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Attorney(S)

Barber and Mitchell, for the plaintiffs. Boyden, for the defendants.

Judges

BATTLE, J.

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Smart Summary

Case Summary: Joseph White and others v. William S. Butcher and others (Sup. Ct. N.C., June Term 1861)

Factual and Procedural Background

This cause was removed from the Court of Equity of Surry. In 1851 the defendant William S. Butcher executed a written contract (in a bond) under which he bound himself to execute a deed in fee simple to Joseph White when White paid three several bonds that constituted the purchase price of certain land. The contract provided that if Joseph White "shall pay off the said bonds as they fall due, then, when the last of the said payments shall be made, the said W. S. Butcher shall personally, or by agent or attorney, execute to the said Joseph White ... a good and sufficient title deed in fee simple."

The bill for specific performance was filed in the fall of 1857. It alleged payment of one of the bonds, that Butcher conveyed the land to Holderfield, and that Holderfield covenanted to convey to Pilson; both Holderfield and Pilson were alleged to have had notice of the plaintiffs' equitable claim. The bill also alleged that shortly before bringing suit White tendered the purchase money (with interest) to Holderfield, who acted as Butcher's attorney-in-fact, but that Holderfield refused to accept the money and hurried to Missouri where he procured a deed for the premises from Butcher to himself.

Holderfield and Pilson answered, admitting many material allegations but asserting that White had paid only part of the first bond, had left the State insolvent and had abandoned his purchase; they alleged that White, upon return, did not intend to enforce the contract until urged and enabled by another person to raise the tendered money. The bill was taken pro confesso as to Butcher. There was replication, commissions and proof, and the cause was sent to the Supreme Court for hearing. Counsel of record were Barber and Mitchell for the plaintiffs, and Boyden for the defendants.

Legal Issues Presented

Whether equity will now enforce specific performance of the contract when, the defendants contend, no action at law for damages would lie at this time on the contract.
Whether the plaintiff's conduct (including leaving the State and insolvency, and a long delay) amounted to an abandonment of the contract such that the defendants were justified in treating the contract as ended and refusing performance.

Arguments of the Parties

Defendants' Arguments

The defendants conceded the plaintiff once had the right to specific performance but argued that the right cannot now be enforced because (1) no action at law to recover damages would now lie on the contract, and (2) the plaintiff's conduct constituted an abandonment of the contract, justifying defendants in treating it as ended.
The defendants argued that punctual payment of each installment (and certainly of the last) was an essential condition precedent to the vendor's obligation to make title, relying on the bond's language specifying payment "as they fall due" and performance "when the last of the said payments shall be made."

Plaintiffs' Contentions (as presented in the bill)

The bill alleged that at least one of the purchase-money bonds had been paid and that, shortly before suit, the plaintiff tendered the purchase money with interest to Holderfield (Butcher's attorney-in-fact), who refused it and procured a deed from Butcher to himself.
The bill asserted entitlement to specific performance of the written contract and alleged notice of the plaintiff's equitable claim to Holderfield and Pilson.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Walker v. Allen, 50 N.C. 58	The opinion cites this case in connection with the principle that equity may enforce specific performance even where a legal action for damages would be barred by failure of punctuality, consistent with the maxim that "time is not of the essence" in equity.	The Court relied on this principle to reject the defendants' first ground—that because an action at law would not now lie, equity cannot grant specific performance.
Falls v. Carpenter, 21 N.C. 237	Referenced both for the principle discussed above regarding time and equity's remedies, and for authority relating to rights and obligations when purchase-money bonds are retained by the vendor.	The Court invoked it to support its conclusion that the first ground was untenable and to support the proposition that a vendor retaining bonds cannot treat the contract as at an end while keeping them.
Sugg v. Stowe, 58 N.C. 126	Cited for the proposition that a vendor who retains the purchaser's bonds cannot lawfully treat the contract as abandoned while retaining them (as authority bearing on the abandonment issue).	The Court cited it in concluding the defendants' defense based on alleged abandonment was fatally defective because the bonds were not surrendered or offered to be surrendered.
Boone v. Drake, 109 N.C. 82	The opinion lists this case under a "Cited:" note at the end; the present opinion does not state a rule or principle from it within the text.	The opinion merely records Boone v. Drake as a subsequent citation; no application within this opinion is stated.
Hairston v. Bescherer, 141 N.C. 209	The opinion lists this case under a "Cited:" note at the end; the present opinion does not state a rule or principle from it within the text.	The opinion merely records Hairston v. Bescherer as a subsequent citation; no application within this opinion is stated.

Court's Reasoning and Analysis

The Court analyzed the two defenses asserted by the defendants in turn.

First, addressing the contention that equity will not enforce specific performance because no action at law for damages would now lie, the Court explained the proper scope of the maxim that equity will not enforce agreements upon which an action at law would not lie. The Court stated that historically parties were once required to establish the contract at law before relief in equity, but that practice has fallen into disuse; the maxim means only that the contract must be of a kind that the law would have recognized if sued upon in proper time and circumstances. The Court emphasized the related equitable principle that "time is not of the essence of a contract in equity," meaning equity can grant relief even where strict legal remedies are foreclosed by delay. The Court therefore found the first ground of objection untenable.

The Court rejected the defendants' argument that the bond's language made punctual payment of each installment an essential condition rendering the vendor's obligation void upon any delay. The Court observed there was no clause declaring the contract void for failure of punctual payment, and even if such a clause existed, it would have been waived by the vendor's subsequent conduct in recognizing and offering to perform the contract after the last bond fell due.

Second, on the abandonment defense, the Court considered testimony (noting Mr. Dobson's evidence) showing the plaintiff never intended to abandon the purchase. The Court acknowledged the plaintiff's conduct might have authorized the defendants to take steps to demand performance or treat the contract as abandoned, but found that the defendants took no such steps. Critically, the plaintiff's purchase-money bonds were never surrendered nor offered to be surrendered to the plaintiff; the Court held that the defendants had no right to consider the contract at an end while retaining those bonds. The defendants' omission to adopt steps inconsistent with the contract (or to surrender the bonds) was fatal to their defense.

On these bases, the Court concluded equitable relief remained available to the plaintiff and issued a decree directing relief against Holderfield.

Holding and Implications

Holding:

The Court decreed that the defendant Holderfield, who obtained title from Butcher after having notice of the plaintiff's claim, must make title to the land to Joseph White upon payment of the purchase money with interest, after deducting rents (with an account of rents if the parties desire it).

Implications:

The direct effect is an affirmative decree for specific performance against Holderfield conditioned on payment of the purchase money with interest and adjustment for rents; the defendants' defenses that equity cannot now afford relief because an action at law would not lie, and that the plaintiff abandoned the contract, were rejected.
The opinion does not articulate broader doctrinal changes; it applies established equitable principles (including that time is not necessarily of the essence in equity and that a vendor retaining the purchaser's bonds cannot treat the contract as ended while retaining them) to the facts and decrees relief accordingly. No new precedent beyond this application is stated within the opinion.

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JOSEPH WHITE and others against WILLIAM S. BUTCHER and others.

1. The maxim, that equity will not enforce the specific performance of an agreement upon which an action will not lie, at law, for damages, never meant more than that the contract must be such as the law would have recognized, if sued on in proper time and under proper circumstances.

2. One who has executed a bond to make title to land, has no right to insist, in a suit for a specific performance, that the defendant had abandoned his right to relief, while he still holds the bonds given for the purchase money, and has never made an offer to surrender them to his vendee.

BATTLE, J.

It is admitted by the counsel for the defendants that the plaintiff, Joseph White, had at one time the right to the specific (233) performance of the contract mentioned in the pleadings, but he contends that such right cannot now be enforced, for two reasons:

First. Because no action at law to recover damages would now lie upon it; and

Secondly. Because the right to enforce the contract in equity had been so acted upon by the plaintiff as to justify the defendants in treating it as abandoned.

1. The first ground of objection is clearly untenable. It is true there is a maxim that equity will not enforce the specific performance of an agreement, upon which an action will not lie at law for damages, and, anciently, it was the practice to send the party to law, there to establish the validity of the contract, before he was allowed to proceed in equity. That practice has fallen into disuse, and the maxim never meant more than that the contract must be such as the law would have recognized, if sued upon in proper time and under proper circumstances. If the rule were that equity would not entertain a suit for the specific performance of an agreement, except where, at the same instant, a suit might be sustained for a breach of it at law for damages, there would be no ground for the existence of another well-known maxim, that time is not of the essence of a contract in equity. Upon the efficacy of this maxim it often happens that a party, by a neglect of a strict compliance with his stipulations in a covenant or other contract, with regard to time, loses his right to sue at law, while he may yet have a remedy by a suit for a specific execution in equity. Walker v. Allen, 50 N.C. 58; Falls v. Carpenter, 21 N.C. 237. Time may, indeed, be made an essential part of a contract, even in the view of a Court of Equity, and in that case that court will require its observance as rigidly as a court of law. The counsel for the defendants contends that the present contract is one of that kind, and, in support of his position, he refers to the language of the bond for title: "Now, therefore, if the said Joseph White shall pay off the said bonds as they fall due, then, when the last of the said payments shall be made, the said W. S. Butcher shall personally, (234) or by agent or attorney, execute to the said Joseph White a good and sufficient title deed in fee simple." The purchase-money for the land was made payable in three installments, secured by three several bonds, and the counsel contends that the punctual payment of each, as it fell due, and, certainly, the payment of all, when last fell due, was intended as an essential requisite to his obligation to make title. We can not discover any such meaning in this any more than may be found in any other contract for the purchase of land, where the vendor stipulates to make title when the price shall have been paid. There is no clause that the contract shall be void if the purchase-money be not punctually paid, and if there were, it would have been waived by the conduct of the vendor in recognizing the existence of the contract, and offering to perform it after the last bond fell due.

2. The second ground of objection, that the contract of purchase was abandoned by the plaintiff, or that at least that his conduct in neglecting for so long a time to fulfill it, taken in connection with his leaving the State and his insolvency, justified the defendants in treating it as abandoned. It is manifest, from the testimony of Mr. Dobson, that the plaintiff never intended to abandon the purchase, and although he acted in such a manner as would have justified the defendants in taking the proper steps to enforce either its prompt execution or its abandonment, yet no such steps were taken, and the plaintiff's claim to equitable relief still remains. The bonds which the plaintiff gave to secure the purchase-money were never surrendered nor offered to be surrendered to him, and the defendants had no right, while retaining them, to consider and treat the contract as being at an end. Their omission to adopt that course is fatal to their defense. See Falls v. Carpenter, ubi supra, and Sugg v. Stowe, 58 N.C. 126.

There must be a decree that the defendant, Holderfield, who obtained the title from the defendant, Butcher, after notice of the plaintiff's claim, must make title upon the payment of the purchase money, (235) with interest, after deducting the rents, as to which there must be an account if the parties desire it.

PER CURIAM. Decree accordingly.

Cited: Boone v. Drake, 109 N.C. 82; Hairston v. Bescherer, 141 N.C. 209.

WHITE v. BUTCHER