MARKS v. GATES et al., 2 Alaska Fed. 788

GILBERT, Circuit Judge, after stating the case as above, delivered the opinion of the court. The enforcement of a contract by a decree for its specific performance rests in the sound discretion of the court — a judicial discretion to be exercised in accordance with established principles of equity. A contract may be valid in law and not subject to cancellation in equity, and yet the terms thereof, the attendant circumstances, and in some cases the subsequent events, may be such as to require the court to deny its specific performance. In Pomeroy, § 400. it is said: “He who seeks equity must do equity.

The doctrine, thus applied, means that the party asking the aid of the court must stand in conscientious relations towards his adversary; that the transaction from which his claim arises must be fair and just, and that the relief itself must not be harsh and oppressive upon the defendant.” Said the court, in King v. Hamilton, 4 Pet. 311-327, 7 L.Ed. 869: “But this power is to be exercised under the sound judicial discretion of the court with an eye to the substantial justice of the case.

When a party comes into a court of chancery seeking equity, he is bound to do justice, and not ask the court to become the instrument of iniquity. When a contract is hard and destitute of all equity, the court will leave parties to their remedy at law, and, if that has been lost by negligence, they must abide by it. It is a settled rule, in a bill for specific performance of a contract, to allow a defendant to show that it is unreasonable or unconscientious.” In Willard v. Tayloe, 8 Wall. 567, 19 L.Ed. 501, Mr.

Justice Field said: “In general it may be said that the specific relief will be granted when it is apparent, from a view of all the circumstances of the particular case, that it will subserve the ends of justice, and that it will be withheld when, from a like view, it appears that it will produce hardship or injustice to either of the parties. It is not sufficient, as shown by the cases cited, to call forth the equitable interposition of the court that the legal obligation under the contract to do the specific thing desired may be perfect.

It must also appear that the specific enforcement will work no hardship or injustice, for, if that result would follow, the court will leave the parties to their remedies at law.” In Pope Manufacturing Co. v. Gormully, 144 U.S. 224— 236, 12 S.Ct. 632, 637, 36 L.Ed. 414, Mr.

Justice Brown said: “To stay the arm of a court of equity from enforcing a contract, it is by no means necessary to prove that it is invalid; from time to time immemorial it has been the recognized duty of such courts to exercise a discretion, to refuse their aid in the enforcement of unconscionable, oppressive, or iniquitous contracts, and to turn the party claiming the benefit of such contract over to a court of law.” The contract in the present case had, at the time when it was made, no reference to any property then owned by the contracting parties, or even to property then in existence.

It did not obligate the appellee, Gates, ever to go to Alaska or to acquire property there. It bound him during his lifetime to transfer to the appellant a one-fifth interest in all property of every description that he might acquire in Alaska by whatever means, whether by location, purchase, devise, gift, or inheritance — property of which neither party could know even approximately the value. It was a bargain made in the dark. The complaint is silent as to the means whereby the property therein described was obtained by Gates. It alleges that its value is more than $750,-000.

For aught that appears in the complaint to the contrary, the appellee, Gates, purchased this property and paid therefor its full value. The appellant, for the payment of $1,000 in cash and the cancellation of a debt of $11,225, which may or may not have been valid or collectible, now comes into a court of equity and asks the court to decree that the appellee, Gates, transfer to him property of the value of more than $150,000.

If he now has the right to such relief, it follows that he may hereafter sustain suits to acquire a like interest in all property of every nature and description which Gates may at any time obtain in Alaska, and that such right will end only with the life of Gates. Courts of equity have often decreed specific performance where the consideration was inadequate, and it may be said in general that mere inadequacy of consideration is not of itself ground for withholding specific performance unless it is so gross as to render the contract unconscionable.

But where the consideration is so grossly inadequate as it is in the present case, and the contract is made without any knowledge at the time of its making on the part of either of the parties thereto of the nature of.the property to be affected thereby, or of its value, no equitable principle is violated if specific performance is denied, and the parties are left to their legal remedies, if any they have. In King v.

Hamilton, supra, specific performance of a contract for the sale of a patented grant of land within the Virginia Military District was denied in a case where the patent specified, and the parties understood, that the grant contained l,533j^ acres, and it subsequently appeared from a survey that it contained 876 acres in excess of that quantity. In Day v. Newman, 10 Ves.Jr. 300, Lord Alvanley refused to enforce the specific performance of an agreement for the sale for £20,000 of an estate worth only £10,000. There was no actual fraud in the case, but the inadequacy was so great that the court would not enforce it.

In Earl of Chesterfield v. Jansen, 2 Ves.Sr. 125, Lord Hardwicke declared unconscionable a contract whereby an expectant heir, in consideration of £5,000, obligated himself to pay £10,000 out of his grandmother’s estate if he survived her, but was to pay nothing if she survived him. In Mississippi & Missouri R. R. Co. v. Cromwell, 91 U.S. 643, 23 L.Ed. 367, Mr. Justice Bradley said: “He comes into court with a very bad grace when he asks to use its extraordinary power to put him in possession of $30,000 worth of stock for which he paid only $50.

The court is not bound to shut its eyes to the evident character of the transaction. It will never lend its aid to carry out an unconscionable bargain, but will leave the party to his remedy at law.” The facts presented in the complaint are not such as to entitle the court to retain the case for the assessment of such damages as the appellant may have sustained for breach of the contract.

A court of equity will not grant pecuniary compensation in lieu of specific performance unless the case presented is one for equitable interposition such as would entitle the plaintiff to performance but for intervening facts, such as the destruction of the property, the conveyance of the same to an innocent third person, or the refusal of the vendor’s wife to join in a conveyance. Cooley v. Lobdell, 153 N.Y. 596, 47 N.E. 783; Matthews v. Matthews, 133 N.Y. 679, 31 N.E. 519; Bourget v. Monroe, 58 Mich. 573, 25 N.W. 514; Eastman v. Reid, 101 Ala. 320, 13 So. 46; Milkman v. Ordway, 106 Mass. 232.

The decree of the court below is affirmed.