74 N.J. Eq. 528 | New York Court of Chancery | 1908
This is a bill by the vendors for the specific performance by the purchaser of a written contract for the sale and purchase of land on Broad street, in the city of Yewark, and to enjoin a. suit at law brought by the purchaser for the recovery of the deposit money paid on the execution of the contract. The defendant resists the specific performance of the contract on two grounds — first, that 'the complainants have not, as required by the contract, “a perfect record title” to the premises, and second, because the time of conveyance was of the essence of the contract, and the complainants not being able to convey a perfect title by the time stipulated, specific performance should not be decreed. The first objection, as to title, was in fact well founded, at the time of filing the bill and the answer, the premises being on the record encumbered by two judgments against the vendors, and also by a dedication of a proposed street across a considerable portion of the frontage of the premises, on Broad street, made by the filing of a map showing such proposed street (called Pyat-t street) in the year 1857, by a former owner of the premises. The street was never accepted by the public, and the lands covered by it had been mostly, if not entirely', improved and enclosed, but the proposed street had never been vacated, and in the absence of such vacation by public authority, the right of the municipal authorities to accept the dedication, even after this lapse of time, was a cloud on the title, and the defendant, who proposed to build upon the premises covered by the proposed street, was justified in declining to accept the title as a perfect record title at the time fixed for passing title. These objections to the title, however, have been removed and at the hearing (Februarj'-, 1908) releases or discharges of the judgments, and also a vacation of the proposed street by the proper municipal authority, were produced, and a perfect record title can now be given. Objection was made at the hearing to the validity of the vacation, but, as I think, without sufficient grounds. If time is not of the essence of the contract, it is suf
“to pay the said sum of $20,000 as and for the purchase money, as follows: $500 on signing the agreement, $7,500 by taking the property subject to a mortgage for that amount now upon the same, interest to be apportioned to date of settlement, $7,500 by giving a second mortgage for one year, with interest at five per cent., payable semi-annually, the balance to be paid on the delivery of the deed.”
It was then further agreed that the purchaser
“may enter into and upon the said land and premises on the 15th day of October next ensuing the date hereof, or upon the day of passing title, and from thence take the rents, issues and profits to his use.”
The time and place for the delivery of the deed and mortgage was then fixed for October 15th, 1906, at the office of defendant’s attorney. The deposit money, $500, was paid on the execution of the agreement. On October 15th, by written agreement endorsed on the contract, signed by the vendors, and by the purchaser through his attorneys, the time for the performance of the agreement was extended to October 19th, 1906. The contract and this endorsement are the only writings signed by the parties bearing on the matter of fixing the time. The contract itself cannot be said to have made the time of passing title of
The defendant, shortly after October 1st, was taken ill, and was not able personally to attend at the passing of title, but on being communicated with over the telephone, lie declined to grant any further extension of the contract.
On the evidence, a question is fairly raised, whether the defendant’s illness and his inability personally to look after the building, majr not have had some influence on his determination not to extend the contract, but on the whole evidence relating to the purchase and its circumstances it would not be fair or just to conclude that the defect, or supposed defect, was a mere pretext to get out of the contract, or to refuse to extend the time. The evidence satisfies me that the object of the purchase was the immediate improvement of the premises, by building, and that possession as early as practicable to pass the title, on or soon after October 15th or October 19th, was important if not necessary to carry out the objects of the purchase. It is also clear, I think, that the vendors knew of this object, and knew also, at the time of the contract, of the defendant’s desire for this immediate unclouded possession.
The question is whether, under the circumstances, this knowledge on the part of the vendors, at the time of the contract, or of the extension, is sufficient to make time of the essence of the contract.
Under the clear language of the authorities, I think it was. Baron Alderson, in Hipwell v. Knight, 1 Younge & C. 401 (1835), one of the leading cases on this point, gives this clear statement of the equitable doctrine and its reasons (at p. 415, &c.) : “While upon this subject of the essentiality of time, a court of law ascertains only what the parties have expressed in their contract, a court of equity endeavors to ascertain what is in truth the real intention of the parties, and to carry that into effect; in so doing, however, the court must, in the first place, look carefully at what they have expressed, that being in general what thej’’ intend, and the burden is thrown on those who assert the contrary. In the ordinary case of purchasing an estate, the fixing of a day for passing the title is merely formal, and the
In both of these cases it had been contended that under the doctrines established by previous decisions in equity, time could not be, and that it could not in any way be made, essential to the conveyance, and it was therefore pertinent to examine and define the grounds of exception to the general doctrine. The views of these distinguished judges that time may be of the essence of the contract, by reason of the avowed object of one party known to the other, has been followed as settled law in subsequent decisions denying tire relief of specific performance. In Tilley v. Thomas, L. R. 3 Ch. App. 61 (1867), the object of the purchase, as the vendor knew, was the immediate occupation as a residence by the purchaser, and this possession could not be given. In Hyde v. Warden, L. R. 3 Exch. Div. 72 (1878), a farm was required, as the vendor knew, for immediate occupation for stocking purposes, and this could not be given. In Nokes v. Kilmorey, 1 De G. & S. 444 (63 Eng. Rep. 1141), the purchase was for the purposes of building, and the time was
I have not been referred to any decisions in our own courts upon the precise point, and have therefore referred to the decisions in other courts somewhat at length, for the purpose of examining the principles which should control the case. The leading text-books repeat the doctrine of these cases. Fry Spec. Perf. (4th ed.) §§ 1081, 1086; Pom. Spec. Perf. § 385.
It is my conclusion, upon the whole evidence, that in this case the time for passing the title fixed by the provisions of the contract and its extension was of the essence of the contract, by reason of the object of the vendee in making the purchase for the purpose of immediate building thereon for the purposes of trade, which purpose of immediate improvement was known to the vendors at the time of making the contract. In such purchases of urban property for immediate improvement, the purchaser, as he is entitled to do on the faith of the contract, and tire reasonable expectation that it will be earned out at the time agreed on, often, if not generally, incurs obligations and secures contracts in reference to the building and occupation of the premises, dependent upon his procuring possession for building at the time specified. The essentiality of time in the performance of contracts made under these circumstances should not be disregarded.
Before the signing of the contract, the defendant had negotiations for renting part of the building proposed to be erected, and upon the execution of the contract at once continued these and secured agreements for renting, with security for the rent conditional on delivery of possession not later than January 1st, and although these agreements may not have assumed such final formal character as to bind the parties legally, there is no reasonable ground for supposing that such binding contracts would not have been made had the title passed on the day agreed on. And these subsequent negotiations of defendant, relying on possession at the time fixed by the contract, and the fact that defendant has been deprived of the benefit of them, by the failure to deliver possession at the time fixed, are matters which can
In another aspect of the case the matter of time was relied on as a defence, this being the lapse of time which occurred between the time of defendant’s rejection of the title on October 19th, 1906, and the filing of complainants’ bill on February 19th, 1907, and not until after defendant had commenced suit at law on February 1st for the recovery of the deposit money. On October 20th complainants served written notice that defendant had defaulted on the contract on the 19th, while complainants were then ready and able to perform on their part, and that defendant would be held responsible for complete performance of the contract. At the same time they offered to remove the defect of title on account of the street, if such defect existed. Defendant, on October 22d, replied with a notice to complainants that the latter had defaulted on the contract, by failing to produce a good record title, although defendant was ready to perform and demanded the return of the deposit money, adding that it was understood that time was of the essence of the contract by reason of the facts known to the vendors at the signing of the agreement, that the premises were desired for the erection of a building before January 1st.
The lapse of time, in this aspect, is set up as a defence to the suit, because of laches in seeking the equitable remedy, an altogether different question from the element of time in the contract itself. As to this defence of laches the general rule is that where one party, arbitrarily or otherwise, notifies the other that he will not perform the contract, the bill must be filed speedily unless the party receiving this notice be in possession. In Ketcham v. Owen, 55 N. J. Eq. (10 Dick.) 344, 349, &c. (1897), I referred to the cases on this subject, and held that a delay of three years was fatal. The doctrine is that the failure of the party receiving notice of abandonment, to make immediate assertion of his right to enforce the contract, may be considered as such an acquiescence in the notice and an abandonment of equitable rights as to leave the parties to their legal remedies and liabilities. Walker v. Jeffreys, 1 Hare 341, 348 (Vice-Chancellor Wigram, 1842). Whether such delay is an acquiescence or