Bothe v. Noack , 149 Ark. 297 ( 1921 )

Hart, J.

(after stating the facts). The correctness of the decree of the chancellor depends upon the construction to be given the contract for the purchase of the land signed by Noack and Scheuer on the 26th day of July, 1919.

On the one hand, it is claimed by Bothe that Noack committed a breach of the contract by failing to pay the note for $2,000 due on January 5, 1920, and that therefore he was not entitled to a specific performance of the contract.

Counsel for Bothe contend further that the contract was made for the benefit of Bothe, and that Bothe, having paid the $2,000 note when it fell due and knowing further that Noack could not himself pay the remaining notes, had a right to pay them off before they became due and to take a deed to himself to the land.

On the other hand, counsel for Noack claim that Noack had the right to pay the purchase money at any time before the last note fell due and demand the execution of a deed to himself to the land. He claims that Bothe had no rights under the contract until all'the purchase money notes fell due and Noack failed to pay them.

Although Bothe did not sign the contract, it was made for his benefit, and he was entitled to the performance of it according to its terms the same as if he had signed it. The contract between Scheuer and Noack provided that the notes for the -purchase money of the land should also be signed bv H. Bothe. Bothe signed these notes, and thereby became bound to pay them and accepted the terms of the contract. Thereafter he became interested in the contract and was entitled to have it performed according to its terms.

We are of the opinion, however, that the contract does not mean that, upon the failure of Noack to pay the first note when it became due, he had committed such a breach of the contract as would prevent him from having specific performance thereof. There is nothing in the contract providing that, upon the nonpayment of one note, all should become due. Neither does the language used indicate that the parties regarded time as the essence of the contract. The contract provides that Noack should assume the payment of a mortgage on the property for the sum of $3,500. Noack is designated in the contract as the second party, and Chas. Scheuer and Martha Scheuer are called the first parties. That part of the contract upon which Bothe relies is as follows:

“Second party shall execute to the first parties his promissory note for that part of the purchase price which is to be paid directly to first parties, and the said notes are to he signed by H. Bothe. In the event second party should be unable to complete the payment of the purchase price, then Mr. Bothe is hereby given the right to pay the aforesaid notes, and, in the event he does so pay said notes, he shall be substituted to all the rights of second party under this contract, and he shall be entitled to have from first parties the said warranty deed. ’ ’

It will be noted that the language used is that, if Noack should be unable to complete the payment of the purchase price, then Bothe is given a right to pay the purchase money notes and be substituted to the rights of Noack. The contract does not give the right of substitution to Bothe upon the payment of the first note merely. It is true that the last two notes are payable on or before a certain date, but that fact, merely, could not give Bothe the right to be substituted in the place of Noack. It only gave him the right to pay off the notes. Noack had the right to have the specific performance of the contract if he paid the purchase money notes off before they all finally became due. It did not make any difference that he did not have the money himself. He had the right to borrow the money with which to pay the purchase price. This he did, and made a tender of the amount due to Bothe before the last two notes fell due.

We hold that under the terms of the contract Bothe had the right to pay the last two notes on the 14th day of January, 1920, because they were made payable on or before a certain date, but the fact that he paid them before they became due did not give him the right to be substituted for Noack, for the reason that Noack had until all the notes became due before he lost his right to have ¡Specific performance of the contract. He made a tender of the amount due which had been paid by Bothe and Bothe declined the tender. Therefore, it was not necessary that Noack should deposit the money in the registry of the court. He stood ready to pay the amount at any time, and the court protected the rights of Bothe by giving him a lien on the land for the purchase money paid by him. Strickland v. Clements, 83 Ark. 484.

By way of cross-complaint, Bothe asked for judgment against Noack in the sum of $639.44 which* Noack owed him on account. Noack was a tenant of Bothe on another tract of land and owed Bothe this amount for supplies furnished him. This was not the proper subject of counterclaim. The suit of Noack was for the specific performance of a contract with Scheuer to convey him a tract of land. We have held that a counterclaim is allowed under our statutes only in actions for the recovery of money, and that the counterclaim must tend in some way to diminish or defeat the plaintiff’s recovery.

The suit of Noack for specific performance could in no wise be affected by the recovery of a judgment by Bothe against him for supplies. The two transactions could have no relation whatever to each other and the court properly denied Bothe the right to recover on his counterclaim. Smith v. Glover, 135 Ark. 531.

It follows that the decree will be affirmed.