Schultz v. Griffin — 31 N.Y. St. Rep. 35

Majority

p. 35

Byron M. Schultz, Resp’t, v. Philip Griffin, App’lt.

(Court of Appeals,

Filed May 6, 1890.)

Headnote

1. Contract—Construction or.

Defendant made a contract with plaintiff by which the latter was to have the exclusive sale of the farmer’s farm for twenty days, he to sell it for $20,000, to be paid for as follows: “Buffalo Savings Bank, first mortgage, $5,000. Second mortgage held by M. Williams, $2,500, the balance to be paid Philip Griffin in cash, April 1, 1887." Plaintiff procured one Longnecker to agree to purchase and assume the mortgages. Held, that the intent of the contract was that the mortgages were to be paid, not assumed, and that plaintiff had not consummated a sale under its terms.

2. Principal and agent—Power to sell real estate.

A power without restriction to sell and convey real estate gives authority to the agent to deliver deeds with general warranty binding on the principal, where, under the circumstances, this is the common and usual mode of assurance.

Appeal from judgment of the general term of the superior court of Buffalo, affirming judgment in favor of plaintiff.

The action was brought upon the following contract: “ I hereby agree to pay to Byron M. Schultz the sum of $1,000, providing he will dispose of or sell my farm on Main street, Buffalo, bT. Y., known as the Owens place, consisting of 86J acres of land, more or less, for the sum of $20,000, to be paid for as follows: Buffalo Savings Bank first mortgage, $5,000; second mortgage heldby M. Williams, $2,500; the balance to be paid to Philip Griffin in cash April 1, 1887, said Schultz to have the exclusive sale for twenty days, $1,000 to be paid at time of making contract.

His

“Philip x Griffin.

mark.

“Buffalo Plains, July 31, 1886.”

Within the twenty days allowed the plaintiff procured one Longnecker to sign a contract as purchaser of the defendant’s farm, containing the following clause: “This agreement is upon the express conditions, viz., the said party of the second part (Longnecker), shall first pay to the said party of the first part (Griffin), or his legal representatives, the full sum of $20,000 in manner following, that is to say, $1,000 in cash on the execution of the contract, and the balance, $19,000, by assuming a mortgage to the Brie County Savings Bank for $5,000, also a mortgage held by M. Williams for $2,500, and $11,500 to be paid in cash April 1, 1887, which sum or sums , at the time, and in the proportion before stated, with lawful interest on all sums unpaid.” The contract also contained a provision binding the vendor, Griffin, on payment, to convey the premises to the purchaser, “ by a good and sufficient deed, containing a covenant of warranty.”

The plaintiff, Schultz, tendered the contract to the defendant,

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Griffin, together with his check for $1,000, but the defendant refused to accept the contract or the check, and subsequently sold the premises to another party. The plaintiff had judgment for $1,000, which was affirmed by the general term. Other facts are stated in the opinion.

John 6r. Milburn, for app’It; Warren F. Miller, for resp’t.

The principal point urged for the reversal of the judgment is that the contract tendered to the defendant, whereby Longnecker agreed to pay such portion of the purchase money as was represented by the mortgage to the Buffalo Savings Bank, and the mortgage to Williams, “by assuming” those mortgages, was not a compliance with the terms upon which Schultz was employed to sell the farm. It is insisted that his authority extended only to a sale in which the purchaser should absolutely pay and discharge the mortgages, and that the agreement made-by Longnecker would be satisfied by his paying the portion of the purchase money over and above the mortgages to Griffin personally, and by his assent to a covenant in the deed of the farm to assume the mortgages.

The agreement between S chultz and the defendant is not free from ambiguity. The price for which the farm was to be sold is fixed, and the agreement proceeds to specify that the purchase money should be paid a part to Griffin personally, and a part on the mortgages. The language as to the payment of the mortgages may be susceptible of two meanings, according to extrinsic circumstances.

It appears that the mortgages were accompanied by bonds of Griffin. He had an interest that the mortgages should be paid to-relieve him from his liability on the bonds. On the other hand the contemplated purchaser would have an interest to apply so much of the purchase money as was required for that purpose, to the extinguishment of the mortgages. In the absence of any circumstances indicating a different intérpretation and regarding-alone the language of the contract, the most natural meaning-would seem to be that actual payment of the purchase money, part to Griffin personally, and part on the mortgages, was to be ma'de before any conveyance by Griffin. It seems quite clear that if the Longnecker contract had been accepted and signed by Griffin, the latter would have been bound to convey on receiving $11,000 in cash, and the covenant of Longnecker assuming the mortgages. Such a transaction would have left Griffin still liable on bis bonds, with his liability changed in equity to that of surety for Longnecker for the mortgage debts. Ayers v. Dixon, 78 N. Y., 818 .

It does not appear whether the mortgages were or were not' due. - If it had appeared that they had not matured, so that they could not have been paid without the consent of the holders, we-are inclined to think that the contract with Schultz would be construed as an authority to sell the land subject to the mortgages.. It could not reasonably b°e supposed in such case -that Griffin, who, as the contract shows, was seeking to sell his farm, vroulcL have inserted an impossible condition or one which could not be=

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performed except by the consent of the holders of the mortgages. But the case gives no light upon this point, and as the burden was upon the plaintiff to show that the contract withLongneclcer was such a one as was authorized by the agreement with Griffin, we are of opinion that judgment was erroneously given for the plaintiff.

The further point is made that Schultz ivas not authorized to make it a condition of the sale that the conveyance should be with warranty. The defendant’s counsel cites in support of this point Nixon v. Hyserott, 5 Johns., 58 , which supports his contention.

The rule that an agent to sell personal property has implied power to warrant, in the absence of" any restriction, where sale with warranty is usual and customary in similar cases, was declared in Nelson v. Cowing, 6 Hill, 336 , substantially overruling Gibson v. Colt, 7 Johns. 390 .

There seems to be no well founded distinction between real and personal property, requiring a different construction of an agency for sale in the two cases. The great preponderance of authority now is that a power without restriction to sell and convey real estate gives authority to the agent to deliver deeds with general warranty binding on the principal, where under the circumstances this is the common and usual mode of assurance. LeRoy v. Beard, 8 How., U. S., 451; Peters v. Farnsworth, 15 Vt., 155 ; Vanada v. Hopkins, 1 J. J. Marsh., 293 ; Taggart v. Stanbery, 2 McLean, 543 ; Rawle on Cov., § 20, note.

It is sufficient, however, for the disposition of this appeal that the first point considered must prevail.

Judgment reversed and a new trial ordered.

All concur, except Gray, J., absent.

Cases cited

Gibson v. Colt 7 Johns. 390 N.Y. Sup. Ct. p. 37