More v. Smedburgh

8 Paige Ch. 600 | New York Court of Chancery | 1841

The Chancellor.

I fully concur in the very able opinion of the vice chancellor, as to the impolicy of permitting the vendor, in an executory contract for the sale of lands, to insist upon a specific performance after the purchaser has actually relinquished the contract in consequence of the neglect of the former to comply with the conditions thereof on his part. But I think the circumstances of the present case were such as to take it out of the general principles laid down by him. The pleadings and proofs in this case, as well as the contract itself, show that the parties did not contemplate an immediate conveyance of the property; although as to the possession of the premises sold, and the stopping of the interest on the judgment, the contract was to take effect immediately. The purchase of the judgment of the Catskill Bank was undoubtedly to be made by Brackney without any unnecessary delay ; and such purchase was accordingly made by him about two weeks after the making of the contract with the complainants. The terms of the agreement, however, show that neither party contemplated the giving of a deed for the premises immediately after the judgment was obtained from the bank. For there was an express provision that after Brackney had purchased the judgment he should hold it until he obtained a conveyance from the complainants ; and then should cancel the same, and pay the balance of the first instalment of the purchase money. And that Brackney himself did not understand that the whole agreement was to be consummated as soon as the judgment of the Catskill Bank was procured by him, is evident from the fact that he did not perform the wdiole of his part of the agreement until the middle of September, 1837. He then, for the first time, caused the premises to be insured, according to the terms of the agreement apparently ; but probably for the express purpose of getting rid of the contract, by demanding an immediate execution thereof, when he knew the incumbrances could not be removed, and the evidence thereof procured for two or three weeks thereafter. Even where a day has been fixed by the contract for the execution of the deed, if the purchaser does not make his objections to the title in time to enable the vendor to remove them before the day fixed, equity may consider a strict performance at the day as waived. (Jones v. Pice, 3 Anst. 924.) And in such cases also, if the vendor has not been guilty of gross negligence, equity will assist him, although the title was not made at the day, unless by the terms of the agreement, the time of making the title was made an essential part of the agreement. (Fordyce v. Ford, 4 Bro. C. C. 494. Radcliffe v. Warrington, 13 Ves. jun. 323.) But in the present case, as no time was fixed for the giving of the deed and the purchaser had asked for an extension of the time for the payment of the balance of the first instalment, which would become due immediately upon the execution of the deed, the complainants were entitled to a reasonable time after the application of Mr. Jordan, and his objection to the title on account of the outstanding incumbrances, to clear the premises and to produce the necessary certificates that such incumbrances were discharged, before the purchaser was authorized to repudiate the contract. And as the title was made perfect within three weeks from that time, which was not an unreasonable delay, I think the purchaser was bound, according to the settled principles of this court in similar cases, to go on and complete his purchase.

Again ; the purchaser, in case he elected to rescind the contract, was bound to give up the possession of the property which he had entered into the possession of under that agreement. And he was not at liberty to say to the vendors, after he had occupied the premises nine months without paying any thing therefor, “ our contract is at an end, but I shall continue to occupy the tannery until I shall have no further use for it for tanning the hides I have now on hand.” Here the answer insists upon a rescisión of the contract before the complainants had cleared off the incumbrances and tendered the conveyance, on the 12th of October, 1837, and yet it is admitted, in the same answer, that Brackney the purchaser was in the occupation of the tannery when that answer was put in, on the 16th of January, 1838.

There is unquestionably a distinction in the rule of vigilance required on the part of the vendor where the purchaser has been kept out of the enjoyment of the property by the neglect of the former to proceed and complete the sale ; as it would be contrary to equity to compel the purchaser, who was not in possession of the estate which he had agreed to buy, to wait an unreasonable length of time for the vendor to make out a title. What, therefore, would be a reasonable time in reference to a purchaser in possession, would not always be so as to one who was not.

As a general rule, if a vendor receives payment of a part of the purchase money after the time of payment fixed by the terms of the agreement has expired, or if the vendee continues in possession under the agreement long after the time specified therein for giving the deed, a court of equity may consider a strict performance at the day as waived. And the party who has thus waived a literal performance of the terms of the agreement, will not afterwards be permitted to insist upon a forfeiture, without notice to the other party and giving him a reasonable time to perform on his part. (See Harris v. Troup and others, ante, p. 423.) In the present case I am satisfied it would be inequitable to permit the purchaser to rescind the contract upon such slight grounds as are attempted to be set up in the defence, after having enjoyed the use of this valuable property so long for nothing; and that a specific performance of the contract should have been decreed.

The objection that the contract was only signed by one of the complainants, in the name of the firm, cannot be sustained.- Under the English statute of frauds it was only necessary that the agreement should be signed by the party against whom the same was sought to be enforced, to enable the other party to maintain a suit thereon either at law or in equity. (See 1 Sugd. on Vend. 160, 10th Lond. ed., and cases there cited; Laythoarp v. Bryant, 2 Bing. N. C. 735; Field v. Boland, 1 Drury & Walsh, 37.) Whether an agreement signed by one partner in behalf of himself and his copartners would be a valid agreement as against the purchaser under our present statute of frauds, which requires the contract to be signed by the party by whom the sale is to be made, it is not necessary now to consider. For the delivery of the possession of the premises under the contract took the case out of the statute of frauds, even if the agreement had not been reduced to writing; and brought the case within the exception contained in the 10th section of the statute. (2 R. S. 135.)

The decree appealed from must therefore be reversed, and there must be a decree for a specific performance against the present defendants, with costs. But the decree must be so drawn, that the administrator and heirs shall not be personally charged beyond the amount of property which has come to their hands by the decedent, and for which they are legally liable to the creditors in the due course of administration, under the provisions of the revised statutes. And if the premises are not paid for by the administrator and heirs, after applying the bank judgment in part payment of the purchase money according to the terms of the contract, the decree may authorize a sale of the premises to satisfy the amount remaining due, together with the costs.

Smedburgh having taken the assignment of the bank judgment with a full knowledge of the complainant’s equitable right, under the contract, to have it cancelled and applied in part payment of the purchase money, he must be decreed to cancel the judgment. And he must be perpetually enjoined from proceeding to enforce the collection of the same, either in the name of the bank or otherwise; but the decree is to be without prejudice to any claim he may have against the estate of Brackney the assignor. As the expense of the litigation has not probably been increased by his joining with Brackney in the defence, and as he was originally a mere security for the latter, to the bank, I do not think it proper to charge him personally with the complainant’s costs.

Decree accordingly, ^(a)

(a) Affirmed on appeal to the court for the correction of errors, December, 1841.