Hyperlawhypertext legal database Beier v. Spaulding 72 N.Y. St. Rep. 279

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Beier v. Spaulding

72 N.Y. St. Rep. 279 Court N.Y. Gen. Term Decision date 1895-12-28 English

Delivered by *280 BRADLEY, J.

Contents

Majority

p. 279
Mary Beier, App’lt, v. Nellie N. Spaulding, Resp’t.
(Supreme Court, General Term, Fifth Department,
Filed December 28, 1895.)

Headnote

1. Payment—Mistake.
Under an allegation, in an action to recover money paid by plaintiff to defendant for an interest in a contract to purchase land, which defendant had rescinded because the vendor’s title was defective, that defendant represented to plaintiff that the vendor’s title was perfect, that the money paid by plaintiff would be entirely safe, and that, if any trouble arose concerning the title, defendant would return the money, and that plaintiff relied upon such representations, and was induced thereby to make.the payment, evidence of mutual mistake is admissible.
£ Contract—Rescission.
Where a party has, in an action to rescind a contract, asserted entire ownership thereof, tender of an assignment of a part interest therein is not necessary before commencing an action to recover the amount paid therefor.
Appeal from a judgment entered on a verdict in favor of defendant, and from an order denying a motion for a new trial, made on the minutes.
By contract of date December 24,1882, Leonard Fierle and Victoria, his wife, agreed to sell to the defendant certain premises situate in the town of Hamburg, Erie county, for the sum of $3,500, of which the defendant agreed to and did then pay $500, and agreed to pay $1,000 in six months, and the vendors agreed thereupon to convey to her by warranty deed, and take her bond and a mortgage on the premises to secure the payment of the residue of the purchase money; and they also agreed to furnish full tax and title searches, showing a marketable title, within ten days after the date of the contract. On December 30, 1892, the defendant assigned to the plaintiff an undivided third part of an interest in that contract, in consideration of $500 then paid to her by the plaintiff. Afterwards the defendant brought action against the Fierles for alleged failure on their part to perform the contract, and to recover damages sustained by her in consequence of their default. The issues in that action were tried, and decision and judgment followed. By the decision the court found that the defendants therein failed to furnish the searches as they had agreed ; that, at the time of the execution of the contract, they had no title to the property described in-it; and that they had no title thereto between the time of the execution of the contract and August 1, 1893. Judgment was directed in that action for $536.06, and costs. By this action the plaintiff seeks to recover the sum of $500, paid for the transfer of the one-third interest therein. Verdict was directed for the defendant.
Carleton H. White, for app’l ; Thomas A. Sullivan, for resp’t.

—It is urged ou the part of the plaintiff that she is entitled to the return of the sum paid by her for the transfer of one-third interest in the contraer, for the reason that there was a total failure of consideration. For the support of that charge, the plaintiff relies upon the record of a judgment in the defendant’s action against the Fierles, by whieh it appears that the court found that they had no title to the premises described in the contract at the time it was made, nor between that time and the 1st day of August, 1893. This situation constituted a breach of the contract available to the vendee to obtain the relief sought and obtained by her action. But those findings of fact did not necessarily require the conclusion for which the plaintiff’s counsel contends. While, in an executory contract to sell land, there is an implied warranty of title in the vendor, there is at law no available breach on bis part in that fact, if he is ready and able to perform at the stipulated time for the conveyance. Nor is a total failure of consideration necessarily the consequence of want of title in the vendor at that particular time, although time may be of the essence of the contract, and the vendee may have his remedy founded upon the breach to rescind the contract, and recover back the money paid upon it. Burwell v. Jackson ; 9 N.Y. 535 ; Spaulding v. Fierle, 86 Hun, 17 ; 67 St. Rep. 235 . There was no partial failure of consideration, founded upon warranty in the transfer made by the defendant to the plaintiff. None was expressed m the instrument, and by it no warranty of title to the premises in the vendors was implied. Thomas v. Bartow, 48 N. Y. 193 . It cannot, however, be assumed that if the plaintiff had been advised, when she took the transfer from the defendant, that the Fierles then had no title to the premises described in the contract, she would have taken the transfer; and it is quite reasonable to suppose that both parties to such assignment then believed that those vendors had the title. Although it is not specifically alleged in the complaint that it was made and taken by mutual mistake of the parties in that respect, the question whether the assignment was made and taken by mutual mistake as to that fact was properly the subject for proof and consideration, within the purview of the matters alleged by the plaintiff She offered to prove what took place between her and the defendant’s agent who transacted the business in behalf of the defendant; and the offer and ruling excluding it were made in such manner and form as to relate to any matter within the scope of the allegations of the complaint, and legitimately bearing upon any question available to the plaintiff in support of the action. The plaintiff, in her complaint, alleged, in substance, that Willis M. Spaulding, the agent of the defendant, and acting as such in the transaction, stated and represented to the plaintiff, before the payment of the $500 by her for the assignment, that the title of the premises in the Fierles was clear and perfect; that the $500 to be paid by the plaintiff wpuld be-entirely safe; and that, if any trouble arose concerning the title the defendant would return the money to her. And the plaintiff further alleged that she relied upon and was induced by such representation to pay that sum for the transfer so made

p. 281
by the defendant. ■ There is not fraud on the part of the defendant alleged or claimed. It must be assumed that the defendant, through her agent, acted in good faith in making the representations in respect to the title to the premises, and believed them to-be true, as did also the plaintiff. All these facts, or any portion of them, may be deemed to have been included in the evidence offered and excluded; and as the evidence would tend to prove' that the money was paid by the plaintiff, and the assignment taken by her from the defendant, upon their mutual mistake in respeet to the title, and therefore as to the then ability of the vendors to perform the contract, the exception to the exclusion of the evidence was well taken unless some other reason rendered it futile.

It is now urged on the part of the defendant that thb plaintiff was in no situation to obtain rescission of the contract of transfer, and the return of the money paid by her for it, on the ground of mutual mistake, because she had not before the commencement of the action tendered to the defendant the instrument by which the assignment in question was made. There is force in this proposition if the assignment had any value to the defendant, Voorhees v. Earl, 2 Hill, 288 , Baker v. Robbins, 2 Denio, 136 ; Wheaton v. Baker, 14 Barb. 594 ; otherwise, the tender before suit was not essential to its support. Nellis v. Bradley, 1 Sandf. 560 ; Nichols v. Pinner, 18 N. Y. 312 ; Nichols v. Michael, 23 N. Y. 264 ; Stone v. Frost, 6 Lans. 440 ; 61 N. Y. 614 . The only value the assignment apparently bad after the recovery of the judgment by the defendant against the vendors was in the right it gave the plaintiff to proceed againt them. But no such right in fact existed. The defendant’s action proceeded, and the result was bad, on the assumption that she owned the entire interest in the contract as vendee, and by the judgment she recovered the entire amount which had been paid upon it, with interest. That suit was prosecuted with the knowledge, acquiescence, and full consent of the plaintiff in this action. These facts are substantially alleged by the parties in their pleadings in the present action ; and the defendant charges that, as the consequence, the plaintiff is concluded by it, and entitled to one-third of the avails of the recovery, which the defendant avers she is ready to transfer to her. The plaintiff, therefore, is by the judgment concluded, as against the Fierles, from asserting any claim against them founded on the assignment by the defendant of such interest in the contract to her; and consequently the instrument of assignment had no value to require the tender of it before suit. It is not seen that the fact that the defendant, for the purpose of her action against the vendors, assumed to appropriate the entire interest in the contract with the consent of the plaintiff, has the effect to deny to her any remedy as against the defendant, arising out of the transaction of the assignment made to her.

The view taken, that the exclusion of the evidence offered by the plaintiff was error, leads to the conclusion that the judgment should be reversed, and a new trial granted; costs to abide the event. All concur.

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