Cannon v. Smith — 15 N.Y. St. Rep. 862

Majority

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Elizabeth R. Cannon, App’lt, v. George T. Smith et al., as Ex’s, etc., Resp’ts.

(Supreme Court, General Term, Second Department,

Filed May 14, 1888.)

Headnote

1. Vendor and vendee—Agreement of sale—Rights of vendee—What IS NOT WAIVER.

A vendor owned three pieces of land known as lots 1, 3 and 3. On the last named there was a mortgage for $3,000, and two others, one for $1,360 and another for $735. On lot 3 there was a mortgage for $350, which included other property. The plaintiff agreed to buy the three lots for_ $5,000, the vendor paying the $3,000 mortgage off and the vendee taking a deed subject to the $1,360 and $735 mortgages, and giving a new mortgage for $3,150 and paying $505 in money. The deed and new mortgage were to be left in escrow until the $3,000 was taken up by the vendor. The vendee paid $505 and went into possession. After the death of the vendor the $3,000 not having been taken up was foreclosed, and the vendee bought in lot No. 1 for $4,035, which she paid for in cash, and the mortgage for $1,360 and $735 were paid out of the sum so paid. Lot No. 3 was sold to strangers for $150. Held, that by this lots 1 and 3 were withdrawn from the operation of the deed by superior title, and the agreement was at an end and the vendee entitled to the return of her money; that the vendee did not waive her right to the return of the money by purchasing lot No. 1.

3. Estoppel—What will constitute estoppel in pais.

The sale of lot No. 3 was made paramount to an agreement between the original vendee and the executor of the vendor and the former promised to make a bid of a stated sum at the sale. At the sale she stated to the bidders that they would have to purchase subject to her rights under the original agreement. Held, that the sale being induced by agreement with the executor the vendee under-the original agreement of sale was estopped from denying the title of the purchaser at the sale.

Appeal from a judgment entered upon a report of a referee in Suffolk county.

Elliott J. Smith, for app’lt; Wilmot M. Smith, for resp’t G. H. Newton; J. Lawrence Smith, resp’t, in person; Smith- & Keene, for resp’ts G. T. Smith et al., ex’rs.

—The case shows that in November,. 1884, one Elizabeth Smith owned three pieces of land known in the evidence as lots No. 1, 2 and 3. There was a $2,000 mortgage on lots 1 and 3. Also a mortgage for $1,260, also one for $735. On lot two there was a mortgage of $350, which included other property. The plaintiff agreed to buy the three pieces for $5,000. The vendor was to pay the $2,000 off, and the vendee was to take a deed subject to the $1,260 and the $735, and to give a new mortgage for $2,150 and to pay $505 in cash. The deed-

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and new mortgage for $2,150 were to be left in the hands of John Lawrence Smith in escrow until the $2,000 mortgage was taken up by the vendor. In this condition the transaction remained when the vendor died.

The papers were held in escrow and the $2,000 was not taken up. The vendee paid the $505 in cash and went into possession. After the death of the vendor the $2,000 mortgage was foreclosed and the vendee plaintiff bought No. 1 for $4,025, which she paid for in cash, and the mortgage for $1,260 and $785 were paid out of the sum so paid. Lot No. 2 was sold to strangers for $150.

The result did not work any great injustice, although the deceased should have,performed his agreement.

After deducting lot No. 2 and assuming that lot No. 3 brought its value the plaintiff gave him for lot No. 1 apportionately; then she was to pay for the whole. The deceased vendor received for the whole property $4,785, including the $505, payment in cash, and allowing the $150 for lot No. 2 and $105 for lot No. 3, which was its value over the mortgage on it.

The rights of the parties, however, are not to be determined by the result of the vendee’s default. Lots Nos. 1 and 2 were withdrawn from the operation of the deed by superior title. The agreement was thereby at an end, and the plaintiff was entitled to a return of his cash paid. By her purchase of lot (No. 1, she did not waive her rights to this return of the $505. It was impossible to execute the agreement entirely after the sale. The land in great part had passed to new owners. There remained only lot No. 2, mortgaged for $350, and worth $105 over that mortgage. The principal controversy is over this lot. The evidence shows undeniably that the sale of this lot was made by the executor of the vendor by the assent and even procurement of the plaintiff and under her promise to bid $450 for it on the sale.

She did state to the bidders that they would have to purchase subject to her rights under the original agreement with the deceased vendor, but in view of the preceding agreement by which the sale was induced, the referee was fairly justified in finding that the sale was not designed to be and was not forbidden. The plaintiff made her bid as she agreed, and another person bid $500 more and took the land. The plaintiff should be estopped from denying this title. She stood by and permitted the sale as the property of the deceased vendor, and she was willing and agreed to take a title from the executor and pay the price for it as land belonging to the deceased. There is no reason why the $505 is not to be repaid. The agreement was at an end by the default of the vendor, and the lands passed by

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other means than the agreement called for. There should have been a judgment against the executor for that sum. The judgment is modified by allowing that sum with interest from the date of the referee’s deed on the foreclosure of the $2,000 mortgage. The plaintiff is also entitled to have the decree modified so that the defendant, J. Lawrence Smith, deliver up the $2,150. Bond and mortgage to plaintiff to be cancelled or destroyed by plaintiff as wholly inoperative and void. Costs should be allowed against the executor, and this judgment, as to the other defendants, is affirmed without costs of the appeal to either party.

Dykman and Pratt, JJ., concur.