Revoir v. Barton — 54 N.Y. St. Rep. 535

Majority

p. 535

Betsey Revoir, Resp’t, v. Florence A. Barton et al., App’lts.

(Supreme Court, General Term, Fourth Department,

Filed September 23, 1893.)

Headnote

1. Foreclosure—Effect of agreement to finish building.

Where a contract of sale provides that the building on the premises in. question shall be completed upon a certain date, and thereafter, and before such date, the purchaser accepts a deed of the property, assumes a mortgage thereon, pays $1,000, and gives a bond and mortgage for the balance of the purchase price, Feld, in an action to foreclose the second mortgage, that the seller’s right to foreclose was not dependent on the fulfillment of her agreement to complete the building.

2. Same—Bar.

In such case, the pendency of an action to foreclose the first mortgage is no bar to the bringing of the action.

Appeal from a judgment entered in Onondaga county on the 6th March, 1893.

The action is for the foreclosure of a mortgage dated October 20, 1890, given by the defendants to the plaintiff to secure the payment of the sum of $4,250, payable $1,000 one year from the date thereof, and $1,000 each and every year thereafter until the principal was fully paid, with interest, from January 1, 1891, payable annually on all sums remaining unpaid. It also contained a provision that if any payment remained in arrear for ninety days, the whole principal should become due at the option of the mortgagee. There was a bond accompanying the mortgage. The judgment appealed from is the ordinary judgment of foreclosure and sale.

Costello & Welch, for app’lts; Knapp, Nottingham & Andrews, for resp’t.

On the 14th October, 1890, the plaintiff was the owner of the premises described in the complaint, upon which there was a mortgage to the Syracuse Savings Bank for $4,750. At that date she and the defendants entered into a written agreement by which the plaintiff agreed to sell and convey the said premises to the defendants for the price of $10,000. For payment of this sum the defendants were to assume the mortgage of $4,750, pay the sum of $1,000 on the delivery of a good and sufficient warranty deed accompanied by an abstract of title showing the premises free and clear of all incumbrances except the bank mortgage, and for the balance of $4,250 give their bond and mortgage on the premises, payable as follows : One thousand dollars in one year from the date of the deed, with interest on the whole principal from January 1, 1891, and the balance of the principal in like payments annually thereafter with interest on all unpaid sums. By the said agreement the plaintiff also agreed “that the building now erected on said premises shall be completed on or before January 1, 1891, or at least the interior of said building shall be suitable for occupancy by said second parties at that time,” and the manner in which the building should be completed was particularly specified, and it was to be done by the plaintiff at her own expense and as a part of the price named. The contract also provided that in case either party failed to perform any

p. 536

of the covenants therein contained on their part to be performed “.the party or. parties so failing shall-pay on;demand to the other-party or parties the sum of five hundred dollars ($500), which is hereby fixed and agreed upon as the ascertained and liquidated damage for such failure, being in lieu of performing- their part-, and shall in no event be considered a penalty."

In accordance with and pursuant to. said contract the deed of said premises was duly delivered by plaintiff to the defendants on October 20, 1890, and concurrent therewith they paid to the plaintiff the sum of $1,000, and executed and delivered the bond, and mortgage described in the complaint.

On December 15, 1891, the. Savings bank commenced in this-court an action to foreclose its mortgage, in which action the plaintiff and the defendants were made parties defendants. The complaint in that case- after setting out the bond and mortgage, the-conveyance by Mrs. Bevoir to the Bartons and the assumption-by them of the bank mortgage and the default in payment, alleged, upon information and belief, that Mrs. Bevoir was the owner and holder of a mortgage, then describing the one involved in the-present action, and that such mortgage was a subsequent lien to the bank mortgage. The ordinary judgment in foreclosure was;' demanded. In that action-Mrs. Bevoir appeared on the 22d December, 1891, but never answered. On the 25th March, 1892,, the defendants Barton put in separate answers, setting forth that' the mortgage of Mrs. Bevoir was not a valid- mortgage, but was void by reason of'said Bevoir not completing the-house according to the contract. They also set up what purported to be a defense to-' the bank action, and demanded judgment that the complaint be dismissed and the mortgage of Mrs. Bevoir be cancelled of record. These answers were served on the attorneys for the plaintiff- in that action and on Mrs. Bevoir. and her attorney in due time. At the time of the service of these answers, the time of Mrs. Revoii;. to answer in the action had expired and she was in default. The-present action was commenced on August 11, 1893, and the bank action was then pending, and was also at the time defendants am swcrcd in the present case.

It is claimed by the appellants that the pendency of the bank action is a bar to the present action. We think not. The bank had no interest in the question whether the mortgage to Mrs. Bevoir was.valid. That issue was foreign to the foreclosure and did not at all affect the claim of the bank. The complaint- only ah . leged in regard.to it what appeared from the record and no relief, as to it was asked. As said by Judge Mon ell in the case of Fink v. Allen, 36 Superior Court, 4 J. & S., 350, 359, which, was. a case somewhat similar to this: “ A defendant cannot be compelled to litigate under such circumstances ; .and if he refuses to-do so, he will not be estopped or debarred of his cause of action, or defense.” In Kay v. Whittaker, 44 N. Y., 565 , it was held , that, under the provisions of § 274 of Code of Procedure, which, in this respect, does not-materially vary from the provisions o£. the present Code, the relief', which defendants may hay.e, am against each other,..must be, based upon, the facts involved- in, the-..

p. 537

litigation of the plaintiff’s claim, and as a part of the adjustment of that claim, and not upon claims with which the plaintiff has nothing to do, and which are properly the subject of an independent litigation between such defendants.” A similar view was taken in Lansing v. Hadsall, 26 Hun, 619 , and by this court in Mutual Life Lns. Co. v. Cranwell et al., 10 N. Y. Supp., 404 ; 32 St. Rep., 376 .

A further question is raised by appellants as to the effect of npn-performance by plaintiff of the agreement to finish the house.

It appears from the contract between the parties that at the time the contract was made the building had been erected but not completed, and the plaintiff as a part of the consideration of the sale agreed to complete it in a specified manner. The time for final completion is by the contract somewhat indefinite. At the trial the defendants, as matter of defense, offered to show that the house was not completed according to the specifications of the contract. This was held not to be admissible, as no defense by way of offset or counterclaim was alleged. The claim of the appellants is that the right of plaintiff to enforce her bond and mortgage is dependent upon her performance of her agreement to complete the house and that, therefore, if she failed in that regard such failure is a bar to her action to foreclose.

In the answer under which this evidence was offered it was in substance alleged that the plaintiff had failed to perform her agreement as to the completion of the house and that, therefore, the bond and mortgage were null and void. The damages to defendants by reason of such failure were not claimed or alleged»The only judgment asked for was a dismissal of the complaint.

Is the position of defendants correct, that the right of plaintiff to enforce her bond and mortgage is dependent upon her performance of her agreement to complete the house? No such condition appears in the bond and mortgage or in the contract There seems to have been an absolute delivery of the deed and-the bond and mortgage on the 20th October, 1890. There was an unconditional acceptance on both sides and the defendants paid the $1,000, thereby with the bond and mortgage fully performing on their- part. The defendants are hardly in a position to say that an act to be done after that is a condition precedent to the thing already performed. Merchant v. Lawson, Clarke Ch., 129; DeKay v. Bliss, 120 N. Y., 91 ; 30 St. Rep., 820 . The defendants still retain the title and do not offer to restore that to the plaintiff. They have no right to rescind the bond and mortgage because of the failure of plaintiff to fully perform her covenant to complete the house. As said in the DeKay case, the partial failure of consideration resulting from the breach furnished no ground to disaffirm the executed provisions of the contract, the defendants’ remedy was to recover damages for the non performance. The DeKay case substantially disposes of the question adverse to defendants. The. cases cited by appellants as to the right of a party to recover a balance upon a building contract do not, I think, apply here.-

p. 538

It follows that the court did not err in rejecting the offered evidence. There are no other questions that need be particularly considered. No error is apparent that calls for a reversal.

Judgment affirmed, with costs.

Hardin, P. J., and Parker, J., concur.