Tamsen v. Schaefer — 14 N.Y. St. Rep. 11

Majority

p. 11

Edward J. H. Tamsen, App’lt, v. Henry Schaefer et al., Resp’ts.

(Court of Appeals,

Filed March 6, 1888.)

Headnote

1. Deed—What will be treated as—Intention of parties.

Whether an instrument shall be treated as a conveyance of land or as an executory contract for a conveyance depends upon the intention of the parties as gathered from all the language used, read in the light of all the circumstances.

2. Contract to convey land—Action for damages under, when maintainable.

One, Mrs. Frank, being the owner of a certain lot of land entered into a written contract to sell and convey the same to one Larchus, who made a part payment. On the day fixed for delivery of the deed Mrs. Frank could not make a satisfactory title. Thereafter she conveyed said lot to the defendant Schaefer, who, March first, entered into a written contract, dated and acknowledged that day, for the sale of the said lot to the plaintiff for a specified sum, part of which was paid down. The deed was to be executed and delivered March sixteenth. On March seventh Larchus commenced an action against Mrs. Frank to recover damages for the breach of her contract with him. On March sixteenth Schaefer was not able to make a satisfactory title and could not perform his contract with plaintiff, but made a new agreement with him, whereby the former re

p. 12

turned the money paid, and also paid plaintiff the expenses incurred in searching the title and agreed to try to have the defects in the title cured and performance of the prior contract was postponed until April first. On the twenty-fifth of March Schaefer reconveyed the lot to Mrs. Frank and on the twenty-eighth of March Frank conveyed the same to the defendant Larchus in performance of her contract with him, above-referred to. On April first the plaintiff was ready to perform his contract with Schaefer, but the latter made default and thereupon commenced this-action for damages for a breach of the contract to convey a lot of land, or to compel specific performance thereof. Held, that the complaint was properly dismissed as to the defendant Larchus.

3. Same—What amounts to such a contract—Construction of.

Held, that the plaintiff’s contract with Schaefer was not a conveyance in presentí to him of the land. That it was a mere contract for a conveyance to him at a future time. That there was no intention that the contract should operate as a conveyance.

4. Same—Rights of parties where there are two contracts.

Plaintiff’s rights and equities were subordinate to whatever rights and equities, the defendant Larchus had under the prior contract made between Mrs. Frank and said Larchus.

5. Same—Rescission of—-Refusal to accept imperfect title is not.

The Larchus contract was not rescinded by his refusal to accept an imperfect title on the day fixed therein. He had the right to refuse to take such title and accept imperfect performance on the part of Mrs. Frank and to still hold her bound by her contract.

6. Same — Commencement of action for damages is not rescission of CONTRACT.

Larchus, by commencing his action for breach of the contract, did not rescind the contract, and the commencement of that action did not release Mrs. Frank from every obligation due from her under her contract, and after its commencement he had the right to withdraw it and accept performance from her.

This was an action by the plaintiff, the vendee, to recover damages against the vendor for the breach of a contract to convey a lot of land, or to compel specific performance of the contract.

The action was brought to trial at a special term of the superior court of New York county, and the trial ' judge ordered judgment in favor of the plaintiff against the defendants Schaefer and Frank, and dismissed the complaint as to the defendants Larchus. From the judgment in favor of the defendants Larchus, the plaintiff appealed to the general term where it was affirmed, and this appeal was taken to this court. The material facts sufficiently appear in the opinion.

Henry Wehle, for app’lt; Joseph E. Newburger, for resp’ts.

—On the 16th day of January, 1882, the defendant Maria Frank owned a lot of land in the city of New York, known as No., 638 Sixth street, and on that day she entered into a written contract with the defendant Joseph Larchus to sell and convey the same to him for the sum of $8,250, $500 of which was paid down and the balance was

p. 13

to be paid by him as specified in the contract, the deed to be delivered on the 31st day of January. On that day Larchus offered to perform the contract on his part, but Mrs. Frank could not make a satisfactory title, and could not, therefore, on that day perform.

Thereafter, on the fourth day of February, she conveyed the lot to her son-in-law, the defendant Henry Schaefer, who resided with her, and the deed of conveyance to him was recorded in the office of the register of the city and county of New York. It does not appear that he was a bona fide purchaser of the lot, or that he paid anything for it. On the first day of March thereafter he entered into a written contract, dated and acknowledged on that day, for the sale of the lot to the plaintiff for the sum of $8,150, $300 of which was paid down at the execution of the contract, and the balance was to be paid thereafter as specified. Under that contract the deed was to be executed, and both parties were to perform on the sixteenth day of March. On the seventh of March Larchus commenced an action against Mrs. Frank to recover damages for the breach of her contract with him, and he obtained an attachment against her property. On the sixteenth of March the plaintiff appeared at the time and place mentioned in his contract with Schaefer, and offered to perform the contract on his part. Schaefer, however, was not able to make a satisfactory title, and on that account could not perform. At that time a new agreement was made between the plaintiff and Schaefer, whereby the latter returned to the plaintiff the $300 received from him on the contract of March first, and also paid him $125 for expenses incurred in searching the title; and he further agreed to do everything within his power to have the defects in the title cured, and performance of the prior contract was postponed until the first day of April. On the twenty-fifth of March Schaefer reconveyed the lot to Mrs. Frank, and on the twenty-eighth of March Mrs. Frank conveyed the same to the defendants Larchus, in performance of her contract with Joseph Larchus above referred to. On the first of April plaintiff was ready to perform his contract with Schaefer, but Schaefer made default; and, thereupon, this action was commenced.

We are of opinion that the complaint was properly dismissed as to the defendants Larchus. Plaintiff’s contract with Shaefer, was not a conveyance in presentí to him of the land. It was a mere contract for a conveyance to him at a future time. It was an agreement to sell and not a sale. While the contract was dated and executed on the first day of March, it was provided therein that the title was to pass upon performance by the parties on

p. 14

the 16th day of March. Both parties treated it as a contract to sell in the future; the $300 first paid was refunded and nothing whatever was thereafter paid thereon. The complaint is not framed upon the theory that there was an actual transfer of the title to the plaintiff, but upon the theory that he simply held the contract and the action was to recover damages for the breach of that contract or to compel specific performance thereof. Whether an instrument shall be treated as a conveyance of land or as an executory contract for a conveyance depends upon the intention of the parties as gathered from all the language used, read in the light of all the circumstances; and here clearly there was no intention that the contract should operate osa conveyance.

Plaintiff’s,rights and equities, therefore, were subordinate to whatever rights and equities the defendants Larchus had ■under the prior contract made between Mrs. Frank and. Joseph Larchus on the 16th day of January.

It is claimed, however, on the part of the plaintiff, that the contract of January 16th, between Joseph Larchus and Mrs. Frank was rescinded and that therefore the defendants Larchus could not base any rights or equities thereon as against the plaintiff. It was not rescinded by Larchus’ refusal to accept an imperfect title on the 31st day of January. He had the right to refuse to take such a title and accept imperfect performance on the part of Mrs. Frank and to still hold her bound by her contract. He could either wait until she could perform or sue her for damages for breach of her contract. He chose the latter course and on the 7th of March commenced an action against her to recover his damages for breach of the contract. But the plaintiff in entering into contract with Shaefer was in no way influenced by anything that Larchus did or omitted to do. He took his contract from Shaefer on the 1st of March without any knowledge whatever of the transactions between Mrs. Frank and Larchus. Neither was his conduct influenced in any way by the action which Larchus commenced on the 7th of March. All he did after that was on the 18th of March to offer performance of his contract with Shaefer, and when Shaefer was not able to perform he obtained all the money he had paid upon the contract, and payment for his expenses, and the time of performance was extended to the 1st day of April, when he again offered to perform and Shaefer failed.

By commencing his action for breach of the contract Larchus did not rescind the contract. It was an action based upon the contract to recover his damages for the breach thereof, and the commencement of thab action did not release Mrs. Frank from every obligation due from her

p. 15

under her contract, and after its commencement he had the right to withdraw it and accept performance from her. In doing so he committed no wrong whatever upon this plaintiff and in no way invaded plaintiff’s rights. If, however, after the plaintiff had received notice of the Larchus action against Mrs. Frank he had entered into contract for the purchase of these lands, and- paid money thereon, or if he had taken a deed thereof, we would have had a different case. But it does not appear that he parted with any money, or did anything in reliance upon the action and the position Larchus took therein against Mrs. Frank. Nor is Larchus concluded by his election to sue Mrs. Frank to recover damages for the breach of her contract. It is not like the case where a party proceeds in affirmance of a contract who thereafter wishes to treat the contract as rescinded, or vice versa. In such cases the party is generally held and concluded by his election.

After commencing his action for the breach of contract, Larchus could, by authority of the court, have turned it into an action for specific performance, or he could have discontinued the action and commenced a new one for specific performance; as he thus had the right to commence an action for specific performance, he could accept specific performance without violating the rights of anyone who had not been in any way misled by his course of proceeding.

There was no evidence that Larchus had any knowledge of the arrangement made between the plaintiff and Schaefer on the 16th day of March, or that he had any design to injure or wrong the plaintiff, or that he entered into any conspiracy to defraud him or deprive him of any of his rights.

The case therefore presents no ground for any recovery by the plaintiff against the defendants Larchus, and the judgment should be affirmed, with costs.

All concur.