Davis v. Hall

Miller, J., delivered the opinion of the Court. It is conceded that the absolute deed of the 20th of' October, 1873, by which Eben C. Ingersoll and wife conveyed the farm in Prince George’s County to Davis, was. intended and is to be treated as a mortgage from Hall to Davis. The bill filed by Davis alleges that Hall had purchased the land from Ingersoll, and had paid the whole of' the purchase money therefor, but being indebted to Davis, in the sum of $10,500, according to the terms of a certain, agreement which had been executed between them in Washington City, he authorized and directed Ingersoll to. convey the land to Davis in order to secure the payment of that debt. The prayer of the bill is that the deed maybe decreed to be a mortgage, and the property sold for the payment of this debt, which is charged to be still due and unpaid.

The agreement referred to in the bill as the foundation of the indebtedness of Hall to Davis was a certain contract between Davis of the first part and Hall and one Charles H. Holden of the second part, dated thelst of March, 1873, the terms of which will be presently stated. When the deed from Ingersoll was executed, two. instalments of $5000 each with interest had become due-to Davis under this contract. One of the defences which. ⁶⁷⁵ Hall sets up in his answer is, that the deed was executed solely upon the consideration that Davis would allow a postponement of the payment of one of these instalments, and that that instalment with all its incidents has been since fully paid and discharged. But the proof in the case, which we have carefully examined, fails to sustain this position.

We think it is very clear that the deed was given as part security for all that was due to Davis under the contract at the time the deed was executed. In the view we have taken of the case it is not necessary to ascertain the exact amount of this indebtedness. The other and main defence is, that after the execution of the deed thus given as collateral security, Davis himself made breach of the conditions of the contract on his part to be kept and performed, and altogether rescinded the same, refused to abide by it, and held it to be wholly null and void, and that he thereby released the collateral security of the deed, and thenceforth held and continues to hold the title of the land so conveyed to him free from all charge, and in trust to convey „ the same to Hall. This defence was sustained by the Court below, and a decree was passed in conformity with a prayer to that effect contained in the amended answer of the defendant, directing Davis to release and convey the land to Hall within a certain time, and in case of his neglect or refusal to do so, then that the decree itself shall stand as a release and conveyance thereof, and the title to the land shall be divested from Davis and vested in Hall, as fully as if the deed from Ingersoll and wife had been originally executed and delivered to Hall as the sole grantee therein.

Erom that decree the present appeal is taken. In reviewing this decree we must first consider the contract of the 1st of March, 1873, and ascertain whether the appellant had in fact abrogated or rescinded it, or had refused to be bound by its terms and conditions. It appears that Davis was the owner of about thirty-six acres ⁶⁷⁶ of land near the City of Washington which he desired to sell, and which Hall and Holden proposed to purchase. After some negotiations between them the land was surveyed, subdivided into blocks and lots for building purposes, with streets properly located, and a plat was made showing the location and subdivision of the property.

The parties then entered into the contract in question under their hands and seals, the terms of which are substantially these: • 1st. Davis agrees in consideration of the sum of $55,000 to he paid to him by Hall and Holden as follows, viz., $5000 with seven per cent, interest, on or before the 1st of June next, $5000 with like interest on or before the 1st of September next, and the remainder with like interest in six equal annual instalments, counting from the date of the contract, and on and after the performance and observance by them of the agreements and conditions hereinafter mentioned, to sell and convey this property to Hall and Holden in fee simple. 2nd. Davis further agrees at any time within six months after the date of this contract, 'to convey to Hall and Holden or their assigns, at their request'and expense, any one or more of the lots in blocks NoS. 11, 12 and 13 in the plan of the property, upon and after* the- payment to him of $100 for each lot sold, and after the work of building four of the dwelling houses or cottages hereinafter mentioned, shall have been commenced. " ,. 3rd.

It is then expressly agreed and provided', that, no deed or conveyance of the whole or remaining portion of the land or lots shall he given or demanded until "after the sum of $.15,000 shall have been paid to Davis, and until after the erection and completion of eighteen dwelling houses or cottages, each of the value of $1800, upon the lots in blocks 11,12 and 13 ; and that upon the payment of said sum and the completion of said houses or cottages, Davis shall and will convey the whole or remain ⁶⁷⁷ ing portion of the lands to' Hall and Holden, upon his receiving at the same time a deed of trust thereof securing the unpaid purchase money. 4th. It is further agreed that Hall and Holden shall pay all the taxes on the land, and if they fail to do so and Davis shall pay the same, the amount thereof shall he considered as part of the purchase money, hear like interest, and be secured in like manner as a charge or lien on the land. 5th. “And it is hereby further agreed and expressly provided, that if at any time before the execution and delivery of the deed or conveyance of the whole or the remaining portion of said land, any default shall he made in any of the payments aforesaid of said purchase money, or any part of the said interest, as hereinbefore provided, then and thereafter it shall be lawful and right for the said Davis, his heirs or assigns, to sell the said land or the remaining portion thereof, upon such terms, and after such public notice customary in public sales of real estate, and to convey to the purchaser thereof in fee simple; and of the proceeds thereof, after paying all expenses of sale and retaining a reasonable commission for the same, to pay all of said payments then unpaid, with the interest thereon, whether due or not, and all amount, if any, paid for taxes as aforesaid, with the interest thereon, to pay the remainder, if any, to said Hall and Holden, their heirs or assigns.” 6th. And Hall and Holden agree to make said payments with interest, at the times hereinbefore provided for the payments thereof, and that they will erect and complete said houses or cottages as hereinbefore provided, within six months from the date hereof, and that they will observe and perform all the provisions and conditions herein expressed. It is manifest from an examination of this agreement, (which seems to have been very carefully prepared,) that ⁶⁷⁸ the parties intended, and that the contract itself provides, that a small portion of these lots should be sold by the vendees, and the title to them pass from the vendor, before a conveyance of the rest of the property should be made or demanded.

The evident purpose of this was to develop the property at once, and bring the rest of it to the favorable notice of purchasers, and thus enhance its value as well as secure its improvement and sale. It is also very important to notice the fact that it provides in explicit and carefully guarded terms, what rights the vendor shall have, and what course he shall pursue in case of any default on the part of the vendees in payment of the purchase money according to its stipulations. It contemplates the contingency of such default, and carefully provides what shall be done, and what rights shall thereupon arise and accrue to each party. With this understanding of its purpose and provisions, we must inquire what was done under it, and which party is, in law, to be regarded as the one that has rescinded it, or refused to abide by its terms.

This must be ascertained and determined solely from the evidence contained in the record before us. The testimony is very voluminous, is confused in its arrangement, and on some points is conflicting. We have given it a patient and careful examination, and without reviewing it in detail, we shall simply state in general terms such facts material to the questions to be decided as, in our judgment, it establishes. We find then, that after the date of this contract, a few of the lots were sold by the vendees, and deeds therefor were given to the purchasers by Davis, and that in some cases he received the $>100 on such sales.

It is clear, however, that Hall and Holden failed to pay the instalments due on the first of June, and the first of September. Davis then pressed for payment, and on the 20th of September, notified them by letter, that unless they paid on or before the 1st of November following, all arrears ⁶⁷⁹ then due, “ the said agreement will he held by me as null .and void, and I consequently discharged from any obligation thereunder,” and that from the date of the letter, he would give no further deeds. To this, Hall replied hy letter of the 29th of September, in which he proposes the Prince George’s farm as security, which he says cost him .§10,000, and Holden, by a letter of the 30th of September, proposes to settle hy the assignment of various col-laterals, being chiefly amounts alleged to he due hy parties to whom sales of lots had been negotiated. The deed ■of the Prince George’s land was then executed on the 20th of October, 1873, for the purpose we have before stated.

After this, some other collaterals were passed to Davis by Hall and Holden, hut were not received hy the former as absolute payment for their face value, hut to he ■collected by him, and the proceeds applied to the indebtedness under the contract. . Upon these some money was ■eventually realized hy Davis, hut very little in comparison with what was then due him. Hall and Holden then ■endeavored to, and did in fact, effect the organization of -an unincorporated Association, called the “ Cottage Hill Company,” for the purpose of purchasing this property, -and negotiations with Davis were had for the purpose of ■effecting a settlement on the basis of a purchase hy this .Association. In a letter to him of the 28th of February, 1874, their inability to meet the payments under the contract is plainly admitted, and they request an extension ■of time, and that he would if possible accede to the terms of purchase proposed hy this Company, of which he was -aware.

But the proposed sale to this unincorporated Association was never assented to by Davis, and on the 1st of March, 1874, when the first annual instalment provided for in the contract became due, he addressed a written notice to Hall and Holden, to the effect that unless they complied with the contract, and made the payments fhpn due under it, he would treat the contract