Barnett v. Cloyd's Ex'rs ( 1919 )

Sims, J.,

after making the foregoing statement, delivered the following opinion of the court:

[1, 2] 1. There is a well and long-established rule in equity that where an executory contract of sale of real estate fixes a date for the completion of the contract and is silent as to interest on unpaid purchase money and is also silent as to when possession is to be taken by the vendee, if the latter, without any new consideration therefor moving from him, takes possession prior to the completion of the contract, he must pay interest on the unpaid purchase money from the date on which he takes possession. Ip. such case, equity, in the absence of any express agreement of the parties on the subject, implies a promise on the part of the ven-dee to pay such interest. This is done on the ground that the vendee enters into possession and takes the rents and profits, or other benefit of the purchase, before he is entitled thereto under the contract of sale, and ex aequo et bom he should pay interest, as aforesaid, from such time in compensation for the benefit of possession thus taken in advance of the right thereto under the contract. 39 Cyc. 1630; Seldon v. James, 27 Va. (6 Rand.) 465, 470; Brockenborough v. Blythe, 3 Leigh (30 Va.) 619, 638; Fludyer v. Cocker, 12 Ves. Jr., 25; Sugden on Vendors (14th ed.-8th Am. ed.), secs. 1, 2, 3, 4, 6, 7, et seq., pp. 314-317, et seq., and English and American cases cited; 18 Am. & Eng. Ency. Law (2d ed.), pp. 167-8; 29 Am. & Eng. Ency. Law, pp. 707-9, and cases cited; Oliver v. Hallam, 1 Gratt. (42 Va.) 298; Bailey v. James, 11 Gratt. (52 Va.) 468, 62 Am. Dec. 659. The mere circumstance that the vendor subsequent to ' the contract of sale may assent to .such advance taking of possession does not alter the rule; for in such case, there being no new consideration moving from the vendee to the vendor to support such assent, equity will not imply that it was given for naught.

[3] .The rule just mentioned has been extended by the authorities to cover cases in which the contract of sale mentions no precise date or dates for the payment of the deferred payments of the purchase money, and makes such due date or dates dependent upon the doing of some act by the vendor for the performance of which no time is limited by the contract of sale', and the vendee is let into the'possession of the estate prior to the doing of such act, either by the contract of sale itself or by subsequent assent of the vendor, and fails to make the payments on the dates prescribed therefor by the contract., Sugden on Vendors, supra, sec. 4, p. 316; Oliver’s Ex’r v. Hallam’s Adm’r, 1 Gratt. (42 Va.) 298; Cohen v. Jenkins, post p. 635, 100 S. E. 678, decided at this term of court.

[4] The same rule has been alike extended to apply to cases in which the contract of sale fixes the date for the taking of possession by the vendee and mentions certain dates for the payment of the deferred payments of purchase money, where the same contract, however, also contains the. additional provision that the payments shall not be demanded by the vendor until he has done some act for the performance of which' no time is limited by the contract of sale (Brockenborough v Blythe’s Ex’rs, 3 Leigh [30 Va.] 619) ; and also where the contingency arises after such contract of some difficulty with respect to the title, and the vendee, having taken, continues to hold possession of the estate, notwithstanding the difficulties as to title, pending their removal, and fails to make the payments on the dates prescribed therefor by the contract. (Seldon v. James, 6 Rand. [27 Va.] 465, 470-1; Hundley v. Lyons, 5 Munf. [19 Va.] 342, 7 Am. Dec. 685.) In such cases, where the act in question is finally performed by the vendor, or. the objections to the title prove unsubstantial, it is held that the vendee must pay interest on the deferred payments of purchase money — not from the time of his taking possession of the estate, however, for that would be in contravention of the express contract giving him such right of possession —but from the dates mentioned in the contract of sale for such payments.

In all of the cases above alluded to, there occurs a failure of the vendee to make the payments of purchase money at the times at which, when the contract of sale was entered into, they were expected to be made, as either impliedly understood by the parties or as expressly stipulated in the contract of sale. That is to say, in all of such cases the vendee is in default in making1 such payments and he is held bound to pay interest on such payments from the time of such default. Further—

[5] In the cases to which the rule above mentioned is applicable, it is well settled that the delay in making title being due to the negligent fault of the vendor will not excuse the vendee from paying interest, as aforesaid, and that the only way of escape for the vendee from the payment of such interest is for him to set aside, by deposit in bank or otherwise, the money to meet the deferred payments, and notify the vendor that he has done so. Sugden on Vendors, supra., sec. 3, p. 317, and authorities cited. But if the delay be due to the willful default of the vendor, such rule does not apply. Atchison, etc., R. Co. v. Chicago, etc., R. Co., 162 Ill. 632, 44 N. E. 823, 35 L. R. A. 167.

[6] 2. But courts will not in equity, any more than at law, make contracts for parties, and the rule in equity above adverted to has no application where the contract of sale fixes a date for the taking of possession by the vendee and a date or dates for the payment of the purchase money, and is silent as to interest on such payment or payments, and the vendee does not take possession prior to the date fixed therefor and does not fail to make the payments on the dates prescribed therefor by the contract. In such case the rule is equally well settled in equity as at law that no obligation of the vendee to pay interest on the deferred payments of purchase money will be implied, nor does such liability for interest arise as damages recoverable by the vendor, except from the date or dates on which the same becomes due and payable in accordance with the terms of the obligation. 22 Cyc. 1536, 1539-1540; 39 Cyc. 1569, 1572-3; 16 Am. & Eng. Ency. Law (2d ed.) 991-2, 1002, 1041; Buchanan v. Leeright, 11 Va. (1 Hen. & M.) 211; Chapman's Adm’r v. Shepherd’s Adm’r, 65 Va. (24 Gratt.) 383; Kent’s Adm’r v. Kent’s Adm’r, 69 Va. (28 Gratt.) 845; Roberts’ Adm’r v. Cocke, 69 Va. (28 Gratt.) 207; note to 68 Va. Rep. Anno. 586, et seq.; McVeigh’s Ex’r v. Howard, 87 Va. 599, 13 S. E. 31; Morley v. Lake Shore Ry. Co., 146 U. S. 168, 13 Sup. Ct. 54, 36 L. Ed. 925; Minaud v. Beans, 64 Pa. 411; McKennan v. Sterrett, 6 Watts (Pa.) 162; Nettleton v. Caryl, 14 Pa. Super. Ct. 443.

3. It is unnecessary, however, for us to determine, in the case before us, whether the contract of sale falls within the rule first or the rule last above mentioned. ' It may be conceded that in accordance with the evidence in the record the mind of none of the parties ever assented to a contract of sale which was silent as to the date when the vendees were to take possession; that the silence of the written contract of sale on the subject of interest was not due to a mutual mistake of all of the parties since Simpson certainly intended that it should be silent on that subject; and that the contract of sale as embodied in writing, when construed along with the lease of which, it was a part, must be held to have fixed a date for the taking of possession by the ven-dees as purchasers, namely, October 26, 1915, being the day immediately following the end of the demise under the lease. But this would not be conclusive of the case in favor of the appellants.

[7] It is too well settled to need any extended statement that a plaintiff who seeks the aid of a court of equity to enforce specific performance of a contract submits himself to the rule that he who asks equity must do equity; and that if the contract sought to be enforced was entered into by the defendant under a misapprehension which was induced by the plaintiff so that it would be inequitable and unfair to the defendant to enforce it in accordance with its strict terms, the court will refuse the relief asked, unless the granting of it can be accomplished with conditions which will obviate that result; in which case the granting of the relief upon such conditions is a proper course for the court to pursue. And parol evidence is admissible to show the existence of such misapprehension and that it was induced by the plaintiff. 2 Pomeroy’s Eq. Jur. (3rd ed.), sec. 860; 4 Idem., sec. 1404-5; Willard v. Tayloe, 8 Wall 557, 19 L. Ed. 501, 504; Halsey v. Monteiro, 92 Va. 589, 24 S. E. 258; Waterman on Spec. Per. of Contracts, sec. 158 pp. 208-9, sec. 361 pp. 484-5, sec. 367 p. 491; So. Ry. Co. v. Franklin, 96 Va. 708, 32 S. E. 485, 44 L. R. A. 297.

As said in 2 Pomeroy’s Eq. Jur., sec. 860, supra: .“Wherever the defendant’s mistake was, either intentionally or not, induced or made probable or éven possible, by the acts or omissions of the plaintiff, then, on the plainest principles of justice, such error prevents a specific performance of the agreement” — in accordance with its precise terms.

And again in the same section of tiie learned work just quoted, it is said: “It is * * * a well-settled rule, that in suits for the specific enforcement of agreements, even when written, the defendant may by means of parol evidence show that through the mistake of * * * either of the parties, the writing does not express the real agreement, or that the agreement was entered into through a mistake as to the subject matter or as to its terms.”

[8] These statements of the law are especially applicable in the case before us, as it appears from the statement of facts preceding this opinion, that the appellants by the positions taken in their bill and in their testimony admit that the option clause in the lease was not intended to embody all the terms in detail of the entire contract of sale; that the appellees, at the time that they delivered the lease and option in writing were unquestionably under the bona fide belief that such written contract was not intended to embody all the terms of sale; that the detail as to the obligation of the appellants to pay interest was understood and agreed to by the appellants, notwithstanding the language of such writing; and that appellees were induced to deliver the contract in that shape by the assurance of one of appellants to one of appellees, given at the time, that that was also his understanding and construction of the contract. And such being the case, even if the contract as embodied in writing would have been in itself equitable and fair, had it been freely entered into and delivered by the appellees without misapprehension or mistake as to its nature or consequences, it is manifest that it would work'a great hardship and injustice upon appellees to enforce it in accordance with its strict terms as written. Even if the appellant, Simpson, was not aware before suit was brought of the assurance aforesaid given appellees by his associate vendee, by which the appellees were induced to deliver the contract in writing in its existing form, if would be most inequitable and unjust to allow him to reap the fruit of such assurance without being required to make it good by living up to it. That is amply sufficient ground to sustain the decree under review in so far as it affects the appellant, Simpson; and, of course, the appellant, Barnett, who gave such assurance, has no standing 'in a court of equity to ask for the enforcement of a contract at variance' with that assurance.

The decree under review will, therefore, be affirmed.

Affirmed.