Baumann v. Pinkney — 8 N.Y. St. Rep. 370

Majority

p. 370

Oscar Baumann, App’lt, v. Mary G. Pinkney, Resp’t.

(New York Court of Common Pleas, General Term,

Filed June 6, 1887.)

Headnote

1. Contract—Construction or—Performance—Time of the essence OF THE CONTRACT.

Where, in a contract for the sale of land, a specific date was mentioned for the performance of the mutual and dependent covenants, and there

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was a clause forfeiting the amount paid on account of the purchase money if the vendee failed to complete the purchase at the time and place fixed, and an express notice had been given at the time of executing the contract that prompt, performance on that date would be demanded, and a further notice was given to the attorney for the vendee that such notice had been given at the time the contract, was made, and the attorney for the vendor had refused to extend the contract two or three days, held, that the time for its performance was made of the essence of the contract.

2. Same—What required of party seeking to put other party in DEFAULT.

A party may be held to a strict performance of . a contract as to time and put in default for non-performance; but to do this the party seeking to put the other in default must not only be ready and willing to perform, but must tender performance at the time, and demand performance from the other.

The defendant was at the time of the commencement of this action the owner of a plot of land lying between One hundred and thirty-seventh and One hundred and thirty-eighth streets, and Eighth and New avenues, in the city of New York. On or about the 22d day of June, 1886, an instrument in writing was executed between the parties, in and by which the defendant agreed to sell such real estate to plaintiff for the sum of $126,000. It was provided in such instrument that $2,000 of said consideration should be paid at the time of the signing of the contract, and the remainder, to wit, $124,000, on the first day of September, 1886, at the office of John 0. Shaw, Esq., 79 Cedar street, in the city of New York, at which time and place the deed to said premises was to be delivered.

On or about the 24th day of August, 1886, Julius Lip-man, Esq., who had theretofore been retained by plaintiff to search the title, applied to Mr. Shaw, the attorney, for information with regard to the title; and Mr. Shaw at that time informed Mr. Lipman that a prompt performance of the contract, at the time therein mentioned, would be demanded. A similar notice that a prompt performance of the contract1 would be enforced had been given to the plaintiff at the time the contract was made.

A few days before the first day of September, the said attorney for the plaintiff made an application to said attorney for the defendant to grant an extension of time for the purpose of completing searches. This application was denied, defendant’s attorney at that time reiterating that his chent would require a completion of the contract upon the day fixed. The said attorney for defendant did, however, offer, at the time of such application by plaintiff’s attorney, to extend the time (according to his own version for thirty days; according to the plaintiff’s attorney’s version for sixty days), provided the plaintiff would pay $10,-000 down on the first of September, 1886, and increase the contract price to $133,000; or, if the plaintiff would pay

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$20,000 in cash'on the first of September, and increase the contract price to $131,000. This option was not then accepted; but it was understood between the parties that the same should be open for the plaintiff’s election when they should meet on the first day of September.

On the first day of September, 1886, the plaintiff’s attorney, and one M. Bauer, went to the placed named in the original contract of sale, and there met the defendant’s attorney, and her general agent Mr. Curtis B. Pierce. Defendant’s attorney tendered a deed of the premises in question and demanded the balance of the purchase money, which was refused. Plaintiff was, at that time, also given an opportunity to exercise bis election under the aforesaid option for an extension of the time for the completion of the contract of sale, upon the payment by him of either of the sums of money referred to in said option. But plaintiff refused at that time to pay any sum of money, alleging as a reason therefor, that there was no person present competent to legally execute the proposed extension of the original contract on behalf of defendant.

This action is brought for the specific performance of a contract to sell such real estate. Upon the trial a judgment was entered dismissing the complaint, and from such judgment this appeal is taken.

Benno Loewy, for app’lt; John C. Shaw, for resp’t.

The opinion of the learned judge before whom this case was tried contains the following-language:

“ In this contract the time ror its performance was made of the essence of the contract. First, by the specific date mentioned in the contract for the performance of the mutual and dependent covenants of the parties thereto; second, by a clause in the contract forfeiting the $2,000 paid on account of the purchase money if the plaintiff failed to complete the purchase at the time and place fixed by the contract; third, by express notice given at the time of executing the contract, that prompt performance, of the contract on that date would be demanded; fourth, by notice given to Mr. Lipman that such notice had been given at the time the contract was made, and by the refusal of Mr. Shaw to extend the contract even for two or three days. ”

' The learned judge might, with propriety, have gone even further and said that, all possible doubt as to whether time was made of the essence of the contract was removed by the acquiescence of the parties and the action of the plaintiff upon the basis that time would be considered of the essence of the contract.

It is testified by plaintiff’s former attorney that he at

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tended at Mr. Shaw’s office on September 1st, prepared to pay §10,000 down upon a new contract then expected to be executed at an increase purchase price for the property. If this be true, plaintiff must have, at that time, acquiesced in defendant’s claim that time was of the essence of the original contract, and in defendant’s election to consider the original contract forfeited by reason of its not having been performed by plaintiff upon the day named.

In the case of Hubbell v. Von Schoening ( 49 N. Y., 326 ), it is held that in regard to real estate contracts “a party may be held to strict performance as to time, and put in default for non-performance; but, to do this, the party seeking to put the other in default must not only be ready and willing to perform, but must tender performance at the time, and demand performance from the other, and then whether equity will relieve will depend upon the circumstances Each case must be judged by its own circumstances.”

In Babcock v. Emrich ( 64 How. Pr., 435 ), the general term of the supreme court in this department say: that Time is not usually of the essence of such contracts, but the parties can always make it so. In this case they had done it by an express stipulation, fixing place, day and hour and, by an adjournment to another day and hour, at the same place, to give the purchaser time to examine á specific objection.”

Under the facts and circumstances of the case at bar I have no doubt that defendant intended to make time of the essence of the contract, and the plaintiff thoroughly understood such intention from the start.

It is not inequitable for the court to sanction defendant’s election to terminate the contract because of its non-performance by the plaintiff on the day named. Plaintiff’s laches are entirely unexplained. For aught that appears he had abundant time to search the title and be ready to complete his purchase on the first day of September, 1886. I am of opinion that the learned judge at the special term properly held that time was of the essence of the original contract, and that such contract was rightfully annulled.

This conclusion virtually decided this case. The action is for the specific performance of a contract, and, according to my view, the only contract involved is the original written one of June 22, 1885, which, as before shown, was properly voided by defendant’s election for non-performance on the part of plaintiff. It cannot be claimed that the negotiations for an extension of time in which to take title to the property at an advanced price constituted a contract.'

According to plaintiff’s own showing an alternative proposition was submitted by Mr. Shaw, which was that

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the time for taking title should be extended, provided the plaintiff would pay $10,000 down on the first day of September and increase the contract price to $133,000, or provided that the plaintiff would pay $20,000 in cash on the first day of September and increase the contract price to $131,000. The plaintiff’s attorney himself admits that he did not accept either of these alternative offers, but the matter was left open for his client to accept when they should meet on the first day of September. The minds of the parties never met on this question of so-called extension. For, on the first of September, although plaintiff’s attorney was prepared and went with the intention of accepting one of such alternatives, yet, according to his testimony, he expressly refused to enter into any agreement at that time by reason of the want of authority in any person present to legally bind the defendant.

These negotiations with Mr. Shaw were in reality for a new contract, and it is immaterial whether or not it was intended that the same should be called an extinction of the old contract, or that the element of interest on the original price should enter as part of the new consideration.

Defendant’s legal position was this: Her attorney was informed prior to the first of September that the plaintiff would not complete his original contract on that day, and notice was then given that in such event defendant would elect to terminate such original contract. Her attorney also said that offers had been made for the same property at an enhanced price, and that defendant would sell the property to plaintiff at an enhanced price under certain alternative conditions, which it was understood were to be agreed upon when the parties came together on September first. There was offered to plaintiff an option in regard to the amount and manner of payment of the consideration for a new contract, which option both parties understood should be open to the plaintiff until September first, when he was to make his election. The only understanding that can be said to have existed prior to September first was that a definite agrément should be made on that day when the plaintiff should exercise such option and the result of the negotiations be reduced to writing and signed by the parties. But on September first, according to his own showing, plaintiff refused to refuse the proposed new contract on account of alleged want of authority in the persons representing the defendant. The question whether or not the defendant’s attorney or her general agent had authority to legally bind her by the contract they offered to sign, is immaterial because no contract of any sort was executed. Nowhere does it appear that the minds of the parties met upon a new arrangement to take effect September first,

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whether the same was to have been called a new contract, or a modification or extension of the old one. The fact that plaintiff may have had the best of reasons for not closing the contract does not help him in an action to enforce such contract. If no contract is shown to be in existence an action for specific performance is an anomaly on its face.

Perhaps plaintiff may claim that the fact that defendant was not present at Mr. Shaw’s office on September first and not represented there by an attorney in fact, having unquestioned power to bind her by instrument under seal, operated to reinstate the original contract, which by its terms and her election had expired. I know of no principle which will support such claim. On the contrary, plaintiff is in precisely the same condition legally as if on the first day of September, when he failed to perform, defendant had elected absolutely to terminate all relations with plaintiff, and refused to entertain negotions with him for an extension of time to take title on any terms.

For the reason, therefore, that it does not appear that there is any valid contract in existence to be enforced, this action for specific performance must fail and the judgment should be affirmed, with costs.

Daly and Allen, JJ., concur.