Majority
p. 35CHARLES H. HEIMBURG, Plaintiff, v. JOSEPH ISMAY, Defendant. Before Monell, Curtis, and Sedgwick, JJ. Decided June 29, 1872.
Headnote
I. Real Estate, sale of.1. Contract for, breach of by vendor, what constitutes.
1. Where a vendor covenants to convey, free from encumbrances, a tender of a deed without a tender of a release of his wife’s dower, either by her joining in the deed or otherwise, is not a performance of the covenant, and by the non-tender of a release of the dower the contract is broken.
2. Measure of damages in such case.
1. It is the difference between the contract price and the value of the property at the time of the breach.
II. Dowse. Outstanding inchoate right of, effect of.
1. It does not constitute, nor does it produce, a defect of title. It is merely an encumbrance.
Exceptions heard at General Term.
The action was to recover for the breach of a contract to convey real estate.
The defendant had agreed to sell and convey certain real property to the plaintiff. Five hundred dollars of the purchase-money was paid on the execution of the contract; and the balance was to be paid or secured on a day and hour and at a place named in the contract, when the deed was to be delivered. The contract provided that the premises were to be conveyed in fee simple, and free from all éncumbranees, and the deed to contain the usual full covenants.
Upon the day, at the hour and place specified in the contract, the plaintiff was present, prepared to perform; but the defendant was not present, and no offer or tender of performance on his part or behalf was made.
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Subsequently, the defendant tendered a deed to the plaintiff, executed by himself alone, his wife being then living ; which deed the plaintiff refused to receive, on the ground of its non-execution by the defendant’s wife.
It was proved that, between the date of the contract and the bringing the action, the property had increased in value, or that it was worth more than the contract price.
The court instructed the jury that, excepting for the cash payment, and some expenses incurred, there could be no recovery beyond nominal damages.
To which instructions the plaintiff excepted.
The plaintiff had a verdict, and the exceptions were sent to the G-eneral Term, to be there heard in the first instance.
Mr. J. Fettrech, attorney, and of counsel for plaintiff,
urged : 1st. The court erred in the rule of damages and the law governing this case, and confounded the case at bar with the case of one who, believing he had a good title, contracted to sell, and was then unable to perform by reason of a defect unknown to him at the time of making the contract (Pumpelly v. Phelps, 40 New York, 66). (a.) The justice failed to draw the distinction between the case of a man honestly believing he has a good title and having none, and one having a good title neglecting to convey (Brinckerhoff v. Phelps, 43 Barb. 473 ; Pumpelly v. Phelps, 40 New York, 59).
2d. In the case at bar, the defendants title was good, and therefore it differs from every case holding only nominal damages recoverable, (a.) In every case holding nominal damages only recoverable, the defendant believed he had a good title at the time of making the contract (Baldwin v. Munn, 2 Wend. 399 ; Peters v. McKeon, 4 Denio, 546 ; Conger v. Weaver, 20 New York 140). (b.) The plaintiff had no objection to make to the title, and was ready to accept the conveyance thereof.
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3d. The exception brought into the law by Flureau v. Thornhill, 2 Wm. Blackstone, 1098, was, “that when a vendor discovers after the contract of sale that his title is defective, and is on that account unable to complete the bargain, he shall not be held liable to the vendee for the loss of such bargain (Pumpelly v. Phelps, 40 New York, 59; Drake v. Baker, 35 New Jersey [5 Vroom], 358). (a.) It is clear that the present circumstances are unlike those of the leading cases above cited. In that case the defect of the title at the time of making the contract was unknown; but in this case the defendant was fully cognizant of it (same authorities).
4th. The defendant in this suit knew, when he agreed to make a perfect title to this property, that it was altogether uncertain whether he would be unable to do so, for his ability to discharge his contract was dependent upon the consent of his wife (Pumpelly v. Phelps, 40 New York, 59 ; Drake v. Baker, 35 New Jersey [5 Vroom], 358). (a). With full knowledge of his power to convey being contingent, the defendant entered into the absolute agreement set forth in the complaint, and this circumstance takes the case out of Flureau v. Thornhill (see cases above cited), (b). A party should not be allowed, even where there is no fraud, to escape liability for an engagement to do that which he knew it was altogether uncertain that he could perform (Hopkins v. Grazebrook, 6 Barn, and Cres. 31; Pumpelly v. Phelps; Drake v. Baker; cited above).
5th. It may be reasonable that a vendor should not be liable for secret flaws in the title of his property, ' but there seems no rational ground for the hypothesis that a similar relaxation of the general law exists in those cases in which a man agrees, in an absolute form, to do some act which he knows he has not the power to do without the assent of a third party (Hopkins v. Grazebrook, 6 Barn, and Cres. 31; Brinkerhoff v. Phelps, 43 Barb. 473 ; Pumpelly v. Phelps, 40 New
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York, 59 ; Drake v. Baker, 34 New Jersey [5 Vroom], 358).
There is neither sense nor law for such relaxation (Drake v. Baker. Ibid.).
6th. The immunity of the vendor does not extend beyond his inability to perform his contract by reason of a defect in his title which was unknown to him at the time he contracted to sell (Hopkins v. Grazebrook, 6 Barn, and Cres. 31; Brinckerhoff v. Phelps, 43 Barb. 469 ; Pumpelly v. Phelps, 40 New York, 59 ; Drake v. Baker, 34 New Jersey [5 Vroom], 358). (a). This rule will exclude all defaults which are wilful or which arise from contingencies known to the vendor, and of which he consciously assumed the risk (see cases above cited). (b). The rule should not be extended to cases other than those where secret defects in title are discovered, after making contract of sale, which were unknown to the vendor at the making of the contract (Brinckerhoff v. Phelps, 24 Barb. 100 , and cases cited above).
7th. The defendant knew his exact position, and ventured to make the contract, and he must be responsible for the damage sustained by a breach of the contract (Brinckerhoff v. Phelps, 24 Barb. 100 , and cases cited under last point), (a). He either made a contract which he had no right to make, or he arbitrarily refused to fulfil, finding the premises were worth more. Either reason rendered him liable for substantial damages (see case above cited).
8th. The question of good f aith cannot arise in such a case (Brinckerhoff v. Phelps, 43 Barb. 469 ; Hopkins v. Grazebrook, 6 Barn, and Cres. 31 ; Drake v. Baker, 34 New Jersey [5 Vroom], 358).
9th. Brinckerhoff v. Phelps, 24 Barb. 100 , is easily reconcilable with Conger v. Weaver, 20 New York, 140 ; Peters v. McKeon, 4 Denio; and Baldwin v. Munn, 2 Wend. 399 (Brinckerhoff v. Phelps, 43 Barb. 469 ).
10th. The plaintiff in this case was entitled to substan
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tial damages for the loss of his "bargain (Hopkins v. Grazebrook, 6 Barn, and Cres. 31; Brinckerkoff v. Phelps, 43 Barb. 469 ; Pumpelly v. Phelps, 40 New York, 59; Drake v. Baker, 34 New Jersey [5 Vroom], 358).
Lastly. The verdict in this case should be set aside, and a new trial ordered with costs.
Mr. E. McCahill, attorney, and of counsel for defendant,
urged : First. On an executory contract for the sale of lands which the vendor believes to be his own, and where there is no fraud on his part, if the sale falls through in consequence of a defect of title, the measure of damages is substantially the same as it is in the case of an executed sale. If the vendee has paid any part of the consideration, he may recover back the money with interest; but he can recover nothing for the loss of a good bargain (Peters v. McKeon, 4 Denio, 550 ; Thureau v. Thornhill, 2 W. Black. 1078; Baldwin v. Mann, 2 Wend. 399 ; Gillet, admr. of Clemins, v. Maynard, 5 Johnson, 85; Pitcher v. Livingston, 4 John son, 1; Bennet v. Jenkins et al., 3 Johnson, 50).
Only nominal damages are recoverable for the failure by a vendor to perform an executory contract for the conveyance of land made in good faith, and broken without fraud by reason of his inability to make a good title (Conger v. Weaver, 20 N. Y. 140 ).
Bad faith cannot be charged to the defendant in this action. He tendered as good a conveyance as he was able, as soon after the time for the completion of the contract as it was possible for him to do.
There is no evidence of any collusion between the defendant and his wife, nor is it claimed that there was any. He made an honest effort to induce her to execute a conveyance to the plaintiff of her inchoate right of dower; and having failed in his efforts, he at once tendered to the plaintiff a conveyance properly executed by himself.
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The cases of Pumpelly v. Phelps, 40 N. Y. 66 ; Brinckerhoff v. Phelps, 43 Barb. 469 ; and Hopkins v. Grazebrook, 6 B. & C. 31, which are relied upon by the appellant to establish the fact that the court erred in its decision on the rule of damages and law affecting this case, will, on examination, be found to sustain the decision of the justice on the trial.
Second. An inchoate right of dower is not an encumbrance. The right to dower does not become an encumbrance upon the property of a married man until after his death (the wife surviving him), because until then it is not such a right as could be enforced. Prior to the happening of that event, it is merely a vague, contingent interest, and nothing more.
An encumbrance is a subsisting positive right in some person that can be asserted and enforced at once against the premises.
The defendant tendered to the plaintiff a full covenant warrantee deed, and the plaintiff would have been protected under the covenants contained therein, if dower in the premises were ever thereafter assigned to defendant’ s wife.
By tendering to the plaintiff such warrantee deed, he performed all he had agreed to do, when he covenanted to convey the premises to him free from encumbrances.
The instruction of the learned judge at the trial was upon the principle, that when a vendor contracts to sell and convey in good faith, believing he has a good title, and afterwards discovers his title is defective, he is to be held liable to nominal damages only. But the principle has no application to this case. The inchoate right of dower of the defendant’s wife was not, nor did it produce, a defect in the title. It was in the nature of an encumbrance upon the property; and unless extinguished by a re
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lease, the defendant could not convey “free from all encumbrances.’ ’
In the case of Holmes v. Holmes ( 12 Barb. 137 ), the vendor, as in this case, agreed to convey free of encumbrances ; and it was alleged that there was an outstanding inchoate right of dower. This was held to be an encumbrance ; and an inability to procure its release was a breach of the contract to convey.
The case of Pumpelly v. Phelps ( 40 N. Y. Rep. 59 ), relied upon by the defendant, merely refers to the general principle, which I have before stated ; but holds, what is applicable to the present case, that when a vendor contracts to sell lands, in which he knows, at the time, he has .not title, or the power of conveying, he is bound to make good to the vendee the loss of the bargain through his default (Brinckerhoff v. Phelps, 43 Barb. 469 ).
It is very clear, I think, that this case presents no exception to the general class of cases, where the actual damage sustained should be the measure of recovery; and it was, therefore, erroneous to restrict the verdict to the purchase money and expenses.
The measure of damage is the difference, if there be any, between the contract price and the proved value of the property at the time of the breach (Pumpelly v. Phelps, supra, p. 66; Barb. v. Cole 28, N. Y. Rep. 261; Brinckerhoff v. Phelps, supra.
The exception must be sustained, the verdict set aside, and a new trial granted, with costs to the plaintiff to abide the event.
Cases cited
- Baldwin v. Munn 2 Wend. 399 p. 36, p. 38, p. 39
- Brinckerhoff v. Phelps 43 Barb. 469 p. 38, p. 39, p. 40, p. 41
- Brinckerhoff v. Phelps 24 Barb. 100 p. 38
- Conger v. Weaver 20 N. Y. 140 p. 39
- Holmes v. Holmes 12 Barb. 137 p. 41