Bethea v. McCullough

• Decision Date: 04 November 1915
• Docket Number: 182
• Parties: BETHEA et al. v. McCULLOUGH.
• Court: Alabama Supreme Court

70 So. 680

195 Ala. 480

BETHEA et al. v. McCULLOUGH.

No. 182

Supreme Court of Alabama

November 4, 1915

Rehearing Denied Jan. 20, 1916

Appeal from Chancery Court, Montgomery County; W.R. Chapman Chancellor.

Bill by T.L. McCullough against T.B. Bethea and others. From decree for complainant, defendants appeal. Reversed and rendered.

Hill Hill, Whiting & Stern, of Montgomery, and A.B. Foster, of Troy, for appellants.

Ball &amp Samford and J.M. Chilton, all of Montgomery, for appellee.

SAYRE J.

The bill in this cause, filed by the appellee, McCullough against the appellants T.B. Bethea and J.M. and H.J. Harris, sought a decree requiring said appellants, defendants, to convey to complainant all the right, title, and interest claimed by them in a certain large tract of land in Montgomery county. The theory of the bill is that defendants acquired the legal title to the land with knowledge or notice of the prior equity of complainant under written agreements for the sale of the land to him into which he had entered with William and Fox McCullough, who had taken the land in equal undivided moieties by devise from C.C. McCullough, deceased, and that complainant was entitled to specific performance of these contracts. The Harrises were bought in on the ground that they had purchased interests from defendant Bethea. William and Fox McCullough were also made parties defendant, and they have confessed the bill; but there was and could be, under the facts to be stated, no decree against them; and hence they have not been joined in the appeal. In the court below complainant was given relief according to the prayer of his bill, and from the decree the defendants Bethea and the Harrises have prosecuted this appeal.

The agreement under which complainant claims purports to have been executed by William and Fox McCullough, severally, on December 8, 1913. Before that, on November 21, 1913, William McCullough executed and delivered to defendant Bethea an instrument in words and figures as follows:

"This indenture made and entered into this the 21st day of November, 1913, between W.M. McCullough, of the first part, and T.B. Bethea, of the second part, witnesseth: That the party of the first part, for and in consideration of the sum of $1.00 to me paid by the party of the second part, the receipt whereof is hereby acknowledged, and for the further consideration hereinafter named, do hereby grant, bargain, sell, and convey unto said party of the second part the following described real estate, to wit: As described in the abstract of title of the McCullough lands in Montgomery county, as per abstract. And it is further understood that the party of the second part assumes all liability of the rent of the Jordan place, in Montgomery county, if forfeited, the McCullough lands is to be reserved to the said J. Smith, and it is further understood that the said T.B. Bethea is to make his commissions over and above the thousand dollars, and the said party of the first part will forever warrant and defend the title of the said land from the lawful claims of all persons.

"The further consideration above named is this: The said party of the second part is to have thirty days from the date hereof to pay said party of the first part the further sum of one thousand dollars, being half of the undivided interest of the McCullough lands as described in this abstract. And it is agreed as a part of this instrument that, if said payment is not made within said time, then this conveyance to be no longer of any effect, but, if said payment is so made, then this conveyance is binding from the date hereof. The making of said payment is optional with the party of the second part, and he is not to be liable in any manner if he elects not to make said payment.

"In testimony whereof we have hereunto set my hand and seal the day and date as above.

"Wm. McCullough. [ L.S.]

"Attest: V.E. Gerald."

Three days later--that is, on November 24th--Fox McCullough executed an instrument in all respects identical with the foregoing, except that it was not attested by a witness. Neither instrument was acknowledged.

Within the time limited by the foregoing instruments for the payment of $1,000 defendant Bethea filed his bill in chancery at Montgomery against William McCullough, averring, to state the matter in a few words, that he had made a tender of the said sum, renewing the tender, and praying for a decree which would declare him to be the owner of the one-half interest which formerly belonged to the defendant in that bill and require said defendant to execute a deed thereto. It resulted that William McCullough on January 12, 1914, received $1,200, which sum he demanded, and, on Bethea's request, executed and delivered to him and J.M. Harris an unconditional deed, after which the bill was dismissed according to agreement. Defendant in this cause testified that on December 18th he paid Fox McCullough the sum of $1,000 and received a deed from him. This was not denied.

The chancellor held as to the William McCullough interest that complainant was a bona fide purchaser for value. There may be other answers to the legal implications of this finding, but it is enough to say that it is not seriously disputed in briefs for appellee, and it is quite clear upon the evidence, that the complainant in this cause took both his contracts with knowledge of facts amply sufficient to put him on notice of Bethea's right under the instruments of November 21st and 24th. The result then turns upon a proper interpretation of those instruments and a correct determination of the nature and extent of the right or title defendant Bethea thereby acquired in the McCullough land.

Defendant appears to have spoken of them at the time of their execution as options, and the chancellor was of opinion that they witnessed contracts that were mere options in legal effect. This conclusion appears to have been considered sufficient to open the way for the further opinion that complainant was free to impeach the considerations recited, and upon the evidence adduced to that end it was found that Fox McCullough had not in fact received the $1 recited as paid in the instrument executed by him on the 24th of November, and so that the option given by him was unsupported by valuable consideration, and for that reason was unenforceable as lacking in mutuality of obligation. In short--and this proposition lies at the root of complainant's entire case--the result of the argument for the decree is that the initial transactions or contracts between Bethea and the McCulloughs, the so-called indentures of November 21st and 24th, constituted mere voluntary executory agreements on the part of the McCulloughs to sell and convey which were revocable by them and unenforceable against them because they imposed no corresponding obligation on the promisee Bethea. One of the involved postulates of this argument is that, notwithstanding the recitals of the instruments, complainant might and did show that the consideration of $1 was not paid, or, if paid, that it was nominal only, and of itself, without other substantial obligations assumed by Bethea, insufficient to support a bill in equity for specific performance.

These contracts did not contemplate any necessity or occasion for other or further conveyance. The one of November 21st, executed by William McCullough with due observance of statutory requirements in cases of the alienation of lands, was a present conveyance of an estate in fee upon condition subsequent; that is, the estate then vested in the grantee, subject to be defeated by his failure to pay. 2 Wash. Real Prop. (6th Ed.) §§ 936, 938, 941; Wheeler v. Walker, 2 Conn. 201, 7 Am.Dec. 264; Langley v. Chapin, 134 Mass. 82. This construction makes it consistent throughout, while any other would involve inconsistency, and for that reason is to be avoided. Viewing the deed as the parties most likely viewed it, and yet, having necessary regard for the legal effect of its uncontradictable terms, the general intention was that the condition secured the payment of the $1,000; and this substantial effect of the instrument is not impaired by its strict legal operation "for the matter shows that the intent of the feoffor was to have the land, or the money." Rawson v. Inhabitants of Uxbridge, 7 Allen (89 Mass.) 125, 83 Am.Dec. 670, nor is it affected by the fact that the grantee might pay or not according to his own election, for the state of the land was executed, though the payment of the money was executory and optional with the grantee. Upon a failure to pay the title would have revested in the grantor upon his re-entry, or a court of equity, at his instance, would have decreed a release to be executed so as to give him absolute protection. In this connection it may be noted, as matter of law, that a condition defeats an estate to which it is annexed only at the instance of him who has a right to enforce it, and until the condition is enforced the estate loses none of its original qualities or incidents (2 Wash. Real Prop. § 951); and, as matter of fact, it may be noted that this conveyance has become absolute by the grantee's fulfillment of the condition, he has paid the sum of $1,000 within the time limited for its payment, or he has done the equivalent of that under the circumstances.

In Borst v. Simpson, 90 Ala. 373, 7 So. 814, to which counsel have referred the contract considered by the court was of a different character. The instrument there contained words of present grant; but the grant was immediately limited and restrained by the condition that the estate should not vest until a stipulated payment should be made within a limited time. The effect of the ruling was that payment according to the contract was a...