Battle v. Rochester City Bank

By the Court, Welles, J. The plaintiff cannot and does not ask to have the case put in a more favorable aspect for him, than it will bear by looking at the transactions as commencing with the contract or articles of agreement for the sale to him by the defendants, of the farm in Greece, bearing date the 9th day of November, 1841, and by regarding the payment of $1823,44, endorsed upon the contract, as having been actually made in money at the time it was endorsed. He claims to recover the amount thus paid, on the ground that the contract is rescinded, and it being rescinded, that there is so much money left in the defendants’ hands which belongs to the plaintiff; there being nothing by virtue of which the defendants can retain it. And he insists that his right to recover this money in no sense depends upon whether the contract was rescinded by his own or the defendants’ fault. That if it be once established that the contract is rescinded, the right to recover back the money paid on it follows as a matter of course, no matter for what cause, or in consequence, of whose fault it was rescinded. And I think it incumbent upon the plaintiff to maintain a proposition as broad as this in order to sustain this action. The cases in which a vendee is allowed to recover back money paid on a contract for the purchase of real estate, where the contract has been rescinded, are, 1st. Where the rescission is voluntary, and by the mutual consent of both parties, and without the default or wrong of either; 2d. Where the vendor is incapable or unwilling to perform the contract on his part; or 3d, where the vendor has been guilty of fraud in making the contract. In either of those cases it would be against equity and conscience for the vendor to retain the money, and the law implies a promise on his part to refund it. But in a case where the vendor has in all respects performed his contract, and the rescission is entirely in consequence of the unexcused default of the vendee in making further payments, to allow him to recover [422] back the money paid, would in my opinion be little short of offering a bounty for the violation of contracts. In the case at bar, it is not pretended that the defendants have not fulfilled, to the letter, every part of the agreement on their part to be fulfilled, and the plaintiff, by his counsel, in his opening, admits that he neglected to pay the first of the five annual instalments mentioned in the contract. I confess myself entirely unable to find in any elementary treatise, or reported case, a principle recognized, which would allow the plaintiff to recover. In the case of Ketchum v. Evertson, (13 John. 365,) Spencer, J. in delivering the opinion of the court, says: “ It would be an alarming doctrine to hold, that the plaintiffs might violate the contract, and because they chose to do so, make their own infraction of the agreement the basis of an action for money had and received. Every man who makes a bad bargain, and has advanced money upon it, would have the same right to recover it back that the plaintiffs have.” Again; “ To say that the subsequent sale of the land gives a right to the plaintiffs to recover back the m.oney paid on the contract, would, in effect, be saying that the defendant could never sell it without subjecting himself to an action by the plaintiff.” In the case of Green v. Green, (9 Cowen, 46,) which was an action to recover money paid by the plaintiff to the defendant, on an agreement for the purchase of land, on the ground that the contract was rescinded, Chief Justice Savage,, who delivered the opinion of the court, held that the plaintiff was not entitled to recover, for the reason that he, and* not the defendant, was in default. I refer to that case as containing a clear and practical illustration of the doctrine on the subject. The chief justice, after citing and commenting upon a number of decisions bearing on the question, remarks: “ I forbear the citation of more cases. I have found none of a recovery, where the party wishing to consider the contract rescinded, has not shown a breach of the contract on the other side, or what is equal to it.” It has been, among other things, urged in behalf of the plaintiff, that the agreement in this case was rescinded in pursuance of the mutual consent of the parties, contained in the [423] agreement itself, and that the plaintiff was therein left at liberty to put an end to it, and that as he has done no more than the defendants Virtually agreed he might do, he is not to be deemed in default, and that therefore according to one of the rules above laid down, he should be allowed to recover. But is this so ? He covenanted to make the payments, and has failed, and the provision abeut rescinding was a right secured to the defendants, and not to the plaintiff. It did not prevent the defendants’ enforcing the contract. They had an election to do so, or to treat it as rescinded on account of the plaintiff’s default. The contract expressed what the law would have adjudged without it; and shall it be said, because the parties spread out in the contract those rights and liabilities which were substantially the legal consequences flowing from the contract, that therefore other conveyances shall be made to attach, which otherwise would not? Suppose the provision about rescinding had been left out of the contract, and in all other respects it remained, as it is— with, as I think is undeniable, time of payments essential—the covenant to pay independent—the payment of the money by the plaintiff made a condition precedent .to the execution of a deed, &c.; the plaintiff makes default, and no further time is given by the defendants, and nothing occurs from which a waiver of strict performance can be inferred ; I ask what is the party to do ? He sees no prospect of his money being paid, and perhaps the plaintiff is bankrupt. I suppose he would have a right at once to treat the contract as rescinded, and sell the property to another, or to bring his action of ejectment and recover the possession, and the plaintiff would be without relief, either at law or in equity, in relation to the money advanced or the premises sold. At all events there can be no doubt but he would have a right to treat the agreement as rescinded upon reasonable notice to the vendee, to make payment, Sec. This would be as liberal a view of the case in favor of the vendee as any of the authorities justify, even in cases where time is not of the essence of the contract. And I should think, under the circumstances of this case, looking at the amount of the payment which had become due, and the nature of the contract, [424] that thirty days’ notice would not be unreasonably short. The time, in such cases, where nothing is to be done but paying money, should be such as to allow the party an opportunity to raise it by negotiating a loan or collecting it in from places where he may have it in deposit, and allowing reasonable time for remittance. He is not entitled to take time to earn the money. Now this is substantially provided for in the agreement, and I cannot see how that circumstance can vary the rights or liabilities of the parties. I think one good test of the vendee’s right to recover in these cases is his right to a specific performance óf the contract upon his paying up what may be due. And judging this case by that criterion, I hazard nothing in saying that no adjudged case, nor any respectable dicta can be found which would entitle this plaintiff to the relief he asks for. In my opinion, the nonsuit was properly granted, and the motion to set it aside should be refused.- Maynard, P. J. dissented. Motion denied.(a) Footnotes [(a)] The above decision was affirmed by the Court of Appeals, in December, 1849