Blevins v. Bank at Decatur

ORMOND, J.

The authority conferred on the agents of the Bank by its order of the 10th November, 1842, did not warrant the agents in making the contract, which they afterwards entered into with Blevins & Horton. It is, however, alleged in the bill, that subsequent instructions were given to the agents by the president and directors, to make a contract conformable to the proposition made to the Bank in writing, on behalf of Blevins, on the 25th Sept. 1842. This is not admitted on the part of the Bank, but there is some proof showing that, some further instructions or advice was given by the Bank authorities, and without, therefore, intending to intimate whether these subsequent instructions aro to be considered as controlling or vacating the first, or that they were or were not, binding on the Bank, we shall proceed to consider whether this is such a contract as this court can be called on specifically, to enforce, and if it is of that description, then whether the complainants are in a condition to call for the aid of a court of chancery.

In the case of Gould, ex’r of Hayes, v. Womack and wife, [2 Ala. 83,] we had occasion to examine the question of the extent of the authority of this court, in enforcing a specific performance of a contract, and its obligation to act in such cases; that case was one of great importance; the leading cases on the subject, English and American, were examined; and the doctrine, as it is understood at the present day, is thus summed up; “A court of equity will not lend its aid to enforce a specific performance of an executory contract, unless it is just, reasonable in all its parts, and founded on adequate consideration;” by this rule we propose to test the contract here sought to be enforced.

It is quite material to a proper understanding of this case, to *383consider the respective attitude of these parties, and the object in view in making the contract now sought to be enforced. Blevins was the debtor of the Bank, in about the sum of $10,000, and although in possession, ns nominal owner, of a large tract of land, was in doubtful circumstances. A proposition is made on his behalf, to the Bank, to pay his debt due the Bank, by a sale of his land to the Bank, at “cash valuation.” To carry this proposition into effect, certain persons are agreed upon, a majority of whom are to fix upon the “fair cash valuation” of the land, which the Bank is to take at their assessment, and pay the residue alter discharging the debt due the Bank, in “notes of the Banks of the State of Alabama.”

This proposition, if made in good faith, impliedly asserts that, upon a resale, the Bank will be able to obtain payment of its debts and be refunded, the excess paid upon the purchase. Although it may be admitted that the Bank was willing to submit to some sacrifices to obtain payment of a doubtful debt, such a result would not necessarily have followed, if the terms of the agreement had been fairly complied with. Every one knows the difference in price between a sale for cash and one on credit, although interest is to be paid from the day of sale; and thus, by a resale on credit, the Bank might have reimbursed itself if it could have obtained the land at its fair cash value. That the terms, fair cash value, must bo considered, in this contract, as equivalent to fair cash price, will be evident, when it is considered that the design was to obtain payment of a debt — that the Bank did not want the land for cultivation, and could not use it in that mode; and that it was contemplated by all the parties, certainly by the Bank, to repay itself by a resale; but to produce this result, or to approximate to it, it was essential that the price should not be greatly over-estimated.

The bill does not allege that the land is worth, or will sell for the price put upon it by the valuers, but that “the persons selected, fixed and assessed the value of the land at thirteen dollars per acre;” whilst the Bank, in its answer, alleges, that the land was so grossly overvalued that, by a compliance with the terms of the contract, more than the entire debt intended to be secured, would be lost. Eight persons, who had been examined by the complainants, state the land to have been worth, at the time it was valued, thirteen dollars per acre; whilst of three persons ex*384amined by the Bank, two estimate its value at from fifteen to eighteen thousand dollars, and one, who was one of the original valuers, estimated it at ten dollars per acre, making a difference between the price fixed by the valuers and the two first named, of about fifteen thousand dollars, and of the last, of about eight thousand dollars.

Although, from the nature of the subject, it does not admit of a precise estimate, yet this extraordinary discrepancy between witnesses of equal credit, can only be explained on the supposition, that one or the other side has adopted an erroneous standard or estimate of value — cither by some supposed difference between value and price, or by depreciating the medium in which it has to be paid, and which would require an increase of the nominal value of the land, so as to make the medium, in which payment was to be made, approximate to its real value; and upon looking into the depositions, such appears to be the fact.

The proper interrogatory to be put to the witnesses, would have been, if you are acquainted with the land in dispute, state what was its fair cash value or price in the market at a given time. The interrogatories which were put, are, after inquiring whether the witnesses were not acquainted with the land, whether it was not fertile and possessed of fine water power, “in view of the goodness of the soil and said water power on it, what would have been the value of said land in November last, to be paid for in Alabama bank notes? Was it not worth, at that time, thirteen dollars per acre, to be paid for in Alabama bank notes? If not, how much?” The manifest tendency of these interrogatories was to lead the mind of the witnesses from the true inquiry, the cash market price of the land; and, accordingly, we find that they answer, that the land was richly worth thirteen dollars per acre,payable in Alabama bank notes, which, at that time, were at a discount of from twenty-five to thirty per cent.; but not one of them intimates his belief that it would have commanded that price in the market, or that they were willing, if they had desired to purchase, to give that price for it. The witnesses on the other side, in answer to the interrogatory, what was the fair cash value of the land, say — One of them, that he had desired to purchase it, and never would have given more than fifteen thousand dollars for it, which he thinks its full value. Another says, that about seventeen or eighteen thousand dollars would have been a full *385price for the land. The third, who was one of the valuers, says that he valued the land at ten dollars per acre.

These opposite and contradictory opinions can only be reconciled, by supposing that the complainant’s witnesses were speaking of the value of the land from its fertility and its water power, without reference to its market price, and especially by consider* ing the medium in which the land was to be paid for, as affecting its value. The notes of the bank, though, at that time, from the operation of temporary causes, at a heavy discount, were payable in specie, which could have been coerced from the bank; and it was, therefore, most unjust to adopt such a rule — not only for the reason just assigned, but also because it was uncertain and fluctuating. The rate of discount, then supposed to exist, might, by the same arbitrary dictation of public opinion, have been reduced to the specie standard on the succeeding day.

A more serious objection than this is, that this mode of valuing the land, violates the agreement of the parties. It could scarcely be supposed, that the Bank would make such a suicidal contract as voluntarily to agree to purchase property to obtain payment of a debt with its own notes at a ruinous depreciation, when, by the very process, the debt intended to be secured would be entirely sunk. Certainly the terms of a contract, from which such a result is to flow, should be very clear and explicit. The contrary appears to us to be the clear meaning and intention of the parties. The Bank was to take the land at its fair cash value, and was to pay for it, in part, by the debt of Blevins, and the residue, in the .notes of the Bank. This shows very conclusively, that the debt of Blevins and the notes of the Bank were to be considered, in the purchase of the land, as money. Blevins could hardly have asked that his debt to the Bank should not be considered as cash, or its equivalent; and the notes of the Bank were, in fact, the ordinary circulating medium of the country passing as money, and upon which the Bank could be compelled to pay specie. If it had been the intention of the parties, that the debt of Blevins and the notes of the Bank were not to be considered in the purchase as money, but subject to such an enormous discount, as appears at that time to have been current, it is impossible to suppose it would not have been expressly provided for; and in the absence of any such provision, we are constrained to believe it was not in the contemplation of the parties; the more *386especially, as such a stipulation would, in its consequences, in all probability, have extinguished the debt intended to be secured, and, indeed, might have imposed on the Bank an additional loss, without the possibility of being a gainer by it.

If the contract was as the complainants suppose it to be, it might well be questioned, whether a specific performance could be enforced; but the ground of this decision is not that the contract, properly interpreted, might not be enforced in chancery, but it is, that the complainants do not show that they have complied, or offered to comply with it, on their part, by tendering to the Bank the land agreed to be received by it at its fair cash value. Nor are we to be understood as deciding that, in ascertaining the fair cash value of the land, we would weigh the opinions of those persons agreed upon by the parties to estimate its value in “gold scales.” Upon such questions, men may be expected to differ, and nothing but an actual sale could ascertain the fact with certainty. In such a case as this, however, there must be an approximation to the cash price of the land, to entitle the party to the aid of a court of chancery. Some sacrifice the proposition supposes the Bank willing to submit to, and it was reasonable to expect that the land would be estimated at its full cash price.

Here, however, we are not left to grope in the dark as to the relative merit of opposite opinions as to the cash value of the land. The valuers themselves inform us of the rule by which they attained their conclusion, and that, as has been shown, was in violation of the agreement of the parties: and there can be no pretence that the complainants can enforce in equity a contract which, in fact, the Bank never entered into.

These considerations lead us to the conclusion, that the complainants have not made out such a case as to entitle them to relief in equity; and the decree of the chancellor must be, therefore, affirmed.