Opinion
12-16-1818
Jones v. Hubard's Representatives
Stanard for the appellant. Gilmer for the appellees.
A Sale, by trustees, at public auction for ready money, of a tract of land which James T. Hubard had purchased of Samuel Allen, and on which he resided, being about to take place for a balance of the purchase money, Hubard requested Samuel Jones to become the purchaser at the sale, by bidding the sum due for the land, (which was 2022l. 9s. 4d.) permitting him to reimburse the money and interest in one year, and take back the land. Jones observed that he could not raise the money without considerable sacrifices. Hubard promised to remunerate him; proposed, repeatedly, to borrow the money, and that Jones should take a transfer of the Deed of Trust as his security; all which proposals Jones rejected. At length it was verbally agreed between them, that Jones should attend the sale, and bid up to the amount of the debt to Allen; that, if the land should thereupon be struck off to him, he should re-sell it to the said Hubard for a sum thereafter to be agreed on, provided the sum, so to be agreed on, should be paid within twelve months from that day. It was alleged by Jones, that it was intended to agree upon such a sum as would not only reimburse the money so to be given for the land, and indemnify him for his sacrifices in raising it, but also compensate him liberally for his trouble.
In pursuance of this agreement, Jones bid at the sale the sum due to Allen which was much less than the cash value of the land, or the sum which probably would have been bidden for it by other persons; but, the agreement being known by some, if not all who were present, they refrained from bidding; whereupon the land was struck off to Jones at that price in ready money, and was conveyed to him by the trustees. Hubard died before the end of the twelve months, without having agreed upon the sum to be paid, or making any payment, for re-purchasing the said land; and, the time having expired, his widow and children, (who still resided upon it,) filed their Bill in the Superior Court of Chancery for the Richmond District, to be permitted to redeem the land; for an injunction inhibiting the defendant Jones from turning them out of possession, (as he threatened,) by a Warrant of forcible detainer; and for general relief: --which Injunction was granted, and, on the final hearing, made perpetual; and it was decreed, that, upon the plaintiffs, or either of them, within six months, paying or tendering to the said Jones the sum of 2022l. 9s. 4d. with lawful interest thereon from the 20th day of April 1812, (the day of sale of the land before mentioned,) 'till payment, he should release and convey to them the said tract of land, with warranty against himself and all persons claiming under him; that, in default of such payment, the plaintiffs, and all persons claiming under the said James T. Hubard, be thenceforth barred and foreclosed of all equity of redemption, & c.; that the land be sold by Commissioners named in the decree, at public auction for ready money, after advertising, & c., and that, out of the proceeds of such sale, after defraying the expenses thereof, the Commissioners do pay to the said Samuel Jones the said 2022l. 9s. 4d. with interest as aforesaid, and the residue, if any, into the Farmers' Bank of Virginia, subject to the future order of the Court, & c.
Note. It appeared in evidence, that, on the day of sale, Hubard requested Col. William Daniel, one of the trustees, (who said he would have given ten thousand dollars for the land,) not to bid. --Note in Original Edition.
From this decree Jones appealed.
Decree affirmed.
Stanard for the appellant.
Gilmer for the appellees.
OPINION
Roane Judge.
The contract before us is not a loan, nor is the Deed to be considered as a mortgage. In both those contracts, money has been received on a condition to be returned. In the case of a mortgage, too, it is of no importance that the deed contains no covenant for re-payment. Such a covenant results from the nature of the transaction. In the agreement before us, however, no money has been received by the appellee's intestate, and there was no contract on his part for it's re-payment. It is true, the transaction was intended to have the same effect, in his favour, as a loan. It was intended to enable him to save his land; not indeed by preventing a sale, as a loan would have done, but by enabling him to re-purchase it, on the terms to be thereafter agreed upon, and within the time specified. The appellant always refused to lend to the appellee's intestate the requisite sum, even under the security of a Deed of Trust; giving for a reason, among others, that it would distress him to sell the land again under such Deed: but he consented to put the business in such a train, as would, in the event of his becoming the purchaser, leave the land absolutely his, if the meditated conditions of re-purchase should not be complied with. If the contract had been consummated, as it related to the terms of re-purchase, and they had been unimpeachable in the eye of a Court of Equity, we can see no objection to the contract; and if, in that case, the conditions of re-purchase had not been duly complied with, the estate would have been absolute in the appellant: it would have been discharged from the privilege of re-purchasing. So, if the transaction could be considered in a separate and insulated point of view; if we could consider the appellant as the absolute owner of the land; the failure to agree on the price of a re-purchase would leave the land his, as well as a failure to comply with the terms when agreed on. The case of Smallwood v. Mercer, 1 Wash. (VA) 290, is a direct authority to shew this. In that case, the contract was vacated, because the price of the land could not be fixed, in the manner agreed on by the parties. But we can not consider the transaction in this insulated point of view. The appellant was not the absolute owner of the land. He was, by the agreement, to become so, on certain conditions only; one of which was, that the terms of re-purchase should be fixed on by the parties. That has not been done in the present instance, nor was the intestate in default in not doing it; and therefore, it affects the contract in all its parts. Without this privilege of re-purchasing, the intestate would never have parted with his land for less than it's value; and, when this privilege is taken from him, the original purchase cannot stand. A purchase is not to be favoured in a Court of Equity, when the consideration therefor has failed.
The contract is therefore to be rescinded, on making just compensation. The measure of that compensation is the principal money with interest. We cannot go into the foreign and speculative enquiry, as to what sacrifices the appellant may have encountered in raising the money. We cannot vary our decree, under like circumstances, with the greater or lesser degree of prudence used by one of the contracting parties.
On these grounds the decree is to be affirmed.