195 A.D. 576 | N.Y. App. Div. | 1921
The action is brought for the specific performance of an alleged option agreement, dated November 18, 1919, given by the defendant Guardian Holding Co., Inc., to the plaintiff for a “ valuable consideration,’’ for the purchase of premises situated at 471-473 Fifth avenue and 4-6 East Forty-first street, for the sum of $1,200,000, upon certain terms and conditions therein set forth. According to its terms the option expired on January 18, 1920. The complaint asks that the right, title and interest of the appellant, the National Association Building Corporation, in said premises be adjudged subject and subordinate to plaintiff’s rights, and that the appellant
The complaint alleges that the Guardian Holding Co., Inc., was the owner and in possession of the premises in question on November 18, 1919; that on December 27, 1919, it made an executory agreement with the Barclay Holding Corporation for the sale of the said premises, containing a clause “ that said premises were encumbered by and subject to plaintiff’s said option; ” that thereafter and prior to January 17, 1920, and before the commencement of this action plaintiff duly notified the Guardian Holding Co., Inc., that he desired to enter into a formal written contract for the sale of the premises to him upon the terms and conditions mentioned in the option agreement, and at the same time duly tendered the sum of $25,000 as a deposit on said proposed written contract, all in accordance with the provisions of the option agreement, but that the Guardian Holding Co., Inc., refused to enter into any such formal written agreement; that on or about January 5, 1920, the Barclay Holding Corporation, “ without plaintiff’s consent, entered into an agreement with one James T. Lee to sell and convey said premises to said Lee; ” that said Lee then had full knowledge and notice of plaintiff’s option; that in said Lee’s agreement with the Barclay Holding Corporation it was expressly set forth, “ (a) that said Barclay Holding Corporation was under contract to purchase said premises, and that if for any reason other than its own fault it failed to acquire title thereto, its liability should be limited to the return of said Lee’s deposit and its expenses for examining title; and (b) that said premises were encumbered by and should be conveyed by said Barclay Holding Corporation to said Lee subject to such rights as plaintiff had under his said option.” It is also alleged that Lee, who was the president of the defendant National Association Building Coiporation, thereafter assigned his contract to said corporation.
The complaint further alleges that on or about February 2, 1920, the Guardian Holding Co., Inc., conveyed the premises in question to the Barclay Holding Corporation without any consideration therefor, and that subsequently and on March 5, 1920, the Barclay Holding Corporation, without plaintiff’s
Respondent opposed the motion for a bill of particulars of the consideration upon which his option was based, upon the ground that the appellant was not in a position to question the consideration, contending that the situation of the appellant is analogous to that of a grantee who, having accepted a deed to real property subject to a specifically described mortgage or lien, could not question its consideration or validity. We do not think it necessary to pass upon the question whether the analogy made by the learned counsel for the respondent is applicable to an executory agreement for the sale of property which is made subject to an existing option agreement to another for the purchase of the same property, for the reason that the amended complaint alleges that the contract of the Barclay Corporation with the appellant was only subject “ to such rights as plaintiff had under his said option,” thus leaving the defendant in a position to inquire into the validity or consideration of the option to establish, if he can, that plaintiff had acquired no rights thereunder.
The fact that the agreement given to the Barclay Corporation contained a clause that it was subject to plaintiff’s option, and that appellant had notice thereof, while perhaps important to plaintiff in establishing his cause of action ,for specific performance, has no bearing upon appellant’s right to inquire into the consideration of the option agreement, as it does not appear that the deed to the Barclay Corporation contained any clause showing that its title was subject to the option agreement. A contract for the sale of real property, even though recorded, is not an incumbrance against the property and it does not create a valid objection to the title. (Boyd v. Schlesinger, 59 N. Y. 301; Washburn v. Burnham, 63 id. 132.) If the deed contained a clause stating that it was subject to the option agreement, a different situation might exist, for the
The order appealed from should be modified to the extent of requiring plaintiff to state what the alleged “ valuable consideration ” of plaintiff’s option was, and when and where such valuable consideration was given to the Guardian Holding Co., Inc., and as thus modified affirmed, with ten dollars costs and disbursements to the appellant.
Clarke, P. J., Dowling and Smith, JJ., concur; Page, J., dissents.
Order modified as stated in opinion, and as so modified affirmed, with ten dollars costs and disbursements to the appellant.