Wharton v. Stoutenburgh

The opinion of the court was delivered by Depue, J.

The principal ground of contention against this decree was, that no contract, definite and complete in all its terms, was concluded between the parties.

The fact that parties negotiating a contract, contemplated that a formal agreement should be prepared and signed, is some evidence that they did not intend to bind themselves until the agreement was reduced to writing and signed. But, nevertheless, it is always a question of fact, depending upon the circumstances of the'particular case, whether the parties had not completed their negotiations and concluded a contract definite and complete in all its terms, which they intended should be binding, and which, for greater certainty, or to answer some requirement of the law, they designed to have expressed in some formal written agreement.

The question as to the degree of completeness in an agreement requisite to relief by way of specific performance has generally arisen (when the negotiations have been conducted in writing, and the inquiry has been whether the writings produced comply with the requirements of the statute. In Chinnock v. Marchioness of Ely, 4 De G. J. & S. 645-6, Lord Westbury states, with precision, the doctrine of courts of equity. He says: “ I entirely accept the doctrine that if there had been a final agreement, and the terms of it are evidenced in a manner *274 to satisfy the statute of frauds, the agreement shall be binding, although the parties may have declared that the writing is to serve only as instructions for a formal agreement, or although it may be an express term that a formal agreement shall be prepared and signed by the parties. As soon as the fact is established of the final mutual assent of the parties to certain terms, and those terms are evidenced by any writing signed by the party to be charged, or his agent lawfully authorized, there exist all the materials which this court requires to make a legally binding contract. But, if to a proposal or offer an assent be given, subject to a provision as to a contract, then the stipulation as to the contract is a term of the assent, and there is no agreement independent of that stipulation.”

Substantially the same views are expressed by Lord Cranyworth, in Ridgway v. Wharton, 6 H. of L. Cas. 264, 268, in which he affirms the binding force of an agreement, all the terms of which have been agreed on, though the parties contemplated that the agreement should be reduced into form before jt is finally executed; and, in referring to the fact that a formal agreement was in contemplation before the business was to be concluded, as cogeut evidence that the parties did not intend to bind themselves until the agreement was reduced into form, he adds: “ That, however, is a question of fact, which must depend upon the circumstances of each particular case.” ' Other cases to the same effect are collected in a note in Pomeroy on Cont. 89.

The doctrine of the courts is the same with respect to the enforcement of agreements within the statute of frauds, Avhere the negotiations -have been conducted by parol, or are partly evidenced by Avritings duly signed, and partly resting in parol, and specific performance is sought on the ground of part performance of the agreement. The terms of the contract must be established by proofs, clearly, definitely, and unequivocally. But it is sufficient that the terms of the contract be made out in a manner satisfactory to the court. The fact that the details of the agreement are controverted by the parties will not deter the court from ascertaining what the terms of it really Avere, and giving effect to the agreement where a complainant sIioavs him *275 self to be entitled to a specific performance, by a part performance, which shall be referable only to a part execution of the agreement. 1 Sugd. Vend. & Pur. [155] ¶ 10; Wallace v. Brown, 2 Stock 308 ; Pomeroy on Cont. §§ 137 — 145.

The agreement, as contained in the complainant’s proposition •of January 9th, 1880, and the defendant’s reply of January 21st, 1880, was so incomplete as not to justify a decree of specific performance. Both parties then evidently contemplated a future settlement of the terms and details of a lease, thereafter to be agreed on. They subsequently, at the interview in Hackettstowu of the 25th of February, 1880, completed the arrangements designed to perfect the understanding between them.

The vice-chancellor before whom this case was heard found, as a question of fact, that the draft of a lease prepared by Stoutenburgh, with the alterations and changes made in it at the interview in Hackettstown, was satisfactory to both parties,| and that the writing, as amended and corrected, though not signed, was a full and complete expression of the terms and stipu-: lations finally agreed on between them. A careful examination of the evidence leaves no doubt of the correctness of this conclusion.

The negotiations, as concluded in Hackettstown, although evidenced by the written draft of a lease as amended and altered by mutual consent, were not embodied in any agreement signed by the parties in conformity with the statute of frauds. If the matter had ended there, the statute would have been a complete defence. The defendant could then have rested successfully on what he calls, in his testimony, his option to sign the lease or not to sign it,, as he thought proper.

But the evidence shows that a lease in duplicate was forwarded to the defendant for execution, shortly after the 25th of February, the receipt whereof was acknowledged by the defend■ant’s letter of the 4th of March. On the 6th of March, the defendant’s agent took possession of the premises. On the same day, the defendant, at Philadelphia, wrote a letter to the complainant, in which he says:

*276 “ In view of the great delays in getting furnaee started, and in starting the hematite mines at Beattystown, and also in view of the large purchases of ore which I have made, I confess that the prospect of working your place looks less attractive and more onerous than it did. I wish, therefore, to let the matter stand, if it can be done without disadvantage to you, until I come up to Hackettstown, which I mean to do directly after hearing that the furnace is in blast; this, I imagine, will be about the middle of next week.”

On the 9th of March the complainant replied, saying:

“ You will allow me to say, in all kindness, that I was a little surprised in receiving your letter without the duplicate copy of lease that I sent you. I regarded our business as finally settled, at our last meeting at Hackettstown, as though the leases had there been formally signed, and have shaped all my business in accordance with that transaction. Have written to several gentlemen and companies which had put themselves in communication with me for the purchase or lease of the mine, that it was already positively and satisfactorily leased. This is the condition in which our affairs pertaining to the mine now are, and have been since Saturday, and, of course, any other arrangement than that specified in our contract would be damaging to me.”

Possession was taken of the mine on the 6 th of March, by the defendant’s agent, without his knowledge, and on the complainant’s suggestion, to prevent the flooding of the mine with water. But the defendant had notice early in April of what was being done, for he then sent up an engine and pump, with directions to have them set up in the mine. After complainant’s letter of March 9th, the defendant was in duty bound to act with the greatest caution, if he did not mean to ratify what had been determined on at the interview in Hackettstown. He retained the leases the complainant had sent him, and continued to work the mine, and continued negotiations for a different bargain. He returned the leases on the 27th of May, with suggestions of alterations in them. Meanwhile, the price of pig iron had steadily declined. He kept possession until the 1st of August, having sunk a shaft twenty feet in depth, and sustained a loss, as he said, of about $2,000 in the working of the mine. The vice-chancellor, I think, rightly held that these acts were referable to the contract mutually agreed upon at Hackettstown; and delivery of possession by a vendor or lessor, accepted and *277 acted upon Joy the vendee-ar — lessee, is such an act of part per-j formarme" by..the_foimer as .to. .take the contract out bf thustátutel of frauds, and to justify a decree of specific perTórinañcTágainst® the flatter. Earl of Aylesford’s Case, 2 Stra. 783; Bowers v. Cator, 4 Ves. 91; Harris v. Knickerbacker, 5 Wend. 638 ; Brown on Stat. of Frauds § 471; Pomeroy on Cont. §§ 118-124.

Before leaving this subject, it is proper to refer to the fact that the'leases forwarded by the complainant to the defendant, at Philadelphia, are not exact transcripts of the lease produced and altered at the Hackettstown interview. The variance was not alluded to in the subsequent negotiations between the parties, nor at the-hearing before the vice-chancellor, and seems to have been discovered after this appeal was taken. If attention had been called to this fact in the court below, it might have been explained. At all events, the defendant has suffered no injury therefrom; for the court of chancery decreed the execution of, the Hackettstown lease.

Another objection to the decree is endeavored to be rested on the doctrine that the court wjll not decree specific performance. -of a continuing contract. There is a class of special andexceptionaPcontracts in which courts of equity refuse to exercise jurisdiction by way of specific performance. These are contracts having such terms and provisions that the court could not carry into effect its decree without some personal supervision. and oversight over the work to be done, extending over a considerable period of time, such as agreements to repair or build, to construct works, to build or carry on railways, mines and the like. In.such cases, the court declines to interfere, because of its inability to give relief by one decree. Pomeroy on Cont. §§ 307-312. The -effort to range this case within this exceptional class of contracts is futile. The court can grant full relief at once, by a decree that the lease be executed, leaving the complainant to his legal remedy thereafter, for breaches of the covenants contained in it. Lord Cranworth, in Blackett v. Bates, L. R. (1 Ch. App.) 117, points out the. distinction between cases such as that now in hand, and cases of the class in which the court will not entertain jurisdiction. *278 In that ease, the controversy had been referred to an arbitrator. He had awarded that the defendant should execute to the plaintiff a lease of the right to use a certain part of a railway — the lease to be in words set out in the award. He had also awarded that the defendant should have certain privileges of use of the railway; but the lease he directed to be executed did not provide for such privileges. The court refused to decree specific performance of the award, for the reason that by such decree full relief could not be given to both parties; that the plaintiff would get at once, by the decree, what he sought — the lease; whereas, the defendant could not get what he was entitled to, which was a right to enforce performance, by the plaintiff, of daily duties, during the whole term of the lease, and the court had no means of enforcing such performance. But the lord-chancellor adds : “ If the arbitrator, instead of awarding that the plaintiff should do certain acts, had awarded that the lease to be executed should contain covenants, by the plaintiff, to do them, the case would have stood on an entirely different footing. The court could not then have been called upon to enforce, either- directly or indirectly, the doing of those acts, but merely to decree the execution of a lease containing certain covenants — a kind of relief which is clearly within the jurisdiction of the court, and open to no objection.” The precedents are numerous of decrees directing, the execution of mining and farming leases, containing stipulations with respect to the mode of working and cultivating, analogous to the covenants of the proposed lease with respect to the working of the mine and the payment of a royalty on the minerals raised. If the defendant shall be involved in difficulties with respect to past non-performance of his engagements, or in embarrassments in exercising his right of rescission, they will be the consequence of his own conduct in evading the due performance of his obligations.

The vice-chancellor properly disposed of the defence, that the agreement between the parties was induced by false and fraudulent representations with respect to the former productiveness of the mine.

The vice-chancellor properly directed that the lease, when *279 executed, should bear date on the 6th of March, 1880, when possession was taken. Pain v. Coombs, 1 De G. & J. 34 ; Rankin v. Lay, 2 De G. F. & J. 65.

The decree should be affirmed, with costs.

Decree unanimously affirmed.