Buena Vista Co. v. McCandlish

Harrison, J.,

delivered the opinion of the court.

The Buena Yista Company sold to McCandlish & Clowes fourteen acres of land at Buena Yista, and a hotel then in process of erection upon said land, for the sum of $125,000, of which $5,000 was paid in cash, $20,000 to be paid when the hotel was completed, and the residue to he paid in four equal annual instalments. The contract of sale, which was in writing, and signed by the Buena Yista Company, but not by McCandlish & Clowes, provided that the hotel should be completed according to certain plans and specifications, which were made part of the contract. The sixth clause of the contract is as follows :

“ It is further covenanted and agreed that should the parties of the second part, or their assigns, fail to pay said sum of twenty thousand dollars on the 1st day of May, 1891, or thereafter, upon the completion of said hotel building as herein-before provided, then their rights under and by reason of this contract, and those of any one to whom they may assign, shall cease and terminate, and the sum of five thousand dollars already paid to said party of the first part shall be retained and appropriated by said party of the first part as and for the consideration and for the price of the option herein given, and there shall be no liabilities of any sort on either party hereto by reason of anything contained in this contract.”

This contract of sale was in the nature of an option. When the hotel was completed according to the terms of the contract, the plaintiffs then had the right to affirm and finally close their purchase by paying the further sum of §20,000, or to abandon the contract and lose the §5,000 already paid; but before they could exercise this option, the hotel was to be built according to certain plans and specifications.

The hotel was completed about July 1, 1891, but the purchasers refused to accept it, or to carry out the contract, for the reason, as alleged, that it was not completed in accordance with the plans and specifications which were made part of the contract; and demanded that the company should remedy the defects, and make the building conform substantially to the contract specifications. This the company refused to do, and the purchasers, treating the contract as rescinded, instituted this action in assumpsit to recover of the company the sum of §5,000, which had been paid in cash to it.

The declaration contains two counts—the first, the common count in assumpsit for money had and received, and the second, a special count, setting forth substantially the contract between the parties, and averring that the hotel building, to be .completed according to the plans and specifications as contracted for, was the main inducement to the purchase ; that said hotel had never been so completed ; that the defendant company had wilfully neglected and positively refused to complete it; that the plaintiffs had often and in various ways, by written notice and otherwise, called the attention of the defendant to its numerous and serious failures to comply with the contract and build the hotel according to the plans and specifications agreed upon ; that the forfeiture of the $5,000 by the plaintiffs was made to depend on the condition precedent that the defendant company would complete the hotel according to the contract, which condition the defendant company had on its part wholly failed to keep and perform. They further aver that they have been greatly damaged by reason of the failure of the defendants to perform their contract, and that they are entitled to recover back the $5,000 paid by them as a cash payment.

These are substantially the averments of the special count. To each of these counts there was a general demurrer, which was overruled. This action of the Circuit Court, it is earnestly contended, was erroneous, in that the plaintiff was allowed to maintain an action in assumpsit to recover back the money paid under the contract in this case.

In Johnson's Ex'or v. Jennings's Adm'r, 10 Gratt. 1, 4, Judge Mon cure says: “There can be no doubt but that if money be paid on a contract of sale which is wholly rescinded, either by mutual consent of the parties, or by virtue of a clause therein, or the consideration of which wholly fails, the party making such payment, if he has been guilty of no fraud or illegal conduct in the transaction, may recover back the money under the common count for money had and received. And though that is the usual and better mode of counting in such cases, there can be no legal objection to a special count, properly setting out the facts from which the cause of action arises. But it must appear with sufficient certainty, from the facts so set out, or from apt averments made in -the count, that the consideration has wholly failed, and that such failure did not proceed from any fraud or illegal conduct on the part of the plaintiff.” Testing the declaration in this case by the foregoing clear and sound statement of the law, we have no difficulty in reaching the conclusion that the demurrer was properly overruled. The plaintiffs stated a case in their declaration which entitled them to a standing in court, and gave them the right to be heard, for, if the averments in their declaration should on the hearing prove to be true, they would be entitled to recover. If those averments should not be supported on the trial by sufficient evidence to justify the action in this form, then the defendant could, by a pi-oper instruction from the court covering this point, be protected against any injury resulting from the improper form of action.

The first bill of exceptions is to the court’s action in allowing the contract to be introduced as evidence before the jury, it being contended that because the contract was under seal it could n'ot be relied on to support an assumpsit, and for the further reason that it was not signed by McOandlish & Clowes, the plaintiffs.

The contract was not introduced to support the form of action, but as evidence to prove the plaintiffs’ case. It showed that the $5,000 sued for had been paid by the plaintiffs to the defendant, and receipted for in the body of the contract. It was necessary evidence in the case to show the terms and conditions upon which the $5,000 was paid, and it was necessary to show by the written contract what the agreement between the parties was, so that the jury could determine whether the defendants had, as alleged, so broken the contract on their part as to entitle the plaintiffs to treat it as rescinded. Nor was it any objection to the introduction of the contract that it had not been signed by the plaintiffs. It had been duly executed by the defendant company, and delivered to the plaintiffs, and it is not denied that it evidenced the true understanding and agreement of the parties in every particular.

The second and third bills of exceptions are to the action of the court in giving four instructions, and refusing others asked for by the defendant.

The instructions given are as follows: “ The changes and deviations from said specifications in the construction and equipment of said hotel building, which would entitle the plaintiffs to refuse to accept it, need not have affected the value or utility of the building, or of the part changed. Changes or deviations which involved merely matters of taste, or which affected the appearance of the building, or in any way made it less desirable to the plaintiffs as a hotel for sale, would have entitled the plaintiffs to refuse to accept it.”

2d. “ The Buena Yista Company could not make up or atone for any substantial failure in complying with the said specifications in one part of the building by doing more than said specifications and contract required in other parts of said hotel building.”

3d. “ If the jury believe from the evidence that the Buena Yista Company did not build a hotel under their said contract of January 16, 1891, which was an attractive, good, merchantable hotel, in substantial compliance with the plans and’specifications, then the plaintiffs are entitled to recover.”

4th. “ If the jury believe from the evidence that the Buena Yista Company built a hotel, under their contract with B. Ü. McCandlish and E. H. Clowes, of date January 16, 1891, which was an attractive, good, merchantable hotel, in substantial compliance with, though not in strict conformity to, the plans and specifications, then they must find for the defendant.”

These instructions clearly, fully, and correctly lay down the law applicable to this case, and are well supported on reason and authority. This case turns on the simple question whether or not the hotel was what the defendants contracted to build and deliver to the plaintiffs; and the instructions, in brief, announce the very sound proposition of law that no man can he compelled to take and use one thing when he has bargained for another, hfor will he be permitted to decline to take what he has fairly contracted for, if the other party has substantially complied with the contract.

The instructions offered by the defendant and refused by the court were objectionable in several particulars. They were not supported by the evidence, and were misleading in many respects. So far as they were proper, they were covered by the instructions given, and were therefore properly rejected.

The fourth bill of exceptions is to the action of the court in refusing to set aside the verdict as contrary to the law and evidence.

The Buena Yista Company contracted to build and deliver to the plaintiffs a hotel, according to certain plans and specifications, about which there seems to have been no dispute or misunderstanding. The evidence is abundant, in support of the plaintiffs’ contention, that the defendant failed in many important and substantial particulars to comply with its contract as to the character of hotel to be built. The evidence shows that the plaintiffs repeatedly, before and after the hotel was built, called the attention of the defendant to the violations of and departure from the contract, and that the defendant refused to correct them. This conduct on the part of the defendant company amounted to a rescission of the contract on its part, and justified the plaintiffs in treating the contract as rescinded, and in bringing this action to recover back the money paid by them, the consideration for which had wholly failed by the act of the defendant, and without the fault of the plaintiffs.

The point is made at bar that the plaintiffs only paid $4,750 as the cash payment on this contract, and not $5,000, as alleged in the declaration. This point does not appear to have been pressed or relied on in the cour’t below. It does, however, appear from the evidence that, of the $5,000 receipted for in the contract, only $4,750 was paid in money, and that the remaining $250 represented commissions agreed to be allowed the plaintiffs on the sale to themselves. In this form of action, and under the proofs, the plaintiffs could only recover the $4,750 actually paid, and it was error to give judgment for'the $250. The court below, on the motion to set the verdict aside as contrary to the law and the evidence, ought to have required the plaintiffs to remit $250, and accept a judgment for $4,750, and, upon their refusal to do so, should have set the verdict aside and ordered a new trial.

Bor the foregoing reasons, the judgment of the Circuit Court is reversed and set aside, and this cause is remanded to the Circuit Court, with directions that, unless the plaintiff will agree on the record to release the sum of $250 of the verdict—the verdict being, in the opinion of this court, excessive as to that amount, and right in every other respect—the verdict be set aside, and a new trial awarded; but, if the plaintiffs accept the sum of $4,750, the motion of the defendant for a new trial shall be overruled, and judgment rendered for the said sum of $4,750, with interest and costs.

Reversed.