Hill v. Grigsby , 35 Cal. 656 ( 1868 )

By the Court, Bhodes, J.:

The leading question is, whether plaintiff is entitled to recover upon certain promissory notes representing the unpaid portion of the purchase money for certain real estate, sold by the plaintiff to the defendants, without conveying or offering to convey the property. The solution of the question depends upon the construction to be given to the bond or covenant of the plaintiff. The bond, after reciting the purchase and the terms of payment, proceeds as follows: “How, therefore, the said Hill agrees and binds himself, on condition that the said Grigsby and Smittle shall pay the sum of eighteen thousand dollars, less eight thousand two hundred dollars heretofore paid, with interest, as aforesaid, to execute and deliver to the said Smittle and Grigsby a good deed, conveying all his right, title, and interest of, in, and to the one undivided half interest in said mill and premises herein as aforesaid, which if he shall well and truly do, the above obligation to be null and void and of no effect; otherwise, the above obligation to be and remain in full force and effect. The said deed to be executed by the said Hill as soon as the full sum of eighteen thousand dollars and interest, as above provided, is paid, and to be sufficient to convey to said Grigsby and Smittle one undivided half interest in and to said mill, free from all incumbrance.”

In the first clause the plaintiff covenants to convey on condition that the defendants pay the price. These acts were plainly intended to be simultaneous, that is to say, the payment in full and the conveyance. The words “on condition” are susceptible of no other interpretation. The second clause was added as if to put the matter beyond question. There the covenant is, to convey as soon as the full sum is paid. The conveyance must, of necessity, be executed concurrently with or before payment in full, or it will not be executed as soon as such payment is made.

Heither argument nor illustration will make the meaning of the covenants in respect to the time for their performance more apparent.

When the meaning of the terms employed in the covenants is ascertained, the application of the rules of law governing the performance of the covenants is not difficult. In a contract for the sale of real estate, where the purchaser covenants to pay the purchase money, and the vendor covenants to convey the premises at the time of payment, or upon the time of payment of the money, or as soon as it is paid—and they all mean the same thing—the covenants are mutual and dependent, and neither can sue without showing a performance, or an offer to perform, on his part; and performance, or the offer to perform, on the one part, is a condition precedent to the right to insist upon a performance on the other part. (Barron v. Frink, 30 Cal. 488.)

When the purchase money is payable in installments, and the conveyance is to be executed on the last day of payment, or upon the payment of the whole price, or at any previous day, the covenants to pay the installments falling due before the time appointed for the execution of the conveyance are independent covenants, and suit may be brought thereon without conveying or offering to convey.

The covenants to pay the installments falling due on or after the day appointed for the conveyance are dependent covenants, and the vendor, in his suit to recover the same, whether he sues for those alone or joins installments that became due before the time, must show a conveyance or offer to convey. In .these respects, contracts of all kinds are governed by the same rule as covenants.

Questions covering the greater portion, if not the entire ground occupied by those presented here, were considered at an early day in this Court, and the decisions accord with the views here expressed. (Osborn v. Elliott, 1 Cal. 337; Folsom v. Bartlett, 2 Cal. 163. See, also, Barron v. Frink, 30 Cal. 486.) It is very correctly said in Bank of Columbia v. Hagner, 1 Pet. 455, that “in contracts of this description the undertakings of the respective parties are always considered dependent unless a contrary intention clearly appears;” and the reason assigned, as well as the rule, would be applicable here were the words of the covenant of doubtful import. “A different construction would in many cases lead to the greatest injustice, and a purchaser might have payment of the purchase money enforced upon him, and yet be disabled' from procuring the property for which he paid it.” The authorities in support of these principles are very numerous, and there is a greater degree of uniformity among them than is usual on a question presented, as this has been, in so many different aspects. (Pordage v. Cole, 1 Wm. Saund. 320; Jones v. Gardner, 10 Johns. 266; Gazley v. Price, 16 Johns. 267; Parker v. Parmele, 20 Johns. 130; Williams v. Healey, 3 Den. 367; Johnson v. Wygant, 11 Wend. 48; Bean v. Atwater, 4 Conn. 3; Lester v. Jewett, 11 N. Y., 1 Kern., 453; Hunt v. Livermore, 5 Pick. 395; Kane v. Hood, 13 Pick. 281; 1 Pars, on Con. 42; 2 Smith L. C. 17.)

The matters set up in the answer regarding the adverse pre-emption claims, constitute no defense to the action; for the plaintiff covenanted to convey only the right, title, andi interest he held in the undivided half of the premises at the time the contract was entered into.

This, we understand from reading together the two clauses of the covenant we have cited, was the intention of the parties. The “ one undivided half interest,” mentioned in the second clause, was the same as that mentioned in the previous clause, where it is limited to “his right, title, and interest” therein. The object of the second clause was to specify with greater accuracy the time for the execution of the conveyance, and that the interest conveyed should be free from incumbrance, and not to enlarge the interest previously specified.

It is unnecessary to consider the remaining questions, because if the plaintiff had not delivered or tendered the conveyance according to his covenant, he cannot prevail in the action.

We are of opinion that the portion of the answer setting up the contract of sale, and alleging the failure of the plaintiff to convey, or offer to convey, to the defendants the interest in the premises sold to them, is a good defense to the action, and that the order striking it out was erroneous.

Jugment reversed, and cause remanded for further proceedings.