Willard v. Tayloe,
Annotate this Case
75 U.S. 557 (1869)
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U.S. Supreme Court
Willard v. Tayloe, 75 U.S. 8 Wall. 557 557 (1869)
Willard v. Tayloe
75 U.S. (8 Wall.) 557
1. A covenant in a lease giving to the lessee a right or option to purchase the premises leased at any time during the term is in the nature of a continuing offer to sell. The offer thus made, if under seal, is regarded as made upon sufficient consideration, and therefore one from which the lessor is not at liberty to recede. When accepted by the lessee, a contract of sale is completed.
2. When a contract for the sale of real property is plain and certain in its terms and in its nature and the circumstances attending its execution is free from objection, it is the usual practice of courts of equity to enforce its specific execution upon the application of the party who has complied with its stipulations on his part, or has seasonably and an good faith offered, and continues ready to comply with them. But it is not the invariable practice. This form of relief is not a matter of absolute right to either party, but a matter resting in the discretion of the court, to be exercised upon a consideration of all the circumstances of each particular case.
3. In general, the specific relief will be granted when it is apparent from a view of all the circumstances of the particular case that it will subserve the ends of justice, and it will be withheld when from a like view it appears that it will produce hardship or injustice to either of the parties.
4. Where specific execution which would work hardship when unconditionally performed, would work equity when decreed on conditions, it will be decreed conditionally.
5. The kind of currency which a party offers in payment of a contract (which, in this case, consisted of notes of the United States, not equivalent at the time to gold or silver) is important, on a bill for specific performance, only in considering the good faith of his conduct. The condition of the currency in April, 1864, and the general use of notes of the United States at that time repel any imputation of bad faith in tendering such notes instead of coin in satisfaction of a contract.
6. Where a party is entitled to a specific performance of a contract upon the payment of certain sums and there is uncertainty as to the amount of such sums, he may apply by bill for such specific performance and submit to the court the question of amount which he should pay.
7. Fluctuations in the value of property contracted for between the date of the contract and the time when execution of the contract is demanded, where the contract was when made a fair one and in its attendant circumstances unobjectionable, are not allowed to prevent a specific enforcement of the contract.
8. The general rule is that the parties to the contract are the only proper parties to the suit for its performance. Hence, the assignment by the complainant, prior to his bill, of a partial interest in the entire contract is no defense to the bill for such performance.
9. Where a party, prior to filing a bill for specific performance of a contract for the sale of land, had sent to the other side for examination and in professed purpose of execution of the contract the draft of a mortgage which he is ready, on a conveyance's being made, to execute, it is no defense to the bill, if the defendant have wholly refused to execute a deed, that the draft is not in such a form as respected parties and the term of years which the security bad to run, as the vendor was bound to accept, especially where such vendor, in returning the draft, had not stated in what particulars he was dissatisfied with the draft.
10. When parties have reduced their contracts to writing, conversations controlling or changing their stipulations are, in the absence of fraud, no more received in a court of equity than in a court of law.
11. In this case, without expressing an opinion upon the constitutionality of the provision of the act of Congress which makes United States notes a legal tender for private debts nor whether, if constitutional, the provision is to be limited in its application to contracts made subsequent to the passage of the act, the Court refused to decree a conveyance of real estate on the tender in such notes where the estate had greatly risen in value, where at the time of the contract gold and silver coin were the only lawful money of the United States, and where it was impossible to suppose that the parties when making their contract -- which was eight years before the notes were authorized -- contemplated a substitution of such notes (when tendered much depreciated) for coin, but did decree a specific execution upon the payment in coin of the price originally agreed on, with interest in coin also.
This was a suit in equity for the specific performance of a contract for the sale of certain real property situated in the City of Washington, in the District of Columbia, and adjoining the hotel owned by the complainant, Willard, and known as Willard's Hotel.
The facts out of which the case arose were as follows:
In April, 1854, the defendant leased to the complainant the property in question, which was generally known in Washington as "The Mansion House," for the period of ten years from the 1st of May following, at the yearly rent of twelve hundred dollars. The lease contained a covenant that the lessee should have the right or option of purchasing the premises, with the buildings and improvements thereon, at any time before the expiration of the lease, for the sum of twenty-two thousand and five hundred dollars, payable as
follows: two thousand dollars in cash and two thousand dollars, together with the interest on all the deferred installments, each year thereafter until the whole was paid, the deferred payments to be secured by a deed of trust on the property, and the vendor to execute to the purchaser a warranty deed of the premises subject to a yearly ground-rent of three hundred and ninety dollars.
At the time of this lease, gold and silver, or bank bills convertible on demand into it, were the ordinary money of the country and the standard of values. In 1861, the rebellion broke out, lasting till 1865. In the interval, owing to the influx of people, property in the metropolis used for hotels greatly increased in value, and as was alleged by Tayloe, who produced what he deemed a record to show the fact, the complainant, Willard, assigned an undivided half of the property which had been leased to him as above-mentioned to a brother of his. In December, 1861, the banks throughout the country suspended payments in specie, and in 1862 and 1863, the federal Government issued some hundred millions of notes, to be used as money, and which Congress declared should be a tender in the payment of debts. Coin soon ceased to circulate generally, and people used, in a great degree, the notes of the government to pay what they owned.
On the 15th of April, 1864, two weeks before the expiration of the period allowed the complainant for his election to purchase -- the property having greatly increased in value since 1854, the year in which the lease was made -- the complainant addressed a letter to the defendant, enclosing a check, payable to his order, on the Bank of America, in New York, for two thousand dollars, as the amount due on the 1st of May following on the purchase of the property, with a blank receipt for the money, and requesting the defendant to sign and return the receipt, and stating that if it were agreeable to the defendant, he would have the deed of the property, and the trust deed to be executed by himself, prepared between that date and the 1st of May. To this letter the defendant, on the same day, replied that he had
no time then to look into the business, and returned the check, expressing a wish to see the complainant for explanations before closing the matter.
On the following morning, the complainant called on the defendant and informed him that he had two thousand dollars to make the first payment for the property, and offered the money to him. The money thus offered consisted of notes of the United States, made by act of Congress a legal tender for debts. These the defendant refused to accept, stating that he understood the purchase money was to be paid in gold, and that gold he would accept, but not the notes, and give the receipt desired. It was admitted that these notes were at the time greatly depreciated in the market below their nominal value. [Footnote 1] On repeated occasions subsequently, the complainant sent the same amount -- two thousand dollars -- in these United States notes to the defendant in payment of the cash installment on the purchase, and as often were they refused by him. On one of these occasions, a draft of the deed of conveyance to be executed by the defendant, and a draft of the trust deed to be executed by the complainant, were sent for examination with the money. This last was prepared for execution by the complainant alone, and contained a provision that he might, if he should elect to do so, pay off the deferred payments at earlier dates than those mentioned in the lease. These deeds were returned by the defendant, accompanied with a letter expressing dissatisfaction at the manner in which he was induced to sign the lease with the clause for the sale of the premises, but stating that as he had signed it, he "should have carried the matter out" if the complainant had proffered the amount which he knew he had offered for the property, meaning by this statement, as the court understood it, if he had proffered the amount stipulated in gold. No objection was made to the form of either of the deeds.
Soon afterwards, the defendant left the City of Washington with the intention of being absent until after the 1st of May.
On the 29th of April, the complainant, finding that the defendant had left the city and perceiving that the purchase was not about to be completed within the period prescribed by the covenant in the lease, and apprehensive that unless legal proceedings were taken by him to enforce its execution, his rights thereunder might be lost, instituted the present suit.
In the bill he set forth the covenant giving him the right or option to purchase the premises; his election to purchase; the notice to the defendant; the repeated efforts made by him to obtain a deed of the property; his offer to pay the amount required as the first installment of the purchase money in United States notes, and to execute the trust deed stipulated to secure the deferred payments, and the refusal of the defendant to receive the United States notes and to execute to him a deed of the premises. It also set forth the departure of the defendant from the City of Washington and his intended absence beyond the 1st of May following, and alleged that the appeal was made to the equitable interposition of the court, lest on the return of the defendant he might refuse to allow the complainant to complete the purchase, and urge as a reason that the time within which it was to be made had passed. The bill concluded with a prayer that the court decree a specific performance of the agreement by the defendant and the execution of a deed of the premises to the complainant, the latter offering to perform the agreement on his part according to its true intent and meaning.
The bill also stated some facts, which it is unnecessary to detail, tending to show that the acquisition of the property in question was of especial importance to the complainant.
The answer set up that the complainant, even on his own showing, had no case; that there was no proper tender; that even if the complainant once had a right to file a bill in his sole right -- the way in which the present bill was filed -- he had lost right by the transfer of the half to his brother; that the complainant had not demanded an execution even
of the contract which he himself set forth, but by the drafts of the trust deed sent to Tayloe, and which was the trust deed of which he contemplated the execution, he proposed to pay, at his own option, the whole purchase money before the expiration of the ten years, and thus would interfere with the duration of that security and investment in the identical property leased, which had been originally contemplated and provided for, thus subjecting the defendant to risk and expense in making a new investment. The answer concluded with an allegation, that
"by the great national acts and events which had occurred when the complainant filed his bill, and which were still influencing all values and interests in the country, such a state of things bad arisen and now existed as according to equity and good conscience ought to prevent a decree for specific performance in this case upon a demand made on the last day of a term of ten years, even if in strict law (which was denied) the complainant was entitled to make such demand."
Both Taylor and Willard were examined as witnesses. The former testified that when the lease was executed, he objected to a stipulation for a sale of the premises, and that Willard said it should go for nothing. Willard swore that he had said no such thing.
The court below dismissed the bill, and Willard took the present appeal.