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Werner v. Zintsmaster

September 27, 1932

WERNER
v.
ZINTSMASTER



Appeal from the District Court of the United States for the Western District of Pennsylvania; Frederic P. Schoonmaker, Judge.

Author: Woolley

Before WOOLEY, DAVIS, and THOMPSON, Circuit Judges.

WOOLLEY, Circuit Judge.

This is the familiar case of a Florida land speculation in which, after the boom broke, each party looked out for himself with little regard for his contractual obligations. As there is an entire absence of equities running to either party, we approach the matter coldly.

The case has been tried twice. Each time the plaintiff had judgment on a directed verdict; and from each judgment the defendant appealed. We refer to our opinion on the first appeal [41 F.2d 634, 637] for the story of the case and shall add, as we go along, only enough to show the bearing of new questions.

Practically the only question in our review of the first judgment was whether the covenants of the parties to convey and pay for the land are dependent or independent. The learned trial judge had held they are independent, that is, the vendee must first pay the purchase price and the vendor might later convey a good title. We were constrained to reverse this decision, holding that the promises of the parties to convey and pay are dependent within the meaning and with the legal consequences of that term. Although the learned trial judge at the second trial followed our interpretation of the contract in this regard, the same matter seems to be raised again on this appeal by the vendee's first question:

"Are the vendor's covenant to convey and the vendee's covenant to pay dependent or independent covenants?"

We hold as before that they are dependent and, in performance, concurrent. This disposes of the first question which really had no place in this appeal except, perhaps, as a basis for the next question, namely:

"Is time the essence of the contract?"

In this connection the defendant-vendee insists, as a ground of the argument presently to be mentioned, that this contract, concerning title, alienation and transfer of land in Florida, is controlled by the lex rei sitae. We shall assume without deciding that it is. He then cites Florida cases to the effect that where time is of the essence of a contract, the vendor, in order to recover, must have been ready, able and willing to convey the title at the time stipulated, and that as the plaintiffvendor had at that time no title, he was, even if later he acquired a good title and made tender, without right to maintain a suit to recover the balance of the purchase price. Seemingly, the learned trial judge thought we had held on the first appeal that time was not of the essence of this contract and therefore an imperfect tender could later be perfected and made a valid ground for recovery.

We did not on the first appeal pass upon the question whether time was of the essence of the contract for, as the appellant concedes, that question had not been raised below and was not argued here. What we said was in way of a general statement of the law applicable to contracts for the sale of land on the question of the alleged error of the court in refusing to submit the case to the jury. It dealt with a situation where the vendor had no title to the land when he contracted to sell it, in respect to which the vendee claimed that, if so, the whole contract was void at the be ginning and, if void at the beginning, he could rescind it; and that as the title the vendor later acquired and tendered was bad, he claimed he could also rescind the contract for that reason. Holding that the title later acquired and tendered was bad, we stated that under Florida law a person may contract to sell land which he does not own but he must own it when finally he makes a tender of the deed. Sanford v. Cloud, 17 Fla. 532. Continuing, we said:

"Tender of a defective title may justify a vendee in refusing to accept it * * * but that does not release him from his obligation to accept a good title tendered later, * * * when time is not of the essence of the contract."

There was no occasion to say, nor did we say, that time is not of the essence of this contract. Although intended as a statement of general law on the subject of rescission which we were discussing, the learned trial judge was, we think, justified, by the relation which the statement had to the final decision, in accepting it as a statement of the law of the case, as did the defendant-vendee, who regarded it as an unfortunate mistake on our part.

Much of the vendee's brief is accordingly addressed to the converse of the quoted expression, namely; that time is of the essence of the contract and, being so, the vendor, to prevail, must have been ready, able and willing to convey a fee simple title at the time stipulated, evidently feeling that if only he could establish this law as applicable to this contract his defense would be complete, for the vendor was not then able to convey. Although on this appeal we cannot find that the question was raised or decided at the second trial, except as it was perhaps ...


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