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ways be maintained between the lumber hereby powers of an agent in a contract, and such grant insured and any mill or other manufacturing es- of anthority is the measure and limit of the tablishment, or else this policy shall be void," is agent's power in such matter, and, where the a reasonable and competent provision to insert or limitations of the agent are expresed in the inattach to the policy.
strument, the parties thereto are bound to have 5. It is reasonable and competent for insurance full notice and knowledge thereof." companies to provide in their policies that no officer, agent or other representative of the com
SPECIFIC PERFORMANCE OF BUILDpany shall have the power to waive such stipulation of warranty, unless indorsed thereon or added
ING CONTRACTS. 1 thereto. 6. Where an insurance policy contains such a
PART I. IN GENERAL. stipulation of warranty, and provides that no 1. Origin and Growth of Specific Performance. officer, agent or other representative of the com
2. Definition of Specific Performance. pany shall have the power to waive any condition
Parr II. ('ONTRACTS ARISING WHERE AX OWNER or provision of the policy, unless such waiver
OF LAND ENGAGES ANOTHER TO BUILD UPOX
His Land. shall be written upon or attached thereto, such limited grant of authority is the measure of their
1. Discussion of Early Important English Cases.
2. Discussion of Conflicting Cases. power.
3. Conclusion. 7. Where 'such limitation is expressed in the
PART III. ('ONTRACTS WHERE OWNER OF LAND policy, the assured is presumed to have notice and
AGREES TO BUILD THEREON IN CONSIDERATION knowledge of such limitation, and is bound there
OF CERTAIN BENEFITS OR PRIVILEGES by.
1. Distinguishing Features of this Class of Con8. Where the waiver relied on is the act of an
tracts. agent of the insurance company, it must be shown
2. Discussion of Early Important English Cases. that the agent had express authority from the 3. Discussion of Important American Authorities. company to make the waiver, or that the com- 4. Rule Sustained by Weight of Authority. pany subsequently, with knowledge of the facts, 5. Discussion of Conflicting Cases, ratified the unauthorized action of the agent,
6. Rule as , to the Enforcement of Contracts InIn commenting on the position assumed by the
volving Continuing Duties. United States Supreme Conrt, Justice Hainer says:
7. Conclusion. “The rule announced by the Supreme Court of the Part I. Origin and Growth of Specific PerUnited States in the case of Northern Assur. Co. formance. The remedy of specific performv. Grand View Bldg. Assn,, supra, where it was
ance is not of ancient origin. The Roman declared that, 'where the waiver relied on is the act of an agent, it must be shown, either that the
law did not offer it, but gave a title to damagent had express authority from the company to ages as the sole right resulting from non-permake the waiver, or that the company subse- formance of a contract. In like manner the quently, with knowledge of the facts, ratified the early common law of England made no action of the agent', is not only directly in point,
attempt actually to enforce the performance but is decisive of this question. We do not deem it necessary to further review the state decisions,
of contracts, but gave to the injured party which are in irreconcilable conflict with the latest
i This thesis is an attempt to present in a clear and expression of the Supreme Court of the United
concise statement the principles governing courts of States upon this important subject. We think equity in their control over building contracts. The that the decision of the Supreme Court of the writer has examined the case law from the earliest reUnited States is the correct and sound rule to ported decision (1469), down to the present time, in adopt, and that the doctrine announced by the which the question of specific perforinance of binding later cases of a number of the state courts and contracts was before the court, and while the very some of the federal courts is a wide departure
early cases are of little aid in determining the rules by
which courts of equity take jurisdiction of such cases, from the true interpretation of valid written con
yet they are cited, and some commented upon to show tracts, and is violative of the fundamental princi
the history and growth of this remedy as applied to ples of the law of agency. The rule of law which
binding contracts. After an examination of the author. admits parol testimony to vary or change the ities, the writer deems it best to divide contracts of terms of a valid written instrument, whose terms this character. Part two of this article treats of conare free from doubt or ambiguity, repeals the tracts arising where an owner of land engages another to fundamental principle that the written instrument build on this land, wbile part three contains a discussion must control over the verbal ne gotiations and
of contracts where an owner of land, or one having a statements made prior to and contemporaneous
possessory interest in same, agrees to build on that
land in consideration of certain benefits or privileges. with the execution of the instrument. It also
The writer contends that contracts of the nature discontravenes the fundamental doctrine that an
cussed in part two should not be specifically enforced agent cannot act beyond the scope of his author
at the present day; while contracts embraced in part ity. It is also in conflict with the doctrine that a
three, if certain and detinite in terms, may be enforced principal has the undoubted authority to limit the in the discretion of the court of equity.
only the right to satisfaction in damages. Sir and it would be suffering him to take advanHenry Maine, in his work on ancient law, has tage of his own wrong if he were not comshown how slow was the introduction into pelled." However, Sir Lloyd Kenyon, in jurisprudence of any provision for the enforce- deciding the case of Errington v. Aynesly, ment of contracts, and how that introduction in 1788, laid down the rule that such contracts was due to the increase of commercial activity. will not be enforced because the remedy at The same spirit of commerce which led to the law is adequate, and he further says that, enforcement of contracts, also brought in the “B” can do what “A” won't. The chancellor notion that money is an equivalent of every- | said that no case of specific performance of thing, is an universal, common measure, and building contracts appeared in the books, this, says Frye, probably led to the arrested which statement is erroneous, as will be shown growth of the remedies for their breach and later in the discussion of this subject. the confining of such remedies for the most Part II. Contracts Arising Where an Owner part to the payment of money or the delivery of Land Engages Another to Build Upon His of a chattel.
Land-Discussion of Early Important EngDefinition of Specific Performance.-What lish Cases.-Returning to the discussion, we is specific performance? Frey, in his work,
will investigate the authorities under our first says: "Specific performance of a contract is proposition, that is, where B contracts to its actual execution according to its stipula- | build on A's land, and for an independent contions and terms.” Such actual execution is sideration moving from A to B. The earliest enforced under the equitable jurisdiction trace of this jurisdiction in the specific pervested in the courts by directing the party in formance of building contracts, which the default to do the very thing which he con- industry of legal antiquaries has discovered, tracted to do.
is found in the year book of VIII. Edw. IV. In the very early cases reported in the in which the court, without hesitation, decreed books, in which the court has decreed specific specific performance of a building contract. performance of building contracts, the division We find no record of such a case coming beor classification which the writer makes in the fore the court again until 1694, when Holt vs note which precede the discussion of this sub- | Holt,? was decided. Here an agreement was ject is not recognized ; and in fact, it seems entered into whereby the defendant agreed to that the fundamental basic principles which build a house, merely a house, with no have governed the jurisdiction of equity courts further description, and the court granted a from the establishment of that court down to decree enforcing the contract, making no disthe present time, had been lost sight of. tinction between this case and one for the perCourts of equity, from an early date down to formance of a contract to convey land. The 1788, had never refused to decree perform- next case in point of time is that of Allen v. ance of building contracts. The courts did
Harding.3 “A” covenanted with “B” to not concern themselves with the question of build a house upon the glebe land, and “B” jurisdiction, as to whether the remedy at law brought his bill for specific performance. . was adequate or not, but took jurisdiction of Defense in this case insisted that the contract such cases and decided them as a matter of was too loose and uncertain both as to time right in the complaining party, and not as and value, for it was neither mentioned when within the discretion of the court. From the house was to be built, nor what sort of a such cases we can discover no rule or test by house it was to be; but the lord chancellor which we may determine the jurisdiction of brushed all such defense aside, and decided equity in the specific performance of building that such a contract would be enforced
a contracts. To quote from one decision, it because it was to be built for the benefit of would seem that their power was unlimited, the church. This case is a fair sample of the which is as follows: “But this cannot be earlier decisions before the jurisdiction of the called a hardship, because it will put the de- equity courts was clearly defined. In 1747, fendant to an expense, for it is merely through Lord Ilardwicke, in deciding City of London his own default, and this court only compels him to perform his own agreement which he 2 Vernon's Ch. 322. has entered into for valuable consideration; 3 1708 or 1709, 7 Anne, 2 Eq. Cases Abr., 17.
v. Nash, where one contracted to rebuild houses, recognized the right of the chancery court to grant specific performance in their discretion, but denied it here because of the hardship it would work upon the defendant by reason of the plaintiff's laches.
Prior to the decision of Errington v. Aynesly, in 1788, no court questioned the right of the equity court to take jurisdiction of such cases, and no test or rule is followed in their decisions. We will not attempt to reconcile such cases with the later ones, as the fundamental, well-grounded principles of equitable jurisdiction are ignored, and such decisions can hardly be considered as authority for either side of the contention. In Errington v. Aynesly, however, the court speaks for the first time of the inadequacy of a remedy at law, and lays down the familiar principle that courts of equity will not assume to enforce contracts in specie whenever the remedy at law is full, adequate and complete. This decision is followed two years later by Lord Thurlow in Lucas v. Commerford, in which a contract to build a house was attempted to be enforced, but Lord Thurlow said: "The court could not undertake the building of a house, and the party must go to the legal side of the court." This decision is recognized by both judge and text-writer as the first great decision upon this subject, and it will be found cited in nearly every case subsequent to this time. It is interesting to note, however, the decision rendered in Mosely v. Virgin, only six years latter, in which Lord Loughborough lays down the rule that if the contract is definite in terms, not loose and vague, "perhaps there would not be much difficulty to decree specific performance.' He attempts to reconcile his views with those of Lord Thurlow, in Lucas v. Commerford, and says that Thurlow "appears to have added that he did not see how it could be made upon a covenant to build, being equally uncertain." And Lord Loughborough, reasoning from this, concludes that if it were in its nature defined and certain, it would be enforced according to Lucas v. Commerford; but in a thorough examination of the reports of this decision, we find no such statement as alluded to by
41 Ves. Sr. 12, 3 Atkyn's Ch. Rep. 512.
52 Bro. C. C. 341.
61 Ves. Jr. 235.
73 Ves. Jr. 184.
Lord Loughborough. However, the case is cited as authority for the proposition that contracts, if in their nature defined, will be enforced, but after a study of each case which relies upon Mosely v. Virgin, as authority, we find that in each case the remedy at law is inadequate, and the party is forced into the equity court to obtain complete relief. Justice Miller, in a review of the authorities, in Ross v. U. P. Ry. Co., does not attempt to reconcile the two decisions, but he does speak of the attempt of Lord Loughborough to reconcile his views with those expressed by Lord Thurlow, and he says that surely Loughborough was mistaken as to the decision of Lucas v. Commerford.
After the decisions of Errington v. Aynesly, Lucas v. Commerford, and Mosely v. Virgin, we find but few courts which hold that contracts of the first division will be specifically enforced, while the great weight of authority promulgates the rule that equity has no jurisdiction over such cases, and bases it upon the ground that there is a remedy for complete relief in law. Many cases are cited in the notes as authority supporting this contention.
Dicussion of Conflicting Cases. - The case
of Paxton v. Newton9 is sometimes cited as authority for enforcing building contracts specifically, but we find such case to be one for repairs and not for building. Cooper v. Jarman,10 is often spoken of as being against the contention of this article, but a review of the facts will clear up the apparent conflict. "A" engaged "B" to build a house for him, but before the completion of it "A" died, and the house was finished after his death, and the heir-at-law, who was the plaintiff in the suit and who had been appointed administrator of the estate, paid "B" for his work out of the personal estate of the deceased "A". The question raised was, whether the plaintiff was to be allowed such payment, as he was the heir
8 Errington v. Aynesly, 1788, 2 Dicken, 692: Lucas v. Cummerford, 1790, 1 Ves. Jr. 235; The So. Wales, etc., Ry. Co. v. Wythes, 1854, 1 Kay & Jno. 186; Whitney v. City of New Haven, 1855, 23 Conn. 624; Ross v. Union Pac. Ry. Co., 1863, 1 Walworth, 26; Fallon v. Ry. Co., 1871, 1 Dillon, 121; Middleton v. Greenwood, 1864, 2 De Gex J. & S. 142; Raphael v. Thames, etc. Ry. Co., 1866, Law R. 2 Eq. 37; The Mayor etc. v. Southgate, 1869, 17 W. R. 197; Mastin v. Halley, 1875, 61 Mo. 196; Greenhill v. Isle of Wight, 1871, 19 W. R. 345; Oregonian Ry. Co. v. Ore., etc. Co., 1885, 37 Fed. Rep. 733.
92 Smale & Gif. 1854, 437.
10 1866, Law R. 3 Eq. 100.
at-law. The court held that the heir-at-law various courts, “B” can be hired to do what was entitled to have the house finished at the “A” won't. expense of the
ersonal estate of the intestate, Part III. Contracts Where Ouner of Land and the question that we are now concerned Agrees to Build Thereon in Consideration of with did not come directly before the court. Certain Benefits or Privileges---- DistinguishBeck v. Allison11 is not authority for enforc- | ing Features of This Class of Contracts.-We ing building contracts, as there the agreement now wish to consider the authorities upon cases was to repair, and we do not concern our- of specific performance arising when "B"' conselves with such contracts, as different ques- tracts to build on his own land, or land in tions arise and different rules are applicable. which he has a possessory interest, with "A," The next case which appears to conflict with who is to be benefited materially by suchi the contention laid down in Lucas v. Commer- building, or is to receive some privilege by ford, and which is the latest case found re- reason of the building, and such benefit or ported that bears directly upon this division privilege is a part of the consideration for the of the subject, is Jones v. Parker. 1 2 A bill contract. Cases involving the above state of in equity was brought by a lessee upon a lease facts are not found in the very early reports, purporting to begin on September 1, 1893, and at least not so often as those of the ordinary to demise part of a basement in a building not kind, such as have been treated under our yet erected. The lessor covenanted to deliver first division of the subject. But since 1740, possession to the lessee upon completion of when the first case involving these facts came said building, and, thereafter, during the term before the courts, the question has been raised of this lease, reasonably to heat and light the a great many times. We find that a majority premises. Plaintiff alleged that the building of the modern cases of specific performance had been completed, but that the defendant, of building contracts are to be found grouped who was léssor, refused to complete the prem
under the second rather than the first division ises with apparatus sufficient to heat and light of our classification. As we proceed to conthe same, and to deliver the same to plaintiff. sider the authorities, and to call especial The prayer was for specific performance. attention to some of the leading cases, we will Judge Holmes, in delivering the opinion, rec- find that the preponderance of authorities is ognizes the doubt as to the jurisdiction of in favor of enforcing such contracts. While equity courts in enforcing building contracts, we may find decisions in which specific perand cites Frye & Pomeroy on Spec. Perform., forniance is denied, we will also discover and the cases of Lucas v. Commerford, and wherein the case before the court was peculiar Ross v. U. P. R. R., cited above. He speaks in its nature and could be distinguished from of the uncertainty of the agreement, etc., but the ordinary case, or the point of specific concludes that specific performance should be performance" was not passed upon directly decreed. The court cites no authority for by the court, but was decided upon some decreeing specific performance of building technicality of pleading, or for other reasons. contracts, and fails, as it seems to us, to ap
We also find cases which are in conflict with ply the well grounded principles which gov- our position and cannot be reconciled, but ern the jurisdiction of the equity court. This these are few in number. is the only modern decision which seems to Discussion of Early Important English militate against the proposition that contracts Cases.—The first English case before the of the first division will not be enforced.
courts was Pembroke v.
“A,” Conclusion.-With this review of the owner of land, leased it to “B” for a number authorities, we conclude that contracts to of years for a consideration, and part of that build of the ordinary class, such as fall within
consideration was that “B” was to pull down the first division, according to the great some old buildings then standing on the land weight of authority, will not be enforced
and build new ones. “B” entered on the specifically, in equity, as the remedy of dam- premises, but failed and refused to build the ages is adequate, and, as has been said by houses as per contract, and this bill
brought asking the court to enforce the agree11 1873, 4 Dailey N. Y. 121.
ment. Other questions arose, but which had 12 1895, 163 Mass. 564.
13 3 Swanton's Rep. 437.
no bearing on this point. The defendant in- premises, and part of the consideration for sisted that the proper remedy was in law and such conveyance was an agreement on the not in equity, but Lord Hardwick met this by part of the defendant to build certain defined saying that the plaintiff had no remedy at crossings as may be necessary.” Defendant
“ law at all, as the contract was not in writing, made the crossings, but not according to agreeand the part performance of the contract ment and the court decreed performance of would not help him there, because that is a the contract regarding the crossings, and the rule in the consideration only of the equity crossings were to be such as were reasonably court, and as there was partial performance necessary. The court recognized the fact of this contract the court would not suffer the that such decrees of the court were difficult parties to take the benefit of the statute; but to properly enforce, but where the equity is he is bound in conscience and in equity to so plain, and justice could be obtained in no perform the whole. Another of the leading other way, it could be referred to a master to English cases is Storer v. The Gr't. W. Ry. ascertain what was reasonable. Co.,14 "A," a railroad, in consideration of a Discussion of Important Amercian Authortransfer of land to it by “B," over which ities.--In Rindge v. Baker, 17 an agreement proposed railway was to pass, covenanted to was entered into to build a party wall and one build and maintain a neat archway over a failing to build his part, the other built it, crossing over such railroad. “A” refused to and sued for the cost of the building. The comply with the terms, and specific perform-court, in awarding damages, said that plaintiff
was asked, and the court, through could have come into court and compelled the Bruce, V. C., held that the court will inter- defendant to specifically perform. Another fere for the purpose of directing the specific leading case is to be found in Gregory v. performance of a contract by defendants to Ingwersen.18 Here the plaintiff transferred do defined work on their own property in the the title of a five foot-strip of land to defendperformance of which the plaintiff, with whom ant in consideration of his (the defendant's) they have covenanted, has an interest so building a stairway of certain dimensions, and material that the non-performance cannot be this stairway was to be built on the strip of adequately compensated by damages at law. land conveyed. The stairway was built, but Two years later, in 1844, the celebrated case not as contracted for, and plaintiff asks for of Price v. Mayor, etc., of Penzance, 15 specific performance. The court, in granting decided. In this case, Price conveyed certain the decree, speaks of the principle governing lands to the defendant city, in consideration equity jurisdiction, i. e., was there an adeof which the city covenanted to build a fish quate remedy at law? The court answered market upon the lands conveyed. Although there was none, as the land was conveyed and the right to compel performance was was low in defendant's possession, and plaintexercised in this case, as the defendants built iff's only remedy would be in equity. the market before the case was finally decided, Rule Sustained by Weight of Authority.the court recognized the right, and said: With this review of the leading cases we be"Under this contract, the corporation has lieve it is made plain that by the great weight taken possession of the land and converted it; of authority, both in this country and Engand having had the benefit of the contract in land, courts of equity will enforce contracts specie, as far as they are concerned, I need of the second class. These cases are recognot say that the court will go to any length nized by both bench and ber as authority, which it can to compel them to perform the and supported by the following authorities. 19 contract in specie.” The case of Sanderson
17 1874, 57 N. Y. 209. v. Cockermouth, etc. Ry., Co.,1
18 1880, 32 N. J. Eq. 199, sidered a leading case, and a short review 19 Birchett v. Bolling, 1817, 5 Mumford's Va. 442; may be beneficial. Plaintiff in this case con
Warring v. Manchester Ry. Co., 1849, 7 Hare, 482; Sir
Edward Bulyer Lytton v. Great Nor. Ry. ('0., 1856, 2 veyed land to defendant, a railway corpora- K. & J. 394; Aikin v. Albany R. R. Co., 1857, 26 Barb. tion, which was to build a railroad on these 289; Wells v. Maxwell, 1863, 32 Beavan, 408; Cubit v.
Smith, 1864, 10 Jurist (V. S.), 1123; Hood v. North E. 14 1842, 3 Ry. Cases, 106.
Ry. Co., 1869, Law R. 8 Eq. 666; Wilson v. Furness, R. 15 4 Hare 506.
R. Co., 1869, L. R. 9 Eq. 28; Randall v. Latham, 1869, 16 1849, in 11 Beavan, 497.
36 Conn. 48; Greene v. W. Cheshire R. R. Co., 1871, 25