, 9
John. 466.
Suppose it were otherwise, it can make no difference in this
case, as it also appears, and the proof on this point is equally
satisfactory, that the tender of the balance of the purchase money
was duly made while the complainant was in possession of the
premises under the agreement, and before any act had been done by
the respondent disaffirming it or any notice or intimation given by
him that he did not intend to insist upon its performance.
Readiness to perform is distinctly alleged in the bill of complaint
and is as distinctly denied in the answer, and therefore it becomes
important to inquire how the fact was according to the evidence in
the case. What occurred between the parties in respect to the delay
which had ensued prior to the interview at the dwelling house of
the complainant does not appear by the testimony on either side,
and consequently it is reasonable to conclude that so far as that
period is concerned, it was not the subject of dispute, and it
seems quite probable that it had been arranged by mutual consent.
That such was the fact, though not directly proved, is clearly
inferable as well from the conduct as the conversation of the
parties at the time the interview took place. They met at the time
in a friendly way, and the respondent asked for the money, and in
turn the complainant asked for some forbearance till he could
collect the means, and apparently it was granted without objection
or any imputation of any prior remissness. No demand was made of
the money, or any intimation given that if it was not paid
immediately, the delay would be regarded in any manner as impairing
the right of the complainant to make it at any time. It was a mere
ordinary request of a creditor to a debtor, and embraced not only
what was due on the agreement, but also a balance due on account,
and was not intended as anything more than an offer to settle and a
request for payment, which applied quite as much to the account as
to the agreement, and there is good reason to infer that the
respondent himself had not been ready to execute the title prior to
that time, as he took occasion to inform the complainant that he
was ready to make the deed when he was paid, whereas if the
business had been delayed contrary to his wishes, there would have
been no necessity for that notification. However that may have
been, the circumstances we think abundantly show that the delay
prior to that time was not the subject of complaint, and therefore
it is dismissed from any farther consideration. Time may be, and
often is, of the essence of a contract for the purchase and sale of
real property, so that courts of equity will not interfere in
behalf
Page 61 U. S. 521
of either party. It may be made so by express stipulations of
the parties, or it may arise by implication from the nature of the
property or the avowed objects of the seller or purchaser, and even
when it is not so, expressly or impliedly, if the party seeking
redress has been guilty of gross laches, or has been inexcusably
negligent in performing the contract on his part, or if there has
in the meantime been a material change in the circumstances
affecting the rights, interests, or obligations of the parties, in
all such cases courts of equity will in general refuse to decree a
specific performance upon the plain ground that it would be
inequitable and unjust. On the other hand, the general doctrine on
this point is expressed in the maxim "that time is not of the
essence of a contract in equity," and except in cases like those
already mentioned or in those of a kindred character, courts of
equity, as a general rule, have always claimed and exercised the
right to decree specific performance of agreements in respect to
the purchase and sale of real property in their discretion, and
usually to a more liberal extent in favor of purchasers than those
who contract to sell such properties.
Taylor
v. Longwood, 14 Pet. 174; 2 Story's Eq.Jur., sec.
771 to 776; Adams Eq., ch. 2, 263.
The authorities cited will suffice for the present occasion, as
the cause depends very much upon the facts exhibited by the
parties, and upon certain obvious principles of justice and equity,
universally admitted wherever courts of equity exist. There was no
negligence or delay of performance on the part of the complainant
prior to the tender of the money on the 1st day of November, 1851,
except what is reasonably and satisfactorily accounted for on the
ground of acquiescence or waiver on the part of the respondent, and
after that time the fault was entirely his own, and neither the
rules of common justice nor equity will allow him to take advantage
of his own wrong. He can derive no benefit from his subsequent
attempt to tender the deed, as it was then too late to impair the
right of the complainant to insist upon performance, and we attach
no importance whatever to his demand of the money, as he well know
at the time that the amount was deposited in the hands of the
solicitor of the complainant, and that he could have it the moment
he returned.
It is a case of clear equity on the part of the complainant. He
has been guilty of no negligence or fraud, and he was admitted into
possession of the premises under the agreement and suffered to make
valuable improvements without any notice to desist, and now, when
he cannot be made whole in any other way, it is his right to insist
that the agreement should
Page 61 U. S. 522
be performed, and a court of equity is the proper tribunal to
enforce his right.
On the whole case, we are of the opinion that the Supreme Court
of the Territory of Minnesota erred in the order and decree made in
this cause. The decree, therefore, of that court is
Reversed and the cause remanded for further proceedings,
with directions to enter a decree affirming the decree of the
district court, with costs.