Michigan Insurance v. Kibbee

The Michigan Insurance Company was the holder of two mortgages executed by the Kibbees, at the time the contract between them and Thompson was executed, and at the same time one David N. Tuttle, of Buffalo, was the holder of two other mortgages upon a portion of the same premises, of jirior date to those of the Insurance Company; the second of which had been foreclosed, and the property advertised for sale by a master under the decree of fore” closure. Tuttle had offered to discharge the first mortgage, and the decree of foreclosure, for the sum of six thousand dollars, one- half to be paid down, and the residue in three years, by semi-annual installments of five hundred dollars each, with interest; and the Insurance Company had also offered to take one thousand five hundred dollars in satisfaction and discharge of its mortgages; and these offers of the Company and of Tuttle were known to Thompson, and were the basis of the contract between the Kibbees and him. With such knowledge, and in the hope of securing the benefit of these offers, the contract of January 5th, 1852, was entered into. By it, the Kibbees agreed to sell, and Thompson to purchase, the property covered by the several mortgages, for seven thousand five hundred dollars, which was to be paid in the following manner: Thompson Was to pay six thousand dollars to Tuttle, to satisfy his claims against the Kibbees, and one thousand five hundred to the *424Insurance Company for a like purpose, and each payment was independent of the other, as we will endeavor presently to show. The six thousand dollars was to be paid to Tuttle, if it should be found necessary to pay so much, to procure the release of his mortgage and decree; but Thompson was at liberty to' make any better, or any other, bargain he could with Tuttle; but the sum of six thousand dollars only was to be allowed to him for obtaining the discharge of these debts, whatever might be the price at which he should procure it, and that sum was bo be allowed to him in any event. The instant Tuttle was satisfied his debts,, the sum of six thousand dollars was paid upon this purchase from the Kibbees, irrespective of the cost to Thompson; the speculation was his, the profit or loss equally accruing to him, as circumstances or his choice might determine. But because Tuttle might not adhere to his offer to discharge the mortgage and decree for six thousand dollars, or Thompson be unable from any other reason to procure such discharge, a provision was inserted to * meet such a contingency, and Thompson agreed that in such event, if the property should go to sale under the decree, he would bid at such sale the six thousand dollars, less the amount due on the first mortgage, if necessary to prevent a purchase by any other party; and as this would not be sufficient to satisfy the decree, interest, and costs, the Kibbees were to provide for and pay the balance of the decree and the first mortgage, so that the amount to be paid by Thompson should not exceed seven thousand five hundred dollars, to be payable at the same time, and upon the same terms and conditions, as if the mortgage and decree had been discharged by Tuttle without sale. In other words, the parties contracted that if the property should be sold by the master, Thompson should bid a sum equal to the remainder after deducting the amount of the first mortgage from the sum of six thousand dollars, and as such bid would not satisfy the decree, the Kibbees were to provide for the balance, and were also to' take up *425the first- mortgage, which would remara still outstanding; and Thompson was to pay to them the balance over and above his bid, so as to make the amount of six thousand dollars, in semi-annual installments of five hundred dollars and interest, as it was contemplated and provided he would pay Tuttle if the negotiation was consummated with him, and the sale of the property prevented.

The residue of the seven thousand five hundred dollars —viz. one thousand five hundred dollars — was entirely separated from this transaction respecting the Tuttle mortgage and decree, and dedicated to another use. This sum, Thompson agreed he would pay to the Insurance Company for the satisfaction of its mortgages, six months after he should have acquired a title to the premises; and this he was entitled to have immediately upon his procuring a release of the mortgage and decree from Tuttle, by negotiation, or after the sale under the decree, if a sale should be made, and he bid thereat as provided in the contract. The time, and nothing but the time, for this payment was contingent upon the success of Thompson’s negotiation with Tuttle, as, if that was consummated, the title would be presently conveyed to him, while if the property should be sold, and the Kibbees be compelled to pay off^the first mortgage, a longer or a shorter time might elapse before they could convey, according to circumstances. This conclusively shows that this payment was in no way contingent upon the amount of the residuum left after paying Tuttle’s mortgage and decree.

The Kibbees, on their part, agreed to convey the property to Thompson upon his performance of his covenants; he first executing such mortgage or other security as might be necessary for securing the payment of whatever balance of the purchase money might remain unpaid, which might be more or less ■ according to the result of his negotiation with Tuttle, but would at least cover the ob*426ligation to pay the debt of the Kibbees to the Insurance Company. Thompson was put into immediate possession of the premises, and they are yet held by him or the Harts, under that surrendry, and, as we shall see, under the contract. The contract was deposited with one Wesson by the parties, and Thompson, at the same time, deposited with him three hundred dollars to be paid to the Kibbees as and for rent, if the sale to him was not perfected in the way contemplated in the contract, or to be applied towards the payment of the purchase price; that is, be refunded, or appropriated towards the satisfaction of the decree and mortgage, as the case might be, if the sale should be consummated.

From this synopsis of the contract it appears that Thompson was restricted to two methods of extinguishing Tuttle’s claims; first, by negotiation, in which case, whatever he paid, more or less, he was to be allowed six thousand dollars therefor; and, second, by bidding at the sale, in which case the Kibbees were to provide for and pay the balance of the decree, as also the first mortgage; so that in either or any event, in whatever ’mode Tuttle was satisfied of his claims, and for whatever consideration he released them, such discharge and release should cost the Kibbees no more than six thousand dollars, unless the property should be sold under the decree, -and they be compelled to pay to Tuttle, for the discharge of the mortgage, a sum Avhich would increase that amount; in Avhich event, Thompson Avould only be required to. pay them sufficient over his bid to make the six thousand dollars.

He could, in no event, compel them to pay more than six thousand dollars, to discharge the Tuttle claims. They might be compelled, it is true, to do -so, but that necessity was left contingent only upon the necessity for a negotiation by them Avith Tuttle for the discharge of the mortgage, which could only arise after a sale under the *427decree; and the right to make this negotiation the Kibbees ■reserved to themselves.

The amount which Thompson should pay to Tuttle for ■a release of his decree and mortgage was therefore a matter of indifference to the Kibbees, as was to him the amount which they should pay to Tuttle for a release of the mortgage in case of a sale under the decree.

The Kibbees, in their bill, charge and insist, among ■other things, that immediately after the execution of the contract, Thompson assumed exclusively the right to negotiate with Tuttle, who resided at Buffalo, and that the negotiation was conducted through the Harts at his request, without any direct communication between him and Tuttle; and they charge, substantially, that he executed the contract upon his part, so far as relates to the Tuttle mortgage and decree, by negotiation, and without sale, ■although he purchased the same for a sum exceeding six thousand dollars (which they claim was at his peril under the contract), and took an assignment instead of a discharge and release, which they insist was contrary to the terms ■and true intent of the contract, and was without their consent: That afterwards, he informed them that he had .paid the decree and mortgage, and was the holder thereof, and that they thereupon executed to him quit-claim deeds of the premises mentioned in the contract (part only of which were included in the moftgages to Tuttle), •at his request and to his satisfaction, and deposited them, with his consent, with Wesson, to be held until] the release of the mortgage and decree should arrive from Buffalo, and that, at the same time, Thompson, with their consent, withdrew the three hundred dollars deposit.

The defendants Hart and Thompson, in their answers, admit the contract, and the deposit of three hundred dollars by Thompson, but deny that he thereafter assumed the exclusive right to negotiate with Tuttle for the purchase of the mortgage and decree.

*428We can discover but one object in making this denial, viz. to establish a standpoint from which to argue that the. purchase by the Harts of the mortgage and decree was upon their own account, and independent of Thompson’s contract. Its falsity and utter worthlessness for such purpose will be* manifested as we examine the other portions of the answers, and the evidence.

In their answers they admit, notwithstanding this denial, that the Harts concluded the negotiation with Tuttle for the-purchase of the mortgage and decree, and that during such, negotiations there were direct communications between them-, selves respecting it, and that in all such communications,, Thompson directed and urged them to pay but six thousand dollars for such decree and mortgage. And they deny that. Thompson failed, neglected, or refused to comply Avith the-terms of Tuttle, as set out in the contract; but they aver-that, on the contrary, he Avas always ready, Avilling, and de^ sirous of purchasing the mortgage and decree for six thousand dollars. The Harts, in their answer, aver "that they had fora long time been anxious to purchase some mill property in Michigan, and had agreed with Thompson to’make inquiries-, for them; and that, in pursuance thereof, he proposed to them to purchase the property of the Kibbees with him, which,, after learning the situation of the property, they agreed to, do for seven thousand five hundred dollars. Thompson, in his answer, substantially admits the same facts.

The defendants Hart, in their answer, further aver that in, pursuance of the true intent and meaning of the agreement of Thompson and the Kibbees, they (the Harts) did propose to Tuttle to purchase from him the decree and mortgage for-six thousand dollars; that he declined to sell for that price,, and that they then, in pursuance of the contract, bought, them for the amount due upon them, and insist that they-had a right so to do. But they say that Thompson urged; them not to pay over six thousand dollars. They also insist that they paid their own money for the mortgage and decree *429and that Thompson has no right or title to them; and they deny that in such purchase they acted as agents for Thompson, 'but claim that they acted for themselves; and Thompson, in íais answer, avers that the Harts paid their own money, •against his express instructions not to pay over six thousand •dollars.

These are a portion of the inconsistent statements of the Harts and Thompson upon the subject of the purchase and •of Thompson’s interest; and although these answers are not evidence (the oath having been waived), they may be examined as to the defenses set up, to illustrate the faith with which the defendants, making them, have acted, and with which they contest the Kibbees’ claims against them-. Here we find them at one time claiming that Thompson had never assumed the exclusive right of negotiation with Tuttle, and yet admitting that he was in constant communication with the Harts, directing and limiting them in such negotiations* We find that Thompson acquired his right to negotiate with Tuttle from the agreement; under which, and in consideration that he would act in the matter for the Kibbees, a contract of sale and purchase was made, and possession of %he premises surrendered to him; and we also find that he, ■through the Harts, attempted to purchase the mortgage and ‘decree for six thousand dollars, and instructed and limited •them to the payment of that amount (he evidently understanding the -true import of the contract, as also knowing ■the object and intention of the parties); and we find the ■Harts insisting that they have executed the contract according to its true intent and meaning, and that they bought under it, asserting no privity of contract with the Kibbees claiming only to act under Thompson’s power, claiming no purchase or assignment from him, but admitting that they agreed with him, upon his representations, to purchase with him the property in question; and after all this, insisting ‘that they bought with their own money, and that Thompson ‘has no right or title to the mortgage and decree, and deny-*430mg that they acted as his agents in the purchase, but claiming that they acted for themselves; and from all these inconsistencies, they would seem to seek to have the court deduce the crowning inconsistency that they bought independently of any agreement with, or authority from, any one,, and yet bought under the contract in question, according to its terms and import, and in execution of it.

"We will now look into the testimony bearing upon this branch of the defense. Holbrook, who drew the contract, between Thompson and the. Kibbees, swears that immediately after its execution there was considerable conversation be-, tween the parties to it as to the best' manner of communi-. eating with Tuttle about accepting and closing with his offer-to take six thousand dollars for the mortgage and decree, and that Porter Kibbee proposed to go through Canada to. see him, but that Thompson dissuaded him from this by telling him that he could telegraph an agent of his at Buffalo, which would answer the same purpose, and that Kibbee assented to that arrangment. Tuttle testifies that the. Harts attempted to purchase the decree and mortgage for-six thousand dollars, and failing in that, they purchased them for seven thousand two hundred and ninety - one dollars, all paid down, or very soon, except three thousand dollars, for which sum he took drafts in five hundred dollars- each, payable, every six months, precisely as to time, and substantially in manner, it will be observed, in which the three thousand dollars no.t paid down was to be paid by the terms of the contract; a coincidence remarkable if not designed. He also, testifies that the mortgage and decree were assigned by him to Thompson at the request of the Harts, without any reason given for such request, and that they stated to him that they would have an interest with Thompson in the property,.

The testimony of these witnesses, Coupled with the ad-^ missions of the Harts and Thompson, in their answers, evidence a want of candor on Thompson’s part respecting the. manner in which he intended to, conduct the negotiation with. *431Tuttle, if they do not show a fraudulent design, and intentional concealment of his connection with the Harts; and also establish the fact that the Harts assumed to act under Thompson and his contract, complied with the ‘latter so far as the terms of payment of the three thousand dollars were concerned, and expected to have an interest with him in the property, through the execution of the contract. If then they paid their own money, it was by way of advance to Thompson, and not as an independent investment. When Thompson dissuaded Porter Kibbee from negotiating with Tuttle in person, to secure a release of the decree and mortgage on*the most favorable terms to himself and Henry C., he did it, we must presume, so as to secure to himself the exclusive control of the negotiation; and whether with honest or fraudulent intent is immaterial. He represented the Harts as his “ agent ”/ it is impossible to conclude from the evidence but that they must have known the terms of his contract, and whether they expected to have an interest with him in the property or not, they must be held to have acted for him, and to have advanced and paid what money they did, for him and not for themselves. Whatever may have been their private understanding, it was concealed from the Kibbees, who knew Thompson only; and he must be considered as having operated through the Harts in the negotiation; and they can claim nothing for themselves adversely to the Kibbees’ rights under the agreement. Or, to assume the position of the defendants Harts and Thompson, if Thompson was acting on behalf of them all, they are all bound by his contract, and his acts and declarations; and their acts will be construed as his alone.

The evidence nowhere discloses the fact that Thompson informed the Kibbees of his connection with the Harts, nor does it show that the Harts informed Tuttle, or that he ever knew, that they were negotiating for Thompson, or for him and themselves, or under a contract with the Kibbees; nor does Thompson’s name appear to have been used until in*432structions were given that the assignments should be made to him. Thompson, in this particular, appears to have deceived the Kibbees, and, perhaps, to have been himself deceived by the Harts. However, this may be, neither of them can complain if they are held to the consequences of the deception. Thompson can not, if he intentionally concealed from the Kibbees his connection with the Harts, and by their act was obligated with them in a greater amount to Tuttle than he contemplated; and if deceived by the Harts, and their pretence be true that they bought with their own money and for themselves, he suffers nothing, and they will not be permitted to make any thing from their double fraud.

Nor do the Harts and Thompson pretend that the Kibbees ever knew of the existence of the Harts while these negotiations were carried on. Thompson studiously kept them out of sight. Had the Kibbees been told that they were concerned with Thompson in the subject of the contract, additional and perhaps stronger reasons might have occurred to the Kibbees why they should attempt the negotiation with Tuttle personally. The evidence most clearly shows that it would have been better for them had they done so. After the purchase had been made and the assignment of the mortgage and decree had been executed to Thompson, he still kept up in the Kibbees the impression that he had negotiated with Tuttle through his agent, and gave them to understand, according to Wesson’s and Holbrook’s testimony, that the negotiation had been conducted according to the contract, and took back his deposit of three hundred dollars upon that representation; for we can not suppose it would have been given up otherwise. Thompson also told Holbrook, in the presence of Henry C. Kibbee, that he had purchased the mortgage and decree from Tuttle, but had not yet received his papers, and that he had purchased through Ms agent, but did not know upon what terms. He afterwards, and when the Kibbees deposited deeds of the property with Wesson, and he withdrew his deposit of three hundred dollars, gave *433the Kibbees to understand the same thing, and that, as his papers had not then arrived, he could not then deliver to them the release of the decree and mortgage, but that when they did arrive the Kibbees were released from their engagements; and to keep up the deception, he also told them that he had paid more to Tuttle than he expected; and inquired of Mr. Holbrook, who was present, whether the Telegraph Companies were liable for mistakes. These facts indicate that the defense, so far as regards the rights of the Harts, and their purchase for a sum exceeding six thousand dollars, and their claim for the excess, was either concocted after the negotiation with Tuttle, or was fraudulently designed and contemplated from the beginning, but concealed until after the three hundred dollars could be obtained back, and a title obtained under the master’s sale; and however we may regard the transaction as between the defendants, as between them and the Kibbees it was grossly fraudulent.

But this is not all of the inconsistency of these defenses, nor of the conduct of the parties making them. The Kibbees charge in their cross bill, that Thompson, after the transaction with Tuttle had taken place, and he had acquired the mortgage and decree, insisted upon making sale under the decree, against their wishes and objections, and that he and the Harts, bid at such sale for the property two thousand three hundred dollars, and it was struck oif to them at that price; upon which they claim that a deficiency of one thousand two hundred and five dollars remains, which they insist upon collecting; and that after such sale Thompson served upon them a written notice informing them that Tuttle had withdrawn his proposition, and requiring them to jwovide for the balance due on the decree &c.; all which they insist is fraudulent.

These things, the defendants by their answers substantially admit, and do insist upon the benefits of the sale, and claim that the Kibbees should execute the contract as though such sale had been made by Tuttle. The testimony upon this *434point shows a most wanton attempt to overreach the Kibbees. ■Holbrook testifies that when Thompson informed the Kibbees that he had perfected the negotiation with Tuttle, quit - claim deeds of the property were prepared and executed by them, which were examined by Thompson, and the parties then agreed that the deeds should be deposited with Wesson, and the three hundred dollars returned to Thompson; all which was done. That at that time it was stated that Thompson was to have the property sold under the decree, to get title through that also; and it was agreed that he was to be at the expense of that sale. That, Kibbee or Thompson, both being present, stated that when his papers transferring the decree and mortgage came, the Kibbees were released from all their engagements under the contract: That Henry C. Kibbee said they were anxious to avoid all risks on their part of the dam being carried off, and as Thompson had not got his papers, aiid wanted to get his title under the decree, the deeds were to be deposited with Wesson, and Thompson was to get his money; and Thompson said he wanted a sale under the decree, and as he had not got his papers from Buffalo he could not then discharge the decree and mortgage. Wesson testifies that when the deeds were deposited with him, he asked the parties if the matter was arranged between them, and understood from them that it was. Walker testifies that on the same day, and after the deposit of the deeds with Wesson (for we find from all the evidence that this must be the time), Thompson and Kibbee were> in the Bank of the Insurance Company, to arrange the claim of. the Company against the property: That he told them the property could bé released for one thousand five hundred dollars, or upon Thompson’s giving his note for that sum at six months: That a note was drawn in blank, and a release of mortgage executed and placed in the hands of the cashier to be delivered to Thompson when he signed the note. At this time Thompson said he had purchased the property and would sign the note: That *435afterwards (and when this afterwards was, will be sufficiently apparent when we consider the conduct of Thompson at and after the sale), Thompson came into the Bank, and said he had concluded not to sign the note. Mr. Bull testifies that on the 30th of January he sold the property under the decree; that Thompson bid it off, and directed the deed to be made to the Harts: That at that time ICibbee asked Thompson if he had an assignment of both mortgages, and that Thompson said he had; that Kibbee then asked him if he was ready to discharge them according to the agreement, and that Thompson evaded an answer, when Kibbee objected to the sale.

This sale, it is manifest, was intended and expected at the time Thompson took up the deposit of three hundred dollars and the Kibbees deposited their deeds of the property, to be at the expense of Thompson, for the purposes of his title, and in no way connected with, nor to affect, the contract, or the rights of the parties; at any rate, such were the Kibbees’ expectations, based upon Thompson’s representations and acts. His whole course at that time, his conversations and statements to them, to Holbrook and Wesson, and his arrangement with Walker, can be explained in no other way than that it was understood the contract was in reality executed by both parties, so far as the extinguishment of Tuttle’s claims and liens were involved. Certainly the Kibbees so understood it, and had a right to understand it, and if Thompson did not, it is because he was maturing his fraudulent schemes upon them. Not until the time of the sale, so far as the case shows, had the Kibbees any suspicion, or reason for suspicion, that they were in danger of being overreached.

Immediately after the sale, Thompson served the notice upon the Kibbees referred to in their bill, and admitted in the answer. This notice sufficiently explains why he informed the Insurance Company that he had concluded not to sign the note for one thousand five hundred dollars, *436and fully reveals the fraudulent designs of himself and the Harts respecting the Kibbees in their misfortunes. It is as follows:

"Mt. Clemens, February 4th, 1852.

“To Porter Kibbee and Henry C. Kibbee: Gents, — You are hereby notified that I have been unable to purchase or obtain a release of the two mortgages executed by you to David N. Tuttle, and referred to and specified in a written contract entered into between you and me on the 5th day of January, 1852, the said David N. Tuttle having withdrawn his proposition in said contract mentioned, and having refused to assign or release the said mortgages for the sum of six thousand dollars. You are further notified that in pursuance of said contract, I attended at the time and place when and where the premises in the said mortgage described were advertised for sale under and by virtue of the decree in said contract specified and mentioned, and at said sale did bid for said premises in said .decree mentioned, the sum of two thousand three hundred dollars; which sum of two thousand three hundred dollars was' the amount of six thousand dollars less the amount due on the first mortgage by you executed to said David N. Tuttle. You are therefore hereby further notified to provide for and pay the balance remaining over on said decree, and the amount due on said first mortgage.”

It is unnecessary to recapitulate the evidence already referred to, to show that this notice is false in letter and false in spirit; that it could only have been devised for the purpose of fraud; and that the claim for payment of the excess over six thousand dollars, paid in procuring the decree and mortgage, is founded in fraud also. If these things evidence good faith, and an honest intention to execute the contract, and are consistent with honesty and fair dealing we can imagine no case where fraud, as a fact, can be proven, or where equity will withhold its aid to enforce iniquitious demands.

*437It will be observed, that in this notice Thompson formally informs the Kibbees that Tuttle had withdrawn his offer to take six thousand dollars for the decree and mortgage, and he and the Harts allege in their answers, and insist as a ground of equity, that it was entirely through the perversity of Henry C. Kibbee in forbidding the sale on the 2d of January (three days before this contract was executed) that they failed to procure the discharge of the decree and mortgage for six thousand dollars; and they claim as a result that they were therefore justified in paying seven thousand three hundred dollars, and in insisting that the Kibbees shall refund to them the excess. But they also aver in their answers that the contract, which was made on the 5th of January, was made with full knowledge on the part of Thompson of what Kibbee had done, and that the offer of Tuttle had been, in consequence, withdrawn, and that no offer of Tuttle then existed. This admission of the answers throw light upon the character of the notice, and if such be the fact, it fortifies the position we have already assumed, that Thompson took his chances under the contract, hoping, and pierhaps expecting, that he could induce Tuttle to renew it, but in any event running the risk of the speculation; and clearly under such circumstances as precludes any claim of bad faith on the part of the Kibbees, from which he and the Harts can claim any equities to themselves.

Another ground of defense remains to be noticed, viz. : that the Kibbees represented themselves to Thompson as having good title to the premises, and that, in fact, they had not; and that the deeds deposited with Wesson, for this reason, do not satisfy the contract. This defense is inconsistent with the other parts of their answers, and is wholly unsustained by the evidence. At the time Thompson withdrew the deposit of three hundred dollars, which could only have been withdrawn upon the assumption that the contract, so far as related to Tuttle’s claim, had been *438executed, deeds for the whole property were deposited with Wesson for Thompson, to remain until the release should be produced. Thompson at that time admitted that the contract was performed on their part thereby. On the the same day, and before the deposit of the deeds (as we infer from the testimony of Wesson and Holbrook), they were examined by Thompson in Holbrook’s office, and their deposit was agreed upon. The Kibbees expressed their anxiety to perform all that could be required of them, and stated the contents of the deeds; and one of them (Porter Kibbee) explained to Thompson the condition of the different parcels. It was then, and upon that information, arranged that Thompson should have the property sold under the decree, to get title through that source also, but at his own expense. These facts, and others which have been already adverted to, are hardly consistent with the assumption that the Kibbees falsely represented the title, or that Thompson was ignorant of its true condition, whatever that may bo. The answers also show that this defense is not made in good faith, but is a mere “make weight.” The Harts admit that Thompson disclaims these deeds because the complainants have not provided for and paid the balance of the decree and mortgage, and they offer yet to pay any balance that may be found due from them, after allowing them the seven thousand three hundred dollars for their purchase, but no pretence is set u¡d of a disclaimer because of defect of title; and they continually insist upon a claim of the title by virtue of the agreement. Thompson also admits that „ he disclaims the deeds, and assigns a like reason, “because complainants have not fulfilled their covenants” in providing for or paying the balance of the six thousand dollars over and above the sum bid by him at the foreclosure sale. And this is the only reason really assigned for refusing to accept them. He also insists upon the agreement, and the title under it, and avers, as do the Harts, that he has ever been ready *439and willing, and he offers, to pay to complainants the balance of seven thousand five hundred dollars remaining unpaid, after deducting therefrom the amount paid Tuttle for the decree and mortgage. Under this kind of defense, and this evidence, it is of little moment what the title of the complainants was. From the evidence of title, we have no satisfactory information respecting it, but we do know that Thompson was informed respecting it, and that all the defendants still insist upon and claim under the agreement, and are still willing to perform it on their part, if they can draw out of the complainants the excess above six thousand dollars which they fraudulently paid Tuttle for his claims. Under these circumstances we regard this defense as fictitious, and unworthy of serious consideration,

Thompson and the Harts must either repudiate the contract altogether, or execute it — they can not claim rights and benefits under it, and repudiate it at the same time.

From a consideration of the whole caso we are satisfied that Thompson pursued neither of the two modes contemplated in the contract for the ■ extinguishment of Tuttle’s claims; that the Harts acted with him, and are bound by his contract and acts and declarations, as well as he by theirs, and that they have no rights independent of his, superior to those he can assort; and that the whole transaction has been grossly fraudulent towards the Kibbees.

By the purchase of the decree and mortgage they deprived the Kibbees of a right, reserved by the contract, to negotiate with Tuttle, and provide for the payment of the first mortgage, and the' balance of the decree remaining after Thompson’s bid, if a sale by Tuttle should take place —a power which, in their embarrassed condition, might be valuable to them; but by that purchase they put themselves in the place of Tuttle, and in a condition to release the decree and mortgage for the six thousand dollars. The power to negotiate, which the Kibbees reserved, so as to procure the release for as small a sum as possible if the *440property were sold, can now be exercised so that the contract shall be executed according to its true spirit; the will which it was feared Tuttle might not exercise,- Thompson and the Harts now control, and they must be held to perform that which they contracted to procure Tuttle .to perform, so long as they have voluntarily placed themselves, and that by their own fraud and bad faith, in his place, and in a condition to do it. If a loss occurs to them, they can attribute it to their own voluntary act, in departing from the contract, by which they were empowered by the Kibbees to procure the release of the decree and mortgage, and which they undertook to perform. They can claim no rights independent of the contract, or power, except that conferred by it, so long as they claim under it, which in this defense they persist in doing: and whatever they have done under it, inures to the Kibbees’ benefit.

In this examination we have omitted to notice the case made by the original bill, and the answers of the Harts and Thompson to it. These will be found to be utterly inconsistent Avith those to the cross bill of the Kibbees, and further show, if such be necessary, the falsity and bad faith of the defenses, and the fraudulent character of their Avhole conduct relative to the execution of the contract. Nor have we shown all of the inconsistencies of the defense to the cross bill; but enough, we apprehend, has been shown to render it evident that the Insurance Company, and the Kibbees, are entitled to the relief they have asked.

The decree of the court below must be affirmed, with costs of the complainants in the original and cross bill to be taxed against the defendants Thompson and the Harts, and this cause must be remitted to that court for execution of the decree.