114 N.Y.S. 521 | N.Y. App. Div. | 1909
Belle G-. Beveridge, plaintiff’s wife and assignor, entered into a contract in writing with the defendant West Side Construction Company for the purchase and sale of a piece of real estate, with a building thereon in process of construction, known as Beverly Hall, No. 316 West Ninety-fourth street, for $117,500, and defendant Axelrod, the president of said company, entered into a, separate agreement, under which he guaranteed the faithful performance of the contract by the said company. The contract was éxecuted on the 26th 'day of August, 1902, and the date for closing was the 1st of December, 1902, with a proviso for an extension not exceeding sixty days from said date. Payment was provided for as follows : By the payment of $2,500 in cash upon the execution and delivery of the agreement, receipt whereof was acknowledged; by taking the premises subject to a first mortgage■ of $80,000 ; by the execution and delivery by the purchaser of a bond secured by a second purchase-money mortgage for $14,000; by the execution and delivery by the purchaser of a deed of the premises No. 244 West One Hundred and Second street, subject only to a mortgage of $24,000, the equity in said property being so fixed at the sum of $11,000; said deed was to be executed and delivered as'soon as a second and third mortgage, then liens upon said premises, should have been paid off and satisfied. The com tract provided that “ if said conveyance of said premises, subject to said mortgage of only $24,000 is not made on or before the 1st day of October, the party of the first part shall retain as liquidated damages for such failure the said sum of $2,500, and thereupon this contract shall terminate, and neither party shall have any further claim against the other by reason of the provisions of this agreement.” By the purchaser paying the balance, to wit, the sum of $10,000 in cash upon the execution and delivery of the deed to the premises No. 316 West Ninety-fourth street, interest and insurance, was. to be adjusted as to each of the premises above mentioned as of the dates of the conveyance of the title, but at the time of closing of the title to 316 West Ninety-fourth street. The contract- further set forth : “It is farther provided that if after the conveyance of said ¡premises 244 West 102nd Street to the party of the first part by the party of the second part, the party of the second part shall fail to carry out
The West One Hundred and Second street house was conveyed on September 24, 1902, and so before the 1st day of- October, 1902, the date fixed by the contract, and on November 11,1902, and before the date of closing, was sold for $28,500, subject to the mortgage of $24,000. An adjournment of the date of closing was had as provided in the contract, but the plaintifE’s assignor breached the contract, as found by the court in the following language: “That the said Belle GL Beveridge voluntarily and causelessly refused to complete on her part the performance of the said Beverly Hall contract, but defaulted in thé performance thereof.” The court also found : “ That the premises No. 316 West 94th Street, known as Beverly Hall, were completely and entirely finished by
. ' That is, the -payments in an executory contract for the, sale of real-estate, the person making such payments having causelessly breached the contract, are created by this decision of the learned court penalties and forfeitures, and as such held to be excessive, invalid and void, and a judgment given to recover them back.
Iff brief the contract provided, first, for a payment on. its execution ¡ of $2,500; second, for a conveyance of 244 West One Hundred and Second street, subject'only to a mortgage of $24,000. Tf the ¡conveyance of the One Hundred and Second street house was not- made by October 1,-1902, the $2,500 should be retained as liquidated damages, the contract should terminate and neither party should have any further, claim against, the other.
If, after the conveyance of the One Hundred and Second street house, the purchaser should fail to carry out. the provisions of the contract, the vendor was to retain the One Hundred and Second street house, and all payments in cash on account of the purchase, price as liquidated damages for the non-fulfillment of the contract, and it should terminate. .
The fact that one sum was payable in cash on execution of the contract, and the other by a fixed estimated equity on a mortgaged property to be conveyed by a day. certain and long before the time set for the completion of the main contract, in no degree affects the well-settled principles of law governing payments on contracts to convey real estate.
Ketchum v. Evertson(13 Johns. 365) was an action of assumpsit by a vendee to recover from the vendor under a real estate contract $700 paid by the former on account of the purchase price. The court said : “ It may be asserted, with confidence, that a party who has advanced money or done an act in part performance of an agreement and then stops short and refuses to proceed to the ultimate conclusion of the agreement, the other party being ready and willing to proceed and fulfill all his stipulations according to the contract, has never been suffered to recover for what, has been thus advanced or done. The plaintiffs are seeking to recover the money advanced on a contract, every part of which the defendant has performed as far as he could by his own acts, when they have voluntarily and causelessly refused to proceed, and thus have themselves rescinded the contract. It would be an alarming doctrine to hold that the plaintiffs might violate the contract and because they chose to do so make their own infraction of the agreement the basis of an action for money had and received. Every man who makes a bad bargain and has advanced money upon it would have the same right to recover it back that the plaintiffs have. The defendant’s subsequent sale of the land does not alter the case; the plaintiffs had not only abandoned the possession, but expressly refused to proceed and renounced the contract. To say that the subsequent sale of the land gives a right to the plaintiffs to recover back the money paid on the contract would, in effect, be saying that the defendant could never sell it without subjecting himself to an action by the plaintiffs. Why should he not sell ? The plaintiffs renounced
In Havens v. Patterson (43 N. Y. 218) the court said: “ There is no principle of law or equity which will sustain such a claim, and I have been unable to find any authority to favor it. It would sanction the doctrine of allowing a party to. recover back money paid upon an executory agreement which he had neglected and refused to perform on his part. This is never permitted either in law or in equity.” (Ketchum v. Evertson, 13 Johns. 365; Battle v. Rochester City Bank, 3 N. Y. 88; Haynes v. Hart, 42 Barb. 58 ; Lawrence v. Simons, 4 id. 354.)
In Page v. McDonnell (55 N. Y. 299), Grover, J., said: “ But the defendants were ready and willing, and tendered full performance on their part. The plaintiff neglected and refused to perform on his part, for which reason the contract was terminated by the defendants. Under these facts the plaintiff is not entitled to recover the money he had paid thereon.”
In Lawrence v. Miller (86 N. Y. 131), Folger, Ch. J., said: “ It is ingeniously argued that, though the vendee has made breach of his contract, all that the law will give for that is the damage that the vendor has suffered thereby; and that, therefore, he has no right to keep the $2,000, though it be granted that he had a right to rescind the contract. * * * It is declared by this court in '
Havens v. Patterson (supra) that it is never permitted either at law or in equity for one to recover back money paid on an executory contract that he had refused or neglected to perform. The plaintiff in the action before us sues for the whole amount of the money paid by the vendee. The defendant came by it rightfully,, in pursuance of a contract lawfully made between competent parties. He has made no breach of that contract. He has failed in no duty to the vendee. Wherefore, then, should he give up that which was rightfully his own ? When and whereby did it cease to be his and to be due to the vendee ? If the contract had been kept by both parties, the money paid would still be his .of right. The contract
In Lakoschowsky v. Utopia Land Co. (125 App. Div. 827), where the action was brought to recover back an amount which had been paid upon the execution of a contract to purchase land, and in monthly installments, the vendee having failed to continue his payments as agreed, this court said: “When he sued, therefore, he was in the position of a vendee who has declined to pay the pur- ■ chase money in the manner and at the times specified in the contract. He has, therefore, no cause of action either to recover back the money already paid of to ask for damages for defendant’s refusal to go on with the contract.”
This being, then, the well-settled- rule of law- that payments upon an executory contract for the sale of land may not be recovered by the vendee, if'the contract has been breached by the vendee, that the vendor is entitled to retain tlie whole thereof, and not merely his actual damages, what effect can it have upon the legal or equitable relations of the parties that they agreed in writing for that which the law would have provided without special agreement?" The statement that these sums shall be retained upon breach as liquidated damages does not affect the law which so provides without agreement. The argument that so characterizing the legal right to retain these moneys as liquidated damages transformed them into penalties and forfeitures, and, therefore, no more than the actual damage, to be alleged and proved, can be retained, has no support.
The respondent relies upon Scott v. Montells (109 N. Y. 1); Chaude v. Shepard (122 id. 397), and Caesar v. Rubinson (174 id. 492).. No one of these cases applies. In.each the question involved was a sum deposited as security for the performance of the terms of a lease where after breach the landlord had re-entered and, then sought also to retain the security. In those cases the rule applying to payments on executory contracts for the sale of real estate was
The respondent also cites Broadbooks v. Tolles (114 App. Div. 646). In that case there was a covenant not to engage in business within a stipulated, territory for a stipulated period, with stipulated damages for violation thereof. It was of such stipulation that the court said : “ If there is a breach of the covenant of stipulation, the vendee may recover his actual damages; or, if they have been stipulated by the parties, the sum thus agreed upon may ordinarily be recovered as liquidated damages, * * * unless the sum specified is manifestly disproportionate to any damages accruing from the breach of the agreement,” and cited Ward v. Hudson River Building Co. (125 N. Y. 230),. which involved damages for delay in completion stipulated in a building contract; Curtis v. Van Bergh (161 id. 47), which also involved a stipulation for damages for delay in a building contract; Hicks v. Monarch Cycle Mfg. Co. (176 id. 111), which considered a stipulation as to the value of a bicycle which had been delivered for examination and return, and Caesar v. Rubinson (174 id. 496), a deposit by way of security for the faithful performance of a lease.
Blewett v. Hoyt (118 App. Div. 227) was an action on a collateral bond given by the defendants as security for the payment of an unpaid balance on the purchase price of certain mines, and like the other cases above alluded to, has no application to that at. bar.
We have searched in vain to find any cases in this State affecting the rule that a vendee who has made a payment on an executory contract for the purchase of real estate, who has causelessly breached
The respondent claims that the appellants did not fully perform on their part, but the court has found: “ That the said Belle Gr. Beveridge voluntarily and causelessly refused to complete on her part the performance of the said Beverly Hall contract, but defaulted in the performance thereof.”' This finding is utterly inconsistent with any other conclusion than that the appellants had performed, because if not, she could not have defaulted. Further, the learned court found: “ That the damages which the defendants actually sustained by reason of the breach of said contract are definitely ascertainable and amount to $2,922,” and in the conclusions of law: “ That the damages suffered upon the breach by plaintiff’s assignor of the contract (designated as plaintiff’s exhibit 1) are ascertainable and amount to the sum of ’$2,922.” Of course, this finding could only be made upon the ground that the appellants had performed. The court also found that the building was completely and entirely finished prior to the adjourned day of closing in the manner prescribed by the contract, and the evidence established that the vendors were ready, willing and able to complete and had with them, at the adjourned day of closing the deed, prepared, signed and acknowledged, and the other necessary papers.
■ We do not deem it necessary to consider any other of the questions raised upon this appeal and for the reasons stated, and as we are of the opinion that the clauses in the contract providing for payments on the execution thereof, and by the 1st bf October, 1902; were not clauses providing for. a penalty this judgment declaring said provisions to be void and that plaintiff recover the sum of $10,578, with interest and costs, should be reversed and a new trial ordered, with costs, to the appellants to abide the event.
Patterson, P. J., Ingraham, Laughlin and Scott, JJ., concurred.
Judgment reversed, new trial ordered, costs to appellants to abide event.