Baumann v. Pinckney — 30 N.Y. St. Rep. 60

Majority

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Oscar Baumann, App’lt, v. Mary G. Pinckney, Resp’t.^[1]

(Court of Appeals, Second Division,

Filed March 4, 1890.)

Headnote

1. Specific performance—Extension of time.

After the execution of the original contract of sale of real estate, the defendant gave the plaintiff a verbal option to extend the time of performance for thirty or sixty days, provided at the time fixed for carrying out the agreement as it then stood he would increase the amount of the purchase price and pay an additional sum down. Plaintiff attended at the time and place specified and gave notice that he elected the extension for sixty days, but did not pay the additional sum, as there was no one present who was authorized to sign an extension for sixty days, and no written authority to receive the money was shown. In an action for specific performance, Meld, that plaintiff had a right to be reasonably satisfied as to the authority of the person who claimed to act as defendant’s agent before paying over the money; that under the circumstances plaintiff was entitled to a reasonable time in which to perform the original agreement, and that the court erred in refusing to find that defendant could not terminate plaintiff's right by a tender of the deed at the time and place mentioned in. the contract.

2. Same.

The court held that it was immaterial whether the option embraced an extension for thirty or for sixty days. Held, error.

3. Same—Tender.

Defendant thereafter made no effort to perform and sold to other parties. On the sixtieth day plaintiff endeavored to make a tender, hut the person designated by defendant was not present, and the tender was made the following day, although plaintiff was informed that it would he usi less. Held, that the tender was made in time. Moreover, under the circumstances, a tender was unnecessary before commencing an action for specific performance.

(Haight, J., dissents.)

Appeal from a judgment of the general term of the court of common pleas of the city of New York, affirming a judgment in. favor of the defendant, entered upon the decision of the court at special term.

Action for the specific performance of an executory contract to convey land situate in the city and county of New York.

The agreement between the parties, dated June 22, 1886, provided that the defendant, in consideration of $126,000, should convey the premises in question to the plaintiff on the 1st of September, 1886, at one o’clock p. M., at the office of John G. Shaw. The sum of $2,000 was paid down and the remainder of the purchase money was to be paid upon the delivery of a deed at the time and place aforesaid. Shortly before the day named for performance of the contract, it was verbally agreed between the parties, each acting through a duly authorized agent, that if, at the time and place specified for payment and delivery “ the purchase price of the said premises were increased to $133,000, and a further payment on account thereof of $10,000 were made, or if the purchase price were increased to $131,000 and a further payment on account thereof of $20,000 were made, the time for performance of the contract should be extended.”

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Belying upon his right to an extension if he accepted this option, in either form, the plaintiff did not prepare to close the contract and pay the remainder of the purchase price on the 1st of September, but by his agent was present at the hour and place named,, “ with a certified check for $10,000, prepared to pay the same to the defendant,” and “requested to have the time for the performance of the contract extended.” The defendant was not present either in person or through anyone whom she had authorized to attend and give an extension for sixty days, the period which the plaintiff claimed was embraced by said option. Mr. Shaw was present and also Mr. Pierce, who claimed to be authorized to receive the $10,000, but he had not appeared in the business before, and, although in fact duly authorized to act for the defendant to a. certain extent, he had no written authority from her and exhibited no evidence of his authority to act for her, either in receiving the-money or otherwise. The plaintiff objected to paying the $10,000-except to the defendant, or to some one showing authority from-her to receive it. Thereupon Mr. Shaw made a tender of a deed for the premises and demanded payment of the purchase money-unpaid.

The plaintiff was not prepared to carry out that agreement, so Mr. Shaw gave notice that the contract was at an end, and that the defendant would retain the $2,000, which had been paid, and. that she refused to recognize any further right of the plaintiff in. the premises. The plaintiff, through his agent, informed Mr. Shaw that he was ready at any time that the défendaut, or someone who could justify as her agent, applied for the same, to deliver to her the said $10,000. He refused, however, to accept an extension signed either by Mr. Shaw or Mr. Pierce, upon the ground that they were not properly authorized to grant the same, as neither had any power of attorney, or to deliver the check to either of them, even if made payable by endorsement to the defendant.

The parties differed about the length of the agreed extension, the plaintiff claiming that it was to be for sixty days, while the defendant contended that it was to be for only thirty days. They also differed as to whether, if the contract was extended, the principal sum named therein would draw interest during the period of extension. After the first of September the defendant did not notify the plaintiff to perform the contract, and she has never returned nor tendered the $2,000. She owned the premises, and had the right to convey them.

A notice of pendency was filed in this action on the second of September, but the summons and complaint, although issued that day, were not served until October 29th, and in the meantime the defendant, who had no notice of said facts, had contracted to sell the premises to other parties for the sum of $137,500.

The foregoing facts, among others, were found in substance by the trial court, and the defendant admitted by her answer that on the 29th of October, and before the expiration of the term of sixty days, the plaintiff duly notified the defendant that on the-next day at her residence, or at such other time and place as she-might designate, he would tender to her the balance of the pur

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chase price, and that he was willing to bring with him a notary public and a deed in readiness for her to execute.

She thereupon referred him to her agent, Mr. Pierce, at his office, and on October 30th and before the expiration of the sixty days, the plaintiff called upon him at that place for the purpose of complying with the directions of the defendant, but found the office locked. The plaintiff forthwith gave Mr. Pierce written notice of these facts and requested the defendant or her agent to designate a time or place at which such tender could be made. Mr. Pierce answered requesting the plaintiff to meet him November 1st at Mr. Shaw’s office, which he did accordingly and then and there offered to fulfill his part of the agreement and tendered the remainder of the purchase price, $131,000. The defendant, through her said agent, refused to accept said sum and declined to give any deed of the premises upon the ground that the plaintiff had forfeited the contract and all his rights thereunder on the 1st of September, 1886. She, also, refused to return the $2,000 paid down on the contract, upon the same ground. It appeared that before or at the time that the summons and complaint were served on the defendant a letter was delivered to her from the attorney for the plaintiff stating that he would be ready to make a tender of the balance of the purchase price the next day, October 30, and to receive her deed; that he would call upon her with a certified check for the amount and interest on that day at eleven A. M.; that if that hour or day would not suit, or if she demanded bills or gold coin, he would accommodate himself tó her wishes. He added: “I desire to do anything and everything which may be necessary to make the tender and payment agreeable to you as to both time and place. Please answer by bearer.” The defendant read the letter and referred the bearer to her representative, Mr. Pierce, designating his office and stating that the matter was entirely in his charge for her.

The uncontradicted evidence tends to show that from June 22 to September 1, 1886, the property rapidly increased in value and that at the date of the trial in the month of December following it was worth $160,000.

The trial court found many conclusions of law and, among others, thát time was the essence of the contract and as plaintiff had not performed at the time and place provided in the original agreement he could not maintain the action ; that there was no valid contract made for an extension of the time to perform the agreement; that the refusal of the plaintiff to pay the $10,000 and accept the extension of time from Mr. Shaw or Mr. Pierce because neither had a power of attorney or other evidence of authority was based upon untenable grounds and constituted a refusal to accept the option and a failure to perform the contract; that the tender on November 1st “ was insufficient and too late for the purpose of performing the said agreement dated .June 22, 1886, as alleged to have been modified by the plaintiff’s alleged acceptance of defendant’s option; ” that the defendant was .“ entitled to judgment dismissing the complaint in equity because the plaintiff ”, had 11 an adequate and complete remedy at law; ” and that she,

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was “ entitled to judgment in her favor against the plaintiff upon the merits.”

The complaint was dismissed upon the merits, with costs and an extra allowance of one per cent, upon $126,000, the value of the-property as fixed by the original agreement.

John M Parsons, for app’lt; John G. Shaw, for resp’t.

The only decision of the special term that appears in the record before us consists of the findings proposed by the parties, marked “found” or “refused,” as the case may be, by the judge who presided at the trial. Thus it happened that the court directed that the complaint should be dismissed both upon the-merits and because the plaintiff had an adequate remedy at law. According to a long and unbroken line of decisions the latter ground is clearly untenable. As early as 1835, it was said by Chancellor Walworth that a suit in equity against the vendee to compel a specific performance of a contract to purchase land had always been sustained as a part of the appropriate and acknowledged jurisdiction of a court of equity, although the vendor lias,, in most cases, another remedy by an action at law upon the agreement to purchase. Brown v. Haff, 5 Paige, 235. One of the-earliest decisions of this court was to the same 'effect, Crary v. Smith, 2 N. Y., 60 , and the right of a vendee to maintain specific performance is too well settled to require further discussion. Stone v. Lord, 80 N. Y., 60 ; Pry on Specific Performance (3d Am. ed., 8;) Pomeroy’s Eq. Jur., §§ 30-42. Ho such defence was set up in the answer, as the established practice requires, and no such question was raised upon the trial. Ostrander v. Weber, 114 N. Y., 95 ; 22 N. Y. State Rep., 979 ; Hollister v. Stewart, 111 N. Y, 644 , 659; 20 N. Y. State Rep., 941.

As the court, however, did not refuse to consider the case, but exercised its jurisdiction by deciding it upon the merits, it maybe that the error above pointed out did not prejudice the plaintiff, because the general result may have been right, although that particular conclusion was wrong. We, therefore, ¡iroceed to the other questions presented by the record.

After the execution of the original contract the defendant gave the plaintiff a verbal option to extend the time of performance for thirty or sixty days, provided at the time fixed for carrying out the agreement as it then stood he would increase the amount of the purchase price and pay an additional sum down. Moody v. Smith, 70 N. Y., 598 ; Worrall v. Munn, 5 id., 229. The plaintiff acted upon this proposition, which was never withdrawn, attended at the time and place specified, prepared to accejit and perform it, and gave notice that he elected to accept that branch of the option which provided for an extension of sixty days. It was claimed in behalf of the defendant that in no event did the option permit an extension of more than thirty days. She was not present, but she was represented by two agents, neither of whom was empowered to sign an extension for sixty days, or had any evidence of his authority to act for the defendant in any respect. We agree with the learned trial judge in his conclusion

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that, unaer these circumstances, “the plaintiff had a right to be reasonably satisfied as to the authority of any person who claimed to act as the agent of the defendant before paying the said $10,000 ; ” and that, “ as it was agreed between the parties that there should be an extension, the plaintiff was entitled to a reasonable time within which to perform the original agreement, if the parties honestly and in good faith differed as to the length of the extension.” We think, however, that these conclusions, together with the facts found by the trial judge, did not justify his refusal to find, as requested, that “ the defendant could not terminate the rights of the plaintiff by a tender of the deed made at the time and place mentioned in the contract, after what had passed in reference to an extension.”

The plaintiff was not in default. By the invitation of the defendant he attended through his agent to modify, not to perform the agreement. He accepted the modification proposed by the defendant as he understood it, so far as, under the circumstances, he was able prudently to do so. He offered to pay the $10,000 at the time and place required by the option to the person entitled to it, but she was not there to receive it. He offered to ¡Day it to the gentleman who claimed to be her agent, if he would produce evidence of his authority to receive it, but such evidence was not produced. There was no one present who was authorized by her to sign an extension for sixty days, and, although she had verbally authorized one who was there to sign an extension for thirty days, there was no evidence of the fact except his assertion. The option was not withdrawn, but was recognized by the defendant as still in force.

The plaintiff, as the trial court held, had the right to be reasonably satisfied as to the authority of the assumed agent, and he also had the right to insist upon an extension in writing, properly signed, before he paid over the money. Marvin v. Wilber, 52 N. Y., 270 ; Rice v. Peninsular Club, 52 Mich., 87 ; Mechem’s Agency, §§ 276, 290; Dunlap’s Paley on Agency, 346. No offer was made in behalf of the defendant to satisfy the plaintiff as to the question of authority, and his right to an extension for sixty days, under any circumstances, was denied. He gave notice that he was ready to pay over the $10,000 at any time that the defendant, or some one who could justify as her agent, applied for it. Assuming that he was right in his position that the extension was to be for sixty days, what more should have been done? Was he under obligation to pay the money and the risk, run or else be put in default? Was he responsible for the embarrassment of the situation? Was it not the duty of the defendant either to be at the place appointed in the city where she resided, or to have an agent there with proof of his authority, or at least, when the question was raised, to do something to satisfy the plaintiff that it would be safe for him to pay the money ?

¡Nothing of this character was done, but, on the other hand, the plaintiff was notified that the contract was at an end; that the money already paid thereon was forfeited, and that he would not be recognized its having any further rights. On the assump

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tion that the extension was to be for sixty days, who was in default or who was next called upon to act at the close of the interview on September 1, 1886 ? The plaintiff still stood within the lines bounding his legal rights, whereas the defendant had wrongfully repudiated her contract. Having taken an untenable position, if she receded therefrom she was bound to notify the plaintiff. Selleck v. Tallman, 87 N. Y., 106 .

If, after this, she had notified him when, where and with whom he could perform the original agreement, or complete the modification thereof, prompt action would have been required on his part to save his rights. The defendant, however, made no effort of this kind, but adhered to the position that the plaintiff had no rights that she would recognize. Under these circumstances, we think that it was material for the trial court to determine whether the option embraced an extension for sixty days or only for thirty days. If it was for the former period the defendant was in default, because at the time and place specified for the performance of the original agreement, and for the completion of the modification according to. the option, she was not present and was not represented by an agent authorized to sign an extension for sixty days. The learned trial judge, however, found that it was not material to determine whether the period of extension was to be for thirty or sixty days, and refused to find, as requested by the plaintiff, that it was to be for sixty days. When the finding and the refusal to find are construed together, it must be assumed that he refused so to find because it was immaterial. While he had the power to disbelieve the witnesses for the plaintiff, he had no power to hold that the question was immaterial, and on this account to refuse to find as requested. As we have held that the question was material, the refusal, under the circumstances, was an error of law, even if the fact was not conclusively proven. James v. Cowing, 82 N. Y., 449 ; Code Civ. Pro., § 993. But the defendant claims that it was not prejudicial error, because even according to the plaintiff’s theory as to the period of extension he did not tender performance in time. He tried to make a tender of the amount required, and interest, on the sixtieth day, pursuant to previous notice to the defendant, but the agent designated by her was not present at the place she had appointed, and the effort was thus rendered futile.

A tender was made as soon as practicable thereafter, but not until the sixty days had expired. This was not the fault of the plaintiff, but of the defendant, and for this reason the tender should be regarded as made within the time required. Duffy v. O'Donovan, 46 N. Y., 223 ; Hubbell v. Van Schoening, 49 id., 326 . Moreover, after the defendant had ruptured all relations with the plaintiff by repudiating her contract and declaring that all his rights thereunder had been forfeited, was he bound to make any tender before commencing an action for specific performance? We do not think that it was necessary for him to go through with the form of making an offer of the money when she had virtually declared that she would not receive it Cornwell v.

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Haight, 21 N. Y., 462 ; Bunge v. Hoop, 48 id., 225; Blewett v. Baker, 58 id., 611; Lawrence v. Miller, 86 id., 131; Selleck v. Tallman, 87 id., 106; Woolner v. Hill, 93 id., 576; Skinner v. Tinker, 34-Barb., 333. When the final tender was arranged for, the plaintiff was informed that it would be useless, as the defendant had sold the property and was not in a position to give a deed. The tender was not refused because not made within the sixty days, but because the contract had been forfeited before the sixty days began to run. Duffy v. O' Donovan, 46 N. Y., 223 ; White v. Dobson, 17 Grat., 262; Brown v. Eaton, 21 Minn., 409 ; Mattocks v. Young, 66 Me., 459 .

It is claimed that the plainti6 was in default on the 1st of September, 1886, because he was not present in person, but appeared through agents who did not produce any evidence of their authority to act for him. This claim is not well founded, because the defendant did not question the authority of those who claimed to represent the plaintiff. If she had, non constat due authority would have been shown, or the plaintiff would have been called in. On the other hand the power of those who assumed to represent the defendant to the extent necessary to consummate the option was distinctly challenged, but nothing was done or offered to be done to remove the objection.

It is also claimed that as the plaintiff recognized the agency of Mr. Shaw in giving the option, he could not deny such agency when the time for accepting the option arrived. The plaintiff in relying upon the option ran the risk of Mr. Shaw’s authority in the matter, but it turned out that he had been duly authorized to offer the extension; but at the time specified for accepting the option it is distinctly found that “ no one was present whom the defendant had authorized to attend and give an extension for sixty days.” Mr. Shaw’s authority, therefore, as well as that of Mr; Pierce, fell short of the requirements of the situation, and the defendant was, consequently, in default, provided the option was for sixty instead of thirty days. The plaintiff had the right at the time and place specified to give notice that he accepted the option, and was ready to perform it, even if there had been no one present, because both the original contract and the option fixed the office and the hour where the former was to be performed and the latter accepted. While the two gentlemen who attended for the defendant had authority to act for her to a certain extent, it was inadequate, as they at the time declared, to perfect the extension for the period insisted upon by plaintiff. If he was justified in thus insisting, he had the right to say, as-it was proved that he did say to Mr. Shaw, “ we won’t take an extension signed by you or Mr. Pierce, but we will take one signed by Miss Pinckney.”

After carefully examining the various grounds upon which the learned counsel for the respondent has urged us to affirm the judgment, we are of the opinion that it should be reversed, and a new trial granted, with costs to abide event.

All concur, except Haight, J., dissenting.