Cheney v. Libby

• Citation: 33 L.Ed. 818,10 S.Ct. 498,134 U.S. 68
• Parties: CHENEY v. LIBBY
• Decision Date: 03 March 1890
• Court: United States Supreme Court

10 S.Ct. 498

134 U.S. 68

33 L.Ed. 818

CHENEY v. LIBBY.

March 3, 1890.

A. A. Goodrich, for appellant.

S. P. Davidson, for appellee.

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court.

This is a suit to compel the specific performance by the appellant, Cheney, of a written agreement entered into May 28, 1880, between him and the appellee, Libby, whereby the former demised and let to the latter the possession and use of, and contracted, bargained, and agreed to sell to him, two sections of unimproved land in Gage county, Neb. The defendant claimed that the contract was forfeited, long before this suit was brought, by Libby's failure to comply with its stipulations. Upon that ground he resists the granting of the relief asked. The circuit court adjudged that the plaintiff was entitled to a decree.

The question to be determined is whether there was any such default upon the part of the plaintiff, Libby, as deprived him of the right to specific performance.

The sum agreed upon for the possession, use, occupancy, and control of the land was $1,361.60 yearly, represented in Libby's notes, and in the taxes assessed and to be assessed against the land. The price for the land was $8,960, of which $1,600 was paid at the date of the contract. The balance was to be paid, 'without notice or demand therefor,' in annual installments, at the times specified in promissory notes, of even date with the contract, which were executed by Libby to Cheney at Tecumseh, Neb. The notes were made payable to the order of Cheney, at the office of Russell & Holmes, private bankers in that city. Eight of the notes represented the balance of the principal debt,—each one being for $920,—and were payable, respectively, in 3, 4, 5, 6, 7, 8, 9, and 10 years after date. The remaining 10 notes represented the annual interest.

Libby agreed to meet the notes as they respectively matured, pay the taxes on the land for 1880 and subsequent years, and, during that year, (the weather permitting,) break 200 acres, and build on the land a frame barn of 16 feet by 20, and a frame dwelling-house of a story and a half. Cheney undertook to pay the taxes of 1879 and previous years, and bound himself to convey the land, in fee-simple, with the ordinary covenants of warranty, (reserving the right of way that might be demanded for public use for railways and common roads,) upon the payment by Libby of the several sums of money aforesaid at the times limited, and the strict performance of all and singular the conditions of the contract.

In was further stipulated between the parties that 'time and punctuality are material and essentiali ngredients in this contract.'

That if Libby failed to perform and complete all and each of the payments, agreements, and stipulations in the agreement mentioned, 'strictly and literally,' the contract should become void; in which event all the interests created by the contract in favor of Libby, or derived from him, should immediately cease and determine, and revert to and revest in Cheney, without any declaration of forfeiture or re-entry, and without any right in Libby of reclamation or compensation for moneys paid or services performed.

That, in case the contract was forfeited, Cheney could take immediate possession of the land, with all the crops, improvements, fixtures, privileges, and appurtenances thereon or appertaining thereto; Libby to remain bound for all taxes then assessed against the premises, and all installments of principal or interest then due on the contract to be regarded as rent.

That whenever one-half of the purchase price was paid, with all accrued interest and taxes, Cheney should execute a deed, as provided for in the contract, and take notes and a mortgage for the remaining payments, to run the unexpired time.

That when Libby's right to purchase the land terminated by reason of non-performance of his covenants, or his failure to make the payments, or any of them, at the time specified, he should be deemed to have only the rights of a tenant, and to hold the land under the contract as a lease, subject to the statute regulating the relation of landlord and tenant; with the right in Cheney to enforce the provisions of the contract, and recover possession of the land, with all the fixtures, privileges, crops, and appurtenances thereon, as if the same was held by forcible detainer.

The agreement also contained these stringent provisions: That no court should relieve Libby from a failure to comply strictly and literally with the contract; that no modification or change of the contract could be made, except by entry thereon in writing signed by both parties; and that no oversight or omission to take notice of any default by Libby should be deemed a waiver by Cheney of the right to do so at any time.

Libby went into possession under the contract. He, and those in possession under him, had, prior to the commencement of this suit on the 26th of February, 1887, broken up and cultivated most of the land, and made improvements thereon of a permanent and substantial character. Nearly all of these improvements were made prior to the 1st of January, 1885. He met all the obligations imposed upon him with respect to the breaking up of the land and its improvement by the erection thereon of buildings. His evidence, which is uncontradicted, was: 'We have broken up and cultivated about 1,200 acres; built five houses and stable and outbuildings to each house; made wells to each house; erected two wind-mills; fenced one whole section with wire and posts, and fenced half of other section with hedge; we have set out some fruit-trees and shrubbery,—all to the value of about ten thousand dollars. All was done under and in pursuance of this contract.'

He also met promptly all the notes given for principal and interest maturing prior to 1885. The total amount paid by him prior to that date, including $1,600 paid at the execution of the contract, was in excess of $5,000.

But the defendant insists that there was such default upon the part of the plaintiff, with respect to the notes maturing May 28, 1885, as worked a forfeiture of the contract, and, consequently, that specific performance cannot be decreed. The precise grounds upon which this contention rests, as well as those upon which the plaintiff relies in support of his claim for relief, cannot be clearly understood without a careful scrutiny of all that passed between the parties in reference to the lands in question.

The plaintiff resided in Iowa, while the defendant resided at Jerseyville, Ill. The notes given by the former were upon blanks furnished by the latter's agent, who caused them to be made payable in Tecumseh, Neb., at the privae bank of Russell & Holmes, through whom the defendant had, for many years prior to 1880, made collections, and with whom he had kept an account. The first payment under the contract was made in bank drafts delivered to the defendant's agent in Tecumseh. All the other notes falling due in 1880 to 1884, inclusive, (except the interest note maturing in 1882,) were paid by bank drafts sent to Russell & Holmes, who placed the proceeds to the credit of Cheney in their bank. The checks of the latter upon that bank, on account of those deposits, were always paid in current funds. The draft to pay the interest note for 1882 was also sent to Russell & Holmes, but, as Cheney had not transmitted that note to them, the draft was forwarded to him. He received it, and sent the note to Libby. In no single instance prior to 1885 did he make objection to the particular mode in which Libby provided for the payment of his notes, or intimate his purpose to demand coin or legal-tender notes in payment. In every instance, except as to the interest note for 1882, the notes were paid at the banking-house of Russell & Holmes, and by drafts sent to and used by them for that purpose.

But it is quite apparent from the evidence that Cheney, in 1885, indulged the hope that he could bring about a forfeiture of the contract for non-compliance upon the part of Libby with its provisions, and that he would, in that or some other way, get the land back. It is proper to advert to the circumstances justifying that conclusion.

On the 4th of March, 1885,—all previous installments having been punctually met,—Libby offered, in writing, to pay all the principal notes mentioned in the contract, as well as the interest note due May 28, 1885, if a deed was made to him. To this offer Cheney replied, under date of March 19, 1885: 'Your letter of the 4th has just reached me. I have no papers with me, and cannot attend to the matter as you request. I expect to go to New Orleans to the Exposition, and to be at home in time to see to it properly. If I am behind time, no harm will come to you.' Libby wrote again, under date of May 20, 1885, renewing the offer contained in his letter of March 4th. Under date of May 23, 1885, only five days before the notes for 1885 matured,—Cheney replied: 'Yours of 20th is received. I think it probable that I can do as you suggest, but I will be in Beatrice [the county-seat of Gage county, where the lands are] between the 1st and 10th of June on other business, and will then make inquiries, and see if I can lend the money to good hands, and will then let you know more certainly.'

On the 26th of May, 1885, Libby sent to Russell & Holmes a draft upon the First National Bank of Omaha, Neb., made by one Stuart, a private banker doing business at Madison, in the same state, for $1,251.20, which was the amount of Libby's two notes for principal and interest that matured May 28, 1885. It was sent in payment of those notes, and was received for that purpose by Russell & Holmes. They accepted it for the amount of money named in it, and were therefore ready to take up Libby's two notes when presented for payment at their office.

On the 28th of May, 1885, A. W. Cross, of the First National Bank of...