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Groden v. Jacobson

129 A.D. 508 Court Second Department, Decision date 1908-12-30 English

Delivered by Jenks, J.:

Contents

Majority

p. 508
Morris Groden, Respondent, v. George Jacobson and Others, Appellants.
Second Department,
December 30, 1908.

Headnote

Real property — vendor and purchaser — breach by vendor — mortgage containing clause not specified — trial — waiver of equitable counterclaim — waiver by notice of trial.
Where a contract to convey lands provides that certain mortgages thereon are to run not less than two and one-half years from”the date of the conveyance, the vendee is justified in refusing title if the mortgages contain clauses providing that the mortgages may be declared due on thirty days’ notice if a statute is enacted changing in any way the laws for the taxation of mortgages or mortgage debts.
A vendee may make objections to the title offered at the time set for the delivery .of the deed. And where the vendee sues at law to recover earnest money on the ground that mortgages upon the property do not comply with the terms of the contract, the vendor cannot contend that he should have been given a reasonable time to obtain a release of the offensive clause, for the time of performance is of the essence of the contract.
Where a vendor sued at law for the recovery of earnest money subsequently conveys to third parties, he waives an equitable counterclaim for specific performance.
Where the plaintiff in such action noticed the cause for the Trial Term, the defendant by serving a cross-notice for that term waives his right to trial in any other forum.
Appeal by the defendants, George Jacobson and others, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 21st day of
p. 509
January, 1908, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the 27th day of January, 1908, denying the defendants’ motion for a new trial made upon the minutes.
Louis J. Altkrug, for the appellants.
Harry Zirn, for the respondent.

The action is to recover a deposit on a contract to purchase realty with improvements to be erected thereon, and the expenses for examination of the title. The defendants appeal from a judgment for the plaintiff entered upon a verdict directed by the court at the close of the case. The contract executed on April 23, 1906, named March 1,1907, for performance. There was not performance on that day. The plaintiff on that day raised certain objections to the title, then tendered the money called for by the contract and demanded a deed. The contract provided that the realty should be conveyed subject to certain mortgages to run for a period of not less than 24 years from the date of closing title. But it appeared that certain of these mortgages, which were made subsequent to the execution of the contract, contained provisions that in the event of the passage of any law by the State deducting from the value of land for the purposes of taxation any lien thereon, or changing in any way the laws for the taxation of mortgages or mortgage debts for State or local purposes, or the manner of the collection of any such taxes so as to affect the mortgage, the holder of the mortgage and the debt which it secured should have the right to give 30 days’ written notice to the owner of the said land requiring the payment of the mortgage, which in that event should become due, payable and collectible at the expiration of the said 30 days. The contract between the parties contains no provision that the mortgages described therein might contain any such or similar clause. I think, then, that the plaintiff was justified in refusing to take the premises subject to mortgages which contained this provision, which in a contingency, neither remote nor bare (in view of the agitation of such legislation and action towards it), might make the mortgages due within a period much less than that stipulated for by the parties

p. 510
in their contract. (Oppenheim v. McGovern, 115 App. Div. 135 ; affd., 189 N. Y. 572 .) A deed was offered to the plaintiff at the time appointed for the closing of the title, and the purchaser was entitled then to make his objections thereto. (Maupin Real Estate [2d ed.], § 43, and authorities cited.) The contention of the appellants is that time was not the essence of the contract; that on the law day the vendors asked and should have received a reasonable time to obtain a release of the mortgage clauses in question, which they could have obtained. But this is an action at law, and the stipulated time for the performance of such a contract is of the essence thereof. (Schmidt v. Reed, 132 N. Y. 108 , 113; Oppenheimer v. Humphreys, 9 N. Y. Supp. 840 ; affd. on opinion below, 125 N. Y. 733 .)

The action was begun in March, 1907. The defendants demanded a decree for specific performance. The learned trial court decided that the defendants waived their demand for equitable relief because they served a cross-notice of trial for the Trial Term ; and because they had conveyed the premises subsequent to their contract with the plaintiff. I think that the court may be sustained in this disposition of the counterclaim, in view of the proof that the defendants had conveyed the premises to those who were for aught that appeared innocent and bona fide purchasers. By this act the defendants either made specific performance on their part impossible (Pom. Spec. Perf. § 466) or dependent on the mood of the defendants’ grantees, which is not sufficient to move the court. (Hinckley v. Smith, 51 N. Y. 25 .) The defendants, by their said cross-notice, waived any right to trial in any other forum than that of Trial Term. (Tubbs v. Embree, 89 Hun, 475 ; Jacob v. Thompson, 80 App. Div. 526 .)

The judgment and order are affirmed, with costs.

Woodward, Hooker, Rich and'Miller, JJ., concurred.

J udgment and order affirmed, with costs.

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