King v. Hamilton/Opinion of the Court

This case comes up on appeal from the circuit court of the United States, for the seventh circuit, in the district of Ohio.

The bill, in the court below, was filed for the purpose of obtaining the specific execution of a contract entered into between Elisha King, the father of John W. King, and Alexander Hamilton, the father of James Hamilton; and also to enjoin all further proceedings at law on a judgment in an action of ejectment, obtained by John W. King for the recovery of possession of a part of the land alleged to have been comprised within the contract.

The answer to this bill is very inartificially drawn; but no exceptions were taken to it, and the general replication put in. No proofs were taken upon the principal matters in dispute: but the cause came on to a hearing upon the bill and answer, and exhibits, and the agreement which had been entered into between the counsel for the parties in the progress of the cause. This agreement puts at rest many of the questions that might otherwise have arisen, and reduces the subject of dispute to the single inquiry respecting what is called by the parties the surplus land: and this involves the inquiries; first, whether this surplus is embraced in the original contract, and if so; then, secondly, whether, under the circumstances of the case, the complainants in the court below have not lost their right to call upon a court of equity to enforce a specific performance of that contract.

The contract signed by Elisha King and Alexander Hamilton bears date on the 8th of February 1805, and is as follows: 'I this day sell to Alexander Hamilton, all my lands lying on the Miami river, in the state of Ohio, one thousand five hundred and thirty-three and one-third acres, as by patent in my name; also three hundred and thirty-three and one-third acres, taken off the lands patented in the name of Sackville King, adjoining to that entry of Elisha King, of one thousand five hundred and thirty-three and one-third acres. He, the said Hamilton, is bound to pay to Elisha King for this land nine hundred and forty-six pounds sixteen shillings, current money of Virginia, in three payments, beginning December the 25th, 1805; then to pay one hundred and fifteen pounds twelve shillings, also, in the year 1806 and 1807, each Christmas day or before, to make the full payments, as is above. The manner and agreement made by us is in payment as tenders: the said Hamilton takes to this country, horses, to be sold at twelve months credit, taking bond and good security, which bond is lawful tenders from year to year; and on these tenders being made, the said King is bound to give to said Hamilton good title to said lands, &c.'

The bill states, that there is a surplus of several hundred acres, beyond the specific quantity mentioned in the contract. The answer alleges, that from actual survey, the patent is found to contain two thousand four hundred and nine and a half acres; which will leave a surplus of eight hundred and seventy-six acres; a quantity equal to more than one half of the whole number of acres mentioned in the contract.

It may perhaps be assumed as facts of general notoriety, that the surveys and patents for lands lying within the Virginia military district, contain a greater quantity of land than is specified in the grant: and that parties would of course, when entering into a contract for the purchase of a tract of land, and referring to the patent for a description, expect, that the quantity would exceed the specified number of acres. But so large an excess as in the present case can hardly be presumed to have been within the expectation of either party; and admitting that a strict legal interpretation of a contract would entitle the purchaser to the surplus, whatever it might be, it by no means follows, that a court of chancery will in all cases lend its aid to enforce a specific performance of such a contract.

The agreement entered into by the counsel which has been hitherto, and which will be more particularly noticed hereafter, puts an end to all questions respecting the land, to the extent of one thousand five hundred and thirty-three and one-third acres. Otherwise it might well be questioned, whether the complainants in the court below could compel a conveyance for any more than has already been conveyed under the contract.

In 1809 a conveyance was given for seven hundred and sixty-six and two-thirds acres; the full consideration for which, after deducting five hundred and sixty-six dollars and sixty-six cents, for defect of title in Elisha King to the three hundred and thirty-three and one-third acres of land included in Sackville King's patent, had not been paid when the bill was filed.

If the rights of these parties were to be governed, and determined, solely, by the question whether the contract covers the surplus land, we should have no difficulty in coming to the conclusion that it does. There is nothing upon the face of the contract from which it can be satisfactorily inferred that it was intended to be a sale by the acre. The language of the contract on the part of King is,' 'I this day sell to Alexander Hamilton, all my lands lying on the Miami river, in the state of Ohio, one thousand five hundred and thirty-three and one-third acres, as by patent in my name.' Had it been intended a sale by the acre, the language would doubtless have been, one thousand five hundred and thirty-three and one-third acres of, or a part of my lands, &c.: instead of which it is 'all my lands, as by patent in my name.' Reference is made to the patent for a description of the land, and to ascertain the subject matter of the contract. And whatever would pass under the patent to King, would be included in the sale to Hamilton. The number of acres is mentioned in reference to what appears by the patent, (one thousand five hundred and thirty-three andone-third acres, as by patent in my name), and not as designating the precise quantity sold. But admitting the contract covers the surplus land; it is contended on the part of the appellants, that a court of equity will not, under the circumstances of this case, enforce a specific performance of the contract. It is insisted, however, on the part of the appellees, that all equitable considerations are precluded by the agreement entered into by the counsel, which has been referred to; and that the question is narrowed down to the single inquiry, whether the surplus land is included in the original contract of 1805. If such is the construction to be given to this agreement, the question has already been answered. It becomes therefore very material to examine, whether this is the fair and reasonable interpretation of the agreement. It is as follows.

1. 'It is agreed that the complainants are at this time, January 6, 1826, indebted to the said John W. King, one of the defendants above named, for the balance of the purchase money, including up to the date aforesaid the interest, one thousand eight hundred and ninety-six dollars and eighty-eight cents, for the one thousand five hundred and fifty-three and one-third acres mentioned in the said bill of complaint. This amount, it is agreed between the parties by their counsel, is now due to the said John W. King; after deducting from the gross sum agreed to be paid by the ancestor of the plaintiffs to the ancestor of the defendants, which will appear by contract, five hundred and sixty-six dollars and sixty-six cents, for the three hundred and thirty-three and one-third acres patented to Sackville King, mentioned in the contract; to which the defendants, or their ancestor, never had title. The sum of one thousand eight hundred and ninety-six dollars and eighty-eight cents is the whole amount due the said John W. King for the one thousand five hundred and thirty-three and one-third acres of land, the number of entry 1548, as mentioned in said bill; and it is hereby expressly understood between the parties, by their counsel, that the sum last mentioned, if it should be decreed by the court hereafter, or by the parties agreed to, that the surplus lands lying within entry 1548, is covered by the contract before referred to, for the gross sum named; the said sum, with interest from this time until it is paid, is the whole amount due the defendant, John W. King, upon said land contract; but it is hereby agreed between the parties, by counsel, that the question whether the said contract covers the surplus in said entry No. 1548, shall be reserved for future decision and determination; and whether the purchase for the sum mentioned in said contract does not entitle the complainants to the surplus land said to be contained in said No. 1548: and it is hereby agreed by the parties, that the complainants shall now pay to the clerk for the said defendants or counsel, seven hundred and thirty dollars, part and parcel of the said sum of one thousand eight hundred and ninety-six dollars and eighty-eight cents, before admitted to be due; and that the said complainant shall pay the balance by the next term of this court, or within a reasonable time afterwards. And it is further agreed by the parties, by their counsel, that the said John W. King, and the other defendants do join, if it appear necessary, shall execute to the complainants a good deed with covenants of general warrantry for the land which the complainants shall be entitled to under the contract aforesaid, immediately upon the payment of the purchase money. It is further agreed by the parties, by their counsel, that the complainants shall pay the cost in the action of ejectment brought in this court for the lands named in the bill, and the costs of this suit; to abide the decision of this court thereon. It is further agreed by the parties, by their counsel, that upon the payment of the whole of the purchase money which may be due the defendants for said land, then, and in that case, the injunction to be made perpetual. And, to avoid all dispute, it is the express understanding of the parties, that the whole question concerning the said surplus land is reserved for future decision; and that all claims for damages, respecting the failure in the title for the tract of three hundred and thirty-three and one-third acres of land, are waived.'

This agreement is somewhat obscurely worded, and its construction not without difficulty. Doubts have been entertained by the court, whether the appellants have not thereby precluded themselves from resisting a specific performance of the contract, on the equitable grounds that might otherwise be set up. We have however come to the conclusion, that the appellants, as to the surplus land, have reserved to themselves the right to set up whatever could have been urged against the relief sought, as to all the land not conveyed, as if the agreement had not been entered into. And that as to the surplus land, the case is open, and to be considered entirely independent of the agreement.

Some of the leading objects of the agreement appear to have been to settle and fix the amount of payments that had been made, and the deduction to be allowed on account of the failure of title to the land patented to Sackville King; and to ascertain the balance due, which was found to be one thousand eight hundred and ninety-six dollars and eighty-eight cents, and which by the terms of the agreement is declared to be the whole amount due for the one thousand five hundred and thirty-three and one-third acres: thereby implying, that the consideration agreed to be paid, was for that quantity of land; and that as to that quantity no further dispute existed: but at the same time providing, that if the court should decree that the surplus land was covered by the contract, that balance should be deemed the full consideration for the whole. And then adds, 'but it is hereby agreed, that the question whether the said contract covers the surplus land shall be reserved for future decision and determination.' If this had been the only question intended to be reserved, the agreement would have stopped here: there is no ambiguity thus far, or any necessity for putting the same question in a different shape. But the argument goes on, 'and whether the purchase for the sum mentioned in the contract does not entitle the complainants to the surplus land said to be contained in No. 1548.'

There would appear to be two distinct questions reserved for future determination. 1. Whether the contract covers the surplus land: and if so, secondly, whether the complainants are now entitled to it, by virtue of their original purchase. If this view of the agreement be correct, the second question reserved must have been intended to leave open all objections to the claims for the surplus lands. If however the agreement had stopped here, there might have been serious doubts whether the question reserved was not, whether the contract covered the surplus land. But the concluding clause in the agreement seems to have been added, to remove all doubts upon the question. 'And to avoid all dispute, it is the express understanding of the parties that the whole question concerning the said surplus land is reserved for future decision.' If the only question reserved was, whether the contract covered the surplus land, there was no necessity or fitness in this last provision. That question had been explicitly and in terms reserved; and to superadd to it, that the whole question concerning the surplus was reserved, will admit of no other reasonable construction, than that as it respected such surplus, the case was to stand as if the agreement had not been made.

This being the construction given by the court to this agreement of the counsel, it remains to inquire whether the complainants in the court below made out a case, which, according to the rules which prevail in courts of equity, entitled them to a specific execution of the contract as to the surplus land.

This part of the case has not been much pressed upon the court, and it is difficult to perceive on what grounds it can be sustained. To have enforced a specific execution of this contract would, at any time and under any circumstances, have been granting a strict legal right against the substantial justice and equity of the case.

To show this, it is only necessary to state some of the leading facts in this case. The contract bears date in the year 1805, and by it all the payments for the land were to be completed in December 1807, on which the title was to have been given. Payment only of a part of the purchase money, and not even to one half the amount, had been made when the bill was filed. No remedy at law therefore ever did exist. The purchaser never was in a situation when he could aver performance of the contract on his part. It is very evident, that no consideration whatever has been given for this surplus land. The price was doubtless estimated by the parties upon the specific number of acres, (although the sale was not by the acre), and which at that time was probably supposed to be nearly the quantity of land covered by the patent to King. This however turns out to be otherwise. The surplus is very large, amounting to more than one-half the number of acres mentioned in the contract. There are no grounds for charging either party with any knowledge of this fact. King manifestly could not have known it, or it would not have been entirely overlooked in the sale. And Hamilton ought not to be charged with a knowledge of it, without satisfactory evidence; as it would be imputing to him a gross fraud. It is therefore a case of mutual mistake, or ignorance of an important fact, in relation to the subject matter of the contract; and that contract still executory, and now sought to be enforced as to lands for which no consideration has been paid. It is therefore a case in which the parties ought to be left to their strict legal rights.

The bill alleges that Hamilton, in his life time, made valuable improvements on that part of the land not included in his deed of 1809. When these improvements were made, does not appear. The contract is silent as to the time when the purchaser was entitled in the possession, and the bill does not allege that possession was taken, or the improvements made, with the assent of King; and the answer expressly denies that King put Hamilton in possession of any part of the land except that for which the deed was given in 1809, and alleges that the possession of any other part was without authority, and unlawful.

In 1818, John W. King, one of the appellants, became the purchaser of all the lands not included in the deed of 1809. He was, it is true, a purchaser with notice of the contract between his father and Hamilton, but he also had notice of all the circumstances with respect to his failure in making payment; and that he had not at that time made payment even for the land which had been conveyed to him: and no further payments had been made when this bill was filed, or any disposition shown on the part of the appellees to perform the contract on their part: and the bill in this case was not filed until nearly seven years from that time, and not until a judgment in ejectment had been obtained, to recover possession of the land not covered by the deed of 1809.

All the payments made upon this purchase might well be applied to the land which has already been conveyed; and was it not for the agreement entered into by the counsel, the complainants in the court below would have had no equitable grounds for asking a specific execution of the contract for any portion of the one thousand five hundred and thirty-three and one-third acres not included in the deed of 1809. But that agreement has put an end to all question in relation to the residue of the one thousand five hundred and thirty-three and one-third acres; leaving the case open, as we understand it, to all objections to a specific execution of the contract as to the surplus land, to the same extent as if the agreement had not been entered into.

Did this case then, thus made out in the court below, entitle the complainants to a specific execution of the contract as to the surplus land? We think it did not, according to the well settled rules of courts of equity on this subject. This branch of the powers of a court of chancery is very valuable and important. For in many cases, even where the remedy at law for damages is not lost, complete justice cannot be done without a specific execution; and it has become almost as much a matter of course for a court of equity to decree a specific execution of a contract for the purchase of lands, where in its nature and circumstances it is unobjectionable, as it is to give damages at law, where an action will lie for a breach of the contract. But this power is to be exercised under the sound judicial discretion of the court, with an eye to the substantial justice of the case. When a party comes into a court of chancery, seeking equity, he is bound to do justice, and not ask the court to become the instrument of iniquity. Where a contract is hard, and destitute of all equity, the court will leave parties to their remedy at law; and if that has been lost by negligence, they must abide by it. It is a settled rule, therefore, to allow a defendant in a bill for a specific porformance of a contract, to show that it is unreasonable or unconscientious, or founded in mistake, or other circumstances, leading satisfactorily to the conclusion, that granting the prayer of the bill would be inequitable and unjust. Gross negligence on the part of the complainant, has great weight in cases of this kind. A party, to entitle himself to the aid of a court of chancery for the specific execution of a contract, should show himself ready and desirous to perform on his part. These are familiar and well settled rules in courts of chancery, and have a strong bearing upon this case. If this contract had been carried into execution by giving a conveyance for the land, a court of chancery would not have given relief to the other party. But the contract is still executory; and the complainants, after the lapse of twenty years, seek for the specific execution of a contract which has not been performed on their part, and the execution of which would be manifestly unjust and unequitable.

If this large surplus of eight hundred and seventy-six acres should be taken as included in the original purchase, it might well be considered a case of gross inadequacy of price.

So far therefore as the immediate rights of the complainants are involved, no equitable claims has been sustained for a specific execution of the contract for the surplus land. It is however alleged in the bill, that sales have taken place, and valuable improvements made upon parts of the land not covered by the deed of 1809. This is not denied in the answer, although it is alleged that such improvements were made without the assent of King. No proofs have been taken with respect to these improvements. Their value and extent are left altogether uncertain. But the rights of third persons, who may be bona fide purchasers under Hamilton's supposed title, may be materially affected by dismissing the bill as to the surplus land. Some diversity of opinion has existed amongst us as to the final decree, on account of those improvements. We have however come to the conclusion, that the complainants in the court below shall have a decree for the surplus land, at the average rate or price which the consideration mentioned in the contract bears to one thousand eight hundred and sixty-six and two-thirds acres, the number of acres specified in the purchase; together with the interest thereon, from the 25th of December 1807, being the time at which all the payments were to have been completed, according to the contract. The decree of the circuit court must be so modified. It should have required payment of the consideration money before the conveyance was to be given. Such are the terms of the original contract, and also of the agreement of the 6th of January 1826.

The decree of the circuit court as to John W. King, must accordingly be reversed, and affirmed as to the other defendants in the court below; and the cause sent back with instructions to cause a survey to be made, to ascertain the number of acres contained in the patent; and that, on payment of the balance and interest due according to the settlement made on the 6th of January 1826, and also a further sum for the surplus land above one thousand five hundred and thirty-three and one-third acres, according as the quantity shall be found on actual survey, at the same average rate or price as in the original contract, with the interest therefor from the 25th day of December 1807; then the said John W. King to be required to make and execute a good and sufficient deed of conveyance in fee simple to the complainants in the court below, for all the lands contained in the patent to Elisha King mentioned in the pleadings, and which have not been already conveyed by the deed of Elisha King, bearing date the 22d of June 1809. The money to be paid and the deed executed, at such time as the circuit court shall direct. The injunction to be continued for such time, and under such modification, as shall be judged necessary by the circuit court for the purpose of carrying this decree into effect.

This cause came on to be heard on the transcript of the record from the circuit court of the United States for the district of Ohio, and was argued by counsel; on consideration whereof, it is decreed and adjudged by this court, that the judgment of the said circuit court in this cause be, and the same is hereby reversed as to John W. King, and that the said judgment in this cause be, and the same is hereby affirmed as to the other defendants in the court below. And it is further ordered and adjudged by this court, that this cause be, and the same is hereby remanded to the said circuit court, with instructions to cause a survey to be made, to ascertain the number of acres contained in the patent; and that on payment of the balance and interest due according to the settlement made on the sixth of January in the year of our Lord eighteen hundred and twenty-six, and also a further sum for the surplus land above fifteen hundred and thirty-three and one-third acres, according as the quantity shall be found on actual survey, at the same average rate or price, as in the original contract, with the interest therefor from the twenty-fifth of December eighteen hundred and seven; then the said John W. King to be required to make and execute a good and sufficient deed of conveyance, in fee simple, to the complainants in the court below for all the lands contained in the patent to Elisha King, mentioned in the pleadings, and which have not been already conveyed by the deed of Elisha King, bearing date the twenty-second of June eighteen hundred and nine. The money to be paid and the deed executed at such time as the said circuit court shall direct. The injunction to be continued for such time, and under such modification, as shall be judged necessary by the circuit court for the purpose of carrying this decree into effect.