Carroll v. Drury

• Decision Date: 22 December 1897
• Citation: Carroll v. Drury, 170 Ill. 571, 49 N. E. 311 (Ill. 1897)
• Parties: CARROLL v. DRURY et al.
• Court: Illinois Supreme Court

170 Ill. 571

49 N.E. 311

CARROLL

v.DRURY et al.

Supreme Court of Illinois.

Dec. 22, 1897.

Appeal from circuit court, Mercer county; Hiram Bigelow, Judge.

Bill for specific performance by Edwin H. Carroll against William Drury and another. From the decree rendered, this appeal was taken. Reversed.

Bassett & Bassett, for appellant.

J. H. Connell and Scott & Cooke, for appellees.

MAGRUDER, J.

This is a bill for specific performance, filed on March 6, 1896, by the appellant against the appellees, setting up that a contract for the sale of 220 acres of land was made by the appellees with the appellant; that the appellant has paid the purchase money called for by the contract, and is entitled to a deed of the premises; and the bill prays that the appellees may be ordered to deliver to appellant such deed. The bill was answered by the defendants thereto, admitting the contract of sale, but denying that the complainant has paid all the purchase money called for by the contract, and alleging that the defendants have executed a deed for said land, and tendered the same to appellant, and offered to deliver it to him, upon his payment of the balance of the purchase money which remains unpaid; and defendants aver in their answer that they bring said deed into court, and tender it to complainant upon his payment of the balance due on the contract as aforesaid. The cause was referred to a master in chancery, who took tetimony, and made a report in favor of the contention of the appellant, as herein set forth. Exceptions were filed to this report. Upon a hearing of the case before the circuit court, the exceptions were sustained, the report of the master in chancery was overruled, and a new reference was ordered to him, directing that he make a report substantially in accordance with the theory of the appellees, as hereinafter set forth. The defendants below, the appellees here, also filed a cross bill, which was answered by the appellant. Upon a hearing of the cause, the court entered a decree confirming the second report of the master, dismissing the cross bill, and ordering the delivery of the deed filed in court to the appellant upon his payment of a certain sum of money to the appellee William Drury within 90 days. The present appeal is prosecuted from the decree so entered.

On August 13, 1895, appellant wrote a letter to the appellee William Drury, proposing to purchase the land upon certain terms therein stated. This letter, though written by appellant, was signed by one Volentine, an agent of appellee Drury. Appellee accepted the proposition contained in the letter on August 14, 1895, with the exception that the date of the payment of one of the installments of the purchase money was changed. Thereupon, on August 14, 1895, a bond was executed by the appellees, William Drury and Vashti Drury, his wife, embodying the terms of sale as agreed upon. This bond is in the penalty of $8,000, given to Edwin H. Carroll, bearing date August 14, 1895, with the condition that William Drury had, on the day of the date thereof, sold to Edwin H. Carroll the said 220 acres in Mercer county for the sum of $7,700, ‘to be paid as follows: $500 upon the delivery of this obligation; $4,000 on or before the 1st day of January, 1896; and $3,200 on or before the 1st day of March, 1897, with seven per cent. interest thereon from March 1, 1896. The said William Drury to allow a discount of seven per cent. on all payments made prior to March 1, 1896.’ The bond also contains a provision that, upon payment of the two first-mentioned sums, the obligators agree to convey to Carroll, on March 1, 1896, the said premises, by deed, taking a mortgage thereon to secure the deferred payment, Carroll having the privilege of making such improvements as he may desire; Drury having the use of the pastures until March 1, 1896. On August 14, 1895, appellant, Carroll, made the cash payment of $500 on the bond. On December 30, 1895, appellant paid the $4,000, which was due by the terms of the bond on January 1, 1896. On February 28, 1896, appellant paid to appellee Drury the sum of $2,697, to apply on the bond. The latter amount was $503 less than $3,200, the amount of the third payment. The sum of $503 was 7 per cent. on the sum total of the three payments made by appellant, to wit, $7,197. Appellee Drury claims that appellant had no right to retain such a large amount from the purchase money, and for that reason refused to deliver the deed.

The dispute between the parties in the case at bar arises out of a difference of opinion between them as to the construction of the following clause in the bond: ‘The said William Drury to allow a discount of seven per cent. on all payments made prior to March 1, 1896.’ The difference arises out of the two meanings of the word ‘discount.’ The term ‘discount’ may be understood, in a general sense, ‘as a counting off; an allowance or deduction made from a gross sum on any account whatever.’ Dunkle v. Renick, 6 Ohio St. 527. One of the definitions given by Webster in his Dictionary is: ‘An allowance upon an account, debt, demand, price asked, and the like; something taken off or deducted.’ In the Century Dictionary one of the definitions given of discount is: ‘An allowance or deduction generally of so much per cent., made for prepayment or for prompt payment of a bill or account; a sum deducted, in consideration of cash payment, from the price of a thing usually sold on credit; any deduction from the customary price or from a sum due or to be due at a future time.’ One of the definitions of ‘discount’ given by Bouvier in his Dictionary is as follows: ‘An allowance sometimes made for prompt payment.’ Where a merchant sells a bill of goods, and throws off a portion of the price for present payment, such a transaction is ‘discounting,’ in one sense of the term. So, also, where a creditor makes a deduction from a sum due by a debtor in consideration of his paying the remainder before it becomes due, such a transaction may be said to be ‘discounting.’ Schober v. Association, 35 Pa. St. 223. Appellant contends that the word ‘discount,’ as used in the bond, has the meaning above referred to; that is to say, means a rebate on the gross sum of the purchase price of the land of 7 per cent., without reference to time. The word ‘discount’ in finance, or among bankers, has still another meaning. Such other meaning is thus expressed by Webster in his Dictionary: ‘A deduction made for interest in advancing money upon a bill or note not due; payments in advance of interest upon money loaned.’ This second meaning is thus expressed in the Century Dictionary: ‘The rate per cent. deducted from the face value of a promissory note, a bill of exchange, etc., when purchasing the privilege of collecting its amount at maturity.’ The discounting of notes or bills has been defined to mean: ‘Advancing a consideration for a bill or note; deducting or discounting the interest which will accrue for the time the note has to run. The taking of interest in advance is called ‘discount.” Loan Co. v. Towner, 13 Conn. 259. The discounting of a note by a bank is understood to consist in the lending of money upon it and deducting the interest or principal in advance. Bank v. Bruce, 17 N....