Wesley v. Eells

delivered the opinion of the court.

This suit was brought in the Circuit Court of the United States for the Northern District of Ohio by "Wesley a citizen of New York against Eells a citizen of Ohio.'

By the terms of sale the purchaser was required to pay in cash one third of the price and to execute his bond and mortgage on the property to secure payment of the balance in two equal annual instalments with interest from the date of purchase, the obligor to have the option of paying the whole or any part of the sum so secured before the maturity thereof.

At the instance of Wesley the Commissioners of the Sinking Fund of South Carolina executed a deed in fee simple for the property to one J. W. Alexander who consented to act as trustee for the plaintiff, the deed however not containing any declaration of. the trust. Thereupon Alexander executed to the Treasurer of the State his bond for the payment of the purchase price — the mortgagor being accorded the privilege of paying before maturity the whole or any part of the money secured.

The mortgage not having then been filed for record, and Wesley having furnished to Alexander a sufficient amount of what is known as South Carolina Kevenue Bond Scrip, the latter tendered to the state Treasurer of South Carolina in such scrip the principal and interest of the above bond. That officer had authority to receipt for the sum due on the bond and mortgage. The tender wras refused by the state Treasurer.

By the laws of South Carolina a tender in full of the amount due on a mortgage of real or personal property at any time when the mortgagor has the right to pay the same operates as a satisfaction and extinguishment of- the lien of the mortgage,whether the amount be accepted or not and whether the mortgagor keeps himself in a position to make good the tender or not.

Notwithstanding the tender, the state Treasurer caused the above mortgage'to be recorded in the proper office.

Subsequently, Alexander conveyed the premises in question to Wesley.

The plaintiff had received from the state Treasurer of South Carolina under the circumstances detailed in the bill (which need not be repeated) a large amount of revenue bond scrip. He stated that he was the owner and holder of' the scrip received by him and charged in his bill that by the tender to the state Treasurer the Alexander mortgage had been extinguished by operation of law.

The revenue bond scrip referred to was in the following form:

$100. No. 21. $100.

Revenue Bond Scrip.

The State oe [Palmetto Tree] South Carolina.

Columbia, S. C., March —, 1872.

Receivable as one hundred dollars in payment of all taxes

Niles Gr. Parker, State Treasv/rer.

One hundred dollars. One hundred dollars.

Such being Wesley’s relations to the mortgaged property he-made a written contract with Eells whereby he agreed for the price of $20,000 to be paid in cash to convey to the latter in fee simple the premises in question, free from any valid lien or incumbrance whatever.

The plaintiff offered to deliver to Eells a deed for the premises in fee simple and demanded payment of the purghase price. But Eells refused to receive the deed or to pay the price, alleging that the scrip tendered by Alexander were not valid obligations of South Carolina and therefore did not constitute a legal tender of the amount due the State nor operate as an extinguishment of the mortgage.

The plaintiff brought into court and tendered a deed to Eejls and offered to agree that the plaintiff might retain so much of the price for the property as would protect'it against any- taxes that had accrued upon it.

The relief asked was a decree that the defendant should accept the deed tendered to hirh and pay the purchase price of the property, less any sum to meet the taxes assessed upon it.

The defendant admitted in his answer that there were no liens or incumbrances upon the property except the mortgage described in the bill and such taxes as were due thereon to' the State and to the city of Columbia. But he alleged that the statute authorizing revenue bond scrip to be received in payment of dues to the State had been repealed, and county auditors and county treasurers forbidden to collect any taxes for the redemption of such scrip; that the act under which the scrip -was issued was in violation of the Constitution of the United States forbidding the States from emitting bills of credit and also in violation of the constitution of South Carolina, and such scrip was null and void.

The defendant stated in his answer that he had always been and was then willing to perform his contract, provided he re-

The plaintiff filed a general replication* and the cause was submitted on the pleadings and certain documentary evidence showing the history of the revenue bond scrip, the legislation of South Carolina, and certain decisions of the Supreme. Court of that State.

The Circuit Court of the United States held that the bond scrip issued under the act of March 2, 1872, were bills of credit and void; that the tender of scrip by Alexander to the state Treasurer was therefore not a valid tender and did not operate to extinguish the mortgage given by Alexander to the State ;■ and that the Agricultural Hall property was still incumbered by the mortgage and plaintiff could not give defendant a clear title to it. The bill was dismissed at the plaintiff’s cost.

In the memorandum of evidence used by stipulation of the parties reference was, made to the case of Tindal v. Wesley, 167 U. S. 204 , 221. But the decision there has no bearing upon the present case. That was an action by Wesley to recover the possession of the property here in dispute — the defendants being in possession only in their capacities as officers or agents of South Carolina, and insisting that the suit against them was, in legal effect, one against the State within the meaning of the Eleventh. Amendment of the Constitution of the .United States. “The settled doctrine of this court,” it was said in that case, “wholly precludes the idea that a suit against individuals to recover possession of real property is a suit against the State simply because the defendant holding possession happens to be an officer of the State and asserts that he islawfully in possession on its behalf. . . . Whether the one or the other party is entitled in law to possession is a judicial, not an executive or legislative, question. It does not cease to be a judicial question because the defendant claims that the right of possession is in the government of which he is an officer or agent.” ‘ These extracts indicate the scope of the decision in Tindal v. Wesley and make it clear that that decision' does not determine any question now presented.

In Hennessy v. Woolworth, 128 U. S. 438 , 112, this court said: “ Specific performance is not of absolute right. It rests entirely in judicial discretion, exercised, it is true, according to the settled principles of equity, and not arbitrarily or capriciously, yet always with reference to the facts of the particular case” — citing Willard v. Tayloe, 8 Wall. 557 , 567; Marble Co. v. Ripley, 10 Wall. 339 , 357; 1 Story’s Eq. Jur. § 742; Seymour v. Delan cey, 6 Johns. Ch. 222 , 224. To the same effect are McCabe v. Matthews, 155 U. S. 550 , 553; Rust v. Conrad, 17 Mich. 449 , 454; Petty v. Roberts, 7 Bush, 110 , 119; Huntington v. Rogers, 9 Ohio St. 511 , 516. A court of equity will not compel specific performance if under all the circumstances it would be inequitable to do so. Starnes v. Newsom, 1 Team Chy. Rep. 239, 211; Parish v. Oldham, 3 J. J. Mar. 544 , 546; Clowes v. Higginson, 1 Ves. & Beames, 524, 527.

Again, it is a settled rule of equity that the defendant in a suit brought for the specific performance of an executory contract will not be compelled to take a title about which doubt may reasonably exist or which may expose him to litigation. Morgan’s Heirs v. Morgan, 2 Wheat. 290 , 299, 301; City of Tiffin v. Shawhan, 13 Ohio St. 178 , 183. And, speaking generally, a title is to be deemed doubtful where a court of coordinate jurisdiction has decided adversely to it or to the principles on which it rests. Fry on Specific Performance, 3d ed. § 870 and authorities there cited. One of the grounds upon which a decree for specific performance was denied in Hepburn v. Auld, 2 Cranch, 262 , 278, was that it would impose upon the defendant the necessity of bringing a suit to perfect his title.

The principle is well illustrated in Jeffries v. Jeffries, 117 Mass. 184 , 187, which was a suit for the specific performance of a written agreement for the purchase of certain real estate. One Of the objections to the title was that it was incumbered by conditions that would interfere with the enjoyment of the property. The Supreme Judicial Court of Massachusetts there said: “ Hence the propriety and the necessity of the rule in equity that a defendant, in proceedings for specific performance, shall

The principle is also illustrated in many English cases. In Parker v. Tootal, 11 H. L. Cas. 143, 158, it was said to be an established rule of equity not to compel a purchaser to take a doubtful title. In Rose v. Calland, 5 Ves. 185, 187, which was a suit by devisees in trust to obtain the specific performance of an agreement entered into by the defendant for the purchase of an estate, certain reasons were'given why the plaintiff could not make a sufficient title, one of which was that the Court of Exchequer, in Nagle v. Edwards, 3 Anstr. 702, had announced principles which, if followed, would prevent the defendant from obtaining such a title as he ought to have. The Lord Chancellor said: “ If I'was to send this case to the master, I should create a needless expense; for upon the case in the Court of Exchequer, Nagle v. Edwards, which I have looked into, my difficulty is this: Can I make a person take a title in the face of that decision ? If I do, I decree him to enter into a lawsuit. ... I desire to be understood as not entirely agreeing with the determination of the Court of Exchequer. Rut I should be in a strange situation in desiring a purchaser to take this title, because I think the point a pretty good one, though the Court of Exchequer have determined against it. It is telling him to try my opinion at his expense.” So in Price v.

We are of opinion that the plaintiff’s title is not such as a court of equity should compel the • defendant to accept. He should not have been compelled to accept it even if the court below had been of opinion that the revenue- bond scrip tendered • by Alexander were not bills of credit.

Upon the grounds stated, and without expressing any opinion upon the question whether the revenue bond scrip referred to were or wei’e not bills of credit within the meaning of the Constitution of the United States, the decree below is

Affirmed.