Majority
Headnote
1. Money received, paid out, etc., under executory contract to purchase.] A purchaser under an executory contract for real property may maintain an action of a legal nature, to recover back his. deposit on the contract, and expenses incurred in the examination of the title, where the title tendered is so doubtful that equity would not compel him to accept it in an action for specific performance.[1]The defendants, describing themselves as trustees, on December 8, 1884, entered into a written contract with the plaintiff to sell to him a lot of land, known as num
The title came to the defendants from William H. Guión, by a deed dated August 1, 1884, which recites that the firm of Williams & Guión, in liquidation^ indebted to the estate of John S. Williams, deceased, in the sum of $105,000 and1 interest from August 2, 1882, and that Guión and the firm, are desirous to receive the payment thereof; and also contains the following recital: “ Whereas the said William EL Guión is seized of the lands and premises hereinafter described in his own name, but in the right of and for the-use and benefit of the said firm of Williams & Guión. Then by apt and proper words the deed conveys the premises in question, with other real estate, to the defendants in. trust to sell the same and pay the recited indebtedness out of the proceeds. Guion’s title to the lot came from Anson B. Moore and George E. Apsley, who conveyed the sámete him by a deed dated, acknowledged and recorded in February, 1883. While the title was thus in Guión, on February 2, 1884, Domas Barnes recovered and docketed a judgment against him for $4,035.14, and that judgment became an apparent lien upon the lot.
The claim of the plaintiff is that on account of the existence of that judgment the defendants were unable to give-
The defendants attempted to get Barnes to release the-lien of his judgment upon the lot, but he refused to do so,, and it still remains an apparent lien thereon. There is no-record or document which precludes Barnes from enforcing-his judgment against the lot. The recitals in the deed of Guión to these defendants do not bind him, and are not evidence against him, a prior incumbrancer. All the evidence to defeat his lien rests in parol and depends upon the memory of living witnesses. Whenever Barnes attempts to enforce his lien against the lot, he can be defeated only by a resort to the evidence of such witnesses, who may then be dead or inaccessible. He may at any time within ten years issue execution upon his judgment and sell the lot, and after the lapse of many years the purchaser at the execution sale may bring an action of ejectment to recover the lot, and the burden would be upon the defendant in that suit to establish by parol evidence the invalidity of the title of such purchaser.
We will assume that the lot, while the title stood in the name of Guión, actually belonged to the firm of Williams & Guión, that thus the defendants actually had a good title to the lot and that the judgment was not in fact a lien thereon. But is a purchaser bound to take a title which he can defend only by a resort to parol evidence, which time, death
If the plaintiff had been a purchaser at a judicial sale ■and this had been a proceeding against him to compel him to take the title, or a proceeding by him to be relieved from his purchase and to have his deposit refunded, it cannot be doubted that the title would have been held so defective or doubtful that the court would have granted him relief (Jordan v. Poillon, 77 N. Y. 518 ; Fleming v. Burnham, 100 Id. 1; Toole v. Toole, 112 Id. 333 ; Ferry v. Sampson, 112 Id. 415). If the vendors here had brought an action ■against the vendee to compel specific performance of this ■contract, it is equally clear that they would have failed in the action. The court would not compel the vendee to take the title with the cloud of this incumbrance resting thereon (Marlow v. Smith, 2 Peere Williams, 198, 201 ; Slope v. Fish, 2 Ves. & Beames, 149 ; Shapland v. Smith, 1 Browns Ch. R. 75 ; Jeffries v. Jeffries, 117 Mass. 184 ; Seymour v. De-Lancey, Hopkin’s Ch. 436 ; Hinckley v. Smith, 51 N. Y. 21 ; Freetly v. Barnhart, 51 Pa. 279 ; 3 Pomeroy's Eg. Juris. ,§ 1405).
But this is an action at law and it has sometimes been held that the distinction between good and marketable titles is peculiar to courts of equity, that it is unknown in courts •of law, and that there the question is simply, is the title good or bad ? The earliest case which has come to our attention
In Jeakes v. White, 6 Ex. 873, decided in 1851, the-action was brought to recover the expenses incurred by the-plaintiffs in investigating the defendant’s title to mortgage certain lands, and the plaintiffs recovered. Pollock, O. B.,. writing the opinion of the court said : “ The question really is, whether this was such a title as a vendee has a right to-expect, and which would justify him in concluding the purchase. We think that, where a question arises between-parties who are about to enter into the relationship of vendor and vendee, as to the meaning of a good or sufficient title,, there must be such a title as the court of chancery would adopt as a sufficient ground for compelling specific performance.” In Simmons v. Haseltine, 5 C. B. N. S. 554, decided in 1858, after the 13th edition of Sugden on Tendors was published, it was held that when the ability of the-vendor to make a good title to a purchaser of the premises-sold depends upon a doubtful question of fact or of law, the title will not be deemed a good or sufficient title as between vendor and vendee. There A. bought certain premises, the description of which in the particulars included a stall, which was claimed by the purchaser of the adjoining house under the same vendor, and it was doubtful as a matter of fact whether the description had been corrected at the time of the sale to A., so as to exclude the stall, and as a matter of law whether the stall was included in the conveyance to the purchaser of the adjoining premises, and a court of equity had refused to decree specific performance against A., and it was-held that A. was entitled to receive back his deposit and interest, and the expenses of investigating the title, in an
In this State in O’Reilly v. King (2 Robertson, 587); Methodist Episcopal Church Home v. Thompson (52 Super. Ct. 321); Bayliss v. Stimson (53 Id. 225), the ¡New York ■superior court held that in an action by a vendee of real ■estate against the vendor, to recover back a deposit made on account of the purchase price, it was not sufficient for him to show that the title tendered was doubtful, but that he was bound to show that it was in fact bad, and that the doctrine of equity courts as to marketable titles had no application. The latter ease was affirmed in this court, not upon the law however as announced in the court below, but upon the ground that the objections to the title were baseless. There is also some countenance for the doctrine of the superior court cases cited in the opinion of Folger, J., in Murray v. Harway (56 dV. Y. 337). There, however, the learned judge •was of opinion that upon the facts a court of equity would have ■adjudged specific performance against the vendee, and it is ■clear that whenever such is the case the vendee cannot, in a court of law, rescind the contract and recover back a payment of purchase money. It has been settled in Pennsylvania that a vendee can defeat an action at law, brought by ■the vendor for an installment of purchase money under an •executory contract for the sale of lands, by showing not that the title tendered is actually bad, but that it is doubtful ■and unmarketable (Colwell v. Hamilton, 10 Watts, 413 ; Ludnick v. Huntzinger, 5 Watts & S. 51 ; Swayne v. Lyon, 67 Penn. 436 ). In Allen v. Atkinson ( 21 Mich. 351 ), an ■action at law, Cooley, J., said: “ The vendee had an undoubted right to a good title, and to a deed with proper •convenants; and he had a right also to insist that the title should be a marketable one, not open to reasonable objection.”
The case of Methodist Episcopal Church Home v. ‘Thompson {supra) came to this court, and the judgment
It has sometimes been said that the reason why a court of equity will not compel an unwilling vendee of real estate to take a title which although good is not marketable, is that such a court is not competent to decide, or is at least unwilling to decide,-doubtful questions of law and fact in such cases, at the hazard of what might afterwards be determined in a court of law (Rawl, on Covenants, 433, note). Courts of law with jurors as triers of the issues of fact were deemed more competent than courts of equity to solve the doubts. But whatever foundation the reason may once have had it has none now in this State since the union of law and equity in the same courts, and since equitable defenses can be set up in legal actions. Courts in equitable actions are just as competent here to deal with both the law and the facts of a case as they are in legal actions. If the conscience of a judge in an equitable action needs information, he can obtain the findings of a jury by submitting the issues of fact to them.
So now there is no longer any reason whatever for the distinction which some judges have made as to marketable
Dealings in real estate generally involve large pecuniary values, and large amounts are frequently invested in buildings and other improvements. The law is such that an adverse claim need not be asserted for many years, until after •time has closed the mouthá of living witnesses and destroyed ancient muniments of title. For many purposes a doubtful •title is a' worthless title. Hence it is generally the expectation of the vendees entering into executory contracts for the purchase of land that they will receive a good title, not only, but one free from reasonable doubt and damaging infirmity ; ■and such a title it must be assumed that every fair, honest vendor expects to give unless he is freed from the obligation by some express stipulation in the contract; and this understanding should be respected and enforced by both courts of law and of equity. As said by Selden, J., in Burwell v. Jackson ( 9 N. Y. 535 ), “ Executory agreements for the purchase of lands are frequently made under circumstances
Here Barnes insists upon his lien and refuses to cancel it. The vendors should be at the expense of clearing the title ■of this cloud, and it is not just that they should cast that burden upon the vendee and require him to take an unmarketable title.
We therefore conclude that the judgment below is right ■and should be affirmed with costs.
All the judges concurred, except Gbaz, J., not voting.
PURCHASER.
Conditions subsequent]. An important class of suggested doubts upon title is that consisting of conditions subsequent. Here the objection appears on the record, and the vendor relies, on extrinsic evidence, sometimes to construe the conditions as. a mere covenant, and sometimes to show extinguishment.
In Post v. Weil (Ct. of App. Oct. 1889) it was held that language expressed to be a condition as thus : "Provided always, and these presents are upon the express conditions that,” etc., should be treated not as a condition but only as a covenant, if in view of all the circumstances this appears in accord with the intent of the parties. Gray, J., in delivering the opinion of the court laid some significance upon the fact that there was no express clause in the same deed giving right of re-entry. A purchaser was accordingly held liable, notwithstanding an express condition subsequent in the chain of title, and its breach. Post v. Weil (to appear probably in 115 N. Y. ) rev’g or overruling 8 Hun, 418 .
Limitation on condition.] In the case of the Mayor, etc. of Macon v. East Tennessee, et.c. R. R. Co. (Ga. 1889), 9 Southeastern Rep. 1127, it was held that a specific limitation, providing that the estate created was to exist only so long as the property was used for the purposes specified in the deed, is to be distinguished from an ordinary condition subsequent, in as much as it marks the limit or boundary beyond which the estate conveyed could not continue to exist [Citing Bl. Comm. 155, 156; 3 Minor, Inst. 263 ; 2 Washb. Real Prop. • 23-25, (457-459); Smith Ex. Int. §§ 34-42; 2 Kent Comm. 129; Henderson v. Hunter, 59 Pa. St. 335 ; Ashley v. Warner, 11 Gray, 43 ].
To the same effect, see Robinson v. Missisquoi R. Co., 50 Vt. 436 ; s. c., 4 New England Rep. 891.
Suspension of alienation by conditions.] Professor Gray in his Restraints on Alienation, opposes the American rule that a perpetual condition may be valid beyond the limits prescribed by the statute forbidding the suspension of the power of alienation for more that a life or lives, or, as in Hew York, two lives in being. He seems to overlook the fact that the rule against suspension is not violated, at least, in the form in which it exists in this State, where there are persons in being by whose uniting a conveyance giving absolute title could be made. The suspension contemplated by the statute may arise where a conveyance is in trust, and the trustee could
Ho tes of Cases.
Spaulding v. Hallenbeck, 35 N. Y. 204 ; affi’g 39 Barb. 79 (Condition to support grantor for life).
Leach v. Leach, 4 Ind. 628 (condition to pay over share of produce for grantor’s support).
Berryman v. Schumaker, 67 Tex. 312 (the same in effect; but death before claim of forfeiture terminated it).
Plumb v. Tubbs, 41 N. Y. 442 (condition against liquor traffic). Smith v. Barrie, 56 Mich. 315 ; s. c., 56 Am. R. 391 (the same). O’Brien v. Wetherell, 14 Kans. 616 (the same). Woodworth v. Payne, ( 74 N. Y. 196 ; affi'g, in effect, 5 Hun, 551
(condition to use for church purposes). Gage v. School Dist., 64 N. H. 232 ; s. c., 4 New Engl. R. 284
(condition for school uses). Eilis v. Kyger, 90 Mo. 600 (condition to build railroad and depot). Gilbert v. Petler, 38 N. Y. 165 ; affi’g 38 Barb. 488 (condition against,
building so as to obstruct neighbor’s view). Hoyt v. Ketcham, 54 Conn. 60 (condition in restraint of cheap buildping).
Tardy v. Creasy, 81 Va. 553 ; s. c., 10 Va. L. J. 346 (covenants against all business, void as in restraint of trade).
Anon., 2 Abb. N. C. 56 (holding a covenant expressed to be as one off the conditions of the foregoing conveyance was a condition).
2 Washb. on Real P. 4 (says that words not in themselves sufficient?; to constitute a condition subsequent may become so with the addition of a clause reserving a right of re-entry).
Towle v. Remsen, 70 N. Y. 303 , 311 (holding that a reservation of right of to re-enter, etc., meant re-entry by action). Compare Osgood v. Abbott, 58 Me. 73 , 79 ; Ludlowy. N. Y. &. Harlem R. R. Co., 12 Barb. 440 ; Stratton v. Cole, 78 Me. 553 ; s. c., 3 New England, Rep. 388 (necessity of judicial proceedings or other acts of notoriety).
Indianapolis, Peru, etc. R. R. v. Hood, 66 2nd. 580 (statement of permanent use for depot, as the consideration implies condition).
Canal Bridge v. Methodist Society, 13 Metc. 335 (condition that church, etc., be built within a specified time, held repugnant to a second condition, that the land should be forever appropriated to public worship, and the latter condition therefore void).
Watson v. Milwaukee, etc. Ry., 57 Am. R. 67, n. (statement of sole purpose of conveyance, interpreted as a condition, upon extrinsic -evidence of intent.
Compare Robinson v. Missisquoi R. Co., 50 Vt. 426 .; s. c., 4 New Engl. 891; abst. s. c., 86 Alb. L. J. 308 (a).
Riley v. Umatilla Co., 15 Oreg. 72; s. c., 13 Pacific Rep. 890 (deed for sole use of educational purposes not a condition).
Lyon v. Hersey, 103 N. Y. 264 (contract for sale of bark restricting' vuse, held not to create a condition).
Bennett v. Culver, 27 Hun, 554 (condition that land should be used 'for cemetery purposes).
O’Brien v. Wagner, 94 Mo. 93 (covenant under penalty of forfeiture, held a condition).
Richter v. Richter, 3 Ind. 456 (deed with mortgage to grantor to secure care and support of him for life, held a deed on condition). Wilson v. Wilson, 86 2nd. 472 (deed with contemporaneous declarasion of grantee’s obligation not to incumber nor convey without parent’s consent during their lifetime, held a condition).
Although equity will not enforce a forfeiture, a remedy in equity by injunction is not denied merely because the parties, instead of inserting a covenant, inserted a condition. Woodruff v. Woodruff, 44 N. J. Eq. 349 ; Stuyvesant v. Mayor, etc. of N. Y., 11 Paige, 414; Morrris v. Tuskaloosa Mfg. Co., 83 Ala. 565 ).
But compare to contrary effect under peculiar circumstances, Hoard v. Chesapeake, etc. Riv. Co., 123 U. S. 222 .
Cases cited
- Burwell v. Jackson 9 N. Y. 535 p. 408, p. 414
- Jordan v. Poillon 77 N. Y. 518 p. 409
- Hinckley v. Smith 51 N. Y. 21 p. 409
- Methodist Episcopal Church Home v. Thompson 108 N. Y. 618 p. 413
- Moser v. Cochrane 107 N. Y. 35 p. 414
- Spaulding v. Hallenbeck 35 N. Y. 204 p. 417
- Spaulding v. Hallenbeck 39 Barb. 79 p. 417
- Plumb v. Tubbs 41 N. Y. 442 p. 417
- Woodworth v. Payne 74 N. Y. 196 p. 417
- Gibert v. Peteler 38 N. Y. 165 p. 417
- Gibert v. Peteler 38 Barb. 488 p. 417
- Towle v. Remsen 70 N. Y. 303 at 311 p. 418
- Ludlow v. New-York & Harlem Railroad 12 Barb. 440 p. 418
- Lyon v. Hersey 103 N. Y. 264 p. 418
- Hoard v. Chesapeake & Ohio Railway 123 U. S. 222 p. 418