Mundy's Executors v. Garland , 116 Va. 922 ( 1914 )

Buchanan, J.,

(after making the foregoing statement) delivered the opinion of the court.

One of the errors assigned is the action of the court u> permitting the defendants to file special pleas of set oft" under the provisions of section 3299 of the Code. The plaintiffs insist that to give the defendants the relief sought by their pleas of set off a rescission of the contract relied on was required, and that such rescission cannot be had in a court of law.

It is well settled that a plea under that statute is not available as a defense to a bond for the purchase price of real estate, if the defense is such as to require a rescission of the contract and a reinvestment of the vendor with the title to the property. Mangus v. McClelland, 93 Va. 786, 22 S. E. 364; Tyson v. Williamson, 96 Va. 636, 32 S. E. 42; 4 Minor’s Inst. 796. The defenses set up in the special pleas filed in this case do not involve the rescission of the contract sued on, or a reinvestment of the title in the vendors. On the contrary, the vendee never acquired title to the property. The only relief, if any, which either party can have in this proceeding is for the others’ failure to keep and perform the agreement sued on, and such relief does not depend upon its rescission.

As the assignments of error based upon the action of the court in overruling the other objections to the special pleas involve largely the same questions ráised by the assignments of error to the court’s action in giving and refusing instructions and in rejecting evidence, the questions themselves will be considered without specific reference to the order, or the manner, in which they were raised.

The defendants insist that the plaintiffs were not entitled to recover upon the contract sued on because when it was entered into they did not have the right to sell the property contracted to be sold; that they did not have title to it and that there were encumbrances upon it, so that they were then unable to make such a conveyance as they contracted to make.

It is true that a vendor, in order to recover for the breach of a contract by the vendee, must himself be able to keep and perform the contract on his part; but as we understand the rule it is not necessary for him, in order to maintain an action for such breach, to be able to convey such title as he contracts to convey at the time he enters into the contract, but he must be able to do so when he is required by the terms of the contract to perform on his part.

The doctrine on this subject is thus stated in 39 Cyc. 1983, and is sustained by the decisions: “It follows from the general rule above stated that the vendor, in order to recover for a breach by the purchaser of the contract of purchase, must have been able to convey a good title, or such as would comply with the requirements of the contract; but it is not necessary that he should have good title at the time of the contract, but only that he should be able to convey a good title at the time of performance.” See also Daniel v. Leitch, 13 Gratt. (54 Va.) 196, 213; Goddin v. Vaughan, 14 Gratt, (55 Va.) 102; Conover v. Tindall, 20 N. J. L. 513.

It appeared that between the 4th of April, 1910, the time when the parties entered into the contract sued on, and the 14th of May following, during which the defendant, Garland, had the privilege of becoming a purchaser of the land, he made what was, or was intended to he, a tender of the amount required of him by that agreement in order to become the purchaser thereof, and demanded the immediate delivery of a deed conveying the property to him. This being the first notice to the executors that the defendant, Garland, intended to exercise his privilege or option and become the purchaser of the land, they were unable to comply with the demand of the said defendant for the immediate delivery of the deed. This tender by the said defendant, and the failure of the plaintiffs to deliver the deed at that time, the defendants claimed released them from all liability under the agreement sued on. This contention the court properly overruled by giving instruction No. 4 asked for by the plaintiffs.

It was further contended on the part of the defendants that the plaintiffs were not able at any time between April 4 and May 14, following, to convey the property free from encumbrance, or to convey good title to it, as they only had legal title to a two-thirds undivided interest therein, and were therefore not entitled to recover.

The court properly told the jury that the defendant, J. L. Garland was entitled under his contract to a conveyance of a good title free from encumbrance. See Goddin v. Vaughan, supra, 102, 117; Kinney v. Hoffman, 1 Va. Dec. 361. It further told them that the fact that they had good title must appear from the records of the office in which title papers are registered, or recorded.

The contract in this case did not require a perfect record title. Unless the contract does so require, the purchaser is not as a rule entitled to demand such title if the title is in fact good. If he could, the vendor who had acquired a perfect title by adversary possession, or under an unrecorded deed could not enforce the provisions of his contract, either at law or in equity, if the purchaser saw fit to resist on that ground.

Prof. Page in his article on Vendor and Purchaser, 39 Cyc. at page 1885, says, in discussing the defenses that may be made by a vendee: “In any case the defect of title must be such as to justify the purchaser in refusing to accept it; and if the contract does not require a perfect record title, the purchaser cannot justify a refusal to perform his part of the contract, that the title if, in fact, good, was not a perfect record title, nor is it any defense that the purchaser in refusing to accept a conveyance acted in good faith and upon the advice of counsel that the vendor’s title was defective, if in fact such advice was erroneous.” See also 1 Warville on Vendors, pp. 309-311; 26 Am. & Eng. Enc. L. (2nd ed.) 106-7, and cases cited in each; also Cowdery v. Greenlee, 126 Ga. 786, 55 S. E. 918, 919-20, 8 L. R. A. (N. S.) 137; Maupin on Marketable Titles, secs. 6 and 288.

To show that they had good title to the one-third undivided interest which the records did not show that their testator owned, they tendered an unrecorded deed, properly acknowledged for recordation, which showed in fact that said interest had been conveyed to and was owned by Swartz when he conveyed the property to the plaintiffs’ testator, thus clothing him with the whole title. The court refused to permit the deed to go to the jury, upon the ground that it had not been recorded and that the defendants had no knowledge or notice of the existence of the deed on or before May 14, 1910, and instructed the jury that the plaintiffs did not have on May 14, 1910, the day agreed upon for the performance of the contract, a perfect legal title to the property; and that Mr. Garland “was not required to accept the title they had or offered, or to take the property, and the plaintiffs had no right to advertise and sell the property at his risk.”

It seems to be conceded (if not, it clearly appears) that neither the executors nor Mr. Garland actually knew of the existence of the deed, or of the apparent defect in the title as shown by the records, nor was such fact known until some months after this proceeding was instituted. There is evidence tending to show that the deed which the executors were having signed to deliver to Mr. Garland, and also an abstract of title furnished to the executors by their counsel, which showed that it appeared from the records that there were certain encumbrances on the land, which will hereinafter be adverted to, were shown to Mr. Garland prior to the 19th of April, 1910, when he claims that he elected to acquire the property under the agreement sued on, tendered the consideration to be paid and demanded an immediate delivery of the deed, and that he made no objection to the title at either time, but declared the deal off because the executors could not make an immediate delivery of the deed; that he afterwards consulted counsel, who advised him that the executors could not make a deed, and not to accept their title. The objections made were upon other grounds, and if none of those grounds were valid and such as prevented the executors from conveying a good title free from encumbrances, the question is can the defendants defeat a recovery upon the ground that the record did not show that' the plaintiffs had a good title, when in fact they did, and when such apparent defect in the title was not actually known to either party, and did not in any way affect their action!

The court is of opinion that they cannot, and that the circuit court erred in not permitting the said deed to go to the jury. If the deed had been admitted in evidence, as it should have been, of course the court could not have given the defendants ’ instructions numbered five, six and seven, since they are based upon the same erroneous view of the law, viz: that for the purposes of this case the plaintiff could not be regarded as having good title unless that fact appeared of record.

The court is further of opinion that the construction placed upon the conveyances mentioned in instructions numbered two, three and four was correct, and that as to the incumbrance mentioned in instructions numbered three and four, the court properly told the jury that the burden was upon the plaintiffs to show that such encumbrance had been satisfied or released before the 14th of May, 1910, and that the release deed mentiond in instruction No. 4 did not show that the debt of the lien creditors secured by the deed of November 19, 1903, had been released.

The plaintiffs’ instruction No. 5, in which the court was asked to tell the jury that said release deed was a complete satisfaction of the said debts, was erroneous and properly refused by the court. There was other evidence tending to show that the said debts had been satisfied. Whether or not they had was a question for the jury upon all the evidence in the cause.

In order to show that the sale of May 14 had been properly advertised, the plaintiffs offered to prove that the property sold for a less price in November following at a public sale largely advertised than it did on May 14. Whether the other conditions were the same or similar when the two sales were made does not appear. Unless they were it is clear that such evidence was not admissible and was propei'ly excluded. Buit even if it had been admissible, no prejudice resulted to the plaintiffs, since the court, by instruction No. 2, offered by them, properly instructed the jury, in effect, that the only question as to the sufficiency of the advertisement was the good faith of the plaintiffs in selecting the method in which it was máde.

The court is further of opinion that the plaintiffs’ instruction No. 1 correctly stated the law, and while it might have been better, perhaps, to have declared what acts or defaults on the part of the plaintiffs would have prevented the defendants from completing their purchase, its language could not have misled the jury, and the court erred in refusing to give it.

As the judgment will have to be reversed for reasons hereinbefore stated, the verdict set aside and the cause remanded for a new trial in which the evidence will not be the same, sufficient has been said without discussing the other assignments of error to indicate the general principles of law which should govern the court upon another trial.

The court is of opinion to reverse the judgment, set aside the verdict, and remand the cause for a new trial to be had not in conflict with this opinion.

Reversed.