Rust v. Conrad
| Decision Date | 18 January 1882 |
| Citation | 11 N.W. 265,47 Mich. 449 |
| Court | Michigan Supreme Court |
| Parties | RUST v. CONRAD. |
The specific performance of contracts is not a matter of right but rests in the sound discretion of the court.
If the contract is unequal; if the consideration is inadequate; if it contains unreasonable provisions, or if there are indications of overreaching or unfairness, a court of equity will refuse to interfere for specific performance, and leave the party to his remedy at law.
If the case is one in which either the provisions of the contract or the law would permit to a party the option to nullify a decree for specific performance, should one be granted, the court will not do a vain thing by granting one.
Where therefore a contract for a lease contained a provision that the lease, when given, might at any time be terminated by the lessees, either as to the whole of the land or a part thereof, on giving 30 days' notice; held, that this option is a conclusive answer to a bill by those who would be lessees, for the specific performance of the contract.
A license to two or more is in general revoked by the death of one of the licensees. Whether such would be the rule under the peculiar facts of this case, quaere.
Appeal from Marquette.
F.O Clark, for complainants.
Albert Crane, for defendants.
This is a bill for the specified performance of what is called in the mining districts a contract of option. The contract bears date July 1, 1880, and is given in full in the margin. [*]
David W. Rust, one of the contracting parties, died intestate October 4, 1880, and when administrators were appointed they united with the heirs at law in transferring the interest of the estate to John F Rust, Ezra Rust and George M. Stevens, and the assignees join with John J. McTavish, Myron E. David and Orrin J. David in filing the bill. The complainants allege the full performance on their part of all that was required to entitle them to exercise their option and demand a lease, and they also aver that they elected to take a lease, and demanded it December 3, 1880. The defendants admit the making of the contract and the demand of the lease, but they deny the performance by complainants of the conditions precedent. The also rely upon two principles of law as constituting a complete bar to the relief claimed. These principles may be stated as follows: (1) The contract of option was a mere license to David W. Rust and his associates, and as such was personal and not assignable, and when David W. Rust deceased, the license was by implication of law revoked. (2) The contract was not such an one as a court of equity will specifically enforce. By its terms the lease to be given under it might at any time be terminated by the lessees, as to the whole land or any part of it not less than 80 acres, on their giving 30 days' notice of intention so to do. The continuance of the lease if one should be given, would therefore depend on the will of the lessees, who might immediately elect to terminate it. The contract therefore lacks mutuality and equality; and not being mutual or equal, lacks equity; and for that reason should not be enforced.
The first of these, as a general principle, is no doubt sound. Its application to this case might perhaps be disputed by complainants upon the ground that although the contract was with David W. Rust and his associates only, yet it provided for a lease that should be assignable. Whether they would be correct in this we shall not inquire, for the reason that it is unnecessary in this case, which must be governed by other considerations.
When a party to a contract appeals to a court for its specific performance, he addresses himself to the judicial discretion. The relief he asks is altogether exceptional, for the general rule is that the party who complains that another has failed to fulfil his engagements, is supposed to have adequate redress at law in recovery of damages. The court may therefore refuse to grant specific performance in any case where in its judgment equity does not require it. McMurtrie v. Bennett, Har. Ch. 124; Smith v. Lawrence, 15 Mich. 499; Blanchard v. Detroit, etc., R. Co. 31 Mich. 43; Berry v. Whitney, 40 Mich. 65; Willard v. Taylor, 8 Wall. 557; Williams v. Williams, 50 Wis. 311; [S.C. 6 N.W. 814;] Mather v. Simonton, 73 Ind. 595. In a few cases a party is suffered to invoke this extraordinary jurisdiction of a court of equity, when it is manifest that the remedy at law is inadequate.
But when a party comes into equity it should be very plain that his claim is an equitable one. If the contract is unequal; if he has bought land at a price which is wholly inadequate; if he has obtained the assent of the other party to unreasonable provisions; if there are any indications of overreaching or unfairness on his part, the court will refuse to entertain his case, and turn him over to the usual remedies. Chambers v. Livermore, 15 Mich. 381; Munch v. Shebel, 37 Mich. 166; Mississippi & R.R. Co. v. Cromwell, 91 U.S. 643; Burton v. Le Roy, 5 Sawy. 510. If, for example, the contract is so drawn that the vendor has the option to retain the property or to convey it, performance in his behalf will be refused. Maynard v. Brown, 41 Mich. 298. And in each case the court will consider "whether, in view of all the facts, and those doctrines which are interwoven with the very texture of equity jurisprudence, and in view of the specific peculiarities presented, and the settled principles and maxims of the court, it is right and proper to entertain the case and administer relief." Buck v. Smith, 29 Mich. 166, 170. These are familiar principles.
But the court will also refuse to interfere in any case where, if it were to do so, one of the parties might nullify its action through the exercise of a discretion which the contract or the law invests him with. The refusal in such a case does not depend of necessity upon any illegality, inequality, or unfairness, but it is sufficiently based upon the impropriety of imposing on the judge the labor, and on the public the expense of an investigation of disputes when the circumstances are such as to preclude any judgment that may be rendered from being final. No court can with reason be called upon to do a vain thing. A familiar instance is that of a contract for the formation of a partnership, which, though it is within the power of the court to enforce it, and it may be done under special circumstances when by its terms the partnership is to continue for a definite period, yet in the absence of a provision to that effect performance will invariably be refused, though the terms be in all respects equally fair and legal. The reason is that the partnership which the court might establish by its decree, the parties or either of them might immediately dissolve; and Lord Eldon says "no one ever heard" of the court executing an agreement under such circumstances. Hercy v. Brick, 9 Ves. 357. See also Scott v. Rayment, L.R. 7 Eq.Cas. 112; Meuson v. Kaine, 63 Pa.St. 335; Coll. Part. 19, 385; Story, Part. � 189; Pars.Part. 298; Fry, Spec. Perf. 64, 504; Story, Eq.Jur. � 666.
All contracts where the party has reserved to himself, or where the law gives him the authority to render nugatory any decree that ought be rendered in their enforcement, rest upon the same principle, This was recognized in Marble Co. v. Ripley, 10 Wall, 339, 359; and more distinctly asserted and decided in Express Co. v. Railroad Co. 99 U.S. 191. In this last case the very strong assertion is made that "a court of equity never interferes where the power of revocation exists."
It is also assigned as a reason why specific performance should not be decreed in this case, that the terms of the contract as respects the manner of working, the extent to which operations should be carried on, and the consequent royality, are such that they cannot be enforced so as to do justice to the defendants after lease given, without the constant supervision of the court so long as the lease shall continue, to compel the lessees to proceed with their operations and to prosecute mining to such an extent as shall be reasonable and just. There are undoubtedly some difficulties in the case, of much the same nature with those encountered in Blanchard v. Detroit, etc., R. Co. 31 Mich....
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