Magee v. McManus

California Supreme Court Aug 31, 1886 No. No. 9411Published

Before: McKee

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Holding. A court of equity cannot enforce specific performance of a contract that is indefinite and uncertain in its terms, nor can it grant equitable relief when the plaintiff has an adequate remedy at law.

Issues

Whether a contract to execute a note and mortgage that is indefinite regarding terms, amount, and interest is subject to specific performance.
Whether a surety who has paid a debt and has an adequate remedy at law is entitled to equitable relief when no subsisting securities exist for subrogation.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“As, therefore, the agreement was not final, and it was indefinite and uncertain in its terms and in itself, specific performance of it could not be enforced in equity.”

“Equity only enforces performance of a contract as-it is made by the parties themselves; it has no power to make a contract for them.”

“Where a party has an adequate remedy at law, he is not entitled to relief in equity.”

Synopsis

Specific Performance—Contract must be Definite and Certain— Evidence. — The specific performance of a contract cannot be had unless the thing agreed to be done is definite and certain in its terms and in itself, and the party claiming performance establishes by clear and satisfactory proof the existence of the contract as he alleges it.

Id.—Contract for Indemnity —Agreement to Execute Note and Mortgage. — The action was brought to procure the specific performance of a parol contract. The complaint alleged that the plaintiff, having become liable as the accommodation surety for the defendant on two promissory notes, hearing a given rate of interest, entered into a contract with her whereby she promised, in consideration of his joining with her in the execution of a new note for six hundred dollars, payable six months after date, at a different rate of interest, to secure him against liability on the three notes by giving him her individual note secured by a mortgage upon her homestead property, the note to he made payable to him at the same time as the six-hnndred-dollar note, in a sum equal to the whole amount then due on the three notes, and to bear the same rate of interest, and the mortgage to be made in such an amount as would secure him against any liability by reason of his becoming her surety. The court found the contract as alleged in the complaint, except that it was made in consideration of the plaintiff becoming surety on a note payable one year after date. Held, that specific performance of the contract could not he had, — 1. Because the contract as alleged in the complaint and as found by the court differed in the consideration; and 2. Because the contract was indefinite and uncertain both as to the time of payment of the note and mortgage, and as to the amount for which the mortgage was to he given, and the rate of interest on the note.

Id. —Waiver of Right to Specific Performance. —The plaintiff performed his part of the contract, hut there was no subsequent ascertainment or agreement as to the amount and terms of the mortgage; nor did he make any demand on the defendant for a performance on her part until after the debt for which he was surety became due, at which time the contract in its original shape could not he performed. Held, that the plaintiff had waived his right to a specific performance of the contract.

Id. — Surety — Rights of after Payment — Insolvency of Principal — Homestead — Excessive Value. —The complaint alleged and the court found that the defendant was insolvent, but owned certain premises which she claimed as a homestead. The notes on which the plaintiff was surety were otherwise unsecured. Held, that upon the payment of the notes by the plaintiff, 1ns remedy was by an action at law against the defendant to recover the amount that he had paid, and that the judgment therein might he enforced against the homestead premises to the extent that they exceeded in value the amount allowed by the statute.

McKee, J. In this case, the defendant was required by the judgment of the court below “forthwith to execute and deliver to plaintiff a note and mortgage, to wit, her promissory note in the sum of $1,662.40, payable to plaintiff on demand, and bearing interest at the rate of seven per cent per annum from the fourth day of October, 1882, secured by her mortgage on the lands and premises described in plaintiff’s amended complaint, the same being a certain lot of land and premises situate, lying, and being in the township of Mcasio, county of Marin, state of California”; and from the judgment, and an order denying a motion for a new trial, the defendant appealed. The judgment was rendered in an action to compel specific performance of a contract to execute a note and mortgage.

By the allegations of the complaint, it appears that the plaintiff had become liable to the Bank of Sonoma County upon two promissory notes, one for five hundred dollars, and the other for three hundred dollars, which had been executed by him as an accommodation surety for the defendant. Each of the notes bore interest at one and one fourth per cent per month, payable quarterly, or to be compounded. On the 23d of June, 1881, both notes were past due and unpaid. As principal debtor, the defendant had paid the interest upon them as it became due, but failed to pay any part of the principal. She [555]had not at that time the means to pay any part of it, and she wanted to negotiate with the bank for a fresh loan. To enable her to do so, she applied to the plaintiff to become surety for her upon a new note to the bank, promising him that if he would join her in the execution of a note payable six months after date to the bank in the sum of six hundred dollars, with interest at the rate of one per cent per month, payable every six months, or to compound,—upon which she could get the money from the bank,—she would on demand secure him against liability for her upon the three notes by giving him her individual note secured by mortgage upon her homestead property, the note to be made payable to him “ at the same time- as the six-hundred-dollar note, .... in a sum equal to the whole amount then due, and for which he was liable on the first two notes, and also upon the six-hundred-dollar note, .... with accruing interest,” and “ to bear the same rate of interest,” and the mortgage to be made “ in such amount as to secure plaintiff against any liability by reason of his becoming her surety as aforesaid.”

The plaintiff consented, and upon the faith of the promise made by the defendant, he joined her in the execution of a note payable to the bank for six hundred dollars, upon which she procured the money from the bank; but she failed and refused to keep her promise, made default in the payment of any part of the principal and interest of the three notes, and when the six-hundred-dollar note became due, the plaintiff was compelled by the bank to pay $1,664.40, in satisfaction of the three notes which he had signed as the accommodation surety of the defendant. The payment was made on the 4th of October, 1882.

Magee v. McManus

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