Swain v. Seamens

APPEAL from the Circuit Court for Wisconsin, in which court Seamens and others filed a bill against Swain, praying that a mortgage executed to him, Swain, by Medbery and wife, on certain lots, of which he, Seamens, and the others were now owners, in Wisconsin, might be cancelled.

It appeared that in 1855, Swain sold to Medbery and one Aldrich real estate in Michigan for $52,400, of which $10,000 was paid in cash, and the balance, $42,400, secured by a mortgage on the lands, payable in instalments at different times; and that on this Michigan land, foundations had been made in the previous autumn, by driving piles for the erection of a saw-mill fifty by one hundred and fifty feet in size; that Medbery was then the owner of certain lots in Wisconsin; and that on the same day and in pursuance of articles of agreement preceding the sale, to give additional security to the extent of $6666.66, he and his wife executed to Swain a mortgage on these lots as additional security.

On the Wisconsin mortgage, Swain, on the same day that it was given, indorsed the following stipulation, which gave rise to this suit:

'It is hereby agreed, that if within two years from this date the large saw-mill, fifty by one hundred and fifty feet in size, shall be property built and completed, upon the foundation commenced last fall, by driving piles, to accept in place of the within mortgage, security in proper fire insurance policy, or policies, on said large saw-mill, and thereupon to discharge the within mortgage.'

The stipulation above made was in pursuance of a contract made by the purchasers in the previous articles of agreement, to keep the buildings erected, and the large saw-mill to be erected, upon the premises, insured in some safely reputed fire insurance company or companies against fire, and that they should assign the policy or policies to Swain, and that in default thereof it should be lawful for him, Swain, to effect the insurance himself, and that the premiums and the costs and charges of his doing so, should be a lien on the mortgaged premises.

THE BILL alleged that subsequently to the execution of the agreement indorsed by Swain on the mortgage, and within the two years, there was built and completed upon the Michigan lands, and upon the foundation referred to in the said agreement, a large saw-mill, not of 50 by 150 feet, but of 78 by 100; this mill, however, being larger and of greater value and better adapted to the purposes intended than one of the dimensions originally contemplated; and that the said mill, as built and completed, was assented to and accepted by Swain as a compliance with the said written agreement indorsed on the Wisconsin mortgage; that in May, 1856, Medbery and Aldrich caused the new saw-mill to be insured in different companies named, to the extent of $6000; and that these policies of insurance were duly transferred and delivered to Swain, and accepted and assented to by him as a compliance with the agreement, and that he had them in possession; that in October, 1857, Swain caused the new mill to be further insured for one year in the name of Medbery & Aldrich, for his own use and benefit; that in September, 1858, he again caused the new saw-mill and other buildings on the premises to be again insured for one year in the name of Medbery & Aldrich, but for his own security, and paid out for premium $210; that all these insurances mentioned were obtained at the request of Swain, with the consent of Medbery & Aldrich, and upon the understanding that they should reimburse him the premiums; that in November, 1858, Swain and Medbery & Aldrich accounted respecting the amount due upon the mortgage, and that Medbery & Aldrich then paid him $15,236.06, in which sum was included, as paid by Swain during 1857 and 1858 for premiums on the new saw-mill and other property mentioned in the mortgage, the sum of $446.50, and interest.

That 'during the building and erection of the said large saw-mill upon the premises referred to in the written agreement aforesaid by said Medbery & Aldrich, the said defendant, Swain, was present at different times, and was informed by said Medbery & Aldrich, or one of them, of the intended or the then variation in the dimensions of said saw-mill from 50 by 150 feet, as specified in said written agreement, and that the said mill, as was then being built or was then completed, would be of greater value and better adapted for the uses and purposes intended than it would be if built of said dimensions as specified in said written agreement, and that the said defendant was then and there asked by said Medbery & Aldrich, or one of them, to consent to such alteration, and accept the mill as then being built, and since completed, in lieu of the one mentioned in said written agreement, and that the said defendant did then and there agree to accept, and did accept the said mill so being built, and afterwards completed, in lieu of the one mentioned in said written agreement, and as a compliance on the part of said Medbery & Aldrich with the said written agreement on his or their part.'

The mortgage on the Michigan property not being paid, Swain foreclosed it, and on a decree, finding $22,464 due, sold and purchased the premises for $19,600.

THE ANSWER denied that Medbery & Aldrich completed the mill substantially according to the agreement; denied that Swain consented to or acquiesced in the departure from the plan for constructing the mill; and, admitting that Swain did accept policies of insurance upon the mill which was built, denied that he did so in pursuance of the agreement, or that he accepted the policies as a compliance on the part of Medbery & Aldrich.

The statute of frauds of Wisconsin, it may be necessary here to state, enacts, that 'no estate, or interest in lands,. . . nor any power over or concerning lands, or in any manner relating thereto, shall be created or surrendered,. . . unless by deed or conveyance in writing, &c.;' and that 'the term lands,' shall be construed as coextensive in meaning with 'lands, tenements, and hereditaments;' and the terms 'estate and interest in lands,' to embrace every estate and interest, freehold and chattel, legal and equitable, present and future, vested and contingent in lands as above defined.

The right to have the cancellation prayed for, depended therefore upon the following questions:

1. Was the mill constructed in substantial conformity with the agreement?

2. If constructed differently, did Swain consent to or acquiesce in the departure from the original plan; or3. Did Swain, after its construction, accept policies on the mill in pursuance of the agreement?

If any one of these questions were answered in the affirmative, then, obviously the mortgage was to be cancelled.

4. Unless, indeed, there was something in the statute of frauds, as above quoted, which interfered with such a conclusion.

The second and third questions were obviously questions of pure fact, and the court below, which decreed the cancellation, considered, as this court (on appeal from that decree) also considered, that the evidence made it clear, on direct proofs, that Swain had in fact acquiesced in the departure in the building of the mill, and moreover that after its construction he had accepted policies, by this means also waiving any objection to such variation.

On the two points of law it was contended by Mr. J. M. Howard, for the appellant:

1. That the contract was clear and specific to properly build and complete a mill of a fixed, intelligible, and practicable size; and that this being so the court was bound to hold the parties to it; and so bound whether the mill really built was of greater value or of less than the one contracted to be built, the creditor having a right to stipulate for just such a mill as he pleased.

2. That the agreement to modify the stipulation as to the dimensions of the mill was an agreement which did, in truth, provide for the 'surrender' of one 'estate or interest in lands' and for the 'creation' of another, and was therefore void within the Wisconsin statute of frauds.

Mr. M. H. Carpenter, contra:

1. What was the spirit of the agreement? Swain was not contracting for a mill which he was to use. He had sold the land. What he had in view was security, and security alone. Precise dimensions were of no consequence to him, value was everything; because upon value depended his security, which was the subject of the agreement. The literal requirements of the agreement would have been satisfied by the construction of a mill of any value, or of no value, provided it were 50 by 150 feet, for this is the only specification in the agreement in regard to the mill. This, however, would not have satisfied the spirit of the agreement. But if a worthless mill, 50 by 150 feet, would not have done this, then a mill of any dimensions, but of value sufficient to support an insurance equal to $6666.66, does do it; does satisfy this spirit. In other words, the true spirit of the contract, so far as regards Swain, was value, not form; and, if the mill actually constructed was of greater value than one constructed 50 by 150 feet would have been, and it could be insured to the amount of $6666.66, then such mill satisfied the agreement in its true spirit and according to the intention of the parties. But the point is not important. We do not urge it. The evidence, which the court will see absolutely demands affirmative answers to the second and third questions, renders any discussion of this first one useless. If Swain accepted the mill either by words, or by silence as expressive as words, or by receiving policies upon it, there is an end of the case.

As to the statute of frauds, no question arises under it. The point seems to be faintly urged. A variation in an agreement as to the size of a saw-mill, is not a surrender of or a creation of an interest in land. If it were, then without insisting on what cases assert, that a written or sealed instrument, even when within the statute, may be varied as to the time or manner of its performance, or may be waived altogether by a subsequent parol agreement, the conclusive answer here is, that the contract was fully executed on the side of both parties; and that Swain, after standing by and witnessing the completion of the mill with its actual dimensions, and agreeing to it, is equitably estopped from objecting to cancel the mortgage upon the ground of change in the plan. The doctrine that where a person encourages an act to be done, or in any way accepts it when done, he cannot afterwards exercise his legal right in opposition to such consent, is perfectly settled, and is applied in all cases where a party has by word or act given others reason to believe that if he had a right, he intended to waive it, and where such others would be prejudiced by his asserting his right. Authorities need not be cited for this horn-book law.

Mr. Justice CLIFFORD delivered the opinion of the court.