Fruhauf v. Bendheim — 40 N.Y. St. Rep. 185

Majority

p. 185

Fannie Fruhauf, Resp’t, v. Henry M. Bendheim, App’lt.^[1]

(Court of Appeals, Second Division,

Filed October 6, 1891.)

Headnote

1. Vendor and purchaser—Undisclosed incumbrance—Lease.

Plaintiff’s husband and assignor contracted to purchase of defendant certain premises, which was to be conveyed subject to “existing tenancies and subject to a lease to one T., expiring May 1, 1889." It appeared that said lease contained a covenant for renewal for an additional two years. Held, that such covenant constituted an incumbrance which justified the purchaser in refusing to take title.

2. Same—Existing tenancies.

In view of the fact that the lease was specifically mentioned in addition to “ existing tenancies,” and the fact that T. was lessee only of the ground floor, the term ‘ ‘ existing tenancies " must be held to have reference to the occupants of other portions of the building and not to cover the lease.

3. Husband and wipe—Transfer of interest in land contract.

A deed is not essential to transfer the purchaser’s interest in a contract for the purchase of land, but it will pass by assignment, and such interest may he assigned by a husband to his wife.

Appeal from a judgment of the general term of the first judicial department affirming a judgment entered upon a verdict directed by the court.

This action was to recover $1,000 paid by Jacob L. Fruhauf to the defendant upon a contract between them, whereby the defendant agreed to convey to said Fruhauf, by warranty deed, certain real estate on Eighth avenue, in the city of New York, and also to recover damages for the breach of said contract.

The deed was to h'ave been delivered on August 3,1886, and on August 4th Fruhauf, by an instrument in writing, sold and assigned said contract to the plaintiff, who was his wife. The time for the execution of the contract was extended to August 13th, and on that day defendant failed to appear, and performance upon his part was refused. Subsequently, on August 17th, defendant tendered a deed, but it was not accepted owing to alleged defects in the title.

By the agreement the property was to be conveyed subject to “ existing tenancies and subject to a lease to Claus Tibkins, expiring May 1, 1889.”

It appeared upon the trial that Tibkins was in possession of

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a part of the premises under a written lease, dated April 27,1886, which lease contained a covenant for renewal for an additional term of two years.

It was admitted on the trial that Jacob L. Fruhauf paid defendant $1,000 under the terms of the contract at the time of its execution ; that the lease to Claus Tibkins was still in force, unchanged in any respect, and that the reasonable expense of searching the title to the premises in question was $250, and that plaintiff had agreed to pay that amount.

The court directed a verdict for the plaintiff for $1,250 and interest, amounting in all to $1,343.75.

Julius J. Frank, for app’lt; Lewis Sanders, for resp’t

The covenant of renewal, contained in Tibkins’ lease, was one which ran with the land and was inforceable against the grantee of the lessor, and constituted an encumbrance which justified the purchaser in refusing to take the title under the contract.

The argument that the term “ existing tenancies ” covered the Tibkins’ lease cannot prevail in the face of the particular specification in the contract of that lease as expiring on May 1, 1889..

The case does not disclose what was intended to be covered by" thexpression “ existing tenancies,” but inasmuch as Tibkins was the lessee of the store floor of the building only, it is sufficiently apparent that existing tenancies ” must have had reference to the occupants of the other portions of the building.

Such tenancies the purchaser agreed to accept whatever their terms, but as to Tibkins’ lease there was a definite agreement that it expired May 1, 1889, and the purchaser was not obligated to take the property subject to a lease that might continue two years longer. By reason of the existence of the covenant to renew contained in that lease the vendor was unable to perform his contract according to its terms.

The objection that the assignment from Jacob Fruhauf to the plaintiff was void was properly overruled.

Although a husband could not at common law contract with his wife, he could make her a valid gift of a chattel or of a chose in action.

In equity the property given was treated as the wife’s separate estate, and the courts would protect her in its enjoyment even against her husband, and her title for-the purpose of protecting her possession was regarded as clothed with the incidents of a legal estate.

But if as to gifts made before the enactment of the statutes of 1860 and 1862 her title was equitable only, under those statutes it ripened into a legal estate and vested the property in her. But separate ownership of property by the wife is now possible, and she may take the legal title to personal property by a gift from her husband. 1 Parsons on Contracts, 345 ; 2 Kent’s Com., 163 ; Savage v. O'Neil, 44 N. Y., 301 ; Rawson v. Penn. R. R. Co., 48 id., 212; Seymour v. Fellows, 77 id., 178; Armitage v. Mace, 96 id., 538; Whiton v. Snyder, 88 id., 299.

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It is true that under a contract for the purchase of land the vendee’s interest for many purposes is regarded as real estate, but the interest is an equitable one solely. The legal title remains in the vendor.

A deed is not essential to transfer the purchaser’s interest in the contract, but it will pass by assignment, and we see no objection to the gift of such an interest by a husband to his wife.

Upon the delivery of the contract and a proper assignment thereof, the rights existing in the purchaser thereunder passed to her.

Ho other exceptions require discussion.

The judgment should be affirmed, with costs.

All concur.