Hayes v. Nourse — 24 N.Y. St. Rep. 569

Majority

p. 569

Ellen T. Hayes, Resp’t, v. Charles J. Nourse, Jr., App’lt.^[1]

(Court of Appeals, Second Division,

Filed June 25, 1889.)

Headnote

1. Title—Pending action.

A pending action brought to establish title to or a lien upon land, does not of itself, nor does a duly recorded notice of its pendency make the title defective or create a lien on the land.

3. Same—Contract—For sale op land—When money paid may be recovered.

A vendee may recover money paid on an executory contract for the sale of land, by proving the title to be so doubtful that a court would not compel him to take it.

3. Same—Bona pide purchaser—When not appected by notice op pen-

dency OP ACTION.

Where a pui chaser pendente lite of the subject of litigation buys in good faith, and without actual notice of the claims of the litigants, he is not affected by the suit pending, or by the notice of its pendency, unless the suit has been prosecuted with due diligence.

4. Action—When right to revive action lost.

The right of a plaintiff to revive and continue an action against the successors in interest of a deceased defendant may be lost by long delay in making the application, and, especially ,if the successors are purchasers in good faith, and the condition and value of the property have greatly changed, and the only witnesses by which the facts in issue could be established are dead.

5. Title—When not appected by pending action.

The plaintiff brought suit to recover a certain sum, part payment of the purchase price of certain lots sold by defendant to her. She claimed to rescind the sale on the ground that defendant’s title was defective, the basis of her claim being that in 1836 a suit in chancery was pending, adverse to the title of defendant and his grantors. Reid, that inasmuch as for sixty-one years prior to the date fixed for the performance of the contract of sale, the defendant and his grantors had been in exclusive possession of the lots, by virtue of recorded deeds, that no more had been made in the chancery suit adverse to defendants, sixteen years before defendants’ immediate grantor became a purchaser in personal good faith, and more than forty-six years before plaintiff purchased, the suit in chancery created- no defect in the title or lien upon the property, and that plaintiff should perform her contract, and complete her purchase. Bradley & Haight, J. J.. dissenting.

p. 570

Appeal from a judgment of the general term of the court of common pleas of the city of New York, affirming: a judgment for the plaintiff for $2,650 damages, entered on? the report of a referee.

In 1819, Peter Kemble owned in fee, and was in possession of two lots now known as No. 56 Marion street and No. 91 Crosby street, in the city of New York. February 1, 1823, he died, having devised these lots to his five children, share and share alike. His will was duly probated April 7, 1824. Four of the devisees conveyed these lots to the fifth devisee, Mary Kemble, who recorded her deed, and subsequently, (the date not appearing) took possession under her deed, remained in possession until October 5, 1854, when she conveyed the lots to James N. Paulding, who recorded his -deed, immediately took possession under it, and remained in possession until August 30, 1884, when he conveyed the lots to the defendant, in this action, in trust for the benefit of creditors. March 25,1885, the defendant sold the lots, by public auction to the plaintiff, for $26,100. She paid down ten per cent., $2,610 and forty dollars auctioneer’s fees; total, $2,650, and contracted to pay the remainder of the price, and take a deed April 15, 1885. But, before that date, she discovered facts which, she asserts, makes the defendant’s title defective, or, at least, so doubtful that she is entitled to rescind the sale and recover the amount paid.

By mutual agreement the time for the performance of the contract was extended to May 16, when the plaintiff finally refused to take the title, demanded the repayment of the $2,650, and on the same day began this action.

The facts discovered were:

(1) A bill filed July 31, 1836, in the late court of chancery, wherein John McGeer, Thomas McGeer, Peter McGeer, an infant, and Mary A. McGeer, an infant, were complainants; and Gouverneur. Kemble, William Kemble, Richard F. Kemble, Mary F. Kemble and Gertrude Kemble Paulding (the wife of James K. Paulding), the five children and devisees of said Peter Kemble, were defendants; (2) a notice of the pendency of the action filed the same day, pursuant to 2 Revised Statutes, 174, section 43; (3) the joint and several answer of the defendants, verified January 28, 1837; (4) depositions taken in the suit in November and December, 1837, before a master; (5) an order entered April 26, 1838, closing the proofs; (6) an order entered May 25, 1844,, substituting Charles O’Connor as solicitor for the complainants.

It is alleged in the bill that August 13, 1819, Peter Kemble and Arthur McGeer (ihe father of the complainants) mutually executed an executory contract, by which Kem

p. 571

Me agreed to sell and McGeer to purchase the lots for $1,200, and that September 18, 1819, the vendee paid $100, and November 20, 1819, $100 on the contract, entered into possession, and in 1819 and in 1820 expended $2,000 in erecting a dwelling and making other improvements. That to complete the dwelling McGeer borrowed $300 of Kemble upon an oral agreement that Kemble should convey the lots to McGeer and receive from him a mortgage on them as security for the loan, and the remainder of the purchase price; and that to secure Kemble until the deed and mortgage should be exchanged, McGeer delivered the contract for the lots to Kemble, who failed to convey them, and never returned the contract. It is further alleged that McGeer continued in possession, paying interest on the contract until May 25, 1825, when he died intestate, leaving the complainants, his heirs and only heirs at law, then infants of tender years; and that shortly thereafter the defendants took, and have ever since retained, possession of the lots.

The defendants, in the suit in chancery, admitted in their answer, the execution and delivery of a written contract of sale, and the payment of $200 thereon; but averred that the contract was to be performed within two years. They admitted that McGeer took possession, built a house, and made improvements; but averred that the improvements did not cost $2,000. It was admitted in the answer, that Kemble loaned McGeer money to complete his dwelling; but it was denied that Kemble received the contract as security, until a deed and mortgage could be exchanged between the parties; and it was averred that November 7, 1821, McGeer and Kemble had a settlement, and there was found due on the contract, for money loaned, and interest, $1,700, which McGeer, by his bond, covenanted to pay in one year, with interest, but never paid this sum, or any part of it. In short, several perfect defenses to the suit are alleged in the answer.

The referee, in the case at bar, found that no proceedings were taken in this equity suit between April 26, 1838 (when the proofs were declared closed), and May 25, 1844 (when Charles O’Connor was substituted as solicitor for the complainants), and that none have been taken since May 25, 18-14. He found that all of the defendants in the equity suit, except Richard F. Kemble, and Mary Kemble Parrott, died prior to November 6, 1881. He also found that about twenty years ago, James N. Paulding, then the owner of the lots, made an unsuccessful effort to find the complainants, and that it does not appear what has become of them.

The plaintiff called, as a witness, James N. Paulding, who testified that about twenty years before the trial of this action, he sold the lots by auction; but the purchaser found the papers in the chancery suit on file, and refused to take the title. Upon cross-examination, he testified:

p. 572

“ That attempt was twenty years before this sale, more or less. I should think quite that. I have not the data to give the exact date, but I should think it must be twenty years, ago. When he, the purchaser at the auction sale, came to search the title, he made this objection. I did not push it. I. was astonished. This is the first thing I knew about anything being the matter with the title. I let it go. I, at the= time, tried to find these people, the McGeers.

“ I employed the two men that I thought would be most, likely to find out about these people. One was an agent I had then for the property. He had been agent for a long while, and knew all about it. The other was a merchant, who had lived there for some time, and had known these parties. They did their'best to find out about them, and reported to. me that they could not be found or heard of; had not been heard of for a great many years. The last that had been heard of them was that the man had been a sort of river pirate, and the woman was a drunkard', and had been carried off to the poor house or asylum, or something or other, and had disappeared, and everybody came to the conclusion that they were .dead. That was the general opinion.”

W. H. Newshafer, for pl’ff-resp’t; George W. Wicker-sham, for def’t-app’lt.

A pending action brought to establish title to, or a lien upon land, does not of itself, nor does a, duly recorded notice of its pendency make the title de fective, or create a lien on the land. The Mahaiwe Bank v. Culver, 30 N. Y., 313 ; Wilsey v. Dennis, 44 Barb., 354 ; Osbaldeston v. Askew, 1 Russ., 160; Bull v. Hutchens, 32 Beav,, 615; 1 Dart., Vend. (6th ed.), 564; 1 Sug. Vend. (7th Am. ed.), 592, pp. 50-520. In Bull v. Hutchens, Sir John Romilly, the learned master of the rolls, discussing this, question said: “It (the registered notice), was notice of the-existence of a suit in chancery, and required all persons, dealing with the property to look at the proceedings to see whether it did affect the property or not. Here the lispendens was no incumbrance, if Pratt had no right against the property, for it depended on the validity of his claim;, for if his claim were idle, it. could not create any incumbrance on the property. A man might file a bill claiming property, alleging that sixty years ago his ancestor was seized in fee; and that although he had sold the property, yet he had no right to do so. The plaintiff might register this as a lis peiidens ; but could anybody say that this was. an incumbrance on the property, or a reason why a purchaser should not complete his purchase ? All that the registration of a lis pendens does, is to require persons to look into the claims of the plaintiff who registers it.”

The record before this court is barren of evidence, except such as is contained in the papers filed in the suit in chancery, tending to show that the complainants in that suit.

p. 573

ever had an interest in, or lien upon, the lots. Nevertheless, this case will be decided upon the assumptions; (1} that all of the allegations in the bill were.true at its date; (2) that the facts there alleged were found by the referee in this action, upon competent and sufficient evidence; and (3),. that those facts were sufficient to have entitled the complainants, in 1836, when their bill was filed, to a judgment, requiring Mary Kemble, then the owner of the legal estate, to receive the remainder of the purchase-price from the complainants and convey to them the lot. Were it material, the defendant might well complain of these assumptions, for while the admissions made by Mary Kemble, in her answer to the bill in chancery, when she-was the owner, and in possession, of the lots, are evidence against the defendant, the unadmitted allegations of the complainants in their bill, on which the assumptions are-based, are not evidence against him, and, besides, the assumed facts were not found by the referee.

Besting upon these assumptions, could the complainants, if living, or, if dead, their successors in interest, in March, 1885, have compelled the defendants in this action to accept, of the remainder of the purchase-price, and convey the lots?' If the answer to this question be doubtful in a legal sense, by reason of resting on a disputed state of facts, or on unascertained facts, the plaintiff was not bound to take the title.

Whether, in actions brought to enforce the specific performance of executory contracts for the sale of land, courts should determine doubts respecting the title, which depend solely on an unsettled question of law, and decree performance when the unsettled question is decided in favor of the validity of the title, seems not to have been definitely settled. Abbott v. James, 111 N. Y., 673 ; 20 N. Y. State Rep., 230; Osborne v. Rowlett, 13 Ch. Div., 774; Fry on Sp. Per. (3d Am. ed.), 435, § 87l; Pom. Sp. Per., 281, § 202.

But it is unnecessary to enter into this controversy, for the determination of the validity or reasonableness of the vendee’s doubt, in the case at bar, does not depend upon the decision of an unsettled legal question.

It is assumed, without deciding the question, that a vendee may recover money paid on an executory contract for the sale of land, by proving the tide so doubtful that a court would not compel him to take it. Upon this question, see Burwell v. Jackson ( 9 N. Y., 542 ); O’Reilly v. King (2 Robt., 587); Methodist Ep. Church Home v. Thompson (20 J. & S., 321); Bayliss v. Stimson (21 J. & S., 225; 1 Dart, Vend. [6th ed.], 222.

A vendee, in an executory contract for the purchase of

p. 574

land, has not an absolute right to a specific performance of the contract, but such relief is granted or refused according to the circumstances of each case. Peters v. Delaplaine, 49 N. Y., 362 ; Day v. Hunt, 112 id., 191; Fry Sp. Per. (3d Am. ed.), p. 10, § 25; Pom. Sp. Per., p. 4, § 4; p. 47, § 35.

The fact that all of the heirs of Arthur McGeer were infants at the date of his death, May 25, 1825, and that the youngest did not become of full age until 1843, is not a legal excuse in an action to enforce a specific performance of the -contract, for their failure to perform the contract of their ancestor, and the loches which would have barred such an action by him, will bar a like action prosecuted by them. Havens v. Patterson, 43 N. Y., 218 .

Paulding having purchased without actual notice of the suit, or of the alleged claim of the McGeers, he was a purchaser in good faith and acquired a perfect title, unless he was bound by the bill in equity and the accompanying notice of the pendency of the suit. His grantee (the defendant herein) succeeded to all of his rights, and a purchaser from the defendant, though purchasing with notice of the suit and of the claim of the McGeers, would acquire a perfect title, free from their claims. Bumpus v. Platner, 1 Johns. Ch., 213 ; Varick v. Briggs, 6 Paige, 323; affirmed 22 Wend., 543 ; Griffith v. Griffith, 9 Paige, 315 ; Webster v. Van Steenbergh, 46 Barb., 211 ; Wood v. Chapin, 13 N. Y., 509 ; 1 Story’s Eq. Juris., § 410; 2 Pom. Eq. Juris., § 754. Paulding’s title, and the title of purchasers subsequent to him, not being weakened or affected by actual notice of the suit, it becomes important to inquire as to the effect of these papers found on file; or for how long a dormant suit and a statutory notice of its pendency binds subsequent purchasers for value and without actual notice.

The rule that a purchaser pjendente lite of the subject of the litigation, if he buys in good faith and without actual notice of the claims of the litigants, is not affected by the suit pending, or by the notice of its pendency, unless the suit has been prosecuted with due diligence, was first formulated by Lord Bacon.

“ 12. No decree bindeth any that cometh in bona fide by conveyance from the defendant before the bill exhibited, and is made no party, neither by bill nor the order; but where he comes in pendente lite, and while the suit is in full prosecution, and without any color of allowance or privity of the court, there regularly the decree bindeth; but if there were any intermission of suit, or the court made acquainted with the conveyance, the court is to give order upon the special matter, according to justice.” Ord. 12, in Chancery; 15 Bacon’s Works, 353.

The learned editors of Bacon’s Works, Spedding, Ellis

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and Heath, say that the main body of these ordinances must have existed previous to the time of Lord Bacon, in some shape qr other, written or unwritten. 14 Bacon’s Works, 160. It may be safely asserted that this rule is as ancient as the earliest reported decisions of the court of chancery, and it continued to be the rule of the English courts until 1839. Preston v. Tobbin, 1 Vernon, 286; Sorrell v. Carpenter, 2 Peere Wms., 482; Kinsman v. Kinsman, Taml., 399; Rev. 1, Russ. & M., 617; 2 Sug. on Vend. (7th Am. ed.), 544, 1045, pp. 24; 2 Fonbl. Eq., 153. In 1839, it was enacted (chap. 11, 2 and 3 Vict.; amended by chap. 15, 18 and 19 Vict.), that a Us pendens should not bind a purchaser or mortgagee pendente lite without express notice thereof, unless a notice of the pendency of the suit should be registered, and that the registered notice should become void at the expiration of five years, unless it should be re-registered. Since the passage of this statute, the effect upon purchasers and incumbrancers pendente lite of a lack of diligence in prosecuting suits has ceased to be, in England, a living question, and only occasional reference to the subject will be found in modern English law books. We do not find that this rule has ever been questioned in this state; but, on the contrary, it has been approvingly cited and applied. Murray v. Ballou, 1 John. Ch., 566; Hayden v. Bucklin, 9 Paige, 512; Myrick v. Selden, 36 Barb., 15 ; Will. Eq. Juris., 251. The courts of other states have asserted and followed the rule. Herrington v. McCollum, 73 Ill., 476 , 483; Watson v. Wilson, 2 Dana, 406 ; Clarkson v. Morgan, 6 B. Monroe, 441, 448: Debell v. Foxworthy, 9 id., 228; Ehrman v. Kendrick, 1 Metcalfe (Ky.), 146; Petree v. Bell, 2 Bush (Ky.), 58; Ashley v. Cunningham, 16 Ark., 168 ; Mann v. Roberts, 11 Lea (Tenn.), 57; Bybee v. Summers, 4 Oregon, 354.

The text-writers state the rule as laid down in the cases cited. 2 Pom. Eq. Juris., §§ 634, 640; Wade on Notice, §§ 357, 359; Bennett on Lis Pendens, 418.

The right of a plaintiff to revive and continue an action against the successors in interest of a deceased defendant, may be lost by long delay in making the application, and especially if the successors are purchasers in good faith, and if the condition and value of the property have greatly changed, and the only witnesses, by which the facts in issue could be established, are dead. Coil v. Campbell, 82 N. Y., 517 ; Lyon v. Park, 111 id., 350; 19 N. Y. State Rep., 626.

For sixty-one years prior to April 15, 1885, the date fixed for the performance of the contract of sale, the defendant and his grantors had been in the exclusive possession of the-

p. 576

lots, claiming to own the entire estate.by virtue of recorded -deeds, which, in terms, conveyed the entire estate.

No move has been made in the chancery suit adverse to the defendants therein, since April 26, 1838, sixteen years before Paulding became a purchaser in personal good faith, and more than forty-six years before the plaintiff in this action purchased. Gertrude Kemble Paulding, one of the defendants, died May 25, 1841, forty-four years before the plaintiff’s purchase; her husband died April 6, 1860, twenty-five years before the plaintiff’s purchase; Gouverneur Kemble died September 18, 1875, nearly ten years before the plaintiff’s purchase, and William Kemble died November 5, 1881, nearly four years before the plaintiff’s purchase. It is apparent that the' condition and value of the property have greatly changed. It was contracted to be sold in 1819 for $1,200; and it was sold to the plaintiff for $26,100. It is alleged in the bill, and is conceded in the answer in the chancery suit, that the business between Arthur McGeer, the vendee, and Peter Kemble, the vendor, was transacted by William Kemble, who is dead.

On the 25th day of March, 1885, the complainants in the suit in chancery, if living, and if dead, their successors in interest, were, by well-settled rules of law, effectually barred from reviving and continuing their suit against the defendant in this action, who then had a good title to the lot; and the plaintiff had no valid reason, in law, or in equity, for failing to perform her contract.

Having held that the suit in chancery and the papers filed in connection therewith created no defect in the title, or lien upon the property, it-is unnecessary to discuss the failure of the defendant to disclose their existence to the purchaser.

The judgment should be reversed and a new trial granted, with costs to abide the event.

All concur, except Bradley and Haight, JJ., dissenting.