DeKay v. Bliss — 30 N.Y. St. Rep. 820

Majority

p. 820

Minna DeKay, App’lt, v. Charles H. Bliss et al., Resp’ts.^[1]

(Court of Appeals, Second Division,

Filed April 15, 1890.)

Headnote

Contbact—Rescission.

Defendant Bliss contracted to sell to plaintiff’s husband certain lots in Hew York city for $810,000, payable part in cash at different times, part in property, $75,000 in DeKay’s mortgages on the property and $35,000 on the next 1st of May, provided the premises were finished by Bliss, or if not then when so finished. The deed was executed and delivered by Bliss to Olin as trustee of plaintiff, and Olin executed the mortgages as such trustee. This action was brought after the mortgages were foreclosed and the premises sold, to rescind the original contract, cancel the deed and the three mortgages and to have the payments made by DeKay declared a lien on the premises, on the ground of the failure of Bliss to complete the buildings, they lacking the. fire escapes. Held, that plaintiff could not maintain the action, but that her remedy was in the liability for damages resulting from non-performance of the party in default.

Appeal from judgment of the general term of the supreme court in the first judicial department, affirming judgment entered •on decision of the special term dismissing the complaint on the merits.

On the 22d of January, 1884, the defendant, Bliss, entered into u contract with Sidney DeKay, husband of the plaintiff, by which he agreed to sell to him certain premises and buildings thereon situate on the comer of Broadway and Fifty-seventh street in the city of New York for the- sum of $810,000, payable

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as follows: $5,000 on the execution of the contract; $35,000 on the delivery of the deed; $250,000 by conveyance of certain premises on corner of Broadway and Greenwich street in that city; $410,000 by taking the premises subject to a mortgage held by the New York Life Insurance Company; $75,000 by DeKay’s three bonds conditioned for the payment of $25,000 each, secured by mortgages on three several portions -of the premises first above mentioned; and $35,000 to be paid on the 1st of May then next, provided the buildings being erected on the premises are then finished, and if they are not then finished at such time as they are completed. The conveyances to be executed and delivered to Stephen H. Olin, as trustee, on February 15, 1884, and payments other than the last mentioned $35,000 then to be made. On that day the deed was executed and delivered by Bliss to Olin as trustee of Minna De Kay, and such payments were made. The three mortgages were executed by Olin as such trustee. And Olin executed an instrument declaring the purposes of the trust assumed by him in taking the conveyance.

One of those three bonds and mortgages was assigned by Bliss to the defendant Montgomeiy and the others to the defendant Kran.

And default in payment of them having been made they were foreclosed and the premises sold. Afterwards and in March, 1885, this action was commenced.

Matthew Hale, for app’lt; G. L. Hives, for resp’ts.

The purpose of this action was to rescind the contract of January 22, 1884, made between the defendant Bliss and Sidney De Kay and cancel the deed from the former to defendant Olin as trustee, also the three mortgages made by him to Bliss to secure payment of $75,000 of the purchase money, and to have the payments made by De Kay amounting to $329,600 declared a lien upon the premises subject only to the mortgage of $410,-000 held by the New York Life Insurance Company. The claim for relief as here presented is founded upon the alleged failure of Bliss to complete the buildings upon the premises in question as he had undertaken to do. That contract was made for the benefit of the plaintiff by Sidney De Kay, her husband, and the deed was made by their direction to the defendant Olin as trustee, in the execution of which trust parties other than the plaintiff and her husband were also interested. It is not essential to the consideration of the questions arising on this review that reference be specifically made to all the purposes of the trust, the execution of which was to precede its termination and the conveyance to the plaintiff or to such person as she should designate.

Upon the premises were three eight story apartment houses under the same roof, designed to accommodate forty-eight families, and known as the “ Rutland.” When the contract was made the buildings were in process of construction. They were to be completed by Bliss. And it was contemplated that their completion would be accomplished by the first of May following, but in the meantime the conveyance was to be executed and delivered, and

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payments to be made and secured other than $35,000 of the purv chase money, which was payable when the buildings should be finished. The conveyance was accordingly executed and delivered to Olin as trustee of the plaintiff, and all the payments other than the $35,000 were made and secured as provided by the contract, on the 15th day of February, 1884. The trial court found that on or about June 15th the whole of the Eutland was substantially completed and ready for occupancy, and was fully, in all respects, completed before the first day of September, 1884. This finding was supported by evidence unless the construction of fire escapes upon the buildings was requisite to the completion of them.

Upon that subject the view of the general term differed from that of the trial court, and held that the fire escapes were essentially part of the work, and that for the want of them the buildings were not completed, and in that respect modified the determination and judgment of the special term. For the purposes of this review it must be assumed that the fact upon which such modification was made was correctly determined by the general term as no appeal was taken by the defendants. The inquiry, therefore, arises whether the failure of Bliss to complete the Eutland, in not putting fire escapes upon it, entitled the plaintiff to the relief sought in this action. The expense of this is not found, but the lowest amount of it which the evidence tends to prove is $800, and the highest $4,800. In other respects the westerly and middle buildings were first completed and the corner later. They were occupied by tenants, and the rents collected for the trustee by Mr. De Kay, and he for his wife advanced from time to time after May 1, 1884, portions of the last and reserved payment to Bliss to enable him to proceed with the work of completion. All of it was advanced except $1,300.

Those advances were made upon the faith that the Eutland .would be completed by Bliss. As between them the contract was performed on the part of DeKay. It is urged that the agreement to complete the buildings was an inducement to the .purchase, and that the contract was- an entirety; and that the consideration could not be treated as divisible, or any part of it by apportionment, as applicable to the undertaking of Bliss to .complete the buildings. It is true that the consideration of $810,000, as the purchase price of the premises with the buildings completed, was entire as the purchase price, but the contract provided for the payment and security of the amount to be received by him, less $35,000, on the delivery of the deed at a time preceding that of the completion of the buildings. The last mentioned sum was to be withheld until that was accomplished. The covenants to give and accept the deed and simultaneously to pay and secure a portion of the purchase money, were dependent only upon performance of what was required to be done ■ by the parties at that time by way of execution of the contract, and were independent of the undertaking to complete the buildings and pay the additional amount of the purchase money at a later day. Tipton v. Feitner, 20 N. Y., 423 ; Kirtz v. Peck, 113

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id., 222; 22 N. Y. State Rep., 733; affirming 10 N. Y. State Rep., 796.

The execution of the contract pro tanto, as provided by its terms, was accomplished on February 15, 1884. The conveyance was made and the larger portion of the purchase money paid and secured. All that remained executory of the contract was the completion of the buildings and the payment of $35,000 -deferred until such event. Those were dependent covenants in so far that Bliss was not entitled to payment of any portion of that sum until he had fully completed them. As contemplated when the contract was made, its provisions were so apportioned as to become executed in part and remain execntory as to the residue. This was apparently within the intention of the parties to it, and, therefore, the right to require the execution of that first provided for was not dependent upon what was subsequently to be performed, nor was the latter in any sense a condition precedent to the former. Grant v. Johnson, 5 N. Y., 247 ; Merchant v. Rawson, Clarke’s Ch., 123.

The remedy in such case is in the liability for damages resulting from non-performance of the party in default. Sickels v. Pattison, 14 Wend., 257 . This was the liability of Bliss so far as he failed to perform his undertaking to finish the buildings. And as the trial court found that there was no agreement in that respect on his part other than that embraced in the contract of January 22d, he did not undertake to complete them in any specified time, but he was required to do it within a reasonable time. Assuming, as we do, for the purposes of this review, that the supply of fire escapes was requisite to the completion of the Butland, it would seem that the defendant Bliss was in default in not putting them on the buildings, and that so far as the plaintiff has failed to retain sufficient of the last installment for indemnity her remedy is for damages. The plaintiff by the allegations of her complaint placed her claim for relief on broader ground than is here for consideration. She there alleged that the completion of the buildings was, at the time of execution and delivery by Bliss ■of the deed, made so far a condition precedent as to render the three bonds and mortgages then executed by the trustee ineffectual until the Butland was finished, and that for such purpose they until then were to be held as escrows. The trial court found the fact to the contrary, and the plaintiff has nothing remaining to urge in support of her claim for relief other than the failure of Bliss to put fire escapes on the buildings. This was merely partial failure of consideration resulting from the breach, and as has already been suggested furnishes no ground to disaffirm the executed provisions of the contract. And there does not appear in aid of the plaintiff to have been any fraud, mistake or undue advantage suffered, nor was there any such failure of consideration as to justify a court of equity in annulling the contract so far as executed or in cancelling the deed to the trustee and the mortgages made by him pursuant to it. Stephen’s Appeal, 87 Penn. St., 202 ; Babcock v. Case, 61 id., 427 ; 100 Am. Dec., 654 . The mortgages were made by the trustee, with the consent of the

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plaintiff, to carry out the contract made for her by her husband, and whatever use was subsequently made of them has no essential importance upon any question here.

No support for the relief sought in this action upon the facts as presented, is found in the doctrine of the cases cited on the part of the plaintiff. The view taken leads to the conclusion that the judgment should be affimed.

All concur, except Haight, J., not sitting, and Potter, J., not voting.