Opinion
12-11-1888
NAGELI v. LENIMER.
H. F. Goken, and S. Kalisch, for complainant. McDermit & Maher, for defendant.
Bill for specific performance.
H. F. Goken, and S. Kalisch, for complainant. McDermit & Maher, for defendant.
BIRD, V. C. Bill for specific performance. Lenimer made a verbal agreement with the owner of a city lot, for the purchase of it. He paid $5 of the consideration money, and was to make a cash payment of $50. In a few days, he met Nageli, and asked him to join with him in the venture of purchasing the lot, and erecting a dwelling-house upon it. Lenimer having paid only the $5, and being out of funds, he prevailed upon Nageli to advance him $20, to complete the payment of the $50; Nageli taking Lenimer's note for that sum, and paying the balance of the $50 on his own account, under the agreement between him and Lenimer. When the deed was delivered for the land, it was taken in their names jointly. In order to carry out their project, it was necessary for them to borrow money, and for this purpose purchasedshares of stock of the building and loan association. The monthly dues on each share of this stock were one dollar, and these they were to pay, until each share was of the value of $200. They were also required to pay interest at the rate of 6 per centum monthly on the loan of $6,000 which they secured, thus making in all, monthly payments of $60, or $30 for each one under the agreement. They entered into a written agreement to this effect, in which they also bound themselves each to the other that if either failed to pay, or should be unable to, the other might make such payment; and, if the failure or disability continued for two months, then the party so defaulting or so unable should forfeit all his interest in said loan and in said premises, and should assign and convey to the other party all such right, title, and interest. This is the interpretation put upon the agreement in the bill; and it is charged that the defendant has wholly failed to comply with this agreement, and that he has thereby forfeited all his right thereto, and that it is now his duty to assign and convey to the complainant all of his interest, both in the stock and in said lands.
Two questions are presented by the bill and proofs, viz.: (1) Has the defendant complied with the terms of the agreement according to its letter; and, if not, has he complied with the true spirit of it? (2) In this case, is time of the essence of the contract? Both questions will be better understood by stating the terms of the contract, which I will give in the language used by the defendant in his answer: "And that if at any time either of the parties should be unwilling or unable to make payment of his share of said dues and said interest for the period of two months, then the party so making default in said payment is to surrender to the other all his right, title, and interest in and to said shares of stock and the profits therein accrued, and is also to make conveyance to the other of all his right, title, and interest in and to the premises described in said bill, on payment to him of such sum or sums of money as he may have up to the time of said default paid thereon, and his share of the profits on said shares as estimated by said association."
Without any difficulty, the first question, in both of its branches, must be answered against the defendant. The proof is very clear that he made no payments to the association for the first two months and a half, nor has he ever made any. Indeed, the whole amount of his disbursements are the $25 paid as part of the purchase money, and the $4 paid for cleaning the vault on the premises. Of the $25 thus paid, it will be remembered that Lenimer gave his note to Nageli, which is still unpaid. But although Lenimer made no actual payments towards the dues or interest, his insistment is that he is nevertheless on equal terms with Nageli, in that he did work on the house erected on the lot, in painting it, and materials therefor to the value of $75, which was the amount that Nageli had advanced for him; and that in addition to this he tendered to Nageli in cash the sum of $75. Suffice it to say that the proof on both of these heads does not balance in favor of Lenimer.
2. But there was some effort to show that Lenimer has always been willing and ready to comply. Hence the inquiry: Is time an essential ingredient of the contract? The language of the contract and the circumstances will be called in to aid us in solving this. I will say that it seems to me that a little reflection will enable every one to see that in this case we have a most striking illustration of the rule that parties may by their contract make time essential, and that it also may become so in the estimation of the court by force of circumstances. In this case the parties agreed that each should bear an equal share of the burdens of the enterprise. But they did not rest at that point. Had the agreement ended with this provision, then, if one had been willing and the other indifferent, the willing one would have borne all of the responsibilities of the venture, while the other would have stood on an equal footing, unless the aid of the courts had been invoked, and that to no purpose, in case of worthlessness in the defaulting party. But provision was made againstthis condition by adding that if this indifference, whether from inability or willful refusal, shall continue for two months, it shall work a forfeiture. It is as if the one had said to the other: In case you become embarrassed, and cannot meet your share of these engagements, I will meet them for you for two months in succession; but I am not willing to take the risk of your inability longer than that. If at the end of two months you can make me whole, your interest will continue; but if not, then your interest will terminate upon my paying all that you have invested. Is not that most reasonable? In such case, must the willing and responsible party either let the enterprise rot, or continue spending his money, it may be, for the benefit of a bankrupt? And when to these considerations is added the circumstances that Nageli continued to advance his money, and to expend it in improving the land by erecting thereon costly buildings, and it thereby every day becomes more and more valuable, the case seems to take rank with the very first in which time has been held to constitute an essential ingredient. I find that Nageli is entitled to a decree, without offering anything to Lenimer by way of repaying him for any outlay; for Lenimer went into possession of a part of the premises, and from the proof on an accounting would be found to be indebted to Nageli. This seems to be so clear that I feel justified in advising a decree without any conditions. The complainant is entitled to costs.