Opinion
12-11-1872
NAGLE v. NEWTON.
Neeson, for the appellant. F. L. Smith and Wells, for the appellee.
N sues J in equity to rescind, or enforce specific execution of a contract, for the sale of land by N to J. J answers, not objecting to specific execution, but insisting that he shall be compensated for injuries to which he has been subjected by the failure of N to comply with his contract, and by the intermeddling of N and his agents with J's possession of the land and the property upon it. HELD:
1. The case being a proper case for decreeing specific execution of the contract, the court has jurisdiction, as ancillary thereto, to decree compensation to J for the damages he has sustained by the improper acts of N and his agents.
2. The damages may be ascertained either by a commissioner, or by an issue of quantum damnificatus to be tried at the bar of the court.
This was a suit in equity brought in February 1866, in the Circuit court of Prince William county, and afterwards removed to the Circuit court of Alexandria, by Isaac Newton, formerly of Pennsylvania, but then of Washington city, against John Nagle, Jr., to rescind a contract for the sale by Newton to Nagle, of a tract of land in the county of Prince William; or if the contract could not be rescinded, then for the specific execution. Nagle answered and did not object to the specific execution of the contract; but insisted that he had been subjected to great losses by the failure on the part of Newton, to complete the contract at the proper time; and by the improper conduct of Newton, and his agents in getting possession of the land, and using or disposing of the personal property which Nagle had put upon the land, and injuring the buildings, & c., upon it. The material facts, as they appear from the pleadings and proofs, are as follows:
Isaac Newton was the owner of a tract of land of three thousand acres, in the county of Prince William, on which there was a deed of trust for $30,000, a part of the purchase money, held by William H. Tayloe and Benjamin O. Tayloe. A part of this debt had been paid by Newton, and the remainder was evidenced by notes, each for two thousand dollars, payable annually. On the 12th of March 1861, Isaac Newton entered into a written contract with John Nagle, Jr., by which he agreed to sell to Nagle twelve hundred and ten acres of this land, to be estimated at twenty-five dollars per acre. And for this land Nagle agreed to give to Newton a mortgage upon it to secure the payment of twelve thousand dollars, payable according to the agreement between Newton and the Tayloes; namely, $2,000 per annum, to pay $500 at the execution of the deed, and give his note for $500, payable in six months from date. To convey to Newton ten houses, situate in Camden, New Jersey, subject to a mortgage of $700 each; two houses eighteen feet front each on Pepper street, Philadelphia, free from all incumbrances, and two ground rents of $1,600 each, on lots situate on Seventh street, above Oxford, clear of all incumbrances. All the above deeds and papers to be delivered as soon as practicable.
In pursuance of this agreement, the deeds were prepared and executed by the parties. Isaac Newton and his son, George Bolton Newton, to whom he had conveyed five hundred acres of the land, executed to Nagle a deed for the twelve hundred and ten acres of land; Nagle executed deeds conveying the property in Camden and Philadelphia, and also the mortgage to secure the $12,000; and a deed of release of the lien for the debt to the Tayloes, was executed by the trustees and Benjamin O. Tayloe, and was forwarded to Edward T. Tayloe, who was then residing in the State of Alabama, to be executed by him; but though he received it and executed it, it miscarried on its return, and was found in the dead-letter office at Richmond after the war was over. All the deeds, except this last, were placed in the hands of Philip R. Fendall, to be held by him as an escrow, until the deed of release from the Tayloes should be executed and ready for delivery. And on the 3d of April 1861, Benjamin O. Tayloe and Isaac Newton entered into a bond to Nagle, in the penalty of $1,000, with condition that the deed of release should be executed and delivered within thirty days.
Nagle was put into possession of the land, and proceeded to make expensive improvements upon it, and took to it a large amount of stock and farming implements, for the purpose of cultivating it extensively; but in 1862, the land still standing in the name of Isaac Newton, it was sequestrated by the Confederate government, as his property; and all the personal property on the place was taken possession of by the officer of that government, and appropriated to the uses of the Confederate government.
When Nagle took possession of the land he found there Lewis Kurtz, who had been in the employment of Newton; and Kurtz was employed by Nagle to superintend and manage for him. Subsequently Kurtz seems to have been employed by Newton to hold the land for him. In May 1865, Nagle went to the farm with a number of men who he had employed to work upon the place, taking with him horses, cattle, provisions, & c., and he found Kurtz there, and told him he must move at once, or he would put his goods into the road. Kurtz asked for the delay of a day, which was twice allowed; but after several days his goods, which had been packed up by his family ready to be taken away, were put into the road. Kurtz thereupon applied to the military authorities who were stationed in the neighborhood, and a squad of soldiers were sent, who sent off the men brought by Nagle, gave possession of the premises to Kurtz, and turned over to him the personal property of Nagle which was there. And Kurtz continued to hold possession of the premises, and use and dispose of the personal property, until March 1866, when he was ousted by a proceeding by unlawful detainer.
Nagle filed with his answer a statement of the moneys which he said he had expended upon the land and had incurred, either in paying Newton or in defending himself against his disturbances, a large part of which was lost, owing either to the failure of Newton to comply with his contract, or by his improper intermeddling with his possession and enjoyment of the premises through the instrumentality of Kurtz, and otherwise. This statement amounted to $41,801.90. And he insisted that he should be allowed, in the adjustment of their contract for the land, the amount of the losses he had thus sustained.
In June 1866, the court made a decree referring the cause to a commissioner to take various accounts, and directed the deeds which had been delivered as escrows to be deposited with the clerk of the court. The commissioner reported that after crediting the mortgage of $12,000 which Nagle was to give, there would be due from Newton to the Tayloes $6,169, and that the net rents received by Nagle from the property in New Jersey and Philadelphia since the contract was $3,819.68. He reported that Nagle had sustained damage by the intermeddling, & c., of Newton; but he did not state an account or the amount. And for his failure to do so Nagle excepted.
The cause came on to be heard on the 1st of June 1867, when the court made a decree to enforce the specific execution of the contract betweeen Newton and Nagle, and directed the different deeds to be delivered, including the deed of release from the Tayloes; and that Nagle should pay to Newton $3,819.68, the net rents aforesaid; and that each party should pay his own costs. And being of opinion that for any injury Nagle had sustained by the misconduct of Newton, he must seek his redress in another forum, no decree was made on that point. From this decree Nagle obtained an appeal to the District court of Appeals at Fredericksburg; where the decree, so far as it enforced the specific performance of the contract and the payment of the rents by Nagle to Newton, was affirmed; but it was ordered that an account should be taken of the damages sustained by Nagle by the acts of Newton or his agents. And thereupon Nagle applied to this court for an appeal; which was allowed.
Neeson, for the appellant.
F. L. Smith and Wells, for the appellee.
OPINION
CHRISTIAN J.
The court is of opinion that there is no error in the decree of the Circuit court of Alexandria county, so far as the said court decreed a specific performance of the agreement for the sale of certain real estate entered into between Isaac Newton and John Nagle, Jr.
The bill and the undisputed facts in the record present a clear case for specific performance. The answer of the defendant does not resist a specific performance of the contract entered into between him and the plaintiff; but claims that he is entitled to compensation for damages sustained by him arising out of the acts of the plaintiff (Newton) and his agents in interfering with the possession and enjoyment of the land bought by him of said Newton. The defendant does not seek a recision of the contract; but expresses his willingness to perform it on his part, and his desire to have the same specifically executed whenever the court shall award to him compensation for the damages he has sustained in consequence of the acts of the plaintiff and his agents.
The whole controversy in the case, which has been one of protracted and bitter litigation, is now narrowed down to the single point (as the case is presented before this court) of a claim on the part of the defendant, for compensation for damages sustained in consequence of the acts of the plaintiff and his agents.
The Circuit court of Alexandria decreed a specific performance of the contract between the parties; but refused to direct any enquiry as to the compensation claimed by the defendant; that court being of opinion that " if Newton has interferred with Nagle's possession and rights, either through the agency of Kurtz or otherwise; if he has been the cause of personal loss to Nagle, or disturbed him in the enjoyment of his private or personal rights, he must seek redress in another forum."
Upon an appeal from this decree to the District court of the Fourth judicial district, held at Fredericksburg, that court, reversing to this extent only, the decree of the said Circuit court, was of opinion " that the appellee, Isaac Newton, is liable to the appellant for any damages which may have been sustained by him arising from the acts of said Newton or his agents in interfering with the appellant's possession and enjoyment of the land bought by him of said Newton, and that an account ought to be taken of the amount of any such damages; and the liability of said Newton therefor, ought to be enforced in this suit." An appeal from this decree brings up the case to this court.
The court is of opinion that there is no error in the decree of the said District court.
While there is some conflict in the English cases, and in some of the American decisions, as to how far courts of equity will entertain bills for compensation or damages, except as incidental to other relief, it seems to be now well settled, that where a court of equity clearly has jurisdiction of the subject of the controversy, jurisdiction for compensation or damages will always attach where it is ancillary to the relief prayed for. 2 Story's Eq., § 798, 799, Ed. 1866.
The case before us does not come within the rule attempted to be settled in the conflicting decisions referred to and relied upon at the bar. The question in those cases, upon which the authorities are much divided, is whether a court of equity will hold jurisdiction of a case merely to make compensation to an injured party where it cannot give specific performance. In other words, is compensation within the power of equity only as an incident of, or collateral to, a specific performance, which would otherwise be inequitable, or can it decree compensation by itself, without reference to specific performance. There is very high authority, including the Supreme court of the United States, for the proposition, that courts of equity have this distinct and independent power of compensation. Pratt v. Law & al., 9 Cranch R. 456; Philips v. Thompson, 1 John. Ch. R. 131; Woodcock v. Bennet, 1 Cow. R. 711.
But many cases might be cited which hold the contrary doctrine, both in England and in the States of the Union. See note (v.), 3 Parsons on Cont. 403.
It is not necessary in this case to attempt to reconcile these conflicting authorities. It is sufficient to remark that the cases referred to at the bar were generally cases where specific performance was denied. And yet in many of these cases the jurisdiction of the court to make compensation and direct an issue quantum damnificatus was expressly affirmed.
But the case before us is one in which specific performance was decreed, and was manifestly a case in which specific performance ought to have been decreed. The court, therefore, having full and complete jurisdiction, and having properly exercised that jurisdiction in decreeing specific performance, the only question is, whether or not the court of chancery may not, as an incident to the relief sought, or collateral to the specific performance, which would otherwise be inequitable, direct an enquiry as to the damages which the defendant has sustained in consequence of the acts of the plaintiff or his agents; or whether the case must be retained in the court of chancery until the question of damages can be ascertained in another form, to wit: in a court of law.
As before intimated, we think the doctrine on this subject is now well settled, and may be succinctly stated to be this: that where the court of chancery has jurisdiction of the case, and where it is a case proper for specific performance, it may, as ancillary to specific performance, decree compensation or damages; and where the ascertainment of damages is essential, in order to do complete justice between the parties in the case before it, the court ought not to send the parties to another forum to litigate their rights; but should refer the matter to one of its own commissioners, or direct an issue quantum damnificatus to be tried at its own bar. 2 Story Eq. Ed. 1866, §§ 798-9, note; Fry on Specific Performance, second Am. Ed. p. 448.
The last named author, treating of the subject under consideration, says: " In early times the courts did not entirely disclaim jurisdiction in respect of damages, where they were incident to the subject matter already in contention before the court. Subsequently, however, the jurisdiction was disowned, and a broad distinction set up between compensation and damages." After some comments on a decision of Lord Eldon on this subject, he proceeds: " At present, however, the courts manifest an inclination to return to the original view of its jurisdiction, and to assist in the ascertainment of damages where these are essential to complete justice in the case before it."
In a recent English case, Prothero v. Phelp, 25 Law Jour. ch. 105 (L. J. J.), Lord Justice Turner said: " That it is competent for this court to ascertain damages, I feel no doubt. It is the constant course of the court in the case of vendor and purchaser, where a sufficient case is made for the purpose, to make enquiry as to the deterioration of the estate: and in so doing, the court is, in fact, giving damages to the purchaser for the loss sustained by the contract not having been literally performed."
It is impossible not to see the great propriety of courts of equity being clothed with such a jurisdiction; so that in cases coming before them by way of specific performance, complete justice may be done to suitors, without their resorting to any other forum. Under the modern practice of courts of equity, aided by legislative enactment, these courts are now provided with all the machinery necessary to aid its jurisdiction to make an end of a cause properly before it. An issue out of chancery may now be tried at its own bar, instead of being sent (as formerly) to a court of law for trial. One manifest object of legislative changes in the administration of the law has been to enable courts of law and courts of equity to do complete justice in matters arising within their respective jurisdictions; and it is in entire accordance with this that courts of equity should proceed by way of damages in cases where they properly have jurisdiction, and where complete justice requires the payment of damages.
It is impossible, therefore, to perceive either the necessity or propriety, in a case like this (where the court has complete jurisdiction of the subject, and with all the parties before it, and where a specific performance has been decreed), of sending the parties before another forum, in order to litigate rights arising directly out of the subject before the court of chancery, and especially where specific performance would be inequitable, and complete justice could not be done without an adjustment of these questions. Why should the cause be divided into two suits--a part of the controversy to be adjudicated in a court of equity, and a part in a court of law? Why should two distinct and independent tribunals be invoked to dispose of a cause between the same parties, where their respective claims are so connected as to be inseparable? Why call upon a court of law to aid the court of equity, which has the undoubted original jurisdiction of the subject matter and of the parties, and is provided with all the machinery necessary to arrive at the same result, and in the same mode, if need be (trial by jury), which could be attained in a court of law? We cannot perceive the necessity or the propriety of such a practice. Nor can we find any authority among the modern decisions to require it.
The cases relied upon by the learned counsel for the appellee, are cases where the plaintiff came into a court of equity seeking compensation in damages for alleged fraud, misrepresentation, & c., and where upon the face of his bill or in the case made out, there is no ground for equitable relief.
The case of Robertson v. Hogsheads, 3 Leigh 723, so earnestly relied upon by counsel, is not in any respect opposed to the principles and practice of courts of equity as above expounded. In that case the bill in form and upon its face was a bill claiming damages for the breach of a contract. It did not ask even for a recision of the contract; but the claim of the plaintiff was merely for compensation in damages in consequence of certain alleged misrepresentations in respect to sufficiency of springs and their actual deficiency. It was argued by counsel in that case, that under the prayer for general relief he might claim a recision of the contract. Carr, J. says, " Taking up the case either upon the bill and answer or upon the whole evidence, there is no ground furnished for a recision of the contract in any stage; but after it was executed by giving and receiving a deed, taking possession, paying good part of the purchase money, executing bonds for the balance, and a deed of trust to secure the payment, there is not the shadow of a cause for a recision. The bill then, so far as it related to the main end of it, was never sustainable; and taking away that ground there could be no propriety in filing a bill in equity for the sole purpose of obtaining compensation or damages for an alleged fraud, and to tie up a part of the purchase money until these damages were liquidated."
Tucker, P. said in the same case, " It is obvious, that no recision of the contract could have been decreed or properly asked for in this case. * * * As the form of the proceeding excludes the possibility of recision, the bill can only be looked on as a bill for an injunction to restrain the payment of an unpaid balance of purchase money until a claim for unliquidated damages for an alleged fraud shall have been settled by an issue to be directed by the court."
It will thus be readily perceived, that the case of Robertson v. Hogsheads, is not, in the slightest degree, in conflict with the doctrines herein announced. In that case there was no possible ground upon which the jurisdiction of a court of equity could attach. But it was a bill filed by a plaintiff merely for the purpose of recovering damages for the breach of a contract. In the case before us the jurisdiction of a court of equity is unquestioned. The plaintiff files his bill for specific performance in a case where he is clearly entitled to it, and which is decreed by the court; and the defendant not objecting to specific performance, claims that he is entitled to compensation by way of damages arising from the acts of the plaintiff and his agents respecting the subject matter of the agreement. In such a case the court having obtained possession of the subject, it will do complete justice by disposing of the whole subject at its own bar, without sending the parties to another forum. This practice has been commended and established by numerous decisions of this court. See Payne v. Graves, 5 Leigh 561; Billups v. Sears, 5 Gratt. 31; Lyons v. Miller, 6 Gratt. 427; Bank of Washington v. Arthur, 3 Gratt. 173; Martin v. Hall, 9 Id. 8.
It may be further observed, that there is an obvious distinction between cases where the party seeks relief in equity as plaintiff, and where compensation is sought by the defendant in resistance or modification of the plaintiff's claim. In the latter case, the maxim prevails that he who seeks equity shall do equity. 2 Story's Eq. § 799 (a). Where a plaintiff in equity seeks the aid of the court to enforce specific performance, he can only receive such relief upon equitable terms; and if it would be inequitable to grant relief without compensation to the defendant (whether such compensation be by way of damages, or otherwise), it is competent for the court having possessed itself of the subject by proper exercise of its jurisdiction, to do complete justice between the parties; and as ancillary to that purpose, may ascertain damages sustained by the defendant, either by an enquiry made by a master or by a jury upon an issue quantum damnificatus to be tried at its own bar.
We are therefore of opinion, that there is no error in the decree of the said District court, and that the same must be affirmed.
DECREE OF DISTRICT COURT AFFIRMED.