201 A.D. 386 | N.Y. App. Div. | 1922
At the close of the plaintiff’s case the defendant moved for a nonsuit upon the ground that plaintiff had failed to make a prima facie case, and failed to prove the existence of any defects warranting the rejection of the title, and that it being admitted that the vendee had made no tender of $67,500, the balance of cash payment due on closing title, plaintiff could not maintain the action. The learned trial justice reserved decision upon the motion and defendant proceeded with his defense. At the conclusion of the testimony the defendant renewed his motion to dismiss the complaint upon the grounds already stated. The learned trial justice again reserved decision and suggested that both parties move for judgment. Counsel for plaintiff said there might be a question of fact as to what transpired on June third and suggested that the court reserve decision on all questions and submit to the jury the question of fact as to what transpired on June third. The court declined to do this. He said that if the jury was to pass upon the case he would send “ the whole thing to them.” He stated that in his opinion it seemed absolutely a question for the court, and added: “ If you both want to move for judgment, or the direction of a verdict rather, I will take it under consideration and you can submit your briefs.” To this the attorney for the plaintiff answered, “ I am perfectly satisfied,” but the defendant’s attorney said he had no authority to do that; that he did not move for a direction but for a dismissal. The court replied, “ Decision reserved on the motion to dismiss.”
The learned trial justice charged the jury as follows: “ There were several objections raised to the title. The defendant says that all of those objections could and would have been explained and cleared up on the closing. The defendant was simply obliged to perform the contract.” Again the learned judge said: “ In regard to the alleged defects of title, the question is were they raised in good faith, were they material, were they such that called for an explanation on the part of this defendant? Did the defendant give the plaintiff a reasonable opportunity for investigation and inspection? Was the defendant at the time of closing in a position to give a title which was called for in the contract, and to explain any ambiguities, anything that needed explanation, to correct any either real or apparent record defects, to put the plaintiff in a position to take over and become the owner of that real estate according to the terms of the contract which will be given to you, and which you must read in order to understand the position of each ? ” He told the jury to say'whether plaintiff had convinced them that the defendant “ breached the contract,” and if so he
I have quoted the charge of the learned judge at some length in order to show that this common-law jury was saddled with rather weighty responsibility. They were told at the outset of the charge that the case turned on the question whether the plaintiff (vendee) went to the place of closing for the purpose of closing title and whether the objections were raised in good faith.
But if the title was unmarketable, I venture to suggest that the good faith or bad faith of the vendee was entirely immaterial. (Roberts v. New York Life Insurance Co., 195 App. Div. 97, 101, and cases cited.) The plaintiff’s assignee had performed the contract by paying the first installment of $7,500, and on the closing day was entitled under the terms of the contract to a deed transferring a marketable title. (Chesebro v. Moers, 233 N. Y. 75.) On the record here the defendant vendor did not tender such a deed and was unable to transfer a marketable title. He refused adjournment and stood strictly upon the contract. Measured by that standard he was unable to perform. The learned judge told the jury that under the contract, defendant Marx was not obliged to tender a deed executed by him personally, and he was undoubtedly right. But the obligation was on him to deliver a deed from someone conveying a marketable title. The transaction involved a considerable sum of money. At the time fixed for closing the record title to the premises was in the Sound Realty Company, but subject to the lien of an unsatisfied judgment against that company. The vendor produced an unrecorded, deed dated October 30, 1919, from the Sound Realty Company to Donovan, who is said to have been one of the products of modern progressive methods of conveyancing known as a “ dummy.” But the deed to the “ dummy ” was incumbered by the judgment. Mr. Donovan was not present, but the attorney for the vendor produced what purported to be a deed dated, executed and acknowledged by him on June 3, 1920, conveying the premises to no one. The name of the grantee was blank. The attorney testified: “ After that I told him that I had the deed from the Sound Realty Co. to Donovan, and had it from Donovan to their "name in blank, if he would let me know what name he wanted filled in I would fill in that name. * * * I had authority from Donovan to fill in the name of the
But there is another serious question affecting the marketability of this title. The contract for the sale of this real estate bore an indorsement or mark “ O. K.” signed by an executor of the Bendheim estate, and Mr. Mark, the attorney for the vendor, said it was put in the contract at his suggestion. He was asked whether he knew the Bendheim’s connection with the property, and replied, “ I knew what was the cause of my requiring or requesting Bendheim’s O. K. on this contract.” He was not asked the cause. He denied that the Bendheim estate had any interest in the property. He said the Sound Realty Company was the record owner on June 3, 1920.
The defendant offered in evidence an agreement dated November 15, 1907, between Nathan Wise, John C. Rodgers, Adolph M. Bendheim, Julius G. Miller and Max Marx of the first part, and the Sound Realty Company of the second part. (The “ O. K.” on the contract for the sale of the property was signed by the executor of Adolph M. Bendheim, one of the parties of the first part to the agreement.) It recites that pursuant to a contract dated November 6, 1907, one Emma L. Jacob has agreed to convey the premises on Broadway (which are the subject of the contract in the case at bar) to Rodgers, Bendheim, Marx and Wise, who with Julius Miller are the parties of the first part. It recites that the five parties of the first part have agreed to “ participate in the above mentioned property,” Wise to the extent of twenty-five per cent, Rodgers twenty per cent, Bendheim thirty per cent, Miller five per cent and Marx twenty per cent; that the parties named have paid and liquidated the cost price in accordance with their ratio of participation, and that they are about to cause the premises to be conveyed to the Sound Realty Company. The Sound Realty Company consents to accept the title and covenants to convey the premises to the parties of the first part or to any other person or persons “ pursuant to the written direction of a
It is not disputed that Galligan & Co., plaintiff’s assignor, had actual notice of this agreement at the time the contract was signed. The defendant Marx told him that Bendheim, one of the parties of the first part, was dead and that he, Marx, could not get along with young Bendheim; that this was one of the last pieces of property that he was still interested in with Bendheim. Seidman, the plaintiff’s attorney, who represented the purchaser, testified that he was told by Mark (the lawyer for the vendors) that this was the first time they represented Marx and it was because of the Bendheim interests, and it will be remembered that Mr. Mark, called by plaintiff, testified: “ I am Counsel for the Bendheim Estate.” And referring to the “ O. K.” on the contract, says:
“ The O. K. was put on at my suggestion.”
It would appear, therefore, that the Sound Realty Company held this title under a passive trust and that it had covenanted that it would convey the property only on written direction of the parties interested, executed and acknowledged as a deed. But there is no evidence of authority to the trustee to execute the deed to Mr. Donovan, the " dummy,” nor is there evidence of authority to Donovan to execute and deliver a deed in blank. There is nó evidence of authority for a conveyance of the property to Max Marx individually, one of the parties of the first part, whose interest was stated to be but twenty per cent, and who signed the trust agreement on behalf of the Sound Realty Company as president. I think the title tendered by defendant was unmarketable. (Real Prop. Law, §§ 92, 93; Sinnott v. McLaughlin, 198 App. Div. 630.)
But the learned trial justice submitted the case to the jury not only upon the question of the good faith of the parties, but it seems to me he went further than this. He submitted to them the question whether the vendee “ went there for the purpose of closing the title, or whether the vendee did not, and whether these objections which are raised to that title are raised in good faith, whether they are real legal objections, or whether they are simply put in here for the purpose of confusing you, or as an excuse for failure to perform the contract. Who breached the contract? If the defend
It is evident that these were questions for the court and not for the jury. The learned justice was right when he suggested to counsel at the close of the testimony that they should both move for the direction of a verdict because it seemed to him that the question was for the court to decide. He said, “ If you both want to move for judgment, or the direction of a verdict rather, I will take it under consideration and you can submit your briefs.” The plaintiff at once accepted the suggestion, but defendant said he did not move for the direction of a verdict but for a dismissal of the complaint.
I cannot see how the jury could determine these questions. And that they had some difficulty is apparent, because they came back after recess and asked: “ Is Donovan’s, a dummy title, a good title ?” The following appears from the record: " The Court: Do you want me to answer that question now? The Jury: Yes, sir. The Court: I understand by the question that you want to know whether a dummy title is a good title. Donovan’s title in this case, as far as you are concerned, is as good as any other title in the chain of title, if found as I have already charged. By Mr. Seidman: Exception. The Court: In other words, whether a man is a dummy or not, other things being equal, and the title being perfected without defects, it is just as good as any other title. By Mr. Seidman: Exception. I call your Honor’s attention to Section 105 of the Real Property Law, and section 63,
I think the exception to the instruction, “ Donovan’s title in this case, so far as you are concerned, is as good as any other title in the chain of title, if found as I have already charged,” presents reversible error.
While I think the title offered by the defendant on June 3, 1920, was unmarketable and that the plaintiff was entitled to recover the $7,500 paid on the contract and the reasonable cost of searching the title, the condition of the record is such that this court cannot direct judgment in plaintiff’s favor. There was no formal motion by plaintiff for the direction of a verdict or specific objection to
The judgment and order appealed from should be reversed upon the law and the facts, and a new trial granted, with costs to the appellant to abide the event.
Blackmar, P. J., Rich, Jaycox and Young, JJ., concur.
Judgment and order reversed upon the law and the facts, and a new trial granted, with costs to appellant to abide the event.
Respectively amd. by Laws of 1918, chap. 403, and Laws of 1916, chap. 364. — [Rep.