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PRATT V. LAW & CAMPBELL, 13 U. S. 456 (1815)
U.S. Supreme Court
Pratt v. Law & Campbell, 13 U.S. 9 Cranch 456 456 (1815)
Pratt v. Law & Campbell
13 U.S. (9 Cranch) 456
Decided that in the sales of lots in the City of Washington, the lots are not chargeable for their proportion of the internal alley laid out for the common benefit of those lots, although the practice so to charge them has been heretofore universally acquiesced in by purchasers, and if a purchaser has acquiesced in that practice and has received a conveyance accordingly without objection, yet he does not thereby acquire a fee simple in such proportion of the alley, and may in equity recover back the purchase money which he has paid therefor.
If a purchaser of city lots stipulates to build within a limited time a house on every third lot purchased, or in that proportion, and receives conveyances for the greater part of the lots, he is not bound to build in proportion to the lots conveyed unless the whole number be conveyed.
In a case where it would be difficult to ascertain the injury resulting from the breach of contract or the sum in damages by which the injury might be compensated, this Court will not themselves ascertain the injury nor the damages, nor direct an issue quantum damnificatus.
Where a contract for the sale of land has been in part executed by a conveyance of part of the land, and the vendor is unable to convey the residue, a court of equity will decree the repayment of a proportionate part of the purchase money with interest.
If three persons mortgage their joint property to indemnify the drawer of bills of exchange drawn for their accommodation in case of protest, and if each of the mortgagors agrees to take up a third part of the bills upon their return under protest, and if two of them neglect to take up their two-thirds, whereby the other mortgagor is compelled to take up the whole of the bills, in consequence of which he requests the drawer not to release the mortgage, but to hold it for his benefit, a lien in equity is thereby created upon the mortgaged property to the amount of two-thirds of the bills in favor of that mortgagor who took up the whole.
Quaere whether a subsequent encumbrancer can compel a prior encumbrancer to disclose the consideration which he gave for the notes of the debtor upon which his encumbrance was founded?
An equity of redemption of real estate in Maryland is liable to attachment.
These several suits in chancery in the Circuit Court for the County of Washington in the District of Columbia, being involved in each other and relating to the same property, were heard and argued as one cause.
The first of these suits in the order of time was that of Pratt v. Duncanson & Ward, which was instituted on 24 March, 1801. The bill prayed that Duncanson and Ward might be enjoined from selling certain squares in the City of Washington which had been mortgaged by Morris, Nicholson and Greenleaf to Duncanson to indemnify him against the return of certain bills of exchange which he had drawn for their accommodation, to the amount of £12,000 sterling, a part whereof, viz., £7,600, it was alleged had been taken up by Ward, who claimed payment from Duncanson and persuaded him to advertise the mortgaged property for sale. The bill alleged that although the bills had been taken up by Ward, he had done it as the agent of Greenleaf, one of the mortgagors, and with his funds, and
prayed for general relief. The squares which were thus mortgaged to Duncanson were included in a previous mortgage to Thomas Law.
The next suit in order of time was that of Pratt v. Thomas Law and William Campbell. The bill was filed on 14 December, 1804.
Its objects were to compel Law to release to the complainants, who were assignees of Morris, Nicholson and Greenleaf, certain squares in the City of Washington which had been mortgaged by them to secure to him the conveyance of certain lots and squares in the same city which they had contracted to convey to him and which he was to select from a larger number which they had purchased of the commissioners of the city, to compel Law to complete his selection, and to vacate certain releases made by him at the solicitation of Campbell, who had attached the equity of redemption of some of the squares which were included in the mortgage to Law.
The third suit in the order of time was that of Law v. Pratt. The bill was filed on 4 October, 1805, and its object was to foreclose the mortgage given to secure to Law the conveyance of 2,400,000 square feet of land in the City of Washington, agreeably to a certain contract between him and Morris, Nicholson and Greenleaf, because about 400,000 square feet which Law contended he had selected agreeably to his contract had not been conveyed to him.
The last of these suits in the order of time was that of Campbell v. Pratt et al., assignees of Morris, Nicholson and Greenleaf, and W. M. Duncanson and Samuel Ward. The bill was filed in June, 1806, and was in the nature of a bill of interpleader. Its object was to obtain a release from Duncanson of the mortgage given to him by Morris, Nicholson, and Greenleaf to indemnify him against the return of certain bills of exchange drawn by him for their accommodation and which Campbell alleged had been taken up by them, or some of them, which release, if made, would enure to the benefit of Campbell inasmuch as he had attached, and under the proceedings upon the attachment had
purchased Morris and Nicholson's equity of redemption.
In order to understand the argument of counsel and the opinion of the Court, it may be necessary to state more minutely the allegations of the parties.
The bill of Pratt and others against Law and Campbell stated that Morris, Nicholson, and Greenleaf, on 3 December, 1794, gave to the defendant Thomas Law their bond with condition to convey to him in fee simple within 90 days from that date
"2,400,000 square feet of land in the City of Washington, the said Law having paid them the sum of five pence Pennsylvania currency per square foot for the same."
That on 4 December, 1794, the day after the date of the bond, a written agreement was executed between the same parties by which, after reciting the bond, Morris, Nicholson, and Greenleaf covenanted that if Law should, within 18 months, be displeased with his purchase, they would return him the purchase money, with interest, at the expiration of that term. And Law covenanted that if, within the same term he should finally determine to keep the land, he would, within 4 years from the time of such determination, cause to be built on every third lot, or in that proportion, one brick dwelling house or other brick building at least two stories high; the lots were supposed to average 5,265 square feet each. The bill further charges that Law did, within the limited time, elect to keep the land, and thereby became liable to build the houses mentioned in the agreement of 4 December, 1794, but had not built them. That on 19 March, 1795, the parties entered into another agreement by which Law was
"to have his selection under his contract of 4 December last in all squares in which the said Morris and Greenleaf have a right of selection excepting water property and excepting such squares as are now appropriated, or respecting which the said Morris, Nicholson, and Greenleaf have made arrangements, a list of which squares is hereunto annexed."
By the same agreement, Morris, Nicholson, and Greenleaf covenanted to mortgage to Law other squares and lots which were then in their possession until they could give him
a good title to such property as he might select; Law agreed to give up his right to return the property, and thereby made the purchase absolute. He also agreed to select by squares and not by lots, and to close his selection within 90 days from the date of the agreement, and stipulated that the houses which he was to build should be such houses as Morris and Greenleaf were obliged to build by contract with the commissioners.
The bill further states that Morris, Nicholson, and Greenleaf, agreeably to that contract, on 4 September, 1795, mortgaged to Law 857 lots and 3,333 square feet of land, the condition of which mortgage was that Morris, Nicholson, and Greenleaf should pay the penalty of the bond or, agreeably to its condition and to the contract of 10 March, 1795, convey to Law in fee simple with general warranty 2,400,000 square feet in the City of Washington.
That Law selected about 2,000,000 square feet, but in making his selections violated his agreement of 10 March, 1795, by selecting lots in squares from which he was excluded by that agreement, to the injury of Greenleaf who never assented to such selection.
That Law had obtained titles to about 2,000,000 of square feet, and that there remain to be conveyed to him about 400,000 square feet, when he shall have complied with his contract of selection, and when he shall have built the stipulated number of houses.
That on 13 May, 1796, Greenleaf conveyed to Robert Morris and John Nicholson all his interest in the City of Washington, excepting three squares,
"and excepting all such lots, lands or tenements as were either conveyed or sold, or agreed to be conveyed by all or either of them, the said Greenleaf, Morris, and Nicholson, or any of their agents or attorneys to any person prior to 10 July, 1795."
That on 26 June, 1797, Morris, Nicholson, and Greenleaf conveyed all their interest in the City of Washington to Pratt and others, the present complainants.
That Law, knowing the complainant's interest in the property and with intent to injure the complainants and to benefit the defendant, Campbell, on 4 September and 5 October, 1797, executed two deeds releasing to Morris, Nicholson, and Greenleaf part of the mortgaged property, which had been attached by Campbell, which releases were executed by Law with a full knowledge of the interest of the complainants in the mortgaged property, in defiance of their express prohibition and with a fraudulent intent to vest the legal estate in Morris and Nicholson so as to give effect to the attachment of Campbell. That Campbell had engaged to indemnify Law for that act. That the releases were executed without the knowledge or consent of Morris, Nicholson, and Greenleaf or either of them, and were never delivered to them or either of them, but were put on record by Law. The complainants pray that those deeds of release may be vacated and annulled. They state that they are ready, able, and willing to carry into effect the contracts between Law and Morris, Nicholson, and Greenleaf and to do everything that in justice and equity ought to be done on their part, but that Law has refused and neglected to build the houses and to make his selection within the time limited and out of the squares prescribed, has violated his contract in setting up a claim and keeping the property mortgaged as a collateral security for making him titles to property, which titles he has prevented by refusing to select the property, &c.
The bill requires Campbell to state when, from whom, and at what price he obtained the notes of Morris and Nicholson upon which his attachment was issued, and prays for general relief.
The answer of Law admits that he had received conveyances for "about 2,000,000 of square feet of ground under the contract, but not within the time stipulated;" it states the number and kind of houses which he had built; denies that he was bound to receive conveyances with a condition to build, the building contract being independent of the contract to convey the land. It states that he was induced to enter into the building contract by the contract which Morris, Nicholson, and Greenleaf had entered into with the commissioners and others to build
a large number of houses, which contract it avers they never complied with.
It states also that Morris and Nicholson assigned Law's building contract to the commissioners of the city, and that the present complainants are not the assignees thereof, nor have any interest therein, and that if they had, their remedy is at law, and not in equity.
With regard to the releases of September and October, 1797, he says that the mortgaged property was more than ample security; that Morris and Nicholson were in 1797 generally deemed bankrupts, that their creditors were suing out attachments, and he thought it unjust to keep covered, by his mortgage, from fair creditors, a property so much more than enough to secure his demands, and therefore executed those releases. He admits that Campbell gave him a bond of indemnity, but denies that he received any compensation. He admits also that one of the complainants desired him not to execute them, but he disregarded the request.
Exceptions having been taken to this answer, Mr. Law filed an amended answer in which he insists that he was released from his building contract because he had not received titles for all the lots he had purchased, or that, as he had originally four years from the date of the contract to complete his buildings and was to have had his titles in 90 days, he ought to be allowed four years from the time of receiving his titles. He affirms that he made his selection within the time limited by his contract, and exhibits a copy thereof. He avers that by the contract of March 10, 1795, he had a right to select as well from the property which Greenleaf had contracted to purchase in his own name from D. Carroll, as from that which Morris and Greenleaf had contracted to purchase from the commissioners of the city. That on 14 March, 1796, after much trouble and vexation, he received his first conveyance of a part of his lots, amounting to 773,122 1/4 square feet, to obtain which he had to release to Morris, Nicholson, and Greenleaf a part of the mortgaged property, viz., squares No. 465, 468, 469, 470, 495, and 498. He avers that any variation which may appear between his original selection and the squares afterwards conveyed to him
was occasioned by the slow compliance on the part of Morris, Nicholson, and Greenleaf with their contracts with Carroll and the commissioners. He states that they gave him full liberty to make another selection of any lots within their purchases or contracts, and refers to Morris and Nicholson's letter to him of 17 September, 1796, in which they say
"you may select by squares out of any that are within our selection, although not chosen by you already, except water property, or where we have since your selection, or before improved on, or contracted for the sale of that which you desire; and we wish you now to name the squares, as the selection and titles shall be completed for you without delay."
That in consequence of that letter he made another selection including other squares, and on 20 July, 1797, received another conveyance of lots from the commissioners containing 1,142,068 1/4 square feet. That he also received a deed dated January 28, 1797, directly from Morris and Nicholson for 128,223 square feet, the title to which has since been decided by the chancellor of Maryland not to have been in them but the commissioners of the city.
He also states that after receiving these three conveyances,
"he had selected to have the residue of what was due conveyed to him out of the half of square 743, square 699, and square 696, containing 314,829 1/2 square feet, which, if the deed of January 28, 1797, had remained good, would have been near the quota to which he was entitled, but the said squares or the proper portion thereof never were conveyed, though the said Morris and Nicholson frequently promised so to do. That the said squares were a part of the property which they had contracted to purchase of the said Carroll according to their contract of 26 September, 1793,"
a copy of which is exhibited and appears to be a contract by Greenleaf alone, with Carroll. He refers to a letter from Morris and Nicholson to him of 19 March, 1797, in which they say
"We are equally anxious with you to get Mr. Carroll paid on his [Mr. Carroll's] account, upon our account, and upon your own account, and yet with all this anxiety we do not agree to sign the articles, which were
handed us yesterday; our objections thereto will be filed. But to make your mind at ease on the subject of the property to be conveyed to you by Mr. Carroll, and ours at ease about getting our property released from your mortgage, which it then ought to be, we propose to enter into a contract, with penalty, with you to fix a limited time within which the money shall be tendered to Mr. Carroll -- say in six weeks -- and on your part to covenant therein that upon so doing, you will release to us our mortgage when Mr. Carroll makes the titles."
He refers also to a letter from Mr. Morris to him of 21 June, 1797, in which Mr. Morris says
"I am in pursuit of money for Mr. Carroll, and expect success, but I hope, when it comes, he will not plague himself and embarrass us by a refusal of it. He ought to have had his money, and I have always lamented that we could not pay it when due, but certainly we will pay as soon as we can."
The answer then avers that Morris and Nicholson never paid the purchase money due to Mr. Carroll nor in any other respect complied with the contract with him, whereby they forfeited all right to the purchase of the property therein mentioned and disabled themselves from conveying to the defendant Law the property he had so selected. That one of the purposes of the deed of assignment under which the complainants claim title was to pay Mr. Carroll $13,000 due upon that contract, whereby it became their duty to pay that sum so as to obtain titles for the defendant Law, but they never did pay that sum to Mr. Carroll, and it is not now in their power to comply specifically with the contract between the defendant Law and Morris, Nicholson, and Greenleaf.
To this answer exceptions were also taken, and the complainants, Pratt and others, filed an amended bill, in which they contend that the defendant Law had not made his selection in due time and manner according to the original contract; that therefore the complainants might now satisfy the balance of the contract by a conveyance of such lots as they should deem proper, and under that idea had tendered to Mr. Law a conveyance for the quantity of land which he had a right to claim.
That by the original contract, Mr. Law had a right to select only out of the property which Morris and Greenleaf had contracted to purchase from the commissioners, for that was the only contract which gave them a right of selection.
The complainants also contended that if, upon Mr. Law's failure to select his lots within the time limited, the right of selection did not revert to Morris, Nicholson, and Greenleaf. yet he was bound to close his selection in a reasonable time, and before Morris and Nicholson had completed their selection under the contract of Morris and Greenleaf with the commissioners, and that after closing their selection, they were not bound to convey to Mr. Law any lots not selected by them or not before that time selected by him and notified to them. They admit that although Mr. Law had forfeited his right of selection, yet Morris and Nicholson, being desirous of gratifying him and of stimulating him to make the stipulated improvements, caused to be conveyed to him, by deeds dated 14 March, 1796, and 20 July, 1797, 1,935,008 square feet of land without annexing thereto the condition of building which they had a right to insist upon, including therein sundry lots not within his right of selection, whereby he obtained more valuable lots and on better terms than he was entitled to under his contracts.
They aver that they are the bona fide purchasers for a valuable consideration of Morris, Nicholson, and Greenleaf's equity of redemption in the mortgaged property without notice of any agreements or transactions between them and the said Law other than those which appear on the face of the bond of 3 December, 1794, the agreement of 4 December, 1794, that of March 10, 1795, and the mortgage of 4 September, 1795, and are not in equity bound by any other agreement, if any such exist.
They further state that the legal estate of the mortgaged premises, never was in Morris and Nicholson, or either of them, but was in Greenleaf alone. That after Greenleaf had sold to Morris and Nicholson his interest in the Washington lots, being largely their creditor, he caused all their property in the city to be attached by
process, issued under the laws of Maryland, on 21 April, 1797, which attachment was for the benefit of the complainants and was laid on the same property which on the following day was attached at the suit of the defendant Campbell, which attachment in favor of Greenleaf was continued until and after 26 June, 1797, when Morris and Nicholson assigned and transferred to the complainants for a valuable consideration all the attached property, whereupon Greenleaf's attachment was dismissed by consent of the parties inasmuch as the complainants had, by the assignment, obtained all the benefit which they could have obtained by prosecuting the attachment to judgment of condemnation. They aver, therefore, that if the defendant Campbell had any equitable claim to the property by virtue of his attachment, the complainants have a prior equitable claim by virtue of their prior attachment.
But they aver also that neither Morris nor Nicholson ever had such an estate in the mortgaged premises as could be the subject of an attachment at law or as could be condemned at law or as could be seized and sold under a fieri facias, and that the defendant Campbell had notice of the complainant's legal and equitable title when he purchased the property.
That if Morris and Nicholson had any equitable interest therein, it was subject to the duty of doing justice to Greenleaf, the legal proprietor, by paying all they owed him before the trust as to them would be decreed to be performed, and if they had an equity of redemption in the mortgaged lots, and if anything was seized, condemned, and sold under the said Campbell's attachment, it could be only the right which Morris and Nicholson had to redeem the said lots, by conveying to Mr. Law the balance of property due to him, and by satisfying all equitable claims which Greenleaf had upon them. And that if the complainants should be compelled to convey to Mr. Law the balance of property which he claims, the defendant, Campbell can have no right to the lots as against the complainants until he shall have satisfied them for all the property which they shall have been so compelled to convey to the defendant,
Law, and shall also have satisfied all equitable claims of Greenleaf upon Morris and Nicholson.
The claimants further state that they have been informed and believe that the attachments of the defendant, Campbell were founded upon notes of Morris and Nicholson, purchased upon speculation at market, and at a price far below their nominal value, and they contend that Campbell could not, in equity, recover, even if he had a prior lien upon the lots, more than the bona fide actual value which he gave for the notes, with legal interest thereon. They call upon him to state what consideration he gave for the notes, and at what price he purchased in the mortgaged lots at the sale under the fi. fa. issued upon the judgment on his attachments.
The answer of the defendant Campbell disclaims all benefit and title under or by virtue of the releases executed by the defendant Law at his request, but claims to hold entirely under the judgment of the Court of Appeals of Maryland upon his attachments, and refers to his bill of interpleader (as he terms it) and the transcript of the record of the Court of Appeals of Maryland exhibited therewith, by which transcript it appears that the attachments were issued on 21 April, 1797, by virtue of the Act of Assembly of Maryland of 1795, ch. 56, entitled "A supplement to the act entitled an act directing the manner of suing out attachments in this province and limiting the extent of them," and commanded the sheriff "to attach, seize, take and safe keep all the lands, tenements, goods, chattels and credits" of Robert Morris which should be found in his bailiwick
"to the value of, as well the damages aforesaid, as . . . , and to have the same before the judges of the General Court . . . , then and there to be condemned, according to the act of assembly aforesaid, to the use of the said W. Campbell unless the said Robert Morris should appear and answer to the said William Campbell in a plea of trespass on the case . . . according to law."
The sheriff was also commanded to make known to the garnishees that they appear, &c., to show cause why the lands, tenements &c., should not be condemned, and execution thereof had and made as in other cases of recoveries and judgments given in courts of record according to the directions of the act of assembly
aforesaid, &c.. The like process was issued against the property of Mr. Nicholson.
On 22 April, 1797, the sheriff levied these attachments on part of the property included in the mortgage to Law, and particularly set forth in the sheriff's return.
On the return of these attachments, Morris and Nicholson appeared by attorney, and upon argument, the General Court quashed the sheriff's return; whereupon Campbell took a bill of exceptions which stated that the plaintiff, Campbell offered in evidence the deed of 13 May, 1796, from Greenleaf to Morris and Nicholson, whereby Greenleaf conveyed to them all his property in the City of Washington, excepting 3 squares,
"and excepting all such squares, lots, lands, and tenements, as were either conveyed or sold, or agreed to be conveyed either by all or either of them, the said Morris, Nicholson, and Greenleaf or any of their agents prior to 10 July, 1795."
That Campbell prayed condemnation of one moiety of certain squares, particularly described, as the property of Morris, and the other moiety as the property of Mr. Nicholson. That Morris and Nicholson offered in evidence the mortgage to Mr. Law of 4 September, 1795, which included those squares, and that Campbell offered in evidence one of the releases of Mr. Law, dated 5 October, 1797, to Morris, Nicholson, and Greenleaf which are mentioned in the bill of Pratt v. Law, and Campbell, Morris, and Nicholson then offered in evidence the deed of trust from Morris, Nicholson and Greenleaf to the complainants, Pratt and others, of 26 June, 1797, conveying to them all the right and interest of Morris, Nicholson, and Greenleaf in the City of Washington, and proved that the aforesaid deed of release from Mr. Law to Morris Nicholson and Greenleaf was lodged by Mr. Law alone, in the proper office to be recorded, and that it was executed by Mr. Law with a knowledge of the aforesaid deed of trust to the complainants against their will and express prohibition and without the knowledge or assent of Morris, Nicholson, and Greenleaf or either of them, whereupon the General Court of Maryland was
of opinion that neither Morris and Nicholson nor either of them had "such an estate in those squares, whereof the plaintiff could have judgment of condemnation."
Upon this bill of exceptions the cause was carried to the Court of Appeals of Maryland, which reversed the judgment of the General Court "as to the land contained in the return of the sheriff of Prince George's County," and adjudged
"that the lands and tenements so as aforesaid attached, that is to say [&c., describing them] be condemned towards satisfying unto the said William Campbell as well the said sum of . . . and that the said W. Campbell have thereof execution, . . . whereupon execution issued from the Court of Appeals, returnable to the General Court."
This execution was a special fieri facias, which after reciting the attachment, the sheriff's return, the judgment of the General Court, the writ of error, and the judgment of the Court of Appeals commands the Sheriff of Prince George's County, that of the lands and tenements attached (describing the squares, &c.) he cause to be made the damages and costs, &c.
Upon this execution, the sheriff sold the attached property to W. Campbell, the plaintiff, for a comparatively small sum.
Under these proceedings, the defendant Campbell in his answer contends that by the laws and Constitution of Maryland, his title and interest in the said lots is conclusive upon all the world, and that the judgment of the Court of Appeals of Maryland cannot be opened. He admits, however, that he acquired by those proceedings no more interest or title than Morris and Nicholson had in the property at the time of the attachment, and that Mr. Law's mortgage was a prior encumbrance, but denies that there is any other lien or encumbrance thereon. He contends that he has a right to redeem the lots from that mortgage on any terms which should be agreed upon between him and Mr. Law. He affirms that the complainants knew of his attachment when they took their deed of assignment of the property. He denies that the complainants had any valid attachment prior to his. He admits that Morris and Nicholson had only an
equitable title in the lots at the time of his attachment. He admits that he knew of the assignment to the complainants when Mr. Law executed his release, and at the time he purchased the property under his attachment.
He demurred to so much of the bill as charged that he purchased the notes of Morris and Nicholson (upon which the attachment issued) on speculation, at a low price, and to so much as required him to state what consideration he paid therefor. To this answer the complainants excepted because the defendant Campbell did not answer that part of the bill to which he demurred.
The bill of Law against Pratt and others stated the bond of Morris, Nicholson, and Greenleaf of 3 December, 1794, to convey to him 2,400,000 square feet of ground in the City of Washington, the agreement of 10 March, 1795, and the mortgage of 4 September, 1795. That he had received conveyances for 773,121 1/4 square feet on 14 March, 1796, for 1,142,068 1/2 square feet on 20 July 1797, and for 128,223 square feet by a subsequent conveyance, the title of which last mentioned quantity was defective. That Morris and Nicholson, having obtained all the right, title, and interest of all the joint property of M. N. & G. in the City of Washington, in the year 1797 became insolvent, and conveyed the same to the defendants Pratt and others. That neither M. N. & G. nor the defendants Pratt and others did procure from the commissioners of the City of Washington a good, clear, and sufficient title to the property, out of which the complainant Law had the right of selection, so that although he made his selection, and requested a conveyance of the remaining 400,000 square feet, the defendants refused to convey the same, and are unable to comply with the engagements of M. N. & G. with him. Wherefore he prays a decree that they should pay him the original purchase money of five pence, Pennsylvania currency, per square foot for the amount of square feet unconveyed, with interest, from 3 December, 1794, by a certain day, and in default thereof that they should be foreclosed of their equity of redemption and for general relief.
The joint and several answer of the defendants Pratt
and others admits the bond of 3 December, 1794, the agreement of 10 March, 1795, and the mortgage of 4 September, 1795, which, it is averred, was executed to remedy a defect in a former mortgage of 11 May, 1795. The defendants also produce the agreement of 4 December, 1794. They admit that the complainant Law had received good titles to 1,915,189 3/4 square feet in part compliance with the condition of the bond, and that the title to the 128,223 square feet was defective. They admit that M. N. & G. became insolvent and conveyed all their interest to these defendants as trustees for certain creditors.
They do not admit that either they or M. N. & G. were ever bound to procure a good title to all the property out of which the complainant had a right to select, nor that he made his selection within the time limited by the contract of 10 March, 1795, nor that they or M. N. & G. ever refused to convey to him any property which he had a right to demand under those agreements.
They say that they have been informed and believe that the complainant Law never made a definite and final selection of lots to satisfy the condition of the bond; but without authority or limitation of time, assumed the right of varying his choice from time to time according as circumstances indicated a prospect of increasing value, and did not confine himself to the property, nor to the terms contained in the contract of 10 March, 1795. They admit, however, that Morris and Nicholson, as a matter of indulgence, acquiesced in the selections thus made, as far as they had the ability to convey the lots so selected.
They contend that upon the complainants' having failed to make his selection within the limited time, the right to select reverted to M. N. & G. and that the complainants, as their assignees, had a right to select and tender a conveyance for the balance remaining unconveyed, and that they had done so, but the complainant refused to accept the same.
They contend also that the complainant is not entitled to relief in equity until he shall have complied with
his agreement to build certain houses according to the agreements of 4 December, 1794, and 10 March, 1795, and they aver that the damage they have sustained by reason of his not having built the houses exceeds the value of the property remaining to be conveyed to him.
They claim the benefit of his releases of certain parts of the mortgaged property dated March 11, 1796 -- September 4 and October 5, 1797, copies of which they exhibit, and they deny in general terms that the mortgage is forfeited or the condition thereof broken.
After replication to this answer, the complainant Law filed an amended bill stating in substance the same matters which are contained in his answers to the bill of Pratt and others against him.
To this amended bill the defendants Pratt and others filed their answer referring to the proceedings in all the causes before mentioned, and praying that the whole may be considered as one cause. They aver that the building contract constituted a material part of the consideration in the sale of lots to the complainant; that the assignment of that contract to the commissioners of the city by Morris and Nicholson was not valid, and did not exonerate the complainant from his obligation in equity to perform it. They proceed to state with more minuteness the facts and transactions stated in their original and amended bills against Law and Campbell.
They deny that Morris and Nicholson could authorize the complainant to make a new selection so as to embarrass the mortgaged property, or to disable themselves from complying with the terms of the mortgage, whereby subsequent encumbrancers, whose rights accrued before such new selection, could be defeated.
They deny also that they are bound by any agreements between the complainant and M. & N. of which they had not notice at the time of the assignment to these defendants.
The complainant having in his amended bill stated that he had solicited to have the residue of what was due to him conveyed out of half of square 743, square 699, square 696, square 730, and the square north of 697, the defendants in their answer deny his right to select either of those squares. As to the square 743, which is the only one in which Morris and Greenleaf ever held any definite interest, they aver that all their interest therein, consisting of one moiety thereof has been conveyed to him. That as to the square 696 and 730, the complainant was expressly prohibited from selecting them by the contract of 10 March, 1795, and that neither of the squares 699, 730, 696, and north of 697 are mentioned in the complainant's selection of December 5, 1795, nor in any former selection pretended to have been made by him; that neither of those squares ever belonged to M. N. & G. or either of them, nor are included in the 6,000 lots bought by Morris and Greenleaf of the commissioners, or have been apportioned to them or either of them, or can of right be claimed by them, or either of them, under any contract.
To this answer there was a general replication.
The bill of Pratt and others against Duncanson and Ward was originally filed to obtain an injunction to prevent Duncanson from selling certain squares which he had advertised for sale under a mortgage dated 12 September, 1795, given to him by Morris, Nicholson, and Greenleaf to indemnify him against the return of certain bills of exchange which he had drawn for their accommodation for £12,000 sterling, £7,600 sterling, of which had been taken up by the defendant, Ward, with the funds of Greenleaf and the residue by Greenleaf himself, and to obtain a conveyance of those squares to the complainants who were the assignees of Morris, Nicholson, and Greenleaf's equity of redemption. Those squares were all included in the prior mortgage to Thomas Law.
After Duncanson and Ward had filed their answers and testimony had been taken in the cause by which it appeared that the facts stated in the bill were true, William Campbell filed a bill against all the parties to the cause, viz., Pratt and others, assignees of Morris,
Nicholson and Greenleaf and Duncanson and Ward, in which bill (which he calls a bill of interpleader) he sets forth his attachment of the squares included in the mortgage to Duncanson, the condemnation thereof by the judgment of the Court of Appeals of Maryland (while the City of Washington was under the jurisdiction of Maryland), the fieri facias issued upon that judgment, and his purchase of the squares at the sheriff's sale, whereby he avers he acquired the equity of redemption of those squares. He states that the bills mentioned in the mortgage had all been discharged by Morris, Nicholson, and Greenleaf or one of them, or with their funds, and the property thereby exonerated, and prays for a conveyance thereof to him, and for general relief.
The defendants Pratt and others, in their answer, admit that they have heard that the complainant Campbell claims the lots mentioned in his bill by virtue of a pretended judgment of condemnation upon certain pretended attachments issued upon certain pretended claims against Morris and Nicholson, but they deny the validity of those claims and of all proceedings founded thereon, and aver that if any such judgments of condemnation have been obtained, they were obtained, as they believe, by fraud and imposition practiced upon the court rendering such judgments, by producing to such court certain pretended deeds of release fraudulently executed by Thomas Law (meaning the releases mentioned in the bill of Pratt v. Law and Campbell). They aver that they were not parties to such judgments, and can not be bound thereby. That the proceedings exhibited by the complainant appear to be proceedings at law, and not in equity, and therefore that if the complainant has any title under those proceedings, it must be a title at law, and his remedy is at law and not in equity, and that no proceeding by these defendants against Duncanson and Ward in equity, can injure the complainant's title at law, if any he has. They therefore deny his right to relief in equity, and contend that the court, as a court of equity, has not jurisdiction in the case stated by the complainant in his bill. They do not admit that any valid attachment was laid on the property before the assignment from M. N. & G. to them. They aver that on the day before the date of Campbell's attachment, Greenleaf being a large creditor
of Morris and Nicholson, caused attachments in his name, but for the use of these defendants, to be laid on the same property, which attachments remained in full force (if the property was liable to attachment for the debts of Morris and Nicholson) until and after their assignment of their interest therein to these defendants, when they, having by the assignment obtained all the benefit which they could have obtained by prosecuting the attachments to judgment of condemnation and sale, caused the attachments to be dismissed. And therefore that if Campbell could claim any title in equity under his attachments, these defendants have a prior claim in equity by virtue of their prior attachments, and the assignment from Morris, Nicholson & Greenleaf. They deny that the legal title was ever in Morris and Nicholson, or either of them, but was in Greenleaf alone, until conveyed to Thomas Law by the mortgage of 4 September, 1795, in whom it remained until his releases of 4 September and 5 October, 1797, which releases, if valid, enured to the benefit of these defendants.
As to certain squares contained in the mortgage to Duncanson, viz., the square east of 516, the square east of 547, the squares 549 and 596, the square east of 596, and the square 597, they aver that long before Campbell's pretended attachment, viz., on 20 June, 1796, Morris and Nicholson conveyed to the said Greenleaf all their interest therein for a valuable consideration, since which time M. & N. have never had any interest therein.
They aver that the complainant, had notice of all these facts at the time of his purchase at the sheriff's sale under his attachment.
They contend also that if the complainant could, by any process at law, attach the equity of redemption, yet he can have no remedy in equity unless he has offered and can show himself able to redeem the property by a compliance with the contract between Law and M. N. & G. which he has not done.
They say they have heard and believe that the complainant's pretended attachments were founded on notes
of M. & N. purchased in market at a great discount as an object of speculation, with a view to take the chance of such an attachment, and they are advised that if the complainant should in equity have a prior lien on the property, he could not claim in equity (as against these defendants who are bona fide creditors of Morris and Nicholson, and purchasers of their equity of redemption for a valuable consideration, and who are seeking for satisfaction out of the same fund) more than the amount of money actually paid by the complainant, for the said notes and bills, with lawful interest thereon.
One of the defendants, John Miller, Jr., assignee of Greenleaf under the Bankrupt law of the United States, answering separately for himself, states that the bills for £12,000 sterling in the bill mentioned were sold and the proceeds thereof equally divided between Morris, Nicholson, and Greenleaf, each of whom were bound in equity as well as by agreement to take up one-third of the amount, if they should come back protested. That they did come back protested; that Morris and Nicholson wholly failed to take up any part the of, but the whole was paid by Greenleaf with his own separate funds, and that Morris and Nicholson are still indebted to him for two-thirds of the amount of the £12,000 sterling, with interest, charges, damages and costs of protest, and were also otherwise largely indebted to him at the time of the attachment. That upon taking up the bills, Greenleaf informed Duncanson thereof and forbade him to release the mortgage, on his intimating a design so to do, and requested him to retain the same as a security to him (Greenleaf) for the two-thirds of the amount of the said bills, which Duncanson agreed to do, and thereby became in equity a trustee of the mortgage for the benefit of Greenleaf, and this defendant as his assignee claims a right to stand on the same equitable ground as Duncanson would have stood upon if the bills had not been taken up, so far as respects two-thirds of the amount of the bills, with damages, &c., and therefore to have a prior equity to that of the complainant, if any he has.
There was evidence tending to show that Mr. Law made a selection of squares within the time stipulated. And that the public property in those squares, which
Morris and Greenleaf had contracted to purchase of the commissioners, was more than sufficient to satisfy Mr. Law's contract. That the commissioners had conveyed to him about 2,000,000 of square feet, and that it was probable they would have conveyed the remaining 400,000 square feet, also at the same time, if Mr. Law would have taken them out of the squares contained in his first selection. No tender however was made to him of the balance out of those squares, and there was evidence that Morris, Nicholson, and Greenleaf had acquiesced in Mr. Law's claim to have part of the property which Greenleaf had contracted to purchase of Mr. Carroll, although neither Greenleaf nor Morris and Greenleaf ever had any right of selection in that property. There was also evidence that it was the universal practice of the commissioners, in selling lots, to charge each lot with its proportion of the alley laid out for the general benefit of the lots in the squares, and that such practice had been universally acquiesced in.
With regard to the opinion of the Court of Appeals of Maryland, upon the subject of Campbell's attachment, there was evidence that the counsel for Morris and Nicholson had written a letter to Judge Rumsey, the Chief Judge of the Court of Appeals of Maryland, requesting to know the extent and ground of the opinion of the court upon which the judgment was rendered, and received from him the following answer:
"The Court of Appeals signed a regular judgment under their hands. It does not contain the point upon which they gave it, but my brethren thought the covenant for a quiet enjoyment * was a lease for years, which was an interest subject to attachment, and this influenced their judgment and they gave it accordingly. The opinion (whether a fee simple, or an estate for years) will not alter the nature of the judgment, which in my opinion will be only of such interest as the party had in the estate, and, if tried in ejectment, can only operate so far. I own privately I was of opinion that an attachment ought to lie against a mortgagor's interest, because he is considered, in chancery, as the
owner, because I would not send a man to chancery in so plain a case where there ought to have been conformity in law, and because all men would secure themselves under this artifice. This also was agreeable to the practice of the City of London, where an equitable interest is attachable. But on this the judges gave no opinion. Sufficient to them was it that in their opinion any interest was attachable, and upon ejectment this would have been disclosed."
"In conformity to my opinion, I pointed out a case or two, that was in my common place book, to Mr. Shaaff, that indicated an equitable interest attachable."
"But this was done as an individual, not as a judge; but, being at the time of judgment, he might have mistaken. At the same time I remarked, and do so now, that the distresses of my family and my own state of health were such that I could not be so much master of the subject as I wished."
"You were wrong in delaying opening the points so long, in which you obliged the court to give a judgment so late in the cause. And wherein is their judgment (hastily obtained) better than that of other courts? It quite destroys the use of a court of the last resort."
"I have opposed -- I shall hereafter oppose -- this practice totis viribus, ergo caveto."
"There is no impropriety in asking the courts opinion; they always wish their sentiments to be known, and will, I hope, in a land of law and liberty, always be willing to disclose them when required."
"I am, &c."
"1 March, 1801"
These causes having been heard together as one cause, the court below decreed as follows:
"In the case of Pratt v. Law and Campbell, that the complainants' bill be dismissed. "
"In the case of Law v. Pratt, that the defendants should pay to the complainant on or before 1 April, 1814, $25,832.88, being the original purchase money for the part not conveyed, with interest from 3 December, 1794, and in default thereof, that the mortgaged property should be sold to raise the same, &c."
In the case of Pratt v. Duncanson and Ward, no decree appears to have been made.
In the case of Campbell v. Pratt and others (assignees of Morris, Nicholson, and Greenleaf) and Duncanson and Ward, the defendants, Duncanson and Ward, never answered the bill, nor was it taken for confessed against them, nor was the bill dismissed or abated as to them, but the court below decreed "that the defendants," Pratt and others,
"and William M. Duncanson, and Samuel Ward, release, convey, and transfer to the complainant, William Campbell, all their interest and estate in the squares and lots of land sold under the complainant's attachment, as mentioned and set forth in his bill, and that the said complainant, his heirs and assigns, be forever quieted, in the title, possession, and enjoyment of said squares and lots, against all the claims, interest and estate of the said defendants."
From these decrees, Pratt and others appealed to this Court.
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