Beverly v. Blackwood

California Supreme Court Mar 29, 1894 No. No. 18185Published

Before: Vanclief

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Holding. The court held that because the defendant failed to perform his contractual obligation to sell the Santa Clara land to satisfy the mortgage debt, and subsequently rendered performance impossible by gifting the land away, the mortgage on the plaintiff's Tehama land is deemed satisfied in equity.

Issues

Whether time was of the essence in the contract for the sale of the Santa Clara land.
Whether the defendant was excused from his obligation to sell the land due to the mortgagee's refusal to accept early payment.
Whether the mortgage on the plaintiff's land should be deemed satisfied due to the defendant's failure to perform.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The general rule of equity is, that time is not of the essence of the contract, unless it clearly appears from the terms of the contract, in the light of all the circumstances, that such was the intention of the parties.”

“The defendant could and ought to have sold the Santa Clara lands for the price and within the time contemplated by the parties, and satisfied the mortgage in question from the proceeds of the sale, as he agreed to do”

“therefore, the mortgage on the Tehama lands should be deemed satisfied, as it ought to have been, and the judgment being to this effect is clearly right.”

Synopsis

Exchange op Lands—Agreement to Sell—Mortgage as Collateral— Cancellation.—Where, upon an exchange of lands, one of the parties agreed to take up certain mortgages on the land received by him, and to sell the land at a certain aggregate price, in tracts to suit purchasers, and to take mortgage security up„xi the land conveyed by him to the other party, as collateral security to insure the obtaining of the aggregate price agreed upon by sales in the market, until that price should be paid, with an agreement to release the mortgage at any time when that price was received, the person giving such mortgage may maintain an action to cancel it, upon proof of the refusal of the other party to sell the land, or to permit a sale at the price proposed, and proof of his con- , veyance thereof to his daughters by deeds of gift, thus putting it out of his power to sell the land at any price.

Id.—Contract—Time, When Not oe Essence. —The general rule of equity is that time is not of the essence of a contract, unless it appears from the terms of the contract, in the light of all the circumstances, that such was the intention of the parties; and where it is not declared in the contract that time shall be of the essence, and there is no limitation of time within which a contract for the release of a mortgage, given as collateral security, must be performed, and no provision that it should become an independent charge upon the land mortgaged, if the land secured to be sold at a certain price was not sold within a limited period, a time fixed in the contract for the sale of the land, is not of the essence of the contract to release the mortgage.

Id.—Estoppel oe Party in Default.—Where time is of the essence of a, contract, and a party agreeing to do an act within the time proposed is the only party in default, such party can take no advantage from his own wrong.

Id.—Agreement to Take up a Mortgage.—An agreement to take up a mortgage, provided the party holding the same will accept Ms money, must be construed as an agreement to pay the mortgagee all that he is entitled to receive,' although the mortgage is not due, and the mort-, gagee insists upon receiving the full amount of principal and interest, which would be due at maturity of the mortgage.

Id.—Equitable Maxim.—Equity looks upon things agreed to be done as actually performed in favor of him to whom and against him from whom the performance is due, and will treat the subject matter as to collateral consequences and incidents in the same manner as if the final acts contemplated by the parties had been, executed exactly as they ought to have been, ,

Id.—Evidence—Value of Lands at Time of Exchange—Fraud—Construction of Contract. —Evidence as to the value of lands exchanged at the time of the exchange is admissible and relevant to an issue of fraud connected with the exchange, and also as a circumstance to be considered in construing the contract.

Vanclief, C. Action to cancel a note and mortgage made and executed by plaintiff to defendant, March 15, 1890, in connection with, and as part of, a transaction by which an exchange of lands between the parties was effected.

The judgment of the trial court was in favor of the plaintiff, and the defendant appeals from the judgment, and from an order denying his motion for a new trial.

The material facts, as found by the lower court, are substantially as follows:

The plaintiff owned 95 acres of land in Santa Clara county, subject to two mortgages, one to Roach for ten thousand dollars, drawing interest at 8-i per cent per annum, payable semi-annually, to mature November 14, 1892; and the other to Frink for $1,000, to become due May 15, 1890. The defendant owned a tract of 840 acres of unencumbered land, situate in Tehama county. On March 15, 1890, an exchange of these lands was effected in the following manner: Each executed to the other a deed of his land, the conveyance of the Santa Clara land to defendant being subject to, and defendant assuming the payment of, the said mortgages thereon. The plaintiff, having represented that his 95 acres was worth $225 dollars per acre, aggregating $21,375, and defendant desiring to realize that price, it was agreed that the land should be sold for a sum not less than $21,375 ($225 per acre, and that defendant should pay out of that sum the Roach and Frink mortgages, and that he would advance to plaintiff $1,000 at the time of [87]the trade, which he did, and that this advancement of $1,000 should be considered a loan in case the land should not sell for the price of $21,375, otherwise to be considered paid from the proceeds of the sale. The plaintiff, on his part, agreed to guarantee that the land would sell for $21,375 if put upon the market according to the agreement; and as collateral security for the performance of this guaranty, and for no other purpose or consideration, plaintiff, contemporaneously with the execution of the exchange deeds, and as a part of the same transaction, executed the mortgage in question for the sum of $9,550, upon the land in Tehama county, conveyed to him by defendant. On the same day, and as part of the same transaction, the parties executed the following written agreement:

“ This agreement, made and entered into this fifteenth day of March, 1890, between Wm. C. Blackwood and Frank P. Beverly, that the saidWm. C. Blackwood is to allow the said tract of ninety-five acres, near the town of Old Mountain View, deeded to him this day by Frank P. Beverly, to be sold in tracts to suit, and should any cash payments be made on such sales then the same shall be applied on the mortgage now held by Wm. C. Blackwood against the said Frank P. Beverly, as said mortgage is to be paid out of the sale of the said ninety-five acres of land, the price of said land to be $225 per acre, and such portion as may be sold on deferred approved payments whereir. the same shall draw a rate of interest, then said interest received from such sales shall be applied to the interest on the mortgage now held by Wm. C. Blackwood from Frank P. Beverly. The time of making such sale to the first day of December, 1890. Said Beverty agrees^to keep place in good order and repair during the existence of this contract.

Beverly v. Blackwood

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