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BANK OF COLUMBIA V. HAGNER, 26 U. S. 455 (1828)

U.S. Supreme Court

Bank of Columbia v. Hagner, 26 U.S. 1 Pet. 455 455 (1828)

Bank of Columbia v. Hagner

26 U.S. (1 Pet.) 455


When no specific time for the payment of money is fixed in a contract by which the same is to be paid by one party to the other in judgment of law, the same is payable on demand.

In contracts for the sale of land by which one agrees to purchase and the other to convey, the undertakings of the respective parties are always dependent unless a contrary intention clearly appears.

Although many nice distinctions are to be found in the books upon the question whether the covenants or promises of the respective parties to the contract are to be considered independent or dependent, yet it is evident the intimation of courts have strongly favored the latter construction as being obviously the most just.

In such cases, if either vendor or vendee wishes to compel the other to fulfill his contract, he must make his part of the agreement precedent, and cannot proceed against the other without actual performance of the agreement on his part or a tender and refusal.

An averment of performance is always made in the declaration upon contracts containing dependent undertakings, and that averment must be supported by proof.

The time fixed for the performance of a contract is, at law, deemed the essence of the contract, and if the seller is not ready and able to perform his part of the agreement on that day, the purchaser may elect to consider the contract at an end. But equity, which from its peculiar jurisdiction is enabled to examine into the cause of delay in completing a purchase and to ascertain how far the day named was deemed material by the parties, will, in certain cases, carry the agreement into execution although the time appointed has elapsed.

It may be laid down as a rule that at law, to entitle the vendor to recover the purchase money, he must aver in his declaration performance of the contract on his part or an offer to perform at the day specified for the performance. And this averment must be sustained by proof unless the tender has been waived by the purchaser.

If before the period fixed for the delivery of a deed for lands, the vendee has declared he would not receive it and that he intended to abandon the contract, it may render a tender of the deed before the institution of a suit unnecessary. But this rule can never apply except in cases where the act which is construed into a waiver occurs previous to the time for performance.

The taking possession of property by the vendee before conveyance is a circumstance from which is to be inferred that he considered the contract closed, but would not deprive him of the right to relinquish the property if the vendor could not make a title or neglected to do so. After a relinquishment for such causes, the vendee could sustain an action to recover back the purchase money had it been paid.

Where the legal title cannot be conveyed to the vendee by the vendor, and the vendee mast resort to a court of equity to establish his title

Page 26 U. S. 456

notwithstanding a conveyance of all the right of the vendor to him, the court will not compel him to pay the purchase money. It would be compelling him to take a law suit, instead of the land.

The plaintiffs instituted their suit in the Circuit Court for the County of Washington against the defendant on a special agreement to purchase two lots of ground in the City of Washington. The plaintiffs, to support the issues joined on their part, offered in evidence certain deeds, papers, and letters, the handwriting of the parties and the delivery of the letters at their several dates being admitted.

John Templeman, being indebted to the plaintiffs in a large amount, conveyed by deed dated 31 March, 1809, to Walter Smith, in trust to secure the debt, certain lots in the City of Washington, the two lots alleged to have been sold to the defendant included, the said trustee being authorized to sell, at public sale, the property conveyed.

On 31 March, 1821, the bank, under seal, authorized Walter Smith to release the two lots to John Templeman, and under this authority the trustee conveyed the property to Templeman, who by deed dated 29 April, 1821, conveyed the same to Peter Hagner, the defendant.

The conveyance, by Walter Smith to Templeman and from Templeman to Mr. Hagner, were made by the direction of the bank for the purpose of vesting a title to the two lots in Mr. Hagner in execution of their part of the agreement upon which the suit was founded and before the suit was commenced.

The material evidence offered by the plaintiffs to establish their claim upon Mr. Hagner and to prove a contract made by him for the purchase of the two lots was contained in a correspondence, &c., between General John Mason, the president of the bank, and Mr. Hagner, commencing on 14 May, 1817, and ending on 19 May, 1821, numbered from 1 to 11.

No. 1, dated 14 May, 1817, letter, Peter Hagner to General Mason, expressed a wish to purchase the lots if the bank was disposed to sell them at a reasonable price; No 2, from General Mason to Mr. Hagner, dated October 16, 1817, stated that the board of directors had fixed the price of the lots at twenty-five cents per square foot; No. 3, from Mr. Hagner to General Mason, dated October 17, 1817, communicated an offer of ten cents per square foot, which, by letter dated 17 December, 1817, No. 4, was extended to fifteen cents per square foot; No. 5 was a memorandum sent by Mr. Hagner to General Mason to be signed by him, and which was so done, on 27 April, 1818, the memorandum bearing date April

Page 26 U. S. 457

25, 1818, and stating that the lots were on that day sold to Mr. Hagner at twenty-five cents per square foot, "payable at such periods as the bank may approve."

On 27 April, 1818, No. 6, Mr. Hagner wrote to General Mason desiring to have the payments for the lots purchased by him at twenty-five cents per square foot, to meet his income, and proposed to have the same divided into six quarterly payments, the first to be made on the first day of the following October, offering his notes and asking for a deed, or if this should not be agreed to stating that he would bind himself to pay the money as proposed "and receive a bond of conveyance, conditioned to give a full title, when the money should be paid." This letter requested a return of the memorandum, No. 5.

Upon this letter there was written in pencil, in the handwriting of General Mason, according to the usual practice at the sittings of the board of directors, "accepted -- interest on each note, as it becomes due"; No. 7, April 27, 1818, from General Mason to Mr. Hagner, enclosed the memorandum, No. 5, and mentions that his proposition would be submitted to the Board.

On 7 October, 1818, Mr. Hagner wrote to Gen. Mason (No. 8) stating that he was prepared to pay the installment falling due on 1 October and requesting a bond of conveyance. December 26, 1820 (No. 9), Mr. Hagner, by letter, states that a long time had passed since his purchase, without the title to the lots having been completed, and the bank continues without authority to convey. The bank at the time of the purchase had no authority to sell at private sale, and must have made title by a circuitous and doubtful process of a public auction, at which someone might have interposed and obtained the lot. That the bank might have held him bound to take the property, although not reciprocally bound, and that the answer of the president of the bank, was not certain and absolute, but was referred to and made dependent on the determination of the board of directors. Under these and other circumstances stated by him, he communicates his determination to relinquish the purchase.

On 8 May, 1821, Mr. Hagner notifies General Mason (No. 10) that he considers his agreement to purchase the lots void, and that he has no claim or title to them. In reply to this letter, upon 19 May, 1821 (No. 11), Gen. Mason says:

"You will no doubt, Sir, recollect a conversation I had with you soon after the reception of your letter of 26 December last, when I informed you that that letter had been submitted

Page 26 U. S. 458

to the board of directors, and that it had been determined that the purchase by you of the lots in question being considered in all respects a firm and bona fide purchase, it would not be relinquished, and that measures would be taken to make you a title valid in law. I am now instructed to inform you that those measures have been taken -- that deeds to that effect have been made by the proper parties, which are expected to be soon received here, when they will be tendered you, and a compliance with your part of the contract expected."

Evidence was also given on the part of the plaintiffs to prove the entire insolvency of John Templeman and the nonpayment by him of any part of his debt to the plaintiffs. That on 28 September, 1821, a tender of the deeds already mentioned was made by an officer of the bank to the defendant, who refused to accept them. The deed of Templeman to Hagner, dated 3 April, 1821, was recorded by the consent without prejudice.

A witness also proved that in the month of June, 1818, he was employed by defendant to enclose the two lots in question, and did enclose them with a board fence; that before enclosing the said lots, an old house was pulled down by order of the defendant, and some part of the materials used in making the said enclosure; that sometime afterwards the witness was employed by defendant to pull down the fence, which was done, and the lots left open; that the said house was a small frame house, very old and in bad repair; that it had been inhabited some time before, but was not in tenantable order and condition; that if the house had been put in good repair, which would have cost half as much as building a new house of the same size and kind, it would have rented for about three dollars per month.

The Clerk of the Circuit Court of the District of Columbia certified that there was no judgment in force on 30 March, 1821 against John Templeman, and proof was also made that the taxes on the two lots of ground from 1809 to 1821 inclusive had been assessed to and paid by the Bank of Columbia.

On 19 May, 1821, the situation of the lots was examined by order of the president of the bank, and it was found "that the fence had been removed apparently that spring, and the lots appeared to have been cultivated the fall before."

Upon this evidence, the defendant, by his counsel, prayed the court to instruct that jury that upon the evidence so given on the part of the plaintiffs, though found by the jury to be true as above stated, the plaintiffs are not entitled to recover in this

Page 26 U. S. 459

action the purchase money for the lots in the declaration mentioned, which instruction the court gave as prayed.

The plaintiffs prayed the court to instruct the jury that upon the evidence, the plaintiffs were entitled to recover such damages as the jury should think the plaintiffs had sustained by the defendant refusing to comply with the contract stated in the declaration if it should believe from the said evidence that the defendant consented to the delay on the part of the plaintiffs to make a deed or give a bond of conveyance for the lots mentioned in the declaration, which instruction the court refused to give.

A bill of exception was then tendered by the counsel of the plaintiffs to the instructions given by the court on the prayers of the counsel for the defendant and also to their refusal by the court to give the instructions to the jury prayed for by the counsel for the plaintiffs.

While the bill of exceptions was preparing, the following additional evidence was discovered by the plaintiffs and was offered and read to the jury:

A deed, commissioners to J. Templeman, 19 September, 1801. Liber G. fol. 490.

A deed, Templeman & Stoddart to Bank of Columbia, 19 January, 1802. H. 386.

A deed, Stoddart to Templeman, 25 September, 1804. M. No. 12,151.

A deed, Templeman to Bank of Columbia, 7 March, 1807, No. 18,346.

The deed of 7 March, 1807, conveyed inter alia to the plaintiffs the two lots alleged to have been sold by Mr. Hagner, and authorized the bank to sell the property vested in them by private or public sale.

This evidence being exhibited, the court adhered to the instructions and opinions given to the jury, and an additional exception was taken thereto by the counsel for the plaintiffs, and a writ of error was prosecuted to this Court.

For the plaintiffs in error it was contended, that upon the evidence, the plaintiffs were entitled to recover, and that the circuit court ought to have so instructed the jury.

Page 26 U. S. 461

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