Brown v. Guarantee Trust & Safe Deposit Co.

128 U.S. 403 (1888)

BROWN
v.
GUARANTEE TRUST AND SAFE DEPOSIT COMPANY.

No. 20.

Supreme Court of United States.

Submitted April 25, 1888. Decided November 19, 1888. APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS.

Mr. Charles A. Dupee and Mr. Monroe L. Willard for appellants.

Mr. J.L. High for appellees.

MR. JUSTICE LAMAR, after stating the case as above reported, delivered the opinion of the court.

It is contended by the appellant that the decree below should be reversed on the ground that the cross-bill is multifarious. In Shields v. Thomas, 18 How. 253, 259, this objection was urged against a bill, and in considering the objection the court say: "There is, perhaps, no rule established for the conducting of equity pleadings, with reference to which (whilst as a rule it is universally admitted) there has existed less of certainty and uniformity in application, than has attended this relating to multifariousness. This effect, flowing, perhaps inevitably, from the variety of modes and degrees of right and interest entering into the transactions of life, seems to have led to a conclusion rendering the rule almost as much an exception as a rule, and that conclusion is, that each case must be determined by its peculiar features."

So in Gaines v. Chew, 2 How. 619, 642, the court say: "In general terms, a bill is said to be multifarious, which seeks to enforce against different individuals demands which are wholly disconnected. In illustration of this, it is said, if an estate be sold in lots to different persons, the purchasers could not join in exhibiting one bill against the vendor for a specific performance. Nor could the vendor file a bill for a specific performance against all the purchasers. The contracts of purchase being distinct, in no way connected with each other, a bill for a specific execution, whether filed by the vendor or vendees, must be limited to one contract... . It is well remarked by Lord Cottenham, in Campbell v. Mackay, 7 Sim. 564, and in 1 Myl. & Cr. 603, `to lay down any rule, applicable universally, or to say what constitutes multifariousness, as an abstract proposition, is, upon the authorities, utterly impossible.' Every case must be governed by its own circumstances; and, as these are as diversified as the names of the parties, the court must exercise a sound discretion on the subject. Whilst parties should not be subjected to expense and inconvenience, in litigating matters in which they have no interest, multiplicity of suits should be avoided, by uniting in one bill all who have an interest in the principal matter in controversy, though the interests may have arisen under distinct contracts."

In that case the bill was filed against the two executors of the will of Daniel Clark, the heirs-at-law of his legatee, and the several purchasers of various pieces of property which had been sold off from the estate. The relief asked was an accounting in respect to the rents and profits of the several parcels, and for general relief, as the heir and devisee of Clark under a different testament. Under this state of facts, the court said, p. 643: "The right of the complainant, Myra, must be sustained under the will of 1813, or as heir-at-law of Daniel Clark. The defendants claim mediately or immediately under the will of 1811, although their purchases were made at different times and for distinct parcels of the property. They have a common source of title, but no common interest in their purchases. And the question arises, on this state of facts, whether there is misjoinder or multifariousness in the bill, which makes the defendants parties... . And the main ground of the defence, the validity of the will of 1811, and the proceedings under it, is common to all the defendants. Their interests may be of greater or less extent; but that constitutes a difference in degree only, and not in principle. There can be no doubt that a bill might have been filed against each of the defendants, but the question is whether they may not all be included in the same bill. The facts of the purchase, including notice, may be peculiar to each defendant; but these may be ascertained without inconvenience or expense to codefendants. In every fact which goes to impair or establish the authority of the executors, all the defendants are alike interested. In its present form the bill avoids multiplicity of suits, without subjecting the defendants to inconvenience or unreasonable expense."

The case against one defendant may be so entire as to be incapable of being prosecuted in several suits; and yet some other defendant may be a necessary party to some portion only of the case stated. In the latter case the objection of multifariousness cannot be allowed to prevail. Attorney General v. Poole, 4 Myl. & Cr. 17, 31; Turner v. Robinson, 1 Sim. & St. 313; Attorney General v. Cradock, 3 Myl. and Cr. 85.

It is not indispensable that all the parties should have an interest in all the matters contained in the suit; it will be sufficient if each party has an interest in some material matters in the suit, and they are connected with the others. Addison v. Walker, 4 Yo. & Col. Ch. 442; Parr v. Attorney General, 8 Cl. & Fin. 409, 435; Worthy v. Johnson, 8 Georgia, 236.

To support the objection of multifariousness, because the bill contains different causes of suit against the same person, two things must concur: first, the grounds of suit must be different; second, each ground must be sufficient as stated to sustain a bill. Bedsole v. Monroe, 5 Iredell Eq. 313; Larkins v. Biddle, 21 Alabama, 252; Nail v. Mobley, 9 Georgia, 278; Robinson v. Cross, 22 Connecticut, 171.

Testing, now, the case at bar in the light of these authorities and their statements of the principle involved, it will be useful to get a clear view of the exact relations of the parties.

Assuming the statements of the cross-bill to be true, and the demands preferred by it to be meritorious, the objection of multifariousness, however presented, raises no question, save the technical one of an undue uniting of demands. The attitude of the parties is this: Mrs. Brown, by her contract with Starr, and by his agreement with the Joliet Water Works Company, had become the trustee of the legal title for the benefit of the company. Starr and the company, on the other hand, owed the purchase money to Mrs. Brown. By his assignment to the company, only an equitable title was conveyed, for he had not a legal title; so the Water Works Company's mortgage to the Guarantee Trust and Safe Deposit Company was but the mortgage of an equity. Having no legal title itself, the mortgagor company could convey none to the mortgagee or the trustee. So, also, as to the other defendants to the cross-bill, the intervenors under the original bill, whatever may be in fact the exact measure and nature of their various rights, all are in common interested in the legal title held, as above stated, by Mrs. Brown. Indeed, as to all the parties to the cross-bill, and their respective demands, she holds the key to the whole situation, especially in view of the fact that the reservoir and engines are on the land in question.

Every defendant to the cross-bill, as well as the complainant therein, is directly interested in the calling in of the legal title. It will necessarily enhance the value of the property to be sold, not merely by the increase in value by the amount paid by the complainant under its tender, but also and to a greater extent by the settlement of the title. To paraphrase the language of the court in Gaines v. Chew, supra, "In every fact which goes to establish the identity and value of the property sought to be sold" all the defendants are directly interested; not interested to the same extent nor in the same way, but still, in a substantial sense, interested in any decree which may be rendered

The case of Dial v. Reynolds, 96 U.S. 340, relied on by counsel for the appellant in this connection, and its cognate cases, are not opposed to this view. This is not an instance of an attempt, in a foreclosure proceeding, to call in and litigate an outstanding legal title. It is the only legal title in the field; it is that under and through which mortgagor and mortgagee equally claim. To say that the alleged trustee of that title, because he chooses to deny the trust relation, can defeat the proceeding without an adjudication on its merits, and drive the mortgagee to a distinct and preliminary suit, is to assume a position not supported by authority, and in the opinion of this court, not maintainable.

The appellant further claims that, as to Mrs. Brown, the case made out below was not such a one as calls for specific performance, and in support of this view relies on alleged unreasonable delay in the payment of the purchase money. The legal propositions applicable to this question are well settled in this court.

In Secombe v. Steele, 20 How. 94, 104, it is said: "Time may be made of the essence of the contract by express stipulation, or it may become essential by considerations arising from the nature of the property or the character of the interest bargained. And the principle of the court of equity does not depend upon considerations collateral to the contract merely, nor on the conduct of the parties subsequently, showing that time was not of the essence of the contract in the particular case. But it must affirmatively appear that the parties regarded time or place as an essential element in their agreement, or a court of equity will not so regard it."

In Holgate v. Eaton, 116 U.S. 33, 40, the court say: "In the case of Taylor v. Longworth, 14 Pet. 172, 174, Mr. Justice Story uses language which has since become a legal maxim in this class of cases. `In the first place,' he says, `there is no doubt that time may be of the essence of a contract for the sale of property. It may be made so by the express stipulation of the parties, or it may arise by implication from the very nature of the property, or the avowed objects of the seller or the purchaser. And even when time is not, thus, either expressly or impliedly, of the essence of the contract, if the party seeking a specific performance has been guilty of gross laches, or has been inexcusably negligent in performing the contract on his part; or if there has, in the intermediate period, been a material change of circumstances, affecting the rights, interests, or obligation of the parties; in all such cases courts of equity will refuse to decree any specific performance, upon the plain ground that it would be inequitable and unjust.'"

Apply these principles to the contract between Starr and Mrs. Brown and what will be the result?

It was not even claimed that there was any express stipulation between the parties that time should be of the essence of the contract: nor, on the other hand, that such obligation arose from the nature of the property or the avowed object of the seller.

It is asserted that there was an understanding that Starr should have no right or title to the land, or the right to any conveyance of the land, until the full purchase price should be paid. But that is a very different proposition. It has relation to the security reserved, and not to the time of payment. It is true, that in his deposition of April 18, 1883, Hobbs, the agent of Mrs. Brown, states that Starr agreed to pay cash, and that such was "the basis of the contract." But no such claim was presented by the pleadings; and, moreover, Hobbs's testimony shows that there was an agreement for the postponement of the payment while Starr should go to Philadelphia; and, finally, in the same deposition, and in a subsequent one, he states that Starr had agreed to pay eight per cent interest on the purchase money, — a proposition manifestly inconsistent with the theory of appellant's insistence on a cash transaction. Without stopping to array them, it will suffice to say, that numerous matters in the record show, to the satisfaction of the court, that Mrs. Brown consented to Starr's delay of payment, reluctantly perhaps, but nevertheless consented. Even were it granted that time was of the essence of the contract, the conduct of Mrs. Brown would have been a waiver of that fact. Her acceptance of a partial payment of $1000, on the 17th of February, 1881, was certainly not a disaffirmance of the contract, but the contrary. So, again, her demand for performance on the 27th of November, 1881, shows very plainly that up to that day it had not been abandoned. Hobbs in his first deposition states that there was a subsequent demand made by him on Starr for the money; and his second deposition shows that he sought an interview with the attorney of the committee of the bondholders on the 26th of January, 1883, for the purpose of getting the money due to Mrs. Brown on the contract with Starr.

The answer of Mrs. Brown declares that the contract was abandoned and cancelled in November, 1881, in Philadelphia. Even if she had the power so to do under the circumstances, still it was not done. The averments of the answer are not only not proved, but are even disproved by Hobbs himself. Hobbs was an officer of the Water Works Company. In his first deposition he gives this version of the transaction relied on in the answer. He says: "I got on the train and went to Philadelphia and told Mr. Starr we insisted upon the payment of that amount and others, and if it was not paid or absolutely provided for while I was there in the city for a day or so, that I should return to Joliet, and the understanding was that Mr. Knowlton and myself would withdraw from the company; Mr. Starr failed, after various plans he had made, to produce the money; he failed in furnishing it, and I returned, he following me back within a few days, and we then withdrew from the company."

The witness is here speaking, as elsewhere appears, of not only this debt, but also of the general liabilities of the concern. Subsequently to this, he still demanded the money from Starr. Pomeroy on Specific Performance, 395, 396; Reynolds v. Nelson, 6 Madd. 18, 19.

As between the appellant and the bondholders, represented by the trustee, it would be inequitable to refuse the consummation of her bargain.

The decree of the Circuit Court is affirmed.