J. Augustus Page, Appellant, v. Patrick McDonnell et al., Respondents

J. Augustus Page, Appellant, v. Patrick McDonnell et al., Respondents. (Argued December 10, 1873; decided December 23, 1873.) Defendants contracted to sell and plaintiff to purchase certain premises. A portion of the purchase-money was paid by plaintiff at the time; the residue, less certain mortgages assumed by plaintiff, he agreed to pay on the 10th February, 1869, between one and two p. m., at a specified place, when defendant was to deliver to him a full covenant deed; plaintiff was to pay interest from date of contract and was to receive the rents from that time. Defendants tendered a deed which plaintiff refused to receive, upon the ground that the premises were incumbered by leases which expired the first of May thereafter. Defendants notified plaintiff that he must accept the deed and complete the purcnase or that the contract would be terminated. Plaintiff offered to perfora on the first of May. In an action for specific performance, defendants were allowed to prove, under objection, that the leases existed at the date of the contract, and that plaintiff knew the premises were then occupied under them. Held, that the evidence was competent to show that the rent referred to in the contract was that reserved on the existing leases; that as, by the contract, plaintiff was entitled to the rent, defendants had no right to procure a determination of the leases before the delivery of the deed, and that therefore the contract was, in effect, that plaintiff was to take title subject to the leases, and their existence furnished no excuse for non-performance by plaintiff; also held, that plaintiff’s delay put an end to his right to a specific performance, and, as defendants were ready and willing, and tendered full performance, plaintiff was not entitled to recover what he had paid upon the contract. Appeal from judgment of the General Term of the Supreme Court in the first judicial department, affirming a judgment in favor of defendants entered upon the decision of the court upon trial at Special Term. This action was for the specific performance of a contract for the purchase by plaintiff, and sale by defendants, of certain premises situate in the city of New York; plaintiff also asked, in case specific performance could not be decreed, judgment for the purchase-money paid, with expenses and damages. The substance of the contract and the facts pertinent to the questions discussed appear sufficiently in the opinion. 0. Goepp for the appellant. An outstanding lease is an incumbrance. (Jerome v. Scudder, 2 Robt., 169.) The words, “free from all incumbrances,” must be construed to mean free from the leases in question. (Parkhurst v. Smith, Willes, 332, 469 ; Marquis of Cholmondeley v. Ld. Clinton, 2 Meriv., 171; 1 Spence Eq. Jur., 552; F. Adams’ Eq., 170; Hunt v. Rousmaniere, 1 Pet., 1; Shotwell v. Murray, 1 J. Ch., 512; Lyon v. Richmond, 2 id., 60; Brown v. Armistead, 6 Rand., 594; Farley v. Bryant, 32 Me., 474; Wintermute v. Snyder, 2 Green Ch., 498; Hall v. Reed, 2 Barb. Ch., 503; Lyon v. Sanders, 23 Miss., 533; Shafer v. Davis, 13 Ill., 395; Mellish v. Robertson, 25 Vt., 603; Smith v. McDougal, 2 Cal., 586.) Mistake as to the legal effect of a conveyance will not be relieved against when the conveyance is such as the parties intended at the time. (3 Adams Eq., 168, note; Gilbert v. Gilbert, 9 Barb., 532; Arthur v. Arthur, 10 id., 9; Irnham v. Child, 1 B. C. C., 92; Townshend v. Stangroom, 6 Ves., 328, 332; Worall v. Jacob, 3 Meriv., 267, 271.) Parol evidence cannot be received to show that, in this contract, the word incumbrances was not intended to include leases. (2 Pars. Cont., 566; 1 Greenl. Ev., §§ 275, 277, 281, 288, 295 ; Doe v. Gwillin, 5 B. & Ad., 122, 129; Warren v. Wheeler, 8 Metc., 97; Bigelow v. Callamore, 5 Cush., 226; Gould v. Norfolk Lead Co., 9 id., 338, 345; Howe v. Walker, 4 Gray, 318 ; Goodrich v. Longley, id., 379, 383; Lyon v. Miller, 24 Penn. St., 392 ; Kennedy v. Erie, etc., P. R. Co., 25 id., 224; Chase v. Jewett, 37 Me., 351; Kelly v. Powlett, Ámb., 605, cited 1 Bro.,475; 1 Serg. V. & P., 252; Davis v. Thomas, id., 253; Shelling v. Farmer, 1 Stra., 646; King v. Buddeley, 3 M. & K., 417 ; Martin v. Drinkwater, 2 Beav., 218; Blundell v. Gladstone, 11 Sim., 488 ; Wigram on Extr. Ev., 57, et seq., 75, 76 ; Starkie on Ev., III, 768, et seq. ; Harrisons v. Barton, 7 Jur. [N. S.], 19; S. C., 1 John. S. & C., 287; Sayward v. Stevens, 3 Gray, 97, 102; Dix v. Otis, 5 Pick., 38 ; Thorp v. Ross, 4 Keyes, 546; Crane v. U. Bk. of Rochester, id., 558; Simmons v. Lay, 3 id., 217; Butler v. Gale, 1 Wil., 739; Preston v. Merceau, 2 W. Bl., 1249; Taylor v. Sayre, 4 Zab., 647; French v. Carhart, 1 N. Y., 102; Bradley v. W. Á. and G. S. P. Co., 13 Pet., 89 ; Gibson v. Tyson, 5 Watts, 34.) It is entirely immaterial whether or not plaintiff knew of the leases in question. (Barrett v. U. Mut. F. Ins. Co., 7 Cush., 175, 180; Lee v. How., etc., Co., 3 Gray, 583, 592; Willard’s Eq. Jur., 71; Taylor v. Fleet, 4 Barb., 108.) Defendants are bound to refund the purchase-money, with interest. (Ketchum v. Evertson, 13 J. R., 363; Tipton v. Feitner, 20 N. Y., 428 ; Monroe v. Reynolds, 47 Barb., 579.) Defendants are bound to refund, because they have not notified plaintiff if he did not take they would foreclose his equity. (Monroe v. Reynolds, 47 Barb., 579; Fancher v. Goodman, 1 Sandf., 297.) 6Mes Morris for the respondents. Plaintiff’s mistake or want of knowledge, as to the leases, will not avail him. (Willard’s Eq. Jur., 71; Taylor v. Fleet, 4 Barb., 108.) It was proper to show by parol evidence that the leases were not regarded as incumbrances by the parties to the contract. (French v. Carhart, 1 Comst., 102; Bridger v. Pierson, 45 N. Y., 604; 1 Greenl. Ev., § 286; Pease v. Christ, 31 N. Y., 141.) Plaintiff’s knowledge of the existence of the leases, when the contract was made, was sufficient to put him upon inquiry, and was an implied notice of the tenant’s rights thereunder. (Williamson v. Brown, 15 N. Y., 354; Kingston Bk. v. Eltinge, 40 id., 396.) Plaintiff cannot recover back the purchase-money paid by him. (Ketchum v. Evertson, 13 J. R., 363 ; Stephens v. Beard, 4 Wend., 605; Simon v. Kaliske, 6 Abb. Pr. [N. S.], 224; Hansbrough v. Peck, 7 Am. L. Reg. [N. S.], 77.) Plaintiff cannot recover back the purchase-money paid by him, on the ground that defendants have rescinded the contract. (Hansbrough v. Peck, 7 Am. L. Reg. [N. S.], 77; Green v. Green, 9 Cow., 46; Haynes v. Hart, 42 Barb., 58; Ketchum v. Evertson, 13 J. R., 364.) Plaintiff’s damages could only be nominal. (Conger v. Weaver, 20 N. Y., 140; Pumpelley v. Phelps, 40 id., 66; Mack v. Patchin, 42 id., 172.) [MAJORITY — Grover, J.] Grover, J. On the 24th of November, 1868, the parties entered into a contract under seal, by which the defendants agreed to sell and convey to the plaintiff, who thereby agreed to purchase, certain premises in the city of New York, therein specified, for the sum of $49,000, $2,000 to be paid upon the execution of the contract, which was then paid; $33,000 payable upon the delivery of a deed of the premises, and $14,000, being the amount of a mortgage then upon the premises, which the plaintiff agreed to pay. The contract provided that the plaintiff should pay interest upon the unpaid purchase-money from its date, and that he should receive the rents of the premises from the same time. The defendants covenanted to convey the premises by warranty deed, containing the usual full covenants in fee simple, free from all incumbrances, except as above; which deed was to be delivered on the 10th day of February, 1869, at the office of Beman & Hoar, No. 175 Broadway, between the hours of one and two in the afternoon. The defendants attended at the time and place specified for the delivery of the deed, with one prepared for delivery, but the plaintiff failed to be there. After the expiration of the time specified for the delivery of the deed, the defendants left the place, and the defendant, Mr. McDonnell, met the plaintiff and tendered him the deed. The plaintiff said it was not right, as there was an assessment for extending Church street not paid. This objection was well founded, as there was a small assessment for that purpose, which was an existing lien upon the property. Upon the morning of the next day McDonnell paid this assessment, procured a receipt therefor, went to the office of the plaintiff, and then tendered him the deed, together with the receipt showing the payment of the assessment. The plaintiff refused to receive the deed upon the ground that the premises were incumbered by leases to various tenants, all of which would terminate on the first of May thereafter, and declared himself ready and willing to complete the purchase if these incumbrances were removed. The defendant told the plaintiff he must accept the deed and complete the purchase or he would put an end to the contract. The plaintiff proved that these leases were existing at the time of making the contract, and that the property was then held under them by the respective tenants, and that these facts were then known to the plaintiff. The latter excepted to the competency of this proof, as the contract provided that the plaintiff should receive the rent of the premises from the time of entering into it; this proof was competent to show what was the rent intended by the parties. It showed clearly that this was the rent reserved upon the existing leases. (Bridger v. Pierson, 45 N. Y., 601.) By the contract, the plaintiff was entitled to this rent down to the time of receiving the deed. The leases must, therefore, be continued until that time. The defendants, under the contract, had no right to procure their determination before the delivery of the deed. This shows that the plaintiff was to take title subject to these leases, as well as to the mortgages, the payment of which he had assumed. The defendants agreed to convey the premises in fee simple, except as above. This was an exception of the leases and mortgages. It follows that the existence of the leases furnished no excuse to the plaintiff for the non-completion of the purchase. The defendant then told him that unless he then completed it, he should put an end to the contract. This required prompt action by the plaintiff if he desired its performance. His delay of more than two months from this time, before doing anything toward performance, puts an end to his right to specific performance. The plaintiff further claims that if not entitled to specific performance, he is entitled to judgment for the money he had paid upon the contract. But the defendants were ready and willing, and tendered full performance on their part. The plaintiff neglected and refused to perform on his part, for which reason the contract was terminated by the defendants. Under these facts, the plaintiff is not entitled to recover the money he had paid thereon. (Haynes v. Hart, 42 Barb., 58; Battle v. Rochester City Bank, 3 N. Y., 88 ; Green v. Green, 9 Cowen, 46; Ketchum, v. Evertson, 13 Johns., 359.) The judgment appealed from must be affirmed with costs. All concur. Judgment affirmed.