Livesley v. Johnston

Mr. Chief Justice Bean

delivered the opinion.

1. After this appeal had been perfected the appellants moved for an order directing the plaintiffs and respondents to satisfy the decree, on the ground that after the case was argued and submitted to the trial court, and while it was under advisement, the plaintiffs and Johnston voluntarily settled the subject matter of the litigation and canceled the contract upon which the suit is based, which fact was concealed and suppressed by the plaintiffs' and their attorneys, and was not known to the defendants or the court below until long after the decree had been rendered. This is an appellate court, constituted and organized to revise and correct the proceedings of the trial court, when regularly brought before it by appeal, and has no original jurisdiction, except such as may be incident to and in aid of its appellate powers: Che Gong v. Stearns, 16 Or. 219 (17 Pac. 871). Its inquiry is ordinarily confined to an examination of the record of the court below as embodied in the transcript, but where the appellant has, by some act of his, subsequent to the rendition of the judgment or decree appealed from, waived the right of appeal or otherwise terminated the controversy, such fact may be shown by evidence dehors the record, and the appeal will be dismissed because there is no longer any substantial controversy between the parties: Ehrman v. Astoria Ry. Co. 26 Or. 377 (38 Pac. 306); Moores v. Moores, 36 Or. 261 (59 Pac. 327).

2. But, where the relief sought is based on newly discovered evidence, the remedy is not by motion in this court, but by an original suit to vacate or annul the decree: Nessley v. Ladd, 30 Or. 564 (48 Pac. 420); Hilts v. Ladd, 35 Or. 237 (58 Pac. 32); McLeod v. Lloyd, 45 Or. 67 (75 Pac. 702). The facts upon which the motion in question is based are in the.nature of newly discovered evidence, and the inquiry presented involves the consideration and decision of controverted questions of fact. The plaintiffs deny that any settlement of the subject matter of the litigation was ever made by them with Johnston. This question cannot be tried out on ex parte affidavits-in this court, and the defendants’ remedj', if any, must be found in some other proper proceeding.

The contention for the defendants is that a court of equity will not decree a specific performance of the contract in suit because (1) the plaintiffs have acted in bad faith and have been guilty of such laches and delay as will preclude them from relief in equity; (2) the defendant Johnston was solvent at the commencement of this suit and able to respond in damages for a breach of his contract and, therefore, plaintiff had a full and complete remedy at law; and (3) the court erred in allowing interest on the value of the hops from November, 1903, the time defendants deprived themselves of the power of specifically performing the contract by selling and disposing of the hops, and removing them from the jurisdiction of the court.

3. On the first point the argument is that although Johnston may be bound by his contract and liable in an action at law for damages for a breach thereof, the plaintiffs’ conduct has been such that they are in no position to ask the aid of a court of equity to enforce specific performance of the contract against him or the other defendants who purchased the property pendente lite. If the plaintiffs have in good faith complied or offered to comply with their part of the contract, and Johnston was in fact insolvent at the time the suit was commenced, their right to a specific performance as against the defendants is settled by the former decision which has become the law of the ease: Livesley v. Johnston, 45 Or. 30 (76 Pac. 13, 946, 65 L. R. A. 783, 106 Am. St. Rep. 647). We are only to inquire, therefore, whether the evidence shows that plaintiffs have in good faith performed or offered to perform the contract on their part, and whether Johnston was in fact insolvent at the time the suit was commenced. By the terms of the contract the plaintiffs were required to advance to Johnston on or about April 1, 1903, the sum of $336, with which to pay the rent on the hopyard occupied by him, $250 “on or about April, May and June,” for expenses of cultivating the hops, and, “at and during picking time of September,” the sum of 4J cents a pound for the expenses of picking. In compliance with their contract the plaintiffs did, on March 28, 1903, send to Johnston by mail their check for $336, payable to the owners of the hopyard, and another cheek for $250, payable to Johnston personally. These checks were sent in a letter to Johnston at Gervais, his post office address, as stated in the contract, but did not reach him until about the 1st of April.

On the 30th and 31st of March, and before the receipt of the letter containing the checks, Johnston started from his home near Gervais to Salem, the place of business of the plaintiffs, to obtain from them the advances as stipulated. While on his way and in the town of Gervais, he met Boberts, with whom he had some conversation, -but not about the contract in suit. While traveling from Gervais to Salem on the train Johnston and Eoberts had some controversy, which, soon after reaching the station, resulted in a personal encounter between them. They differ as to the cause and nature of the difficulty. Eoberts says that while on the train Johnston approached him and said he was not going to live up to the hop contract and if the plaintiffs made any advances thereunder he would not use the money for the purposes stipulated and that the plaintiffs would have no recourse as he was insolvent. Johnston testifies that as the train approached Salem he was going through the cars, “having some fun with the boys,” and Eoberts asked him why he did not quit drinking, and he said he “would not quit for anybody, for he was having too much fun”; that after the train arrived at Salem Eoberts again remonstrated with him about drinking and said that if he did not quit the plaintiffs would not advance any money under the hop contract; that he informed Eoberts that the plaintiffs were “not the only men on the beach,” whereupon Eoberts struck him over the head with an umbrella and he returned the blow with his fist; that he returned home without calling.at the office of the plaintiffs because he was afraid to do so.

On March 31st, the day of this difficulty, or the following day, the plaintiffs wired the bank at Woodburn, with which Johnston did business, stopping payment on their check for $250 in Johnston’s favor and at the same time wrote him that they had stopped payment on the check because in looking over the contract they had ascertained that “the advance was to be made on or about April, May and June,” and not on April 1st as they originally supposed, but that they would “advance the money according to contract.” On April 1st and before Johnston received this letter he called at the bank at Woodburn to cash the checks previously received by him from the plaintiffs, and was informed by the cashier, as he testifies, that payment of the checks had been stopped. He did not, however, present either of the checks, or request to see the telegram stopping payment on them, but immediately telephoned the defendants Wolf & Son and arranged with them to advance money with which to pay the rent on the hopyard. On the nest day he returned the two checks to the plaintiffs and notified them that he had elected to rescind the contract because of their failure to comply with its terms. He has ever since refused to recognize the plaintiffs’ rights under the contract, although they notified him in writing on April 4th, April 16th, August 31st and September 8th, that they were ready and willing to comply with the contract and to make all advances stipulated therein, and did on April 4th offer in writing to pay the sum of $250 for the expenses of cultivation and $336 with which to pay his rent. On April 3d, Johnston borrowed from the defendants Wolf & Son money for rent and on the 10th of the next month contracted his hops to them and thereafter received from them advances from time to time to pay the expenses of cultivating and harvesting the crop, and after the preliminary injunction had been dissolved, sold the hops to them and they were shipped out of the State by the defendant the Southern Pacific Co.

It thus appears that plaintiffs tendered to Johnston the rent money before it became due and were at all times ready and willing to comply with their contract by making the stipulated advances. The only amount due on April 1, 1903, was the rent and a check sent in payment of it on March 28th was received by Johnston. No objection was made because the money was sent in the form of a check, and there is no pretense that payment of such cheek was stopped by the plaintiffs or that it would not have been paid had it been presented. The advances for cultivation were to be made “on or about April, May and June,” and presumably'as the same might be needed for the purposes stated. Payment was stopped of the $250 cheek sent for such purpose because the plaintiffs believed the money was not then due, or because they supposed from Johnston’s conduct that he might carry out his threat and misapply it. It was not because the plaintiffs did not intend to comply with their contract. In the letter to Johnston in reference to the matter it was expressly stated that the advances would be made “according to contract.” If the plaintiffs were mistaken as to the proper interpretation of the contract and the money was in fact due on the 1st of April, a failure to make the advances on the exact day specified would not justify Johnston in rescinding the contract if the plaintiffs were willing to make such advances as they were needed for cultivating purposes. There was, therefore, no such laches, delay or misconduct of the plaintiffs as will defeat this suit.

Where the party who applies for the specific performance of a contract has been guilty of laches and unreasonable delay, or has not acted in good faith, he will be denied relief: Creath v. Sims, 46 U. S. 192 (12 L. Ed. 110); Kinney v. Redden, 2 Del. Ch. 46, 54; Benedict v. Lynch, 1 Johns. Ch. 370 (7 Am. Dec. 484); Conrad v. Lindley, 2 Cal. 173. But this case does not fall within this rule. Much importance is given to the personal difficulty and encounter between Roberts and the defendant Johnston, but in our opinion it has but little, if any, bearing upon the merits of the- present controversy. It certainly was no ground for the repudiation of the contract by Johnston, and it does not appear that the plaintiffs refused to perform their part of the contract on that account. There is no evidence that the plaintiffs intended to repudiate the contract because of this difficulty. It may be that on account of Johnston’s conduct Roberts gave the terms of the contract a stricter and more technical construction than he otherwise would have done, and stopped payment on the check for advances because it was not then due, but it is clear that he intended to make further advances. If the plaintiffs had designed to repudiate the contract and not to be further bound by it, they most certainly would have stopped payment on the check for rent as well as the one for advances. The only security they had for the payment of either was the hop contract, and the right to deduct the several amounts from the stipulated price of the hops. It may be that Johnston sui3j>osed when informed by his banker that payment of the check had been stopped that the plaintiffs intended not to be further bound by their contract. He made no inquiry, however, to ascertain the truth of the matter, but immediately entered into negotiations with his codefendants Wolf & Son for money with which to pay the rent and the expenses of cultivating and harvesting his hop crop, and on the next day attempted to rescind the contract. It is undisputed from the testimony that Johnston was mistaken if he entertained the opinion that plaintiffs did not intend to comply with their contract and clearly his mistake did not justify him in repudiating it and is no defense to the relief sought by the plaintiffs in this suit.

4. On the question of Johnston’s solvency but little need be said. At the time this suit was commenced he had no property outside of the hop crop of 1903, which is the subject matter of this controversy, and cannot be considered in determining the question of his solvency as it affects the jurisdiction of the court to enforce specific performance of the contract, except a lease of the hopyard for the years 1904, 1905, 1906 and 1907, and a house and 20 acres of land worth, as he testifies, about $1,500. The lease was of an uncertain value and contained a stipulation that it should not be assigned or sublet without the consent of the lessors, and it is doubtful whether it could be seized or sold on execution at all. The other property was probably a homestead and not subject to seizure and sale under execution: B. & C. Comp. § 221. So that it is perfectly clear that an action at law against Johnston for breach of his contract would have been an inadequate remedy.

5. Interest was allowed by the court below, not as such, but as damages. The pleadings and evidence show that the hops were in the possession of the defendants at the time this suit was commenced, but that during its pendency Johnston and the defendants Wolf & Son, who purchased the hops of him, and the Southern Pacific Co. shipped them out of the State so that it is not possible for them now to specifically perform the contract. And where defendants thus deprive themselves of the power, during the pendency of a suit for specific performance, to perform the contract specifically, the court will retain jurisdiction to award the plaintiffs compensation in damages: Waterman, Spec. Perf. § 517; Milkman v. Ordway, 106 Mass. 232.

6. And the measure of damages in such ease is the amount the plaintiff would have been entitled to recover in an action at law for breach of the contract.

7. In this instance such amount is the value of the hops at the time of the breach, less what the plaintiffs were to pay for them, with legal interest thereon: 1 Sutherland, Damages (3 ed.), § 105.

It follows that the decree of the court below must be affirmed, and it is so ordered. Affirmed.'