Link Realty & Construction Co. v. Public Construction Co.

Majority

p. 88

Link Realty and Construction Company, Respondent, v. Public Construction Company, Appellant, Impleaded with Others, Defendants.

Second Department,

June 11, 1915.

Headnote

Real property — suit for specific performance of contract to exchange lands —failure of vendor to tender good title — specific performance denied.

In a suit for specific performance of a contract to exchange lands it appeared that the defendant’s lands were subject to mortgages, and that the plaintiff’s lands were restricted to private dwellings or to apartment houses of not less than four stories, but the contract for exchange stated that the restriction permitted apartment houses of less than four stories, and that the mortgages on the defendant’s lands should not expire before certain dates, which necessitated the procuring of extensions, which the defendant was unable to obtain. Upon the plaintiff’s refusal to allow an adjournment of the day of closing, the defendant did not appear, although plaintiff was present with a deed. The plaintiff pleaded compliance on his part and failure and refusal to perform on the part of the defendant who denied but did not plead the

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inability to perform on the part of the plaintiff by reason of the restriction.

Held, that the defendant1 did not waive the variation in the terms of the restrictions as to the height of the buildings by failing to raise it at the date of closing, or by failing to plead it, although he could have discovered the fact by examining the public records;

That equity would not compel the defendant to accept a title which was insufficient under the contract, merely because the defendant refused to perform on its part.

Appeal by the defendant, Public! Construction Company, from a judgment of the County Court of Kings county in favor of the plaintiff, entered in the office of the clerk of said county on the 9th day of June, 1914.

Joseph Sapinsky [Alvin Theo. Sapinsky with him on the brief], for the appellant.

Grover M. Moscowitz [Sidney F. Strongin with him on the brief], for the respondent.

The plaintiff and defendant companies agreed to exchange lands. In lieu of specific performance plaintiff has recovered damages. The lands were subject to mortgages recited, and the plaintiff’s lands were restricted to private dwellings or to apartment houses of not less than four stories, but the contract stated that the restriction permitted apartment houses of less than four stories. The defendant stipulated that the mortgages on its lands should not expire before dates named, which required it to procure extensions of the times of payment. The defendant could not get extensions of the mortgages so as to comply with the agreed expiration periods. In fact, foreclosure was started on one of the mortgages, but was arranged so as to leave it payable on demand. The defendant’s lawyer asked for an adjournment of closing, which was refused. So defendant did not appear on closing day, but plaintiff was there with a deed. The plaintiff plead compliance on its part and failure and refusal to perform on the part of defendant, who denied, but did not plead the inability to perform on the part of the plaintiff by reason of the restriction. The plaintiff insists that the defendant waived the variation in the terms of the

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restriction (1) by failure to raise it at the closing; (2) by failure to plead it, as he could have discovered the truth in a public record. It has been decided that a vendor must plead that he is ready and willing to perform, but that his inability to perform is a matter of defense. (Clexton v. Tunnard, 119 App. Div. 709 [3d Dept. 1907]. See, also, Reed v. Hayt, 109 N. Y. 659 , affg. 51 N. Y. Super. Ct. [19 J. & S.] 121.) In the last case the answer alleged particular breaches and defendant was not permitted to add to them on the trial. Clexton v. Tunnard is based on early chancery decisions that the plaintiff need not show that he was able to give a good title at the date of agreement or at the commencement of the suit, if he can give a perfect title at the time of the decree or when the master makes his report. (Brown v. Haff, 5 Paige, 235; Dutch Church in Garden Street v. Mott, 7 id. 77.) The plaintiff also cites Ten Eyck v. Witbeck ( 55 App. Div. 165 ; affd., 170 N. Y. 564 ), where it was decided that in an action of ejectment defendant could not show without pleading that a deed in plaintiff’s title was void for champerty. To same effect is Udell v. Stearns ( 125 App. Div. 196 ). In Martin v. Colby ( 42 Hun, 1 ) it was decided that it will be presumed that a party is able to perform his undertaking where nothing appears to the contrary, but he is permitted to prove that he cannot. That relates to the defendant. How can a man in equity procure a judgment for specific performance if he is not able to perform himself ? Of what avail is it for him to say that he is ready and willing, if he is not able ? I believe the primary rule to be that a party demanding performance must show what is equivalent to performance on his part, or plead waiver by the opposite party. (Granger Co. v. B.-K. Iron Works, 204 N. Y. 218 .) If the plaintiff plead that he tendered a deed, it may not be his duty to show that he has good title, inasmuch as in absence of objection his title may be presumed But if fin a court of equity it appear that he has not such title as the contract demands, it would be very unjust to regard the defect waived and compel the opposite party to take tit le. It is not performance to tender a deed that conveys nothing, or something less than the contract. But the plaintiff urges that its fulfillment regarding the restriction is unimportant, as defend

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ant contemplated using the land to be received from plaintiff for an apartment house of more than four stories. ' What defendant proposed to use the land for excuses a bad title — that is plaintiff’s plea. But may not the purchaser change his mind ? The defendant had the right to have what his contract gave him, and knowledge of a defect in the title cannot be imputed to him to defeat that right. (Nathan v. Morris, 62 Hun, 452 .) The plaintiff urges that the record imputes knowledge to the defendant of the scope of the restriction, and that, so knowing, he cannot raise the objection, • and cites cases. According to that, defendant should have searched the title before he contracted, and he may not rely on the terms of the contract — a proposition most inequitable as well as incorrect in law. The plaintiff urges that it may make the defendant accept a bad title or pay damages for rejecting it because it did not appear on the closing day and decline performance on that ground. The suggestion is quite illogical. The plaintiff was on hand at the closing with a deed that would not convey what the contract demanded. The defendant was not there. The plaintiff draws the conclusion that by reason of the defendant’s absence the plaintiff’s ineffective deed became a sufficient deed for the purpose of fulfilling the contract on its part. Had the defendant appeared and pointed out wherein the plaintiff could not perform, the latter could not have obviated the defect. The defendant was not obliged to do a vain thing. (Alpern v. Farrell, 133 App. Div. 278 ; Rosenberg v. Jacobson, 56 Misc. Rep. 693 ; Oppenheimer v. Knepper Realty Co., 50 id. 186, 187.) But plaintiff urges that defendant could not have raised such objection at that time because it had not then examined the title. The suggestion seems to be that the deed tendered was legal performance because the defendant, had it appeared, would have been ignorant that the proper title was not tendered. That does not seem a worthy argument where it appears that the plaintiff could not do what it agreed to do. It is true that the defendant did not appear at the closing, as it urges, because it could not obtain the extension of the mortgages, but, as plaintiff contends, because it willfully refused to fulfill. But in a court of equity the plaintiff should not be permitted to foist on the defendant a title, defective as measured by the

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contract, upon the excuse'that the defendant refused to perform on its part. That would allow the plaintiff, not able to perform, to prevail over the defendant in default by ascribing to the latter the more blame, although neither was blameless. We have considered the other questions involved in the appeal, but it is unnecessary to decide them.

The judgment should be reversed and the complaint dismissed, without costs.

Jerks, P. J., Carr, Rich and Putnam, JJ., concurred.

Judgment of the County Court of Kings county reversed on reargument, and complaint dismissed, without costs to the appellant.

Cases cited

Clexton v. Tunnard 119 App. Div. 709 N.Y. App. Div. 1907-05-24 p. 90
A. D. Granger Co. v. Brown-Ketcham Iron Works 204 N. Y. 218 N.Y. 1912-01-23 p. 90
Rosenberg v. Jacobson 56 Misc. Rep. 693 N.Y. App. Term 1907-12-12 p. 91