Opinion
02-25-1890
KEYPORT BRICK & TILE MANUF'G Co. v. LORILLARD et al.
Vredenburgh & Parker, for complainant. James Benny and Gilbert Collins, for defendant Lorillard.
On bill for specific performance.
Vredenburgh & Parker, for complainant. James Benny and Gilbert Collins, for defendant Lorillard.
BIRD, V. C. Rachel Van Buskirk, one of the defendants, was the owner of a large tract of land. She executed and delivered a lease for about 25 acres of it to the Union Brick & Tile Company, which company filed the bill of complaint in this cause. This company became insolvent, and a receiver was appointed to take charge of its assets, through whom title was made to the present complainant. In the lease which bears date March 24, 1882, were two provisions, which must be considered in determining the present controversy, the first of which is in these words, viz: "To have and to hold the said premises for the term of twenty years and two months from the first day of March, A. D. eighteen hundred and eighty-two, paying therefor the yearly rent of five hundred dollars, (.$500,) as follows: Eighty-three 33-100 dollars upon the execution of this lease, which will be in full for rent to May 1st, A. D. 1882, and thereafter the sum of one hundred and twenty-five dollars on the first day of May, August, November, and February in each year of said term, and during the continuance of this lease;" and the second is in these words, viz.: "That the said company is to have the privilege of buying the aforesaid premises at any time within five years from the commencement of this demise, at the price or sum of seven thousand dollars, but such privilege is given upon the conditions that all rents due are first paid, and the other agreements herein of said company first performed." On the 15th day of February, 1887, Mrs. Van Buskirk conveyed all her right and interest in the entire tract of land to the defendant Lorillard, subject to the said lease, expressly mentioning in the conveyance the clause giving the right to the said company to purchase. The complainant shows by its bill that it exercised this right of purchase by tendering the $7,000, and by demanding a deed within the time described by the agreement named in the lease according to its interpretation of the lease. The defendant admits the tender by his answer, and the demand of the deed, but denies that it was within the time required, and insists that this is fatal to the complainant's claim, because, in such cases, time is of the essence of the contract. The complainant also claims that, in case the tender and demand were not within the time specified in the contract, the defendant is not permitted to object on that ground, because by his conduct and declarations he waived any rights he might have had to make such defense, and sets forth in its bill various circumstances in support of such waiver. An answer is called for under oath, and Lorillard by his answer denies many of the principal statements which are relied upon to establish the waiver. The tender and demand were made upon the 24th day of March, 1887, five years after the date of the execution of the lease. It will be perceived that the clause which gave the company the option of purchasing does not say within five years from the date, but within five years from the commencement of the demise; and in the first phrase above quoted it is declared that the company shall have and hold the said premises for the term of twenty years and two months from the 1st day of March, 1882. Hence the insistment upon the part of Lorillard that the five years expired on the 1st day of March, 1887, and not on the 24th; in his mind thewords "term" and "demise" being equivalent terms, and used in the same sense by the parties.
The complainant endeavors to establish the correctness of his views by urging that the demise was a present demise, and that the time referred to was to be extended five years from that date, and that the reference to the antecedent period was only referred to for the purpose of the computation of time. Independently of the authorities referred to, it seems to me extremely difficult to sustain the complainant's claim. In my judgment, the contracting parties used the word "demise" in the same sense in which they had used the word "term" previously. Had their minds been fixed upon the date of the lease, it would have been infinitely more natural and business-like for them to have said, "from the date of this lease," or, if they intended to refer to the lease as a demise, to have said, "from the date of this demise." Had the contract provided that the term should begin on the 1st day of April then next ensuing, and that the option to purchase might be exercised within five years from the commencement of the demise, doubtless the complainant would have said that the latter clause referred to the time when its rights as lessee might be first exercised in the possession and dominion over the property; and had the present lease provided that the lessee should have the right to take and convert to his own use all the green grain and growing crops, and all the timber, wood, and rails being upon the said premises "at the commencement of the demise," and there had been growing valuable crops and timber, wood, and rails, the said lessee doubtless would have claimed, and justly, all such personal property. That the parties really had in their minds the 1st day of March is shown by the fact in the lease itself that the rent was not only reserved and made payable from the 1st day of March, but was actually paid from that date. This shows conclusively that the period of time which the parties regarded as significant, and to which their minds were directed, was the 1st day of March. In support of his views, counsel for complainant refers to Tayl. Landl. & Ten. p. 50, par. 78, and notes; Enys v. Donnithorne, 2 Burrows, 1190; Webb v. Dixon, 9 East, 15; Folts v. Huntley, 7 Wend. 215; Jaqui v. Johnson, 26 N. J. Eq. 321, In my judgment, these authorities cannot be applied to the case in hand, nor are they in any sense in conflict with the views above expressed. This being so, the defendant Lorillard insists that the company was in laches in not exercising his option, and making demand of a conveyance, and tendering the consideration money, on or before the 1st day of March. He presses the point that, in all unilateral contracts, time is of the essence of the contract; citing these authorities: Swaine v. Maryott, 28 N. J. Eq. 589; Pinner v. Sharp, 23 N. J. Eq. 274; Hawralty v. Warren, 18 N. J. Eq. 124; Grigg v. Landis, 19 N. J. Eq. 350; Pom. Cont. 387, 388, and cases cited; Potts v. Whitehead, 20 N. J. Eq. 55; Coleman v. Applegarth, 11 Atl. Rep. 284; Kerr v. Purdy, 51 N. Y. 629, (Ct. App.;) Maughlin v. Perry, 35 Md. 352; Magoffin v. Holt, 1 Duv. 95; Jones v. Noble, 3 Bush, 694; Browne, St. Frauds, § 427; Stowell v. Robinson, 3 Bing. N. C. 937; Stead v. Dawber, 10 Adol. & E. 57; Marshall v. Lynn, 6 Mees. & W. 109; Goss v. Nugent, 2 Nev. & M. 28; Blood v. Goodrich, 9 Wend. 68; Dana v. Hancock, 30 Vt. 616; Long v. Hartwell, 34 N. J. Law, 116; Hasbrouck v. Winkler, 48 N. J. Law, 431, 6 Atl. Rep. 22.
But, in the consideration of such questions from an equitable stand-point, the doctrine of waiver always performs an important part; and the conduct of Lorillard tends strongly to give countenance to the insistment of the complainant that he cannot claim any benefit from the supposed laches of the company, he having to some extent, at least, encouraged such laches. I have not any doubt but that all parties interested understood and believed that the period of time within which the company had the right to comply expired on the 24th day of March, 1887. On the 25th day of February, Mr. Gallop, an officer of the company, called upon Mr. Lorillard, and asked him to consent to the extension of the time for two years beyond the 24th day of March then next ensuing. This was only 10 days after Mr. Lorillard purchased, when his mind must have been still fresh with the provisions of his deed with reference to the rights of the company to purchase. Such officer says that Mr. Lorillard told him he could not give him an answer at that time, because another person was interested with him, but would let him know within two weeks. He says that he then urged him to let him know within ten days, and that Mr. Lorillard promised him that he would do so at the end of ten days. On the 7th of March, the day agreed upon between the parties, as Gallop says, Gallop called on Lorillard for the purpose of having his answer. He says Lorillard then told him that there could be no extension of time, and that the money must be paid on the 24th of March. The important statements in connection with these interviews are denied by Lorillard, both in his answer under oath and in his testimony as a witness. He says that at the first interview he told Gallop that by its terms the contract was to be performed on the 1st day of March. The inference is, from his testimony, that he made no appointment on the 7th of March, but I think, if he intended to be so understood, the circumstances of the case show that he must have forgotten what actually took place, for the company seemed to rely upon such promise. From its conduct, it evidently intended to exercise its option and secure the title to the property. One of its officers was not only deputed to have a conference with Lorillard on the 25th of February, for the purposes above stated, but called upon him again upon the 7th of March. There is no possible explanationor reason for this second interview, to be gathered from any branch of the case, except upon the theory advanced by the complainant; and this second interview could only have been had by the consent or connivance of Lorillard, and by his appointment, or, if not by his direct appointment, by his consent thereto on the 25th of February.
In my judgment, Lorillard consenting to this interview, and not unwaiveringly insisting upon the claim which he says he made, that the contract required performance on the 1st day of March, turns the scales against him. That he did so consent is not only shown by the testimony of Gallop, but by the testimony of Lawton, another officer of the company, who was well acquainted with Lorillard, and by Lorillard's own conduct thereafter; for on March 12th Lawton called on Lorillard with respect to this matter, and Lorillard promised him that he would have the deed prepared for the premises, and executed by himself and wife that very day, and that he would place it in the hands of his clerk or agent, who was then present, with authority to deliver it on the 24th, upon the payment of the consideration money. The clerk was thus referred to and authorized, because Lorillard expected to be absent. He prepared such deed, and had it executed, and left it with the agent accordingly, with instructions to deliver it unless it was ascertained that he was not obliged to deliver it. His counsel informed the agent that he was not obliged, under the terms of the option, to deliver the deed. Counsel for Lorillard contends that, if the elements of a waiver exist in these facts,—that is, one of the officers calling upon Lorillard, and his agreeing to meet with him for further consideration of the matter after the 1st day of March, and their having such meeting, and after these interviews, his promising another officer of the company to prepare a deed ready to be delivered upon the 24th of March, upon the payment of the $7,000,—said waiver was made by him in ignorance of his legal rights. The case shows that he was no more ignorant of his legal rights than was the company of its legal obligations. The insistment admits that he supposed the fact to be precisely what the company supposed it to be. This being so, and both acting upon this supposition, it would be the height of injustice to allow either party to take advantage of the other. Undoubtedly the mistake was a mutual one. This being so, since neither party has changed his situation for the worse, each must be held to the same obligation, and each enjoy the same rights as though both had understood that the option was to be exercised on the 1st day of March. I speak with reference to this case, and do not mean to hold that in every such case, where the parties misunderstood the legal effect of an instrument, and put an interpretation different from what the courts would enforce under the law, that thereby Lorillard was deprived of his legal rights, or that he is bound by his misunderstanding. Where both parties are under such misapprehension, and remain silent and inactive, neither can claim anything of the other because of such mistake. Hunt v. Rousmaniere, 1 Pet. 1; 2 Pom. Eq. Jur. § 846. But in this case Lorillard went so far as to justly encourage the belief on the part of the company that the contract did not require them to exercise their option until March 24th, and I think this gives it a right in equity which it otherwise would not have enjoyed. To sustain Lorillard would be giving to him an advantage acquired by his own wrongful conduct, which evidently a court of equity ought not to encourage. See 2 Pom. Eq. Jur. § 847. By his conduct in preparing the deed, and by his assurances to Lawton, on the 12th of March, Lorillard recognized the contract as still subsisting. This, I think, binds him to a fulfillment of the contract. Wat. Spec. Perf. § 480.
But an important fact remains to be noted. Counsel for Lorillard laid no little stress upon what he considered to be a fact, that Lorillard supposed the agreement gave the company the right to exercise its option on or before March the 24th, but that in that supposition he was in error. As intimated above, the conduct of the parties leads me to the conclusion that they both were under the same apprehension. However, I now call attention to the fact that Lorillard swears that he told Gallop, February the 25th, that the contract provided for the performance on March the 1st, and not on the 24th. If this be correct, and such was his understanding, then there was no error on his part; from which fact it must be inferred that what he did afterwards he did understandingly, and was treating with the other side with reference to an extension of time, and recognizing the existence of the contract, and so liable to be called upon for specific performance. I think the complainant is entitled to the relief for which it prays, and will so advise. It is also entitled to costs.