Bennett v. Abrams

By the Court, Bockes, J. The facts found and stated by the learned judge before whom, the cause was tried are well established by the pleadings and proofs. Most of the material allegations of the complaint are not denied in the demurrer of the defendant. Therefore they stand admitted of record. It is denied that the defendant agreed to procure for the plaintiff a right of way across the land of Mr. McIntosh. On this point the case is clearly with the plaintiff. He swears that the defendant was to furnish him a right of way through McIntosh’s lot. In this he is distinctly supported by both William and Angus McIntosh. Nor does the defendant deny that such was his agreement, except as it stands denied by his answer. Perhaps this is of no great importance in the case, although it seems of some significance in considering what matters were subjects of release, in consideration of the payment by the defendant of the three hundred dollars. The defendant also denied that the receipt of February 22d was intended as a release of his obligation to procure the right of way, or as a' discharge from his liability under the covenant of warranty, by reason of the Marvin Strong claim; but he insisted that the receipt and payment of the $300 relieved him from his agreement to procure a cancellation of the Ladd mortgage for $1300. The findings of fact are against the defendant on these issues; and the strength of the evidence is in favor of the conclusions stated in the record. The testimony of the parties, on this branch of the case, is in direct conflict. But if we consider the obligations of the defendant, the probability of the plaintiff’s statement, and unreasonableness of the defendant’s, the case is clearly with the plaintiff. It is simply absurd to suppose that the plaintiff would understandingly discharge a responsible party from the payment of $1300, and himself assume its payment for the insignificant sum of $300; to say nothing of the further release of other important obligations, for the same and no other consideration. According to the facts admitted — 624 — and proved, there is propriety in the arrangement by which the defendant obtained, in consideration of the payment of $300, a release from his covenant to protect the plaintiff from the Marvin Strong claim, and from his obligation to procure the right of way. But it is against all reason that the plaintiff would in addition, and with no superadded inducement, release the defendant from a debt of $1300, and take upon himself the burden of its payment. A release which operates so unjustly, obtained on such gross inadequacy of consideration, has either the taint of fraud or the more charitable presumption of mistake; and it then lies, with the party who sets it up as a protection to establish its perfect integrity. This is a case where fraud or mistake might well be inferred from the circumstances attending the transaction; and I am entirely satisfied with the conclusions of fact stated by the learned judge who tried the .cause. Even if it were otherwise, the court on appeal could not overhaul the findings, inasmuch as there is evidence to sustain them. It has been very often decided that findings of fact will be held conclusive on appeal, when based on a conflict of evidence, as in this case. The questions of law remain to be considered. It is urged that an oral agreement to exchange real property is void by the statute of frauds. This is unquestionably true, and had the agreement in this case remained wholly unexecuted, no legal obligation would have resulted from it. But the parties executed the agreement in part. The plaintiff fully performed to the extent of his agreement, and the defendant accepted and retained all the advantages to be derived from such performance. It did not, after that, lie with him to refuse performance on his part, and urge its invalidity. As was said in Malins v. Brown, (4 Comst. 403,) to permit the defendant to avoid the agreement on this ground would be to make the statute an instrument of fraud, instead of a shield against it. Story’s Eq. § 759. Thomas v. Dickinson, 12 N. Y. Rep. 364.) — 625 — It is also urged that the court cannot reform an oral agreement in relation to real property, when possession was not taken, nor any part of the consideration paid. Such is not this ease. Here possession was taken by both parties, and the plaintiff fully performed on his part, and the fairness of the agreement is not assailed by either party. But this action is not brought to reform the agreement, but to enforce it. This objection is most clearly untenable. It is next insisted that the contract was merged in the deeds of conveyance. But the defendant agreed to satisfy and discharge the Ladd mortgage in addition to the execution and delivery of the deed. These were separate and distinct acts. Performance as to one neither extinguished or discharged the defendant’s obligation as to the other. (Witbeck v. Waine, 16 N. Y. Rep. 532.) It was held in Atwood v. Norton, (27 Barb. 638,) that when the things stipulated in an agreement to be done, were distinct in their character, and could be done at successive times, performance of one did not operate as a merger, waiver or extinguishment of the other. (2 Kernan, 561. 1 Denio, 125. 9 Barb. 641.) I am unable to understand how the giving of the deed relieved the defendant from the further duty, which he had stipulated to observe, of procuring the Ladd mortgage to be satisfied and discharged of record. The decision in Malins v. Brown, (4 N. Y. Rep. 403) answers another objection, to wit, that the plaintiff, having sold and conveyed away the premises, has lost his right to demand performance of the agreement as to the discharge of the Ladd mortgage. The defendant conveyed with covenant of warranty. In this case it was expressly decided that a party who is entitled to a specific execution of an agreement to release his land from the lien of a mortgage may maintain a bill for that purpose, notwithstanding before the filing of the bill he has conveyed away the land, such conveyance being with warranty. Nothing remains of this case then, except to determine — 626 — how performance of the agreement is to be enforced against the defendant. In this case the plaintiff has not, as yet, suffered; still he is entitled to protection from apprehended or possible damage. It was this for which he contracted, and he is entitled to the benefit of the agreement according to its terms. It is a well settled rule of equity jurisprudence that a suit for specific performance may be maintained, before any actual molestation, distress or impleading of the party. So equity will decree thó performance of a covenant or agreement to indemnify. The only difficulty is as to the form of the judgment or decree. In what manner is the court to enforce the duty or obligation ? The flexibility of the'practice in a court of equity, and in the application of equitable principles, generally obviates all difficulty in the administration of justice in that court. Sometimes the party will be directed to execute the decree, and punishment as for contempt will follow disobedience. Sometimes compensation in damages will be decreed, in case of contumacy. This course is generally adopted when the damages can be estimated with certainty; in which case the amount may be collected on execution. And again money when collected may be paid into court, to be applied as the ends of justice require, through the aid of a receiver or other of its officers. This latter course is often adopted, when it would, for any reason, be improper to pay the money over into the hands of the party who has invoked the aid of the court for his protection. This seems to be the situation of the case under consideration. The defendant agreed to procure the mortgage to be satisfied and discharged of record. But it is held by a third person, not a party to the action, and is not yet due. Perhaps the holder is unwilling to receive payment; hence it may not be a proper case to punish for disobedience. The plaintiff .here is entitled to a specific performance of the agreement. That, however, may be impracticable. If so, then he may have approximate relief in some other form, — 627 — which will secure to him the substantial advantages of his contract. This end may be attained by means of a fund to be raised by a sale of the defendant’s property on execution, and to be invested or applied under the direction of the court, in such manner as to meet the conditions of the agreement between the parties. But it is not right that the money, should be collected from the defendant and paid over to the plaintiff, who may or may not apply it in satisfaction or discharge of the mortgage. The decree should be in such form as to protect all parties. As it stands, there is a chance of injury to the defendant, against which provision should be made. It should therefore be so modified as to require the money when collected, to be paid into court, or held by the sheriff subject to the further order of the court, in the alternative that the defendant shall neglect or be unable to obtain a satisfaction and discharge of the mortgage. When the money shall have been collected, in case of collection under execution by the sheriff, the plaintiff will be at liberty to move the court in the premises, and it will then be invested to meet the payments on the mortgage as they shall fall due, or he will be allowed to take the money himself on giving adequate security that it shall be paid off according to its conditions. This, however, can be settled and arranged after the money shall be made on execution, and need not be provided for in the decree, further than to permit ulterior proceedings as the exigency of the case may require. This modification of the decree is but formal, and doubtless would have been adopted had suggestion been made to the court below, in proper time. The facts and law of the case are with the plaintiff, and the judgment should be, with the modification intimated, affirmed with costs of the appeal. It is Usual when a judgment is reversed in part, or modified, on appeal, to deny costs of the appeal to both parties. But here the defendant has failed in all the substantial points of the litigation both on the facts and on the law. The ground of defense has been, from first to last, that the defendant was not bound to satisfy the mort — 628 — gage, by reason of a pretended discharge from that duty or obligation. He has failed in his defense, and must as is usual in such cases, meet the expenses of the litigation. The modification of the judgment does not reach the merits of the controversy between the parties, but is the suggestion of the court to prevent the possibility of injustice in carrying out the details of the decree. [Clinton General Term, May 5, 1863. The decree should require 1st. That the defendant specifically perform his agreement with the plaintiff by procuring a satisfaction and discharge of the mortgage. 2d. That the plaintiff recover against the defendant the costs of the action as adjusted and allowed, together with the costs and disbursements of the appeal, and that he have execution therefox-. 3d. In case of the defendant’s inability or neglect to obtain a dischai'ge of the mortgage, that judgmentbe entei’ed herein against him for the amount unpaid thereon, with interest, and the further sum of five dollars for the costs and expenses of procuring the discharge, and that execution issue against his property therefor. 4th. That the sheriff retain in his hands the moneys which he shall collect under this decree, except the costs and disbursements aforesaid, and immediately report to this court in regard thereto, to the end that such further action may be had as the exigency of the case may require. Potter, Boches and James, Justices.]