Doan, King & Co. v. Mauzey

1. Jurisdiction in chancery—recovery of damages for breach of contract. , Unless in very special cases, a court of chancery will not sustain a bill for damages on a breach of contract. It is not the ordinary jurisdiction of that court It is a matter strictly of legal, and not equitable jurisdiction. 2. So, where a party who has executed a conveyance of land, exhibited his bill in chancery, praying for the specific performance of a contract to reconvey upon the performance of certain conditions, and, in the alternative, for damages for the non-performance of the contract, having knowledge, at the time of filing his bill, that his grantee .had conveyed the premises to third parlies, who had no notice of the complainant's alleged equities, and thereby had disabled himself from performing his contract to reconvey, it was held, the court of chancery had no jurisdiction to retain the bill for the purpose of awarding damages for a breach of the contract. In such case, the allegation in the bill of notice to the subsequent purchasers, when the complainant knew better, was regarded as intended merely to give color of jurisdiction to a court of chancery. As the complainant knew, at the time of filing his bill, that he could not obtain a specific execution of the contract, his remedy was not in chancery, but at law, upon the covenant. 3. Equitable rights — Turn lost. Where a grantor of land, claiming to hold a contract for a reconveyance upon his performing certain stipulated conditions, promotes the sale of the property by his grantee to third persons, who have no notice of his alleged equities, and stands by, asserting no rights, while the subsequent purchasers are making improvements upon the property, and acquiring a reversionary interest, he is not entitled to the interposition of a court of equity in his behalf.

Appeal from the Circuit Court of Adams county; the Hon. Joseph Sibley, Judge, presiding. . This was a suit in chancery instituted in the court below, on the 1st day of October, 1859, by Henry G. Mauzey against Doan, King & Co., and others. It- is stated in the bill that on the 6th of January, 1854, Mauzey, the complainant, was indebted to Doan, King & Co., in the sum of- $2,483.87, on two promissory notes. That Mauzey then owned a building, situate on a lot in the city of Quincy, which he held by lease from John W. McFadden, running twenty years from April 1st, 1839, at the annual rent of $200, with right to purchase at $2,000 during'the term. That in January, 1854, Doan, King & Co., sent said notes for collection to Stephens & Wagley, attorneys-at-law, and it was agreed between Stephens & Wagley and the complainant that the latter should convey his interest in the premises mentioned to King, for the firm, and that Stephens & Wagley should give up the complainant’s said notes, and that Doan, King & Co., should execute a memorandum as follows: “We hereby agree that H. G. Mauzey shall have the privilege of purchasing the property on lot seven, block nine, in city of Quincy, this day sold and conveyed by him to Wyllys King, at the price of $5,000, if purchased within one year from this date; and that we will allow him the privilege of taking the same at that price, with interest from this day, at any time within five years, in preference to any other person, hereby giving him the refusal: This agreement is not intended to cover any part of the ground, which we may hereafter purchase. DOAIST, KIISTG & CO. January 6,1854. Per Stephens & Wagley.” . It is charged in the bill that in pursuance of this agreement, the complainant, by deed bearing date on the 6th of January, 1854, for the consideration therein expressed of $5,000,- conveyed the premises to King, and that Stephens & Wagley, as agents for Doan, King & Co., at the same time gave up the notes and signed the above memorandum. That on the 6th of October, 1855, King, for the expressed consideration of $4,500, conveyed to A. & L. Buddee, and one Buff; that - Buff¡~on- the 8.th of the same month, conveyed to the Buddees; and that McFadden, in pursuance of the lease, on the same day conveyed the fee to the Buddees, who have since executed various conveyances and incumbrances upon the premises. The complainant alleges that on the 17th of December, 1858, he tendered to King $6,500, and demanded a deed, and King refused to accept the tender or to reconvey. He charges that all the parties claiming under King, took with notice of the- complainant’s rights. He offers still to pay the $6,500, upon receiving a reconveyance. Th"e grantees of Doan, King & Co., and subsequent purchasers and incumbrancers, are made parties defendant, and their answers under oath waived. The prayer of the bill is in the alternative, for specific performance, or damages for -nonperformance. Doan, King & Co. answered the bill, admitting that the complainant owed them the two notes mentioned in the bill, besides a much larger sum; that complainant was in possession of the premises under the lease from McFadden; and that the notes were sent to Stephens & Wagley for collection. ' The answer alleges that the sale and conveyance were absolute, and that the memorandum set out in the bill was not made, nor thought of, until some time after the deed was made, and that Stephens and Wagley had no authority to make any such agreement. That the memorandum merely gives to the complainant the right of “ refusal ” of the property over other persons, at $5,000, whenever the same should be sold, and that he so understood it, and acted accordingly. The answer, denies that Doan, King & Co. had any knowledge of such memorandum until shortly before the alleged tender, and alleges that the complainant never pretended to have any claim-to the premises until the tender was made. The other defendants answer, setting up that they were innocent purchasers and incumbrancers without notice. Testimony was introduced .upon the hearing in relation to the value of the premises, but the question upon which the decision of the case turns was developed in the. testimony of Isaac O. Woodruff, who testified that he was employed by Doan, King & Co. as their agent to sell the property from the time they bought it until sold by him to the Buddees in 1855, during all which time he constantly offered the property for sale, and advertised it in the newspapers. The witness stated that during all this time Mauzey, the complainant, was fully cognizant of his agency and of his efforts to sell,, and held several conversations with him about selling it; that Mauzey never, in said conversation, nor at any time while the witness was trying to sell the property, made any objections to the sale being made, nor pretended to have any claim to the property, but appeared anxious that it should bring as good a price as possible. Upon his cross-examination the witness stated that all the recollection he had of Mauzey’s saying anything about the property was, that he thought it ought to bring the price first asked for it—$5,000. He could not say how the conversation was brought about, nor whether that remark of Mauzey’s was anything more than an expression of his opinion as to the value of the property, but the witness thought at the time that Mauzey had turned the property over to Doan, King & Co. at that price, and wanted it to realize that' much to them; He thought he derived that impression from what Mauzey said. He had no recollection of anything else said by Mauzey affecting the subject, although other things might have been said by him; they had frequent conversations on the subject. The witness’ impression above stated cattie, he thought, from what Mauzey said. He did not infer that Mauzey was interested in the disposition of the property. He presumed that he did not wish Doan;. King & Co. to lose anything by the purchase from him. The witness did not . consult Mauzey about selling* because he supposed that he had no interest in it. It also appeared in evidence that the complainant asserted no rights, while the Buddees, -who purchased from Doan; King & Co., were making improvements upon the property, and acquiring the reversion from McFadden, of which he seems to have had knowledge at the time those things were being done. The court below found that the memorandum set out in the bill was executed by Stephens & Wagley; that all "the defendants, except Doan, King & Co., were innocent purchasers, or incumbrancers, for value, and without notice. That Mauzey, by reason of the violation of the agreement of Doan, King & Co., had sustained damage up to January 6tb, 1859, to the amount of $1,000; that it was out of the power of Doan, King & Co. specifically to perform their agreement, and decreed that within thirty days from the date of the decree, the defendants, Doan, King & Co., should pay to the complainant the said sum of $1,000, damages, with interest thereon at six per cent, per annum from January 6th, 1859, until the date of the decree, amounting to $1,254, and interest thereon from the date of the decree, and costs of suit. From that decree Doan, King & Co. took this appeal, and now assign for error, among other things, that the Circuit Court decreed damages to Mauzey for the supposed breach of contract, when his remedy, if any, was at law.