92 N.J. Eq. 569 | New York Court of Chancery | 1921
Complainant's suit is as vendee for specific enforcement of a contract of sale of a house and lot known as No. 228 Emerson street, situate in Plainfield, New Jersejb In addition to the vendor, J. D. Loiseaux Company, there are two other defendants —Joseph Nathanson, to whom vendor made a subsequent contract to sell the premises in question, and Plainfield Bealty Wall Paper Supply Company, a corporation in which Nathanson was interested, and to which, in consummation of the second contract of sale, conveyance of the property was made before bill filed.
The terms of the contract sued on are evidenced by a letter of February 4th, 1920, from vendor to vendee, which reads as follows:
“Plainfield, N. J., Feb. 4, 1920.
Mrs. David Patterson,
888 Emerson Ave.,
Plainfield, N. J.
Deaf. Madam :
We acknowledge having received $130 from you on February 3d, to' apply as follows: being the rent on the house for the month of February, and $100 being a payment on account of the principal of $3800 for the house and lot known as No. 228 Emerson Ave.
*571 Our understanding- is this—that you will pay $30 each month until we are able to give you a free and clear title, the result of the foreclosure which we are now proceeding with. So soon as we are able to do this, you agree to pay us $3700 in the manner following: $3000 by raising this amount by mortgage on the above mentioned property, and $700 in cash, which we understand you are to raise by second mortgage, and the above when carried out is satisfactory to us, but if for any reason you are unable to carry out the above provisions, you agree, upon being requested, to vacate the property, leaving it in first class condition, and all that you have paid in to be counted as liquidation of any damages we might sustain.
If any of the above you do not fully concur, please advise at once, so that there can be no misunderstanding.
Very respectfully yours,
J. D. Loiseaux Lumber Oo.,
(Signed) J. D. Loiseaux,
JDL/DC By Treasurer.”
By the terms of this contract, the date of consummation— that is to say, the date when the vendor should convey and when the vendee should pay—was to be as soon as vendor obtained and could convey a free and clear title, as the result of a foreclosure suit then being carried on by vendor. That date in itself was indefinite and uncertain. Being- within the control of the vendor, it was obligated to- proceed in its foreclosure suit with reasonable diligence and dispatch. In other words, the time for' performance by bath parties was fixed as a reasonable time after the contract. Time was, obviously, not of the essence as to this. The vendee had been put in possession (she desiring the place as a home), and vendor was receiving, and was to continue to receive, adequate and satisfactory rent at a rate fixed by itself, during whatever time should elapse before the clearing up of the title. Apparently, vendor had title, but there was an encumbrance thereon to be cleared away by the foreclosure. (See Exhibit D-2.) The exchange of deed and purchase price was postponed, upon terms equitable to both parties, until that should have taken place.
It may be noted here that it appears by the entire correspondence that the negotiations were begun November 13th, 1919, and, indeed, the arangement for the sale and purchase agreed to about December, 1919. The vendee inquired the price of the house and accepted the price fixed, without haggling. The vendor,
The precise time that the vendor acquired its cleared title, and thereby fixed the time for performance, is a little uncertain. It could not have been until after May 24th (the date of the deed to vendor). From the testimony of Mr. J. D. Loiseaux and of complainant, and the letter D-13, I fix June 1st as the approximate date when notice was given to or acquired by complainant that the vendor was now able to convey. There had thus been a lapse of about six months from the time of the original oral agreement and of four months from the letter which was the written evidence of the modified agreement (prior to the writing of which the foreclosure had been commenced). Reference to the record and proceedings of that foreclosure suit on file in this court shows that the bill was filed December 26th, 1919, and that no unusual speed was exercised b}r vendor’s agent, the solicitor for complainant therein. For instance, there was a lapse of six weeks between the decree pro confesso and the filing of the master’s report.
June 1st, then, became, and was, the date for the consummation of the sale by conveyance and payment. But here, again, time was not made the essence of the contract by provision in the contract, 'nor by force of the circumstances. Hence, even if the
The latter motive is, of course, one which in nowise appeals to a court of equity. In equity the vendor is considered a trustee of the property for the vendee from the time of the making of the contract. Saldutti v. Flynn, supra; King v. Ruckman, 21 N. J. Eq. 599; Haughwout v. Murphy, 22 N. J. Eq. 531.
From the evidence I find the fact to be (as explained more in detail hereafter) that the vendee was ready to perform on July 30th. I further find that this delay of two- months was not an unreasonable delay under all the circumstances. Admittedly, all but the last two or three days of this delay was acquiesced in or waived by the vendor. This time was being spent by the vendee in actual endeavors to raise the $700 balance to pay the vendor (which, in the meantime, as Mr. Loiseaux testifies, had agreed to take the $3,000 first mortgage itself, as part of the purchase price), having been disappointed in the arrangements which she had originally made in that behalf.
The facts in the case at bar are, in the majority of particulars, remarkably similar to those in the case of Cranwell v. Clinton Realty Co., N. J. Eq. 540—so much so that the opinion of Vice-Chancellor Garrison in the latter case might serve almost equally well for the present issues. Here, as there, there was no unreasonable delay; no effort by vendee to obtain undue advan
Here, also, as in the Cranwell Case, there was an attempt by vendor to rescind or terminate the contract, and a question arises as to the effect of that which' was done in that behalf. On July 27th, vendor, through Mr. J. D. Loiseaux, wrote to vendee as follows:
“Plainfield, N. J., July 27, 1920.
Mrs. Margaret Patterson,
888 Emerson Ave.,
Plainfield, N. J.
Dear Madaii :
According to the writer’s call on you last Friday evening, you will remember you agreed that Tuesday morning, the 27th. you would call at our office to make payment of the balance of the $800.00 or at that time the property would be given up by you.
No doubt your party has disappointed you, for which we are indeed sorry, as we expected you were going to take this property over and make it a home, but as we have been waiting for you for many months, we are sure you cannot End fault with us, as the previous correspondence shows how the matter stands. Although we told you formerly .that if you did not pay the balance, the $100.00 you paid would be forfeited, yet we do not want to take advantage of this, and if you can give possession on the first of August, we will return you the $100.00 you have deposited, less,*575 however, the unpaid rent, but if you cannot give possession the first of August, it will be satisfactory for you to live there until the first of September, at which time we can make the adjustment on your deposit.
Very respectfully yours,
J. D. Loiseaux Lumber Company.
Treasurer.
JLL/H J. D. Loiseaux.”
It will be noted that the first paragraph of this letter speaks of an agreement between vendor and vendee that the latter would pay the $700 on the morning of the 27th, or that at that time the property would be “given up” by vendee. There is no other evidence in the case of any such agreement—Mr. Loiseaux did not testify as to anjr such agreement. This letter, in itself, is, of course, no evidence in that behalf, but the fac-t that Mrs. Patterson in her reply made no denial or contradiction of the statement in Mr. Loiseaux’s letter might be evidence from which the making of such an agreement could be found as a fact. However, I find myself unable to give any such effect to this letter and Mrs. Patterson’s reply of July 29th, which reads as follows:
“228 Emerson Ave.
Plainfield, N. J.
July 29th, 1920.
Dear Mr. Loiseaux:
Your note I received yesterday afternoon, which was characterized as all your treatment towards us has been, namely, with great fairness.
Mr. Loiseaux that has been mainly why I have wanted this house so much to make a home [using your own phrase],
Mr. Chas. Schwab has not paid Mr. Tebbs as yet [he is having a big summer home built for himself and is very busy]. However, Mr. Patterson called on Mr. Eeickert of the State Trust Co. and he will advance the amount for us, by Mr. Tebbs signing for it to be paid at a stated time, which Mr. Tebbs is willing to do for us.
I know this has all been a great source of annoyance to you, Mr. Loiseaux, and I am just miserable over it all, but the before stated reason has made me anxious to carry on.
Mr. Patterson will call into the office Mr. Loiseaux on or around Saturday, kindly grant us just that much longer.
Gratefully yours,
Mabst. Patterson.”
“P. S. Enclosed you will find $30.00 rent for July.”
In the first place, the finding of such a fact, as already noted, can only be reached bv an inference from Mrs. Patterson’s failure
Again, even if it should be assumed that the agreement mentioned in Mr. Loiseaux’s letter had been made, the agreement by Mrs. Patterson, as stated, was, “I will, pay the balance of the $800 on Tuesday morning, the 27th, or I will, at that Lime, give up the property.” It does not appear that there was any consideration for the promise—and, certainly, she did not “give up the property.” If it be regarded as a notice from vendor to vendee, then the answer is, as pointed out in Cranwell v. Clinton Realty Co. (at p. 549) (citing Hubbell v. Von Schoenig, 49 N. Y. 327, and the opinion in the court of errors and appeals in McTague v. Sea Isle, &c., Association, 57 N. J. Law 428), that neither rescission nor termination was accomplished because there was neither return of the part paj'ment nor tender of the deed.
It will further be noticed from a careful reading of vendor’s letter of the 27th that it by no means constitutes a statement or notice that vendor considers the contract terminated or rescinded —much less, that it is going to act upon that assumption. There is nothing in the letter which, concludes anything—the letter still leaves it open, for anything to the contrary therein, for the
Still, further, and of perhaps even greater significance, not only was nG claim made by Mr. Loiseaux in his testimony that a rescission or termination had been made by agreement, nor any such claim made in the vendor’s pleadings, or by its counsel in oral argument or brief (the point was not adverted to by either counsel), but, on the contrary, the vendor, in its answer, specifically says that it made repeated demands on the vendee for her to fulfill the contract, from May 24th, 1920, to August 10th, 1920.
From all of these considerations, therefore, it is clear to me that there was in fact no agreement to terminate or rescind, and that there was no termination nor rescission prior to July 30th.
The letter from vendor to vendee of July 29th, mailed late that night and not received until the afternoon of the 30th, seems of no great materiality, since it was not received until after the conversation between Mr. Patterson and Mr. Loiseaux on the morning of July 30th. ' On that morning, Mr. Patterson testifies, he went to Mr. Loiseaux at the company’s office with tho $700 (which was in the form of a treasurer’s check of the State Trust Company to Mr. Patterson’s order), in order to make the pavement- for the house; that he told Mr. Loiseaux he had come with the money to fix up on the house and “for my deeds right away;” that Loiseaux said, “Patterson, I am sorry, the hou.se is sold to another party in Elizabeth for more cash; can you move out before the first of September?” that he replied, “I have nothing to do with the people in Elizabeth—I have the money to pajr you for the house;” but Loiseaux did not give the deed nor-take the $700.
From all this evidence it is impossible to conclude otherwise than that Patterson did go there on that morning with the $700 check to pay to vendor and talked with Loiseaux. I also find in fact that Loiseaux told him at that time that the house had been sold to the Elizabeth party for more money and refused to perform the Patterson contract. Mr. Loiseaux’s failure to deny this, coupled with his letter to Mrs. Patterson of July 29th, make this practically certain, to my mind. As to just what Mr. Patterson did by way of tender is less clear. There is no testimony that Patterson physically tendered the check, or that he even showed it to Loiseaux. Patterson says he told Loiseaux “I have come with the money to fix up(on the house,” and “I have the money to pay you for the house.” It may well be that Patterson did not make clear to Loiseaux that he then and there had the money with him;' it may be that Loiseaux did not understand Patterson’s statement that he had the money, or that Loiseaux did not give Patterson a chance to make it clear'. I am satisfied, as I said, that Patterson had the money and intended then and there to make the payment. Having gotten the money as he did, and gone with it to Loiseaux for the purpose of paying, it is incredible but that one of two things necessarily happened—
The next question that arises is as to the effect of the letter of July 31st, from Mrs. Patterson to Mr. Loiseaux, which reads as follows:
“July 31st, 1920.
228 Emerson Ave.
Plainfield, N. J.
Saturday morning.
Dear Mr. Loiseaux :
Mr. Patterson called into the office yesterday afternoon, but did not find you there.
Should your buyer wish to rent to us I feel that $35 a month should be plenty, in the event of his not renting, how could it have been possible for us to give possession on August 1st. even September is only a 30 day notice, and you will remember how fair I wished to be with Mrs. Henry, surely I deserve what I gave.
I am grateful to you, and thankful that you wish to return me the $100.00 deposit, it is quite an item to me, and of course of little account to you. ■
But I would add Mr. Loiseaux that we have done numerous little things around here and the -property has not deteriorated any since we came into it. I am,
Respectfully,
Margaret Patterson.”
It is now contended by the vendor’s counsel that complainants by their conduct, “after receiving notice of the rescission, have estopped themselves from equitable relief at the hands of this court.” The first-sentence of the letter refers to a call by Mr. Patterson at the Loiseaux office on the aft&nwm of the 30th. This, obviously, is not the call of the morning of the 30th. What the purpose of the afternoon call was does not appear; it may have been to make a further attempt to conclude the purchase, or it may have been to the same purport and effect as Mrs. Pat
' Neither can it be said that vendee’s waiting to file her bill of complaint until August 26th amounts to waiver, acquiescence, estoppel'or laches. The effect of vendor’s misstatement of fact would continue in this behalf until vendee was informed or learned of its falsity. Vendor does not show when that occurred, nor does -it appear from anything in the case, although it may be argued that it occurred at Nathanson’s call about August 10th. There is no evidence whatever that vendor relied upon
I conclude, therefore, that as between the vendor and vendee, vendee is entitled to a decree for specific performance. Now, as to the rights and liabilities of the other defendants—Nathanson and the Plainfield Bealty Wall Paper Supply Company. For the purposes of this suit these two ■ defendants may be deemed identical—Nathanson being the agent of the Plainfield company and negotiating the contract for its benefit.
Quoting from Cranwell v. Clinton Realty Co., supra (at p. 550):
“The rule is well established that a purchaser with notice of a prior equity, superior to the rights of his grantor, takes the place of the grantor and is bound to do that which he was bound‘in equity to do. Such a purchaser can be compelled specifically to perform the agreement by conveying the land in the same manner and to the same extent- as the grantor would have been compelled to do had he retained the legal title. Young v. Young (Chancellor McGill, 1889), 45 N. J. Eq. (18 Stew.) 40, 41; Haughwout v. Murphy (Justice Depue, Court of Errors and Appeals, 1871), 22, N. J. Eq. (7 C. E. Gr.) 547; Brinton v. Scull (Vice-Chancellor Grey, 1897), 55 N. J. Eq. (10 Dick.) 747.
“And to be a bona fide purchaser without notice, the defendant must not only have agreed to purchase without notice of the complainant’s previous agreement, but he must also have actually paid the purchase-money and taken his deed without such notice. Dean v. Anderson (Chancellor Bloomfield, about 1810), 34 N. J. Eq. (7 Stew.) 503; Brinton v. Scull, supera."
The subsequent purchasers by their answer dény that they had any knowledge of the Patterson contract. But at the time of the Nathanson contract, August 10th, and at the time of the deed, August 24th, and, indeed, at all' times, the vendee was in actual possession and occupancy of the premises. It is well settled, therefore, that Nathanson and the Plainfield company are chargeable with notice of the legal or equitable interest which
The testimony shows that in the forepart of August, just prior to the execution of the second contract on August 10th, Nathanson came to the house with Kenyon, an employe of the Loiseaux company, told her that Nathanson was going to buy the house and wanted to see it; went through and looked at the downstairs part, and went out, and as they went out Nathanson said to her, “Your rent will be $45 a month,” but did not stop for any reply from her. This is Mrs. Patterson’s testimony. Nathanson testidtes to some additional conversation with Mrs. Patterson, which might be contended to be sufficient inquiry as to her rights 'or claims, or an estoppel. But I am satisfied that this alleged conversation did not take place. Mrs. Patterson denies it; Kenyon, called as a witness by Nathanson, did not corroborate it; and Nathanson did not make a favorable impression on me as a witness—he was evasive and in several instances made replies to questions which proved on further pressing to be untrue.
Nathanson called later on with McIntyre. It is not clear whether this was after the deed had passed or not, but even assuming it to have been prior to the deed, I find that nothing occurred to raise an estoppel against Mrs. Patterson. She denies the conversation as related by Nathanson and McIntyre, and I believe her. Nathanson I have already commented upon. McIntyre was a close associate of Nathanson’s, and both he and Nathanson say that on this occasion Mrs. Patterson said she could have bought the property but “couldn’t raise the money.” This is impossible for me to believe. It is absolutely certain from the evidence that she not only could, but did, raise the money. That being so, she certainly would not have made the alleged statement. The probability is that Nathanson believed she couldn’t raise the money, and believed that she had no rights except as a monthly tenant—but that that information came from the Loiseaux people.
Estoppel in pads is, of course, different from waiver, and might arise even in the absence of a knowledge of rights. But I do not see how any such arises here from Mrs. Patterson’s failure to consult counsel or to bring suit, or to notify Nathanson of her claim, between August 10th and August 24th. It was incumbent upon Nathanson to inquire of her as to her rights or claim, and this he did not do. Furthermore, there has been no damage occasioned to Nathanson; he has made no improvements or alterations in the property; he can be restored completely to the statu quo ante by the returning to him from the Loiseaux company of his money with interest. Neither is the latter damaged —it has had the use of Nathanson’s money. The only result of a specific enforcement of the Patterson contract is that the Loiseaux company and Nathanson are prevented from acquiring profits out of this house which in equity belongs to Mrs. Patterson, which equity I find she has not waived nor lost by estoppel.
I will, therefore, advise such decree.
The contract does not specify the term or interest rate of the $3,000 bond and mortgage to be given, nor that payment shall be postponed. It will, therefore, be payable on demand and with legal or six per cent. interest. Green v. Richards, 23 N. J. Eq. 32, 536.
Complainant is a married'woman and a conveyance by her is not valid without her acknowledgment (Chassman v. Wiese, 90 N. J. Eq. 108), nor without her husband joining in the same. Corby v. Drew, 55 N. J. Eq. 387. In the present case the hus
So, in the present case, the mortgage is to be security for the unpaid part of the purchase price; the vendor has a lien for that in any event—and a lien which is prior to any interest which the husband could take in the property. It might be said that under the agreement the complainant on receipt of the deed would immediately hold the property as trustee in favor of the vendor, to the 'extent of the mortgage promised, and a self-executing decree
I think that under the circumstances of the case it is only equitable that the vendee should pay the interim “rent” up to the time of performance specified in the decree (which may be ten days after the date of the decree). It does not appear clearly from the evidence whether those payments have been kept up or not, but, inferential^, they have not. If the parties cannot agree on the amount (if any) due in this respect, I will hear testimony 'on any motion day, on five days’ notice.
The decree should provide for the complete adjustment of the matter among all the parties. Cf. Saldutti v. Flynn, supra. In addition to providing for the conveyance by the defendant realty company to complainant, and the payment of the purchase price, plus unpaid rent, by complainant, as above mentioned, it should also provide for the return by the Loiseaux company to the realty company of all moneys paid by the latter on account of purchase price, together with interest thereon at six per cent, from the dates of such payments; also sudh taxes as have been paid by the realty company with interest. The Loiseaux company is paid for these taxes out of the “rent” from complainant. Allowance is also to .be made by the Loiseaux company to complainant on account of taxes for the current year. Cf. P. L. 1918 p. 847 § 514. It would appear from the second agreement of sale (D-29) that there is a mortgage of $2,400 on the property held by outside parties. This, if still outstanding, must be satisfied and cancellation procured by the Loiseaux company, unless the parties are willing that complainant assume payment in lieu pro tanto of the $3,000 mortgage to be given by her under the contract.
The form of the decree can be settled on notice. Complainant is entitled to costs.