Chilhowie Iron Co. v. Gardiner

• Decision Date: 07 August 1884
• Parties: CHILHOWIE IRON CO. v. GARDINER.
• Court: Virginia Supreme Court

79 Va. 305

CHILHOWIE IRON CO. v. GARDINER.

Supreme Court of Appeals of Virginia.

August 7, 1884

Appeal from decree of circuit court of Smyth county, rendered 25th April, 1882, in the cause of Thomas E. Gardiner against the Chilhowie Iron Company. The object of the suit was to compel specific performance of a parol contract made with said company by said Gardiner for the sale of a tract of two thousand acres of land, the property of Gardiner's wife for $10,000, in the stock of the said company at par, there having been partial performance of the contract by the delivery of possession of the land, and the exercise of ownership over it by the company in cutting timber, putting a tenant on it, & c. But when approached by the president of the company with a deed of conveyance of the land to be executed and acknowledged by Gardiner and wife, and an offer to issue the stock, issuance whereof was not to be made until title was conveyed, the vendor expressed an intention to delay delivering the deed until he could see how the company succeeded. He did delay the delivery of the deed several years and until the land had depreciated one-half and the company had ceased to exist, the stockholders however remaining solvent. Then he brought this suit, filing with his bill the deed of conveyance of the land, duly executed and acknowledged by him and his wife, and praying for specific execution of the contract.

The circuit court decreed in his favor, and the company obtained an appeal and writ of supersedeas from one of the judges of this court. Opinion more fully states the facts.

W W. Gordon, for the appellant.

J H. Gilmore, for the appellee.

The question of mutuality cannot arise in this case; for there is no want of it. There was no disability on the part of either of the contracting parties.

To the doctrine of mutuality, however, as contended for by the appellants, there are so many exceptions and limitations and in modern times so narrow is its application, that it may with more propriety be said that mutuality, especially the mutuality in the right of the respective parties to the equitable remedy, is, instead of being a general rule governing cases of specific performance, an exception to that rule. See notes to case of Benedict v. Lynch, 7th Amer. Dec. 492, et seq., and cases cited; Clason v. Bailey, 14 Johns. 488-9.

But if it be conceded, which it is not, that a contract by a purchaser with a husband for his wife's lands is bad for want of mutuality, yet if the plaintiff has performed his part of the agreement, specific performance may be decreed, although the contract, so far as concerned performance by the plaintiff, was originally beyond the jurisdiction of the court; and if the husband and wife have, as in this case, conveyed and put the other party in possession, the objection that she could not have been compelled to perform her contract comes too late, and cannot be set up as a defence. Seager v. Burns, 4 Minn. 141; Chamberlin v. Robertson, 31 Iowa 408; 1 Mad. Ch. 399, 401; Farley v. Palmer & Wife, 20 Ohio St. 223; 2d Chitty on Con. (11th Amer. ed. by Perkins), 1478-9, and note o. ; Pomeroy on Spec. Per. § 295, p. 373.

Whatever may be said about this company's having suspended operations does not affect their liability upon their contract, and the company will not be heard saying in its defense against such liability that it has ceased operations. Code 1873, p. 543, chapter 56, § 31; Minor's Inst., vol. I, p. 583, 2d edition. Upon the whole the decree below should be affirmed.

OPINION

LACY J.

In 1872, the appellant was chartered, and in the month of January, 1873, organized by the election of officers and adoption of by-laws.

The appellee being one of the subscribers, subscribed $10,000, and at the said meeting of the said company it was resolved, that the president be authorized to purchase the iron property of Thomas E. Gardiner, situated near Marion, at the price of $10,000, payable in the stock of the company at par, the stock to be issued as soon as the deed is made. It was then ordered that the treasurer call on the stockholders of the company who have not paid for their stock, for an installment of five per cent. on the same, and that stockholders be required to pay six per cent. interest from January 1st, 1873, on all sums subscribed and not paid up, until paid, and that the treasurer make further calls, from time to time, as the necessities of the company may require, until the amount subscribed shall be fully paid.

The stockholders paid up the five per cent. required, except the appellee, who paid nothing.

The company commenced to make arrangements for the enterprises in view, by making and burning brick, & c., and prospecting for iron on the land of the appellee, and called upon the appellee for the deed to the land and offered to deliver the stock in question, but the appellee refused to part with title to the land, or to make the deed and to receive the $10,000 of stock of the company for the same, until he could determine by the progress of affairs, whether the company was to be a success, and whether the stock was to be worth par. And it appearing that the land belonged to the wife of the appellee, the company did not seek to compel the appellee to make the deed and receive the stock of the company, but abandoned the purchase and went out of business; first preparing a deed in due form, and tendering the same to appellee, to be executed by his wife and himself, which appellee refused to receive or to execute.

In February, 1878, more than five years after the order was made by the company authorizing the president to purchase this land, and two years after the company had practically ceased to exist, the appellee tendered the deed of himself and wife for this land and demanded $10,000 of the stock of the company of the president. The company having long since ceased to exist practically, and gone out of business, the president declined the offer, and the appellee brought this suit for the money, alleging that the stock not having been promptly given him he claimed money. The appellant demurred and answered according to the foregoing statement. The cause coming on to be finally heard, the bill having been amended the court decreed specific performance of the...