Alley v. Peeso

I agree with all that is said in the foregoing opinion, except in so far as it limits defendant's recovery to 5,000 shares of stock.

Plaintiff testified: "I have between five and six thousand shares." He also said that he had transferred 123,500 shares to his brother in November, 1927, retaining in himself a proxy to vote the stock. He expected to get some of that back after reaching a settlement of business matters with his brother. When asked as to how much he expected to have returned to him, he said: "I probably will get 15,000 shares, maybe more or less." He was asked: "You estimate when you get the settlement with Roy Alley you will own about 22,000 shares?" His answer was: "Probably." This evidence is not contradicted. To me there seems no logical reason for limiting recovery to 5,000 shares of stock, and for denying the right to recover compensation in lieu of the remaining shares of stock covered by the contract.

Under section 28, Article VIII of our Constitution it is provided: "There shall be but one form of civil action, and law and equity may be administered in the same action." Of like import is section 9008, Revised Codes 1921.

"It appears to be well settled that where a court of equity obtains jurisdiction for the purpose of granting some distinctively equitable relief, such as the specific performance of a contract, or the rescission or cancellation of some instrument, and it appears from facts disclosed at the hearing, but not known to the plaintiff when he brought his suit, that the special relief prayed for has become impracticable, and the plaintiff is entitled to the only alternative relief possible, — of damages, — the court may, and generally will, instead of compelling the plaintiff to incur the double expense and trouble of an action at law, retain the cause, decide all the issues involved, and decree the payment of mere compensatory damages (1 Pom. Eq. Jur., sec. 237); especially since, by the Code, the distinction between courts of law and courts of equity has been abolished." (Cole v. Getzinger, 96 Wis. 559, 71 N.W. 75, 81.) This rule has even been extended to cases where plaintiff, in a suit for specific performance, knew the facts rendering such relief impossible at the time the action was commenced. (McLennan v. Church, 163 Wis. 411, 158 N.W. 73.) But here the record shows, and the court found, that when the cross-complaint was filed plaintiff was able fully to comply with a decree for specific performance, and the court expressly found that the cross-complaint was brought in good faith.

"It is settled, with little or no conflict of authority, that when a defendant in a bill in equity disenables himself, pending the suit, to comply with an order for specific relief, the court will proceed to afford relief by way of compelling compensation to be made; and for this purpose will retain the bill, and determine the amount of such compensation, although its nature and measure are precisely the same as the party would otherwise recover as damages in an action at law. * * * There is equal ground in equity for applying the same rule, with the same qualifications, to all cases where a defect of title, right or capacity in the defendant to fulfill his contract is developed by his answer, or in the course of the hearing, or upon reference of his title or capacity, after an order of fulfilment. * * * Relief might then be given by a decree in the alternative, awarding damages unless the defendant should secure the specific performance sought. In many cases, this would be an effective and proper course; inasmuch as the defendant, although not having himself, at the time, the title or capacity requisite for such performance, might be able to procure it otherwise. * * * The peculiar province of a court of chancery is, to adapt its remedies to the circumstances of each case as developed by the trial. It is acting within that province when it administers a remedy in damages merely, in favor of a plaintiff who fails of other equitable relief, to which he is entitled, without fault on his own part." (Milkman v. Ordway, 106 Mass. 232.) To the same effect is Wonson v. Fenno, 129 Mass. 405.

A person by his own voluntary act in rendering specific performance of a contract impossible does not divest a court of equity of jurisdiction to decree specific performance so far as possible and to render a money judgment for the deficiency. (Hansen v. Hevener, 69 Cal. App. 337, 231 P. 361; C. O.Ry. Co. v. City of Dayton, 177 Ky. 502, 197 S.W. 969;Tri-State Terminal Co. v. Wheat Growers' Assn., 134 Wash. 519,236 P. 75; Saperstein v. Bank, 228 N.Y. 257,126 N.E. 708; McFarlane v. Dixon, 176 Wis. 652, 48 A.L.R. 1, 187 N.W. 671; Altoona etc. Supply Co. v. Kittanning etc. Ry. Co., (C.C.) 126 Fed. 559; 36 Cyc. 748.)

Neither was it incumbent upon defendant, under the circumstances, to specifically pray for such relief in his cross-complaint. Defendant asked for general equitable relief. Under a prayer for general relief in equity the court may grant relief differing from the specific relief prayed for, and may decree a money judgment. (Marston v. Catterin,290 Mo. 185, 234 S.W. 816; Waite v. O'Neil, 76 Fed. 408, 22 C.C.A. 248, 34 L.R.A. 550; Thomas v. Haly Coal Co., 189 Ky. 698,225 S.W. 1053; Fike v. Fike, 3 N.J. Misc. Rep. 485, 128 A. 849.)

"A prayer for general relief is as broad as the equitable powers of the court. Under it the court will shape its decree according to the equities of the case, and broadly speaking will grant any relief warranted by the allegations of the bill, whether it is the prayer in the bill or whether there is a special prayer for particular and different relief; and defects in the special prayer are usually cured by a general prayer. If the facts alleged are broad enough to warrant relief, it matters not how narrow the specific prayer may be if the bill contains a prayer for general relief. The prayer for general relief serves to aid and supplement the special prayer by expanding the special relief sought, so as to authorize further relief of the same nature. It may also serve as a substitute for the prayer for special relief, and authorize relief of a different nature when that specially prayed is denied, even to the extent of substituting a money decree in lieu of the relief specifically prayed." (21 C.J., p. 679 et seq.)

As stated by Waterman in section 500 on the Specific Performance of Contracts: "When compensation is sought by the vendee, although it is better for him to state his grounds therefor in his pleading, yet he is not obliged to do so, but may obtain `compensation' at any time during the investigation before performance, though the prayer of his bill and the decree rendered at the hearing do not allude to compensation."

In Cushman v. Bonfield, 139 Ill. 219, 28 N.E. 937, 945, the court said: "The point is also made that the decree is not warranted by the prayer of the bill. It is true, there is no specific prayer for a money decree, the relief specifically prayed for being what would be substantially a specific enforcement of the plan of reorganization embodied in the agreement, to which nearly all the bondholders subscribed, by issuing to the complainant first mortgage bonds of the company to which the railroad property was transferred in exchange for those already held by him. The bill, however, contains the general prayer for relief; and under that prayer, as the rule seems to be well settled in this state, the decree rendered was proper."

In speaking of the same question, the court, in Superior Oil Gas Co. v. Mehlin, 25 Okla. 809, 138 Am. St. Rep. 942,108 P. 545, 549, said: "Notwithstanding the fact, however, that we are unable to grant to plaintiff the primary relief for which it prays, there is no fraud shown, and there are manifest equities in its behalf which we cannot pass without noticing. Plaintiff has paid defendant money in an effort on its part to carry out the terms of the contract as it assumed them to be, and defendant has received and retained this money, and apparently has made no offer of return. In addition thereto plaintiff, with the consent of defendant, entered upon his allotment, and erected a house on the same for a residence or office building, the exact cost of the same being uncertain. Plaintiff's petition contains a prayer for general relief, and in such cases the trend of authorities is that, where the equitable relief specifically prayed for cannot be given, the plaintiff's action will not be dismissed, but in some proper manner he will be given an opportunity to obtain relief to the extent to which he is shown a right. (16 Ency. Pl. Pr., p. 801; Seibert et al. v. Thompson et al., 8 Kan. 65;Martin et al. v. Martin, 44 Kan. 295, 24 P. 418.)"

Where, as here, the statute of limitations has run against the remedy for breach of the contract sought to be enforced, and in consequence defendant has no remedy at law, there is additional reason why a court of equity should retain jurisdiction over the cause, rightly invoked at the time of the filing of the cross-complaint, and do complete justice between the parties. (Combs v. Scott, 76 Wis. 662, 45 N.W. 532.)

The majority opinion assumes that, if the court should decree compensation for the deficiency, it would to that extent work a transformation of the action from one in equity to one at law. This assumption, in my opinion, is erroneous. A decree for compensation for deficiency in a suit for specific performance is recognized by the authorities as a proper function of a court of equity while sitting as such. And the fact that the measure of compensation, in lieu of specific performance, cannot be exact or certain is no obstacle to the granting of such relief. (Pomeroy on Specific Performance of Contracts, 3d ed., sec. 448.)

Since it does not appear that plaintiff will be unable to comply fully with a decree for specific performance of the contract, it is my opinion that specific performance should have been granted to the extent of 42,334 shares. Were that done, and should it be made to appear thereafter that full performance could not be had, upon appropriate supplementary proceedings the court could then determine the compensation to be awarded in lieu of whatever stock plaintiff would not be able to surrender. (See 21 C.J. 544; Bartee v. Matthews, 212 Ala. 667, 103 So. 874.)