Wheelock v. . Tanner

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] I think the court below erred in finding that there was not, in 1860, a sufficient tender of wagons to pay the installments due in that year. The facts bearing upon that question are uncontroverted, and the question whether they constituted a tender was, therefore, purely a question of law, and may be reviewed here. (Pratt v. Foote, 9 N.Y. 464; Farmers' Bank v. Vail, 21 N.Y. 486.)

The finding is, that the tender was bad because accompanied by the condition that the Tuttle mortgage should be discharged. It is not found that the tender was insufficient in the quantity or quality of the property tendered, and, as there was no objection to it on the latter ground, it must be held to have been sufficient in those respects. The question is, therefore, whether imposing the condition of the discharge of the Tuttle mortgage before the property should be delivered, vitiated the tender. There is no question but that the defendants were entitled to have the Tuttle mortgage discharged before they could be required to deliver the wagons. Such was the letter of the bond. The condition was, therefore, one upon which the defendants had a right to insist, and to which the holder of the mortgage had no right to object. Such a condition does not vitiate a tender. (2 Parsons on Cont. 154; Chitty on Cont. 695.) The discharge of the Tuttle mortgage was, by the bond, a condition precedent to the defendants' liability to pay, and a tender of payment on such condition was therefore a tender of full performance of the defendants' obligation. But, in my opinion, the undisputed evidence in this case showed, not merely a tender, but actual performance on the part of the defendants, and acceptance of the property on the part of the holders of the mortgage. The bond provided, that the wagons should be "delivered at such store-house, on the Black River canal, in the village of Booneville, as the party of the second part (the mortgagee) should direct." It is undisputed that, on the day when the payments of May and June, 1860, respectively, became due, the defendants had the number of wagons requisite to make those payments at their workshop, completed and ready for delivery; and this, until some place of delivery was specified by the holder of the mortgage, would have been full performance on their part had nothing more occurred between the parties; but more did occur, and those subsequent transactions, it seems to me, constituted an acceptance on the part of the holders of the mortgage, and an actual transfer of the property in the wagons. Twenty wagons were completed and ready for delivery on the 15th day of May. These were more than sufficient to make the payments then due. On that day Fisk, who still held the mortgage, came to the defendants' shop and inquired for the wagons; they were shown him and he looked them over and made no objection to their quality or sufficiency in any respect. He declared himself not ready to take them away at that time, whether because he was not able then to give a discharge of the Tuttle mortgage does not appear; but he arranged with the defendants to store them for him, and at his expense, until the number necessary to complete the June payment should be also finished, when he agreed to come and take them all away together. Accordingly the defendants took the wagons to pieces and stored them on their own premises, as requested. There can be no doubt that here was an acceptance on the part of Fisk, and that the property in these wagons was from that moment in him, subject only to the defendants' right to retain the possession until the Tuttle mortgage should be discharged. Delivery of possession was not necessary to effect a transfer of the property; the case was not within the statute of frauds. And the property passed, even though the right of possession remained in the defend ants until the performance by Fisk of his covenant to procure a discharge of the Tuttle mortgage. (Hinde v. Whitehouse, 7 East. 558.) If the defendants' store-house had been burned the following night, without their fault, and those wagons destroyed, the loss must have fallen upon Fisk, and the mortgage have been held protanto discharged. It is also proved, and undisputed, that on or before the 15th of June the number of wagons necessary to complete the payment due on that day, with interest, were finished and stored with the rest, Fisk still failing to designate any place of delivery, and the defendants having no notice of the transfer of the mortgage to Wheelock. This, as it seems to me, fulfilled the measure of the defendants' obligation. Nothing remained for them to do. Delivery was impossible until a place of delivery should be designated, and a tender of delivery was unnecessary, because Fisk knew that the wagons were stored for him, and he had agreed to come and take them away. What remained to be done was clearly the duty of the holder of the mortgage. His covenant to procure a discharge of the Tuttle mortgage was still unperformed, and, until that was done, he had no right to have the wagons. This view of the case seems to have been accepted and acquiesced in by Wheelock from the moment when he became the owner of the mortgage. The whole case from that point seems to me to show, that he regarded those wagons stored by the defendants as his own, and that his solicitude and effort were not to obtain payment of his mortgage, but to obtain possession of his wagons. With no other view of the case is it possible to reconcile his acts and declarations disclosed by the evidence. He recognized and assumed Fisk's agreement to pay for the storage of the wagons; he liquidated the amount due the defendants therefor; he proposed to turn out one of the wagons to pay the amount thus liquidated, with other items of account; he requested, at one time, to have the wagons stored on his own premises, in order that he might have no more storage to pay; he arranged that in case his boys should find sale for one or more of the wagons from time to time, the defendants should set them up for them; he consulted with the defendants as to where the wagons would be best sold, and proposed to employ one of them to assist in making sales, and, lastly, he effected the arrangement with the defendants by which they were to accept the Hulbert mortgage with his own guaranty, and give up the wagons; all of which facts seem to me to show that he considered the wagons to be his, and that the defendants' possession of them was merely as security for the performance of Fisk's covenant, assumed by himself, to pay off the Tuttle mortgage. That the arrangement as to the Hulbert mortgage was an agreement on the part of the defendants to accept it, with Wheelock's guaranty, as a substitute for their lien upon the wagons, and did not constitute a waiver of the condition of their bond, is clear from the undisputed evidence in the case. Upon that subject the plaintiff gave no evidence whatever, and the evidence of the defendant Tanner is the only proof in the case bearing upon the transaction. He says, "Wheelock asked me if I would give up the wagons if Mr. Hulbert would get us a mortgage," etc. "I told him I would if he would guarantee it and cancel our mortgage. Wheelock said he would if Mr. Hulbert would get the mortgage, and he thought he would. A paper purporting to be that was made to me individually, and Wheelock guaranteed it." Upon his cross-examination he gave the same account of the transaction, and there is no other reference to it in the evidence. This evidence certainly goes no further than to prove an agreement on the part of the defendants to give up to Wheelock the wagons in store for him, and to establish his right to have them at any time after furnishing the proposed security. This effect was conceded to it, as appears from the subsequent narrative of the case. The parties came together soon after to ascertain the exact amount due on the mortgage, and the amount was computed, with interest, up to the 15th day of June, 1860, and not later, and no claim was made that interest was payable for any longer time. Upon this basis the whole matter was adjusted, and Wheelock agreed that the defendants' mortgage should be canceled and the wagons taken away. Thus do all the facts in the case, as it seems to me, argue in support of the conclusion that there was acceptance by the holders of the mortgage of the property in the wagons manufactured and set apart for the two payments of May and June, 1860, and that the possession by the defendants after that time was by way of lien for the performance of the covenant of the mortgage, and hence that there was no breach of any condition of their bond on the part of the defendants. But even if the transactions described by the evidence did not constitute performance by the defendants, yet there could be no breach on their part till the Tuttle mortgage was discharged, or that condition waived by them. There is no pretence that that mortgage was discharged, and I am of opinion, for the reasons already stated, that the court at Special Term erred in its finding to the effect, that the transaction in respect to the Hulbert mortgage was a waiver of that condition. If the views heretofore expressed are correct, then, upon strictly legal grounds, the plaintiff's action must be defeated. But the decree entered below is also highly inequitable. It requires the defendants to pay interest for over two years on a sum of money of the use of which they were during all that time deprived, by the neglect or inability of the mortgagee to perform his covenant in respect to the Tuttle mortgage. In the finding at the Special Term it is held, that the defendants, having enjoyed the property which was the consideration of the mortgage, they were equitably bound to pay the interest. But this finding overlooks the fact that, while they enjoyed the property, they had, so far as their use and enjoyment was concerned, paid the full purchase price of it. The wagons stored for Fisk and Wheelock represented the entire balance of that purchase price, and the defendants were as much deprived of the use of the money invested in those wagons as if they had been delivered to the mortgagee. On the other hand, it is suggested, that the defendants might have sold the wagons and had the use of the money until it was called for by the holders of the mortgage. But to this proposition there are several objections. In the first place, in the view of the case taken by me, the property in the wagons had passed from the defendants, and they had no right to dispose of them until there was a refusal to receive them by the mortgagee. But even if this were not so, the defendants were liable to be called upon at any time with a tender of a discharge of the Tuttle mortgage, and a demand of payment, and either the wagons or the money must be kept on hand to meet the demand and save them from default. The evidence also discloses the fact that there was not a market for such a number of wagons at the place of manufacture, but that the mode of sale was to send them to a distant section of the State, or even to another State, and peddle them out. Besides this it is sufficient to say, that the defendants had a right to pay in wagons at a fixed price, and it was probably to their advantage to do so.

For all the reasons above considered, and on grounds both legal and equitable, I conclude that the decree in this action cannot be sustained.

The judgment below should therefore be reversed, and a new trial granted.