Catanzano v. Hydinger

• Decision Date: 15 October 1936
• Docket Number: 6 Div. 920
• Citation: 233 Ala. 116,170 So. 214
• Parties: CATANZANO et al. v. HYDINGER.
• Court: Alabama Supreme Court

170 So. 214

233 Ala. 116

CATANZANO et al. v. HYDINGER.

6 Div. 920

Supreme Court of Alabama

October 15, 1936

Appeal from Circuit Court, Jefferson County; E.M. Creel, Judge.

Suit in equity by E.E. Hydinger against Joseph Catanzano, Marie T Catanzano, and others. From a decree for complainant, the named respondents appeal.

Affirmed.

Erle Pettus and Erle Pettus, Jr., both of Birmingham, for appellants.

Leader Hill, Tenenbaum & Seedman, of Birmingham, for appellee.

FOSTER Justice.

This is a suit in equity; its nature and purpose and the equitable principles on which it is founded are treated on a former appeal from decree on demurrer. Catanzano et al. v Hydinger, 228 Ala. 547, 154 So. 588.

After an answer was filed, the court heard the cause in which the witnesses were examined in open court, and made a final decree, in which appellants were given the privilege of performing that certain alleged covenant in the contract assumed by them of "grading and graveling the streets and making electric current and city water available in the streets and alleys adjacent to all lots in said sub-division, the work to commence within thirty days from the date of this decree, and be prosecuted with due diligence and dispatch, and to be completed within twelve months," and complainant in the meantime was relieved from the duty to make the installment payments not already paid. In lieu of an observance of this option, respondents were ordered to convey the property to complainant and to pay him $250 found to be that much paid by him more than the value of the lots without the improvements, and to be paid within thirty days.

It was then decreed that upon a failure to comply with either of those requirements, the cause "will be referred to the register of this court to determine the amount of the debt due the complainant by the respondents with interest thereon, and when the report of the register has been made, this court will render a judgment against the respondents and in favor of the complainant, for the amount of the debt with interest thereon, and by decree provide for the enforcement of said judgment," with a reservation for further orders and decrees as may be necessary to enforce the decree.

It is noted that the decree does not provide for its execution as to making the improvements, nor as to conveying the property with a refund of $250. So that, as we construe the decree, it gives the respondents the right in thirty days either to begin the work of improving the streets, or to convey the property to complainant and pay him $250; but, in the event neither is done, no provision is made looking to a compliance with one or the other, nor which, but that then "this matter will be referred" (as we have quoted). It is not clear whether that means that such a reference is made to occur without further order, or that in that event it will be referred by an additional decree. Since the first two features are expressly alternative, and the third is dependent upon a failure of compliance with the first or second, it alone is the final mandate of the court if there is one in the decree. The parties seem to treat the order for a reference as such, so we will do so.

The effect of the decree is to leave it to the discretion of respondents whether they will make certain improvements, thereby complying with the contract, as interpreted by the court, when complainant must pay as he agreed, or will specifically perform the contract without making such improvements, and in that event complainant is due certain concessions for such failure, or will submit to rescission and cancellation of the contract on account of his breach of covenant, and refund the entire amount which complainant has paid. This is what we understand by "the debt due complainant by respondents," since there is no such debt except resulting from a rescission of the contract, which is one of the features of the bill.

Since therefore the ascertainment of that "debt" is the only feature of the decree which does not appear to be optional with defendants, it seems that it should be interpreted as a decree for rescission as incidental relief, unless respondents exercise the right to select one of two alternatives named leading to a specific performance. The decree is not therefore to be measured by the rules applicable to specific performance, but to rescission for the breach of a covenant.

As was said on former appeal, the court has the undoubted right to decree a specific performance to the extent of requiring a conveyance to complainant upon payment of the purchase price, and if that should be abated by reason of a breach of the contract by respondents, the damage which resulted from such breach would be a proper matter in reduction of the contract price. Neal v. Williams, 168 Ala. 310, 53 So. 94.

And when a right to rescind a contract of purchase of land is shown to exist in the purchaser who has made improvements and paid the purchase price, or some of it, the land may be charged with a lien in equity for its enforcement, especially since equity enforces all liens. Section 8935, Code; Aday v. Echols, 18 Ala. 353, 52 Am.Dec. 225; McWilliams v. Jenkins, 72 Ala. 480; Donald v. Reynolds, 228 Ala. 513, 154 So. 530.

The prayer of the bill in this case is for rescission and the enforcement of a lien to secure a refund of the purchase money paid, or in the alternative a specific performance and a reduction of the amount unpaid on account of the breach, and for general relief.

If a decree of rescission is justified by the facts proven, it is not prejudicial to respondents, who alone appeal and assign errors, that it allowed them certain optional privileges which they could pursue if they desired, regardless of their terms.

The question before us is whether the facts show a right to rescission with a consequential lien. It is claimed on account of the breach of a covenant. Is it such a covenant as that its breach justifies a rescission? If so, do the facts show that it was so breached as to be sufficient to that end. It is embraced in the last clause of the contract under a title of "Restrictions and Guarantees." The first seven of them, all numbered, are restrictions operative on the purchasers. The eighth contains all the features of the contract which are the basis of the right in question. It is: "The party of the first part (the seller) agrees to grade and gravel the streets, and make electric current and city water available in the streets or alleys adjacent to these lots." There is no provision which declares the result of a failure, nor is there any feature which makes the covenant more specific as to detail nor the time of its performance.

If the covenant to pay is dependent upon the covenant to improve the streets made by the seller, a breach by the latter justifies steps looking to a rescission by the purchaser. 13 Corpus Juris, 614; Western Union Tel. Co. v. Tersheshee, 230 Ala. 239, 160 So. 233; Worthington v. Gwin, 119 Ala. 44, 24 So. 739, 43 L.R.A. 382; 9 R.C.L. 925; Birmingham News Co. v. Fitzgerald, 222 Ala. 386, 133 So. 31; McCoy v. Prince, 11 Ala.App. 388, 66 So. 950, certiorari denied 197 Ala. 665, 73 So. 386; 27 R.C.L. 646.

The test usually stated is that the covenants to be dependent must enter into the whole consideration, according to the intention and meaning of the parties. 13 Corpus Juris, 614; 7 R.C.L. 1089; Western Union Tel. Co. v. Tersheshee, supra; Lowery v. May, 213...