Dietz v. Farish

Freedman, J. This is an action to compel the specific , performance of a contract for the sale and purchase of real estate. The defense is two-fold: First, that the contract was never concluded so as to be binding upon the parties; and, secondly, ■ if it was, that a defect existed in plaintiff’s title. Upon these issues evidence was introduced by both sides, and upon such evidence several interesting questions of fact and of law arise. As to the facts, I shall only say that upon a proper application of the rules which govern in the consideration of testimony, the evidence preponderates so largely in favor of the — 221 — defendant that he is entitled to have his version concerning the transactions constituting, as plaintiff" claims, an execution and delivery of the contract, adopted as the true one. So far as necessary the facts thus established- will be referred to hereafter. As to the law, the learned counsel for the plaintiff strenuously insisted that in every.aspect which may be taken of the case there was, in law, a perfect execution and delivery of it, and that such execution and delivery could not be varied by proof of annexation of conditions. This claim, in view of the facts as actually determined, is a bold and startling one, and in consequence thereof I felt induced to make, and" did make, before coming to a conclusion thereon, a careful examination of the principles of law which govern in the matter of the execution and delivery of contracts. The conclusions at which I arrived, after such examination, may be stated to be as follows : A contract or agreement is the union of two or more minds in a thing done or to be done. In .the language of some of the old writers, it is called “ a coupling or knitting together of minds.” The assent of the parties must be mutual, reciprocal, concurrent. There must necessarily be some medium of communication by which the union of minds may be ascertained and manifested. Among men this medium is language, symbolical, oral or written. In oral and symbolical communications, when the parties are together, the assent is mutual and the contract completed when the acceptance of one party is announced to the other. In written communications, and especially in cases where the law requires the assent to be evidenced by a writing, the writing must be delivered by the party to be bound thereby in such a manner as to deprive him ’of the right to recall it. The delivery may be by words without acts; as if a deed be lying upon a table, and the grantor says to the grantee, “ take that as my deed,” it will be a sufficient delivery; or it — 222 — may be by acts without words, and therefore a dumb man may deliver a deed. The intent is the governing and controlling element in the determination of the question whether a contract has or has not been concluded in a given case. Established forms and ceremonies furnish useful indications of intention; but in themselves, and in the absence of mutual and concurring intention, meeting in the same sense, to the same point, and embracing the same subject-matter, they are inoperative. This is a rule oí universal jurisprudence, and applies to all classes of contracts. - Thus, although the mere consent of the partjes is sufficient for the perfection of consensual contracts, nevertheless, if, in agreeing upon a sale or any other bargain, they also agree that' there shall be a formal act" passed before a notary, with the intent that the bargain shall not be deemed perfect .until the notarial act is so likewise, the parties, though they may have agreed upon the terms, may recede before the act is complete (Pothier on Obligations, art. 1, Ev., p. 110). Referring to the same principle, under another title, Mr. Bell, in his very learned commentaries on Law of Scotland (7th ed. [McLaren], bk. 3, pt. 1, p. 345), says : The plea of locus pomUentiw is grounded not merely on the want of evidence of a bargain, but on the want of that perfect and full consent which stands contradistinguished from imperfect resolution or intention. The want of evidence may be supplied by a reference to oath; the want of the badge of full and perfect consent never can be so supplied. Such evidence may supply the loss of the document after it has been completed as an irrevocable engagement; but it will not destroy the privilege of receding, where the irrevocable obligation has not been legally declared. In the case of a contract under seal or a deed therefor, the locus pcenitentioe, the opportunity of withdrawing from it before the parties are finally bound, exists up to the time of its actual delivery as a living obligation. — 223 — If the grantor do not intend that his deed shall take effect until some condition is performed, or the happening of some future event, he should either keep it himself, or leave it with some third person as an escrow, to he delivered at the proper time. If he deliver it as his deed to the grantee, it will operate immediately, and without any reference-to the performance of the condition, although such a result may be contrary to the express stipulation of the parties-at the time of the delivery. This is one of the cases in which the law fails to give effect to the honest intention of the parties, for the reason that they have not adopted the proper legal means of accomplishing their object. • But it is only in cases falling strictly within the exception stated, that is to say, in cases of delivery of the deed with intent to part with it as a deed, and for the benefit of the grantee, that the law, for reasons of public policy, fails to carry out the intention of the parties as expressed in the condition annexed to the delivery, and rejects parol evidence as to such condition ( Worrall agt. Munn, 5 N. Y., 229; Braman agt. Bingham, 26 id., 483 ; Cocks agt. Barker, 49 id., 107). If, though there be a delivery to the grantee, the deed is delivered with the intent that the grantee shall not take it as the deed of the grantor, nor receive it as grantee, but as the agent of the grantor for a special purpose, as, for instance, for the purpose of transmitting it to a third person to be held by the latter in escrow, the case does not come within the exception (Gilbert agt. The North Am. Fire Ins. Co., 23 Wend., 43). A deed may be deposited with the grantee, or handed to him, for any purpose other than as the deed of the grantor or as an effective instrument between the parties, without becoming at all operative as a deed (Ford agt. James, 2 Abb. Ct. of App., 159; per Grover, J., 163). Formerly the law was that delivery in escrow must be to a stranger, and that if made to the grantee’s authorized agent the delivery has the same effect as if made to the grantee — 224 — personally. But this rule has since been invaded by numerous acknowledged exceptions. Thus, in Watkins agt. Nash (L. R., 20 Eq. Cas., 262; S. C., 13 Moak's Eng. R., 781), vice-chancellor Hall had occasion to pass on the question of delivery in escrow to the solicitor of a party to the deed, and sustained the apparent intent of the parties against a strict construction of the technical rule, that delivery to the agent of the grantee cannot be in escrow. It appeared that defendant’s solicitor, Skyrme, represented to plaintiffs that his client wished to pay off a mortgage which the plaintiffs, as trustees, held on Hash’s estate; and at Skyrme’s request, to facilitate the transaction, as he said, they executed a reconveyance and delivered it to him expressly as an escrow, and took a writing declaring it to be such. Skyrme used the reconveyance to get the money from his client, which he appropriated, and then returned the reconveyance, pretending that the payment was not made. The vice-chancellor laid down the broad explanation of the old rule, that when a stranger was spoken of, “ what is meant, is a delivery of a character negativing its being a delivery to the grantee or to the party who is to have the benefit of the instrument. Moreover, the delivery to the solicitor of the grantee might be deemed a delivery to a third person for the benefit of all parties.” On the other hand, if the usual formalities of execution take place, and the contract under seal is, to all appearances, consummated without any conditions or qualifications annexed, and the acts of the parties clearly evince their intention to be bound without a. formal delivery, it is a complete and valid deed, notwithstanding it be left in the custody of the grantor (Scrugham agt. Wood, 15 Wend., 545, and eases there Cited). Here, again, the law regards the duly authenticated intention of the parties rather than mere ceremonial formalities. It even regards the mere possession of the document-as a nonessential, but the decisive and conclusive evidence of the intention of-the parties as the operative and controlling feature. — 225 — I think I have now sufficiently demonstrated, for the purposes of the case before me, that, except where reasons of public policy intervene, it is the invariable policy of the law;, in determining the question of the execution and delivery of a contract, to give full effect to the true intent and meaning of' the parties, so far as the same can be ascertained from the surrounding circumstances, and that in this respect the law is in full accord with right, reason and substantial justice. • The claim advanced by the learned counsel for the plaintiff that, notwithstanding the agreement of the parties that delivery should take place upon the approval of the contract by counsel, the bare execution of it under seal, so far as it was executed, imparted binding force to it, and is not only sufficient, but conclusive evidence of the existence of a valid contract, involves, therefore, a misconception of the true relations of legal principles. At the time it was agreed between the parties to make the delivery of the contract and the payment of the first installment required by it dependent upon the approval of defendant’s counsel, it had not yet been delivered either by words without acts, or by acts without words. It was still under the control of the defendant, and his opportunity for withdrawing had not yet expired. Hot even a qualified or conditional delivery had been made to the plaintiff. The defendant thereupon took both duplicates into his possession, and both parties proceeded to the office of defendant’s counsel. The latter not being in, both duplicates, together with a check for the amount of the first installment required to be made by the contract, were left by defendant for his counsel with instructions, in case of approval, to deliver one of the duplicates and the check to the plaintiff. The contract was never approved, nor were any of the papers handed by said counsel, or with his knowledge or consent, to the plaintiff. Hence there was no valid delivery. The mere fact that plaintiff, against the express understanding of the parties, managed to get hold of one of the duplicates, is not sufficient to enable him to maintain the action. — 226 — ¡Nor can it avail the plaintiff that he succeeded in subsequently inducing Hr. Pell, the subscribing witness, to acknowledge, before a commissioner, the execution and delivery of the instrument, when, as appears from the evidence, the said witness, at the time of making such acknowledgment, had no knowledge that the contract had not been concluded, or that the duplicates had not been duly exchanged, and was not aware that any controversy touching the matter had arisen, but had. every reason to believe that a delivery had taken place. True, he should not have made the acknowledgment, unless he knew the fact to be as he stated, and his course, in that respect, is highly reprehensible. But I do not see why the consequences of his unauthorized act should be visited upon the defendant. Even the record of a deed, after acknowledgment, is only jorima facie evidence of a delivery, and as such it may be rebutted (Jackson agt. Perkins, 2 Wend., 308; Gilbert agt. North Am. Fire Ins. Co., 23 id., 43). In my findings I have set forth with great particularity all the circumstances touching the execution of the contract, its deposit in the office of defendant’s counsel, and the manner in which plaintiff got possession of the duplicate upon which he brought this action. It is, therefore, not necessary to enlarge upon them here. Suffice it to say that upon the facts as thus established, plaintiff has failed to show that the said contract for the purchase and sale of the premises in question, was ever concluded so as to have any binding force whatever. In regard to the alleged defect in plaintiff’s title, I have come to the conclusion that upon the evidence as it stands, the plaintiff did not have a marketable title to the premises described in the complaint. The facts being as found, the case is not one for a specific performance. This relief is always discretionary and will never be granted except it be strictly equitable under all the circumstances that it should be granted. The defendant is entitled to judgment, dismissing the complaint upon the merits, with costs.