Scudder v. Lehman

McLaughlin, J.: On the 1st of April, 1909, tlie parties to this action entered into a written agreement by which the defendant was to assign to the plaintiff a mortgage for $27,500 on certain real estate in the city of New York in consideration of the plaintiff’s conveying to him certain other real estate in such city, which conveyance was to be subject, according to the contract, to two mortgages, one for $65,000, which according to the contract had about two years to run, and the other for $10,000. The time fixed for closing the contract by the delivery of the assignment and ..conveyance'was April 15, 1909, at twelve o’clock nooá at the office of defendant’s attorney. The pai ties met at the time and place named and it was then discovered fhat the $65,000 mortgage had only fourteen months to run inslead of two years. The attorney for the defend- . ant, speaking for him, said: “There is no use in talking. You must extend that mortgage for two years and we will pass the title.” To enable the plaintiff to get the extension an adjournment was taken until the twenty-sixth of April, when the parties again met, the defendant being represented by his attorney, who, upon being informed that the extension had not then been obtained, consented to a further adjournment, saying: “ You had better-get yourself within the contr ict as soon as you can and we close the contract, — we close the deal according to the contract.” No time was mentioned when this adjournment was- taken within which the plaintiff was required to bring himself within the terms of his contract by procuring the extension. The parties then separated and the plaintiff proceeded at once to enter into negotiations with a third party looking towards the purchase of the mortgage and extending the time of its payment. . The negotiations had been carried on to such an extent that on the 2d of May, 1909, he informed the defendant’s attorney of what he had done and that he felt certain he could pro [633] cure an extension of the time, to which the attorney responded, “ All right, go ahead and get yourself within the contract.” Five days later he notified the attorney that he had succeeded and would be ready to close the transaction on the twentieth of May, in reply to which the attorney said: “ The deal is off.” On the tenth of May defendant’s representative was informed in writing by plaintiff’s counsel that the plaintiff was ready and willing to carry out the terms of the contract and would be able to do so at any time between the twentieth and twenty-seventh of May, and unless he heard from the defendant before the twenty ^seventh of May he should conclude that he refused to carry out the contract on his part. 'Nothing further was heard"from the defendant and i aereupon this action was commenced on the 2d of June, 1909, to compel the defendant to specifically perform. The answer put in .issue the plaintiff’s right to specific performance, and at the trial, at the close of plaintiff’s case, the court held plaintiff was not entitled to the relief asked,'and from the judgment entered upon a decision to that effect the plaintiff appeals. During the course of the trial thq plaintiff sought to prove that on the twenty-fourth of June lie actually obtained a written extension of the .time of payment for the period of two years of the mortgage in question. This proof was objected to and the learned trial ■ court sustained the objection, “ On the ground, first, that you have pleaded that yoii had the extension between the 20th and 27th days of May, and on the second ground that this was not within a reasonable time.” Exception was taken to this ruling and the plaintiff then endeavored to prove that the reason why he did not obtain an extension before the twenty-fourth of June was the declaration of defendant’s representative, on the seventh of May, that “ the deal is off.” This evidence was excluded, the court saying : “ What 1 am going to hold in this case is that, while a person has a reasonable time, where the action is in equity, to comply with the contract, he has got to get ready to carry out the contract within that reasonable time, and lie cannot come in and say, first, that he did not carry it out because he should have had a reasonable time to make the title good, .and then attempt on top of that to excuse why he did not do it within a reasonable time; and that when, under these circumstances, plaintiff did not obtain the extension until the [634] 24th of June, it is too late and is not within-a reasonable time — that is, the plaintiff was not within a reasonable time in a. position to carry out his contract.” Exception was also taken to this ruling. I am of the opinion that the rulings of the trial court were erroneous. When the parties met on the twenty-sixth of. April the . defendant was represented by his attorney. . Whatever the attorney did in connection with the closing bound the defendant to' the .same extent ,as if the defendant, had been present himself. The adjournment then taken was binding upon the defendant, and no time being mentioned within which the plaintiff, was to procure' the extension, gave him a reasonable time in which to accomplish that result. I think, upon the facts presented, he put himself in a position to perforin within a reasonable time. (Merchants' Bank v. Thompson, 55 N. Y. 7; Pakas v. Clarke, 136 App. Div. 492.) Time is not of the essence of a-contract for the purchase and sale of real estate unless it is made so by the parties themselves. (Hubbell v. Von Schoening, 49 N. Y. 326; Kahn v. Chapin, 152 id. 305.; Lese v. Lamprecht, 196 id. 32.) Not only this, but the adjournment on April twenty-sixth being indefinite in point of time, some affirmative act had to be" taken by the defendant before the plaintiff could be said to be in default; that is, the defendant had to notify the plaintiff that unless he was ready to carry out the contract by a specified time he should consider him in default and refuse to perform. (Schiffer v. Dietz, 83 N. Y. 300; Pakas v. Clarke, supra.) Not having'done. this, in the absence of anything tending to establish that the delay had worked to tiie prejudice of the defendant, or subjected him to any damage, entitled the plaintiff to have specific performance decreed, if he could perform even at the time of the trial. It must be borne in mind that the action is in equity. That being so, in the absence of some provision in the contract making time the essence of it, a purchaser will be required to specifically perform if the title is good at the time of. the trial, even though defective at •the time fixed for performance in the contract, if, in the meantime, - nothing has taken place to defendant’s prejudice which would make performance on his part inequitable. (Schmidt v. Reed, 132 N. Y. 108; Haffey v. Lynch, 143 id. 241; Baumeister v. Demuth, 84 App. Div. 394; affd., 178 N. Y. 630.) Here time was not 'tirade the essence of the contract, and the [635] record is barren of any evidence tending to show that plaintiff’s delay in procuring the extension in any way damaged the defendant oi worked to his prejudice, or that it would be inequitable to compel him to do what he agreed to do. It seems to me, therefore, the undisputed facts, as well as the' erroneous rulings of tire trial court on the admission of evidence, require a new trial. The judgment appealed from, therefore, is reversed and a new trial ordered, with costs to appellant to abide event. Ingraham, P. J., Clarke, Miller and Dowling, JJ., concurred. Judgment reversed, new trial ordered, costs to appellant to abide event.