Chicago, M. & St. P. Ry. Co. v. Stewart

• Decision Date: 01 December 1883
• Citation: 19 F. 5
• Court: U.S. District Court — District of Minnesota
• Parties: CHICAGO M. & ST. P. RY. CO. v. STEWART.

19 F. 5

CHICAGO M. & ST. P. RY. CO. v. STEWART.

United States Circuit Court, D. Minnesota.

December, 1883

Bill in equity brought to obtain decree for the specific performance of a written agreement for the sale by defendant to complainant of certain land. The agreement is dated April 21 1879, and provides that the defendant--

'In consideration of one dollar to him in hand paid, the receipt of which is hereby acknowledged, and other considerations hereinafter named, has bargained and sold unto the said second party, and upon payment of the further consideration therefor as hereinafter provided doth hereby covenant and agree to convey to the said party of the second part, by a good and sufficient warranty deed, free and clear from all incumbrances, on demand of the party of the second part, all that piece or parcel of land situate in said Hennepin county and state of Minnesota described as follows.'

Here follows a particular description of the land by metes and bounds, and the remainder of the agreement is as follows:

'And said parties do mutually agree to submit to D. R. Barber Esq., of said Minneapolis, the question of the value of said piece or parcel of land, and the compensation to be paid therefor by said second party to said first party, and that his decision shall be final. And upon the payment of such sum as shall be so fixed and determined by said Barber, the party of the first part will at once execute his warranty deed of the same as aforesaid, free and clear of all incumbrances except a certain lease to Wiggins &amp Thompson; the party of the second part to take the same subject to such lease, and to receive any and all rents hereafter accruing under said lease. The award of said Barber is to be made in writing and a copy thereof to be delivered to each of said parties.'

On the first day of October, 1879, the said arbitrator made his award, by which he fixed the value of said land at the date of said agreement, and the compensation to be paid therefor, at the sum of $3,350. The respondent resists the claim of the complainant upon various grounds, among which are the following: (1) That the arbitrator, after his appointment, refused to accept the same, and declined to act, continuing his refusal for about four months, but afterwards, and at the expiration of about six months, he decided to act, and did so against the objection and protest of defendant, who in the mean time had revoked his authority; (2) that the arbitrator, in making his award, did not include, but on the contrary omitted, a part of the land included in the agreement.

McNair & Gilfillan, for complainant.

Geo. B. Young, for defendant.

McCRARY J.

We will first consider the question whether the powers of the arbitrator had ceased prior to the time when he undertook to act. The agreement is silent as to the time within which the award was to be made. In such a case the arbitrator must act within a reasonable time. What is a reasonable time must be determined in each case upon its own peculiar facts and circumstances. If the property to be sold is situated in or near a growing and prosperous city, and in a place where the value of real estate may be expected to increase rapidly, it would be fair to presume that the parties contemplated promptness. A delay in fixing the price for a period of five or six months, under such circumstances, would be unreasonable, because the value of the property within that time would be very materially changed. Much would depend, in such a case, upon the question whether the agreement contemplates the fixing of the price according to the value at the date of the contract or at the date of the award. If the former, then the seller would certainly be entitled to a prompt appraisement, and a delay of five or six months would, as to him, be unreasonable, because it would require him to sell at a price which might and probably would be much below the value of the land at the time of the conveyance and at the time of the payment of the purchase money.

The contract in the present case is silent as to the question whether the value at date of contract or at date of award shall constitute the price to be paid for the land; but the arbitrator evidently considered it his duty to ascertain the value at the former period, and to fix the price accordingly, as he expressly states in his award that he fixes the value of the property at the time when the agreement was entered into, which was the twenty-first day of April, 1879, while the award is dated October 1, 1879. The delay was for more than five months, and the arbitrator acted in the end against the protest of the defendant. The property is situated very near to the cities of Minneapolis and St. Paul, both of which have grown with marvelous rapidity within the past 10 years, and at the time of the agreement it was known that the land in question was advancing in value. It is scarcely to be presumed that defendant intended to bind himself to sell his land in October for its appraised value in the previous April, and if not, he must have understood that the arbitrator was to act at once, or at lease without unnecessary delay. That such was his understanding is apparent from the fact which appears in evidence that he urged the arbitrator to accept the duty and proceed to act soon after his appointment, which the latter declined to do. After waiting some four months for action by the arbitrator, the defendant concluded not to consummate the sale, and accordingly notified the arbitrator that he objected to his acting after so long a delay. If the arbitrator was right in assuming that the land was to be appraised according to its value at the date of the contract, we think defendant had a right to object to the delay. If the arbitrator was wrong in that, then his award must be set aside on that ground. The evidence sufficiently shows that the land increased in value between April and October, 1879.

Nothing appears on the face of the agreement or in the evidence to show that the parties to the contract contemplated any unnecessary delay in making the award as to the value of the land, and it is plain that no great delay was necessary. We do not, of course, mean to say that the arbitrator was bound to act immediately. He was at liberty to take a reasonable time in which to determine as to his acceptance of the trust, and thereafter a further reasonable time in which to investigate the question of value and make his award. But it is manifest that no great length of time was needed in which to determine the question submitted to the arbitrator in this case. Under the circumstances of the case, we do not think the delay of over five months was contemplated by the parties when they entered into the contract, nor do we think it reasonable. We should, therefore, in the exercise of the discretion which belongs to courts of equity, decline to decree a specific performance of the award, even if this were the only objection to its validity.

It is, however, further insisted that the arbitrator excluded from consideration, in making his appraisement, the quantity of land included in certain streets, or supposed streets, being a part of the land to be conveyed, and of which complainant now asks a conveyance by warranty deed. Whether there were any streets or highways constituting easements upon the land was not a question for the arbitrator to determine. The contract called for a deed of general warranty against all adverse claims, except a lease mentioned therein, and it was provided that the arbitrator should appraise the entire tract. The arbitrator was not authorized to go into an inquiry as to the effect upon the value of the land of the supposed public easements for street purposes, for the conveyance with covenants of warranty, as provided for by the contract, would have bound defendant to remove or vacate the streets, if any lawfully existed, or to pay to complainant the damages resulting to it in consequence thereof. If the award fixed the price subject to an easement, and the contract be specifically performed by the execution of a warranty deed as therein provided, and now demanded by complainant, then the defendant will be called upon to convey more than he is paid for. He would convey free of all easements, and, if any are found to exist, would be bound by his covenants to remove them. He would be paid only for the land subject to the easement.

Upon consideration of the proof we find that it clearly appears that the arbitrator took into account at least one street in fixing the price of the land, and reduced the price by the sum of $150, on account of the same. In his own testimony he distinctly says: 'If I had known certain that that road did not come out, the award would have been $3,500, instead of $3,350. ' And again: 'If I had known certain that no road would cross there, $3,500 was the net sum. ' And still further: 'The award would have been $3,500 instead of $3,350 for the tract, as the papers show that I had seen, if I had known that there wasn't any road there to be taken off. That I say.'

It is clear that the duty of the arbitrator was to appraise the whole tract without inquiry as to the incumbrances or easements. These were to be removed by the grantor. It is also clear that in deducting $150 from the value of the tract on account of easements, he departed from or varied the contract. In order to enforce a contract by specific performance, the court must be enabled to specifically perform every part of it. We cannot decree a specific performance with a variation. 1 Sugd.Vend. 221; Jordan v Sawkins, 4 Brown, ch. 477; Nurse v. Seymour, 13 Beav. 254; Carnochan v. Christie, 11 Wheat. 446. The award is also bad for the reason that it does not cover the...