Hosmer v. Wyoming Ry. & Iron Co.

HOOK, Circuit Judge,

after stating the case as above, delivered the opinion qf the court.

Did the Circuit Court commit reversible error in overruling the demurrer to the amended bill of complaint, which was alleged to be multifarious? Was time of the essence of the contract sought to be enforced? Was the failure of complainant and its predecessor in interest to tender the amount due under the contract fatal to the maintenance of the suit? These are the questions presented on this appeal.

The doctrine of multifariousness in equity pleading rests largely upon considerations of inconvenience and expense. Its limitations are not sharply defined, and it would be both difficult and unwise to formulate a rule for unvarying application. It often becomes a nice question whether the convenience of a complainant, and his interest that a multiplicity of suits be avoided, which is also of public concern, outweigh the inconvenience of the defendants arising from the joinder of two or more causes of action in a single suit, and whether the relation between the causes of action is sufficiently apparent to present a common point of controversy. United States v. Bell Telephone Co., 128 U. S. 352, 9 Sup. Ct. 90, 32 L. Ed. 450; Brown v. Guarantee Co., 128 U. S. 403,410,9 Sup. Ct. 127, 32 L. Ed. 468; Barney v. Latham, 103 U. S. 205, 215, 26 L. Ed. 514; Oliver v. Piatt, 3 How. 333, 411, 11 L. Ed. 622; Gaines v. Chew, 2 How. 619, 641, 11 L. Ed. 402. But it has rarely, if ever, happened that a decree has been reversed in an appellate court of the United States upon the sole ground that the bill was multifarious. An appellate court should hesitate in awarding a reversal, if the evil resulting to an objecting party from a pleading of that character may be properly and effectively cured. In the absence of a union of causes of action or defenses which are repugnant and inconsistent with each other, the substantial evil is generally one of costs accruing in respect of a matter in which an appellant has no- concern. In the appeal before us it is contended that the complainant used the suit to enforce the payment of rents into court by an unresisting defendant, that the demand was not of an equitable nature, that the contract reserving the rents was solely between complainant and its lessee, that the appellants were not parties to the instrument and asserted no claim thereunder, that the trial court ordered the moneys so turned into court by the lessee to be paid to complainant and taxed against the appellants all of the costs including those connected with that feature of the case. Assuming, without determining, that the claim of multifariousness is well founded, it is clear that with the lifting of the burden of the costs all substantial cause for complaint would disappear, and that in the action of the Circuit Court there would be nothing of prejudice to the appellants.

The general rule applied in courts of equity is that time is not ordinarily of the essence of a contract for the sale of real property, and that it will not be so regarded unless it affirmatively appears that the parties so intended it. Such intent may be indicated by express stipulation to that effect, or it may be gathered by clear implication from the character of the contract itself, or from the nature of the property which is the subject of the contract, or the avowed purposes of the parties with reference thereto. Thus a strict and prompt performance of optional contracts by the party to whom the privilege of purchase is given is regarded as essential to the maintenance of his rights thereunder. The same rule has been applied to contracts for the sale of property of a speculative character, or which is subject to sudden or frequent fluctuations in value or condition. The principle underlying this rule is manifest. It is designed to prevent a defaulting party from utilizing his own default in a hazard or speculation to the disadvantage of another. But the mere fact that the property is of the character mentioned does not give rise to a necessary or inevitable inference that time of performance is a vital and essential feature of the contract. Other facts and other circumstances may so condition the relation of the parties as to clearly impel a contrary conclusion. Notwithstanding the character of the property, it may appear from their course of dealing that the contracting parties did not regard time as of the essence. It may also appear that the transaction has progressed to such a stage that the vendee has an equity in the property equal or superior to that of his vendor, and that the latter’s title or possession should be regarded in the light of a securby cor the balance of the purchase price, or that the vendee has such an interest that it would be unconscionable to permit of its forfeiture. When by the omission of affirmative stipulation the question is at large, and is one for the determination of a court of equity, it is to be so determined, if possible, that no unnecessary hardship or loss shall be inflicted upon one party not demanded by the clear rights of the other. It is presumed, in the absence of countervailing reasons, that such interpretation was within their intent and purpose when they assumed the contract relation and before their controversy arose. To reach a just conclusion in a suit for specific performance, a court may avail itself of all of those aids which the rules of law permit in the ascertainment of the intention of the contracting parties, and all of the facts and circumstances which serve to disclose their conduct under the contract, their own interpretation of its terms, and their relations to the property and to each other. While it will not make a new. contract for them, nor interpolate stipulations not of their selection, nevertheless it will distinguish between those provisions which pertain to the form and those which are of the substance of their agreement, to the end that the former be not permitted to lead to an inequitable and unjust result. The power so to do belongs to one of the great heads of equity jurisprudence. No express provision making prompt payment by Wegg of the essence of his rights appears in the contract of September 7, 1898, or in any of the agreements of extension. The fixing in the extension agreements of new times for payment is of no more importance in this connection than the specification of the maturity of the installments in the original contract. Does it arise by implication that such vital importance should be attached to time of payment by Wegg? It is clear that the contract is not of an optional character. On the contrary, Hosmer agreed to convey the property to Wegg, and the latter obligated himself unconditionally to pay the remainder of the purchase price. This operated to pass to Wegg an equitable interest in the property, even if he possessed none before, and his interest increased with his continued payments. The legal title remained in Hosmer as security for the balance due him and as trustee for his vendee. Nor should the consideration be overlooked that Hosmer did not acquire ownership of the property solely through his own means, but that, on the contrary, nearly two-thirds of the consideration moving to Sturgis, the original owner, was paid directly by Wegg himself, and in that wise Hosmer secured his title. It is true that the property in controversy is a group of mining claims containing deposits of iron ore, but it is also true that whatever enhancement in value has occurred is attributable largely, if not wholly, to the efforts and industry of Wegg and the complainant. Certain prior transactions are expressly referred to in the contract of September 7, 1898, as constituting a part of the consideration thereof. We do not reopen that contract for the purpose of inserting new stipulations, but simply avail ourselves of its áffirmative recitals of the considerations moving between the parties. Briefly stated, those recitals refer to the contract of sale by Sturgis to Hosmer, the partial payment of the purchase price by the latter, his contract of sale to Wegg and associates in consideration of reimbursement to him and payment of balance due Sturgis, the actual payment in full to Sturgis, and the inclusion as part of the consideration of a sum of money expended by Hosmer in another matter. By these recitals and by the evidence we learn that at the institution of the suit Wegg had paid to Sturgis and Hosmer upon the purchase of the property more than $86,-000 over and above the royalties received from the mining operations. When this is placed against the fact that there remained due to Hosmer, principal and interest, but $53,205.40, it becomes apparent, in the light of all of the other circumstances of the case, that a forfeiture of the purchaser’s rights would be grossly inequitable and unjust, and that it would be unconscionable to impose such a penalty upon him. While it is true that the prior contracts were canceled and the parties released from all obligations thereunder by the contract of September 7, 1898, what was meant thereby was merely that the last contract should stand as the evidence of their rights and obligations, and not that the former could not be referred to, as they were in fact expressly referred to, as indicating in part the consideration already paid and the equitable relation thereby created.

Neither the complainant nor Wegg made a tender of the balance of the purchase price due to Hosmer before the suit was instituted, nor is it at all clear that the offers set forth in the pleadings are sufficient either in time or character. The amount due to Hosmer was fixed and certain, and did not depend for its ascertainment upon trial and decree by the court. No accounting was necessary. The indefinite and uncertain tenders in complainant’s bill and Wegg’s answer were well calculated to postpone the performance of an immediate and positive obligation. In this connection' it should be said that upon a careful consideration of the record we are of the opinion, notwithstanding the averments of forfeiture in the answers of the Hosmers, that, had a full and fair tender been made to them before suit was instituted, it would have been accepted, and thereby all of the costs.incident to this litigation would have been avoided. The course of complainant and of Wegg, its grantor, has caused them to be unfairly charged with the payment of a large bill of costs. Ordinarily, when a tender is not made before the institution of the suit, or is not made in the bill in cases in which it is proper to so tender performance, the bill will be dismissed at complainant’s cost. But should that be done in this case? The transactions of the contracting parties were such that-at the time the suit was instituted each of them possessed a substantial interest in the property in controversy. The purchaser had paid the major part of the purchase money. He had been, and his grantee was then, in the actual possession of the property, and had caused to be made extensive improvements in the immediate vicinity, to the end that the product thereof was readily marketable. The seller retained the legal title, and there remained unpaid to him, even with interest added, considerably less than one-half of the principal of the original purchase price. When a court of equity has acquired jurisdiction of a suit, it will generally proceed to a complete determination of the entire controversy, and will not remit the parties to additional suits or actions for relief, if such course may be properly avoided. And while, in working out an equitable result, a court has no power to impose conditions not authorized bv the settled principles of equity jurisprudence, nevertheless it is well recognized that, under the doctrine that he who seeks equity must do equity, it may so condition and qualify its decree that a righteous adjustment of the claims of the contending parties may be accomplished. The Hosmers have not sought, by act or pleading, a rescission or termination of the contract, except by way of strict forfeiture of Wegg’s equitable interests; and this, we have seen, is inadmissible. There should be no forfeiture of his or his grantee’s interests, if they are still willing to promptly pay the balance which is due.

No result beneficial to any of the contending parties would be secured by a dismissal of complainant’s bill because of failure to tender performance. Their rights would be by such course left in a condition wholly unsatisfactory. When the contract evidences an actual sale and purchase of real property, and time is not an essential element therein, and the parties have substantially progressed with performance, the rule requiring tender before institution of suit for specific performance is not of imperative application. Much depends upon the equities of the particular case, and whether the omission to proffer performance has resulted in a hardship or loss that cannot be readily remedied by the decree. It is not infrequent that the question is resolved into one concerning the mere assessment or apportionment of costs. In Hepburn v. Auld, 5 Cranch, 262, 3 L. Ed. 96, it was held that a.vendor could' compel specific performance of a contract for the sale of land, if able tO‘ give a good title at the time of the decree, although it was perfected after suit was instituted. And in Hepburn v. Dunlop, 1 Wheat. 179, 4. L. Ed. 65, it was suggested that in a case peculiarly circumstanced a court might even continue the cause for the purpose of affording a party time for the completion of his title. In Stevenson v. Polk, 71 Iowa, 288, 32 N. W. 346, it was said;

“It is sufficient if the title is perfected or incumbrances removed prior to the trial. If the court can then by a decree protect the rights of all parties, this is all either can justly ask, unless there has been a rescission, or an offer to rescind, and the party so offering has done all he is required to do, and was entitled thereto at the time the offer was made.” Wilson’s Ex’rs v. Tappan, 6 Ohio, 174; Linn v. McLean, 80 Ala. 368; Chrisman v. Partee, 38 Ark. 60; Tewksbury v. Howard, 138 Ind. 111, 37 N. E. 358; Oakey v. Cook, 41 N. J. Eq. 364, 7 Atl. 503.

The principle of these authorities may well be applied to the case of a proffer or tender by a vendee, where considerations of equity and justice demand it. On the whole we are of the opinion that substantial justice will be accomplished by the reversal of the decrees of the Circuit Court and the entry in lieu thereof of a decree in conformity with the views herein expressed.

The decree below will be reversed, with costs, and the case will be remanded to the Circuit Court, with instructions to enter a decree to the effect that Edward S. Hosmer and Amanda S. Hosmer recover of the complainant below their costs in the Circuit Court, to be duly taxed, and that if, within 30 days after the filing in the Circuit Court of the mandate herein, the complainant, as the grantee of Wegg, shall pay into the Circuit Court, for the benefit of the said Edward S. Hosmer and Amanda S. Hosmer, the entire amount due and unpaid under the contract of sale, with interest to the date of payment, all of the costs of this suit in the Circuit Court and in the Circuit Court of Appeals, and the commission or percentage upon said amounts which the clerk of that court will be entitled to obtain for his services in receiving and disbursing the money, the complainant may have specific performance of the contract, and the Hosmers may receive the moneys thus deposited for their benefit; but, if it fails to make these payments at the time and in the manner above specified, it shall be deemed to have elected to abandon all rights under the said contract, and Amanda S. Hosmer shall be deemed and decreed to be the owner of the property free from the claims of the complainant and of the defendant Wegg. Amanda S. Hosmer should not be required to execute a deed containing covenants of warranty against demands, liens, or titles of persons who do not claim under or through her or her grantor, Edward S. Hosmer, nor against claims, liens, or titles arising out of unpaid taxes, general or special.

It is so ordered.