Brokaw v. . Duffy

Vann, J. The plaintiff was entitled to a marketable title free from doubtful questions of fact or law. Unless the defendant could convey such a title, it was impossible for her to perform her contract and the plaintiff was entitled to recover the money paid thereon and the expenses incurred by him in examining the title. • “ If the vendor of real estate, under an executory contract, is unable to perform on his part at the time provided by the contract, a formal tender or demand on the part of the vendee is not necessary in order to enable him to maintain an action to recover the money paid on the contract or for damages.” (Ziehen v. Smith, 148 N. Y. 558, 562, and cases cited.) Upon the trial there was no conflict in the evidence, and the following facts appeared without dispute: The defendant’s grantor was Bernard McKenna, her brother, who was nearly 90 years of age on the 22nd of May, 1884, when, in consideration of one dollar, he conveyed to her four different *396 parcels of land in the city of New York, including the premises in question. Both grantor and grantee resided in Ireland at the date of the conveyance, but before that the former had lived in this country for many years. Shortly after the plaintiff entered into the contract with Mrs. Duffy he procured a search upon the premises and found a notice of' pendency that referred to a record of an inquisition in lunacy, which disclosed that on the 24th of July, 1885, Mary J. McShane, a niece and heir at law of said McKenna, filed a petition in lunacy alleging that he then was and for about ten years had been insane and incompetent to take care of his estate. The petition referred to the. conveyance of May 22nd, 1884, from him to Mrs. Duffy, and alleged that, at the date thereof, he was insane and wholly under her influence and control. A commission was issued, a trial had, and on the 1st of December, 1887, the jury found that “ Bernard McKenna is a lunatic and of unsound mind, and that he has been in the same state of lunacy since October 26th, 1881.” Attached to the inquisition was the evidence upon which it was founded. Four lay witnesses, called by the petitioner, testified to irrational acts and declarations on the part of McKenna continuing from 1881 until the trial, and three expert witnesses, called by her, testified, one in answer to a hypothetical question, and the others as the result of personal examinations, that said McKenna was of unsound mind and incapable of managing his estate. One of the lay witnesses who had known McKenna for twenty-five years while he lived in this country, saw him five times in the spring of 1885, when he was living in Ireland with Mrs. Duffy. He testified that he called upon him and said, “ How do you do, Mr. McKenna % ” and that McKenna, pulling at his nose, replied: “ I am not Mr. McKenna ; Mr. McKenna is dead; I am not Mr. McKenna at all.” After a while the witness said to him, “ Mr. McKenna, you know you are McKenna,” and he answered, “ No, I am dead years ago; my face is dead ; my head is dead; I am all dead.” He then talked sensibly for a few minutes, but soon said; “What *397 brought you to this country ? ” and the witness replied, “ I came here t'o see you.” He then said: “How 1 will be dead to-morrow; did you bring that flagstone from Thirty-fifth street to make a head stone for me; did you come without it ? ” Occasionally he would talk lucidly about something that transpired years before in America, but would soon break out as follows: “ I am not Mr. McKenna. Sure I have got nothing in Hew York * * * sure I have got nothing in America; I never was in America.” After a while Mrs. Duffy entered the room and he said to her : “ Bad luck to you ; you have robbed me, you old robber.” Four days later this witness called upon him again, but “ he did not know that I ever was there at all. * * * He told me he never saw me ; he did not know me; * * * he said he was not Mr. McKenna; Mr, McKenna was dead; he was at one time Mr. McKenna, but not now. He said he had never seen me; * * * he said he had no nose. When Mrs. Duffy brought him food he said, I won’t eat it; I don’t eat nothing; I am dead; I want nothing to eat; * * * Oh, I was a bad man, wasn’t I ? The unfortunate creature, to come here; to be placed here, a poor man without anything to eat or anything to wear. Oh, my, ain’t I a foolish man ? ’ Mrs. Duffy went up to him, stamped her foot and said, ‘ shut up, you musn’t talk that way.’ He would cry and talk about his property in Hew York, and then in a little while he would say, ‘ I never had any property ; I am not Barney McKenna at all; I will be dead in the morning; bury me outside.’ ” This conversation was partly monologue and partly dialogue, and each time that the witness saw him he acted and talked in the same way. Four lay witnesses, including Mrs. Duffy, and five experts, gave evidence tending to show that McKenna had always been sane and capable of doing business. A motion made to confirm the verdict of the jury was denied and the proceeding dismissed, with leave to apply for a new commission, solely upon the ground that the commissioner discredited some of the medical evidence in his charge *398 to the jury. The court held that the evidence was sufficient “ to make out a case.” An application for a new commission was denied upon the ground that McKenna was beyond the jurisdiction of the court, and “ that the question as to his sanity should be tried in the country where he resides, and in which he can be personally seen and heard in his defense.” After thus learning the facts stated in the inquisition record, the plaintiff, through his counsel, inquired of the attorney who conducted the proceeding for the heirs at law, and was informed by him “ that they had undoubted evidence of Bernard McKenna’s insanity; that he was still living at that time, but was very advanced in years, being ninety years of age or thereabouts, and that as soon as Mr. McKenna died he, on' behalf of the heirs at law, would commence proceedings to set aside the deed from Bernard McKenna to Ellen Duff J on the ground that, at the time of its execution, Bernard McKenna was a lunatic, and further, he threatened that if we took title we would do so at our own risk.” The plaintiff’s counsel testified that at the time fixed for closing the contract he called upon Mr. Quinn, who acted for the defendant, told him of these proceedings, and said that he could not advise the plaintiff, who was present prepared to take a deed, to accept the title under the circumstances, to which Mr. Quinn made no reply. No attempt "was then, or at any time, made by Mrs. Duffy, or her counsel, to deny or explain the facts upon which the plaintiff relied in rejecting the title. Those facts were wholly undisputed, for the defendant simply put in some documentary evidence and rested without swearing a witness. The issue raised by the pleadings and tried before the court was whether Mrs. Duffy had a marketable title. Her title was not marketable because it was subject to a serious question of fact which might be decided in different ways by different tribunals. The plaintiff was not obliged to accept a title which was under the shadow of an impending lawsuit. “ A title open to a reasonable doubt is not a marketable title. The court cannot make it such by passing upon an objection depending *399 on a disputed question of fact, or a doubtful question of law, in the absence of the party in whom the outstanding right was vested. He would not be bound by the adjudication, and could raise the same question in a new proceeding. The cloud upon the purchaser’s title would remain, although the court undertook to decide the fact or the law, whatever moral weight the decision might have. It would especially be unjust to compel a purchaser to take a title the validity of which depended upon a question of fact, where the facts presented upon the application might be changed on a new inquiry or are open to opposing inferences.” (Fleming v. Burnham, 100 N. Y. 1, 10.) “ A purchaser should not be left, upon receiving a deed, to the uncertainty of a doubtful title or the hazard of a contest with other parties which may seriously affect the value of the property, if he desires to sell the same.” (Jordan v. Poillon, 77 N. Y. 518-521.) He “ ought not to be conrpelled to take property, the possession of which he may be obliged tp defend by litigation.” (McPherson v. Schade, 149 N. Y. 16, 21.) “ He should have a title that will enable him to hold his land free from probable claim by another, and one that, if he wishes to sell, would be reasonably free from any doubt which would interfere with its market value.” (Heller v. Cohen, 154 N. Y. 299, 306; Vought v. Williams, 120 N. Y. 253, 257.) “ It has often been held that a title is not marketable when it exposes the party holding it to litigation.” (Swayne v. Lyon, 67 Penn. St. 436, quoted with approval in Moore v. Williams, 115 N. Y. 586, 592.) “ The title tendered need not in fact be bad in order to relieve him from his purchase, but it must either be defective in fact or so clouded by apparent defects, either in the record or by proof outside of the record, that prudent men, knowing the facts, would hesitate to take it.” (Greenblatt v. Hermann, 144 N. Y. 13, 20.) The distinction which once prevailed as to marketable titles between courts of law and equity no longer exists, and an action at law by the vendee to recover back purchase money paid may be based upon the same ground that *400 would justify a court of equity in refusing to compel him to accept the title. (Moore v. Williams, 115 N. Y. 586.) Even if the plaintiff would have been justified in disregarding the notice of pendency because it had been canceled of record, as well as for the reason that it was filed in a special proceeding and not in an action, still he had the right to examine the inquisition record. ( Valentine v. Austin, 124 N. Y. 400.) If not obliged to make further investigation, it was his privilege to do so, as one may take more care in transacting business than is required by law. The plaintiff saw fit to make thorough inquiry, as was his right, and having done so he is chargeable with whatever facts he discovered. Those facts were not constructive, but actual notice to him, which he could not disregard in safety. The defect discovered is none the less a defect because he would not have found it but foy the exercise of unusual diligence. It left his title open to attack upon a question of fact and he knew there was evidence which would authorize a finding that Mr. McKenna was insane when he conveyed to Mrs. Duffy. He did not act upon rumor, but mainly upon facts stated by seven witnesses under oath. He was warned by the persons opposed in interest to Mrs. Duffy that if he accepted the title he would have to defend it. He was informed that those persons could produce convincing evidence that McKenna was insane when he gave all his property to his sister. He knew that this was not an empty threat, but was based on substantial facts, for he also knew that there was evidence on file, taken in a judicial proceeding, which would not only warrant a jury in finding that this was true, but that a jury, acting upon such evidence, had once so found; yet his announcement that he should reject the title for these reasons met with neither explanation nor denial. His action was not based on a mere possibility, but on a reasonable probability, that the title could and would be successfully attacked. The defendant could not correct the defect, and she did not offer to. We are not called upon to determine whether the defend *401 ant could convey a marketable title to a bona fide purchaser who had no notice of the alleged insanity of her. grantor, but whether she could convey a title which was marketable as to the plaintiff while he possessed the knowledge acquired by his investigation. In determining that question, the inquiry is not whether the defendant’s grantor was or probably was insane, but whether the plaintiff received such notice of the probable invalidity of the defendant’s title as to justify him in rejecting it as unmarketable, because he might be required to defend it upon the ground that her grantor was insane. While it may be that the lunacy proceedings which came to the plaintiff’s knowledge and were admitted in evidence upon the trial were insufficient to establish the invalidity of the defendant’s title, they were at least sufficient notice to the plaintiff to put a reasonably prudent man upon inqidry as to its validity. They constituted notice that the defendant’s title was questioned and in doubt, and that there was existing proof which would justify the conclusion that it was invalid as against him. This notice could not be safely disregarded by a purchaser, as it directly involved the validity of the title. Under these circumstances, the defendant was bound to show by proof, which would be satisfactory to a reasonable person, that her title was unimpaired by the alleged defects of which the plaintiff had notice, and when she omitted and neglected to make any explanation the plaintiff was not required to accept the proffered title, but might recover the money paid upon the contract. While there was a conflict of evidence in the lunacy proceeding, there was no conflict of evidence on the trial of this action, and no evidence to warrant any finding adverse to the plaintiff, who was not obliged to show that McKenna was insane, but that there was enough evidence in existence, which, uncontradicted and unexplained, would create a reasonable doubt as to his sanity in the mind of a reasonable man. The court might find him sane, or might conclude that there was a preponderance of evidence to that effect, but that would not make the title marketable, provided there was evidence, *402 which, if believed by a jury upon another trial, with different parties before the court, would warrant the conclusion that he was insane when he conveyed to his sister. ■ The learned trial judge found that there was no evidence of insanity, and not enough to create a- reasonable doubt upon the subject. This covered the controlling issue as to the existence of any evidence, which, when fairly considered, could establish a reasonable doubt. It was either a finding of fact, or a conclusion of law. If the former, it was without any evidence to support it, and was, hence, subject to, exception as an error of law. (Otten v. Manhattan Ry. Co., 150 N. Y. 395; National Harrow Co. v. Bement, 163 N. Y. 505.) If the latter, it was reversible error, because it held as matter of law that there was no evidence on the vital question, when there was enough competent evidence, not only to justify, but to require a finding that there was a reasonable doubt as to McKenna’s sanity. The question was not whether he was actually insane, but whether there was a reasonable doubt about it, which was conclusively established. The evidence was not hearsay, but a fact, as notice, although given orally, is, notwithstanding, a fact. If a grantor, in a chain of conveyances, regular upon the record, should inform a proposed purchaser that a deed, purporting to have come from him, was a forgery, and that he would take the title at his peril, and should fortify his statement by affidavits, it would be evidence of the same character as that upon which the plaintiff acted. On the trial the plaintiff offered in evidence a written agreement between the defendant and the other heirs of her grantor, made after the law day had passed, whereby she agreed to unite with them in conveying the real estate embraced in'the deed to her, and to receive only one-fourth of the avails of the sale. He also offered to prove that the attorneys for the other heirs refrained from bringing an action to set aside the deed to the defendant, for the reason that she voluntarily entered into an agreement by which she was to accept the share of the estate which would have been hers as heir at law if she had^never received the deed. • This evidence was *403 objected to by the defendant upon the ground that it was irrelevant and immaterial. The objection was sustained and the plaintiff excepted. This was error. The proof offered was both material and relevant. It would have tended to show that the defendant herself regarded the deed as invalid, and for that reason voluntarily surrendered three-fourths of the property which it purported to convey. This constituted a practical admission on her part that the title which she claimed to the property when the contract between the parties was made was not only unmarketable, but invalid. It was a circumstance which the plaintiff was entitled to prove, as tending to show that the title offered was at least doubtful, and not such as the plaintiff was required to accept. The order appealed from should be affirmed and judgment absolute rendered against the defendant upon her stipulation, with costs in all courts.