Frankovich v. Podolsky

Opinion by Mr. Justice Frazer, Plaintiff agreed in writing to sell to Joseph Podolsky, one of defendants, three described properties for the sum of $90,000; $1,500 being paid at the time of signing the contract, $42,250 to be paid in cash at time of settlement and the balance of $46,250 to be secured by the purchaser taking the properties subject to new mortgages on the lots aggregating that amount to be made by plaintiff. The agreement contained the usual clause that time was of the essence of the contract and that the advance money of $1,500 should be forfeited as liquidated damages in case the purchaser failed to carry out his agreement. Podolsky subsequently assigned his interest in the contract to Louis Rothman, the other defendant. At the time the agreement was signed there were two mortgages against the premises, amounting to $55,000, which were to be paid off and satisfied by plaintiff at the time of settlement, partly out of the proceeds of the new mortgages for $46,250, which were to remain, and the balance from the cash payment. The day fixed in the agreement for settlement fell on Sunday, necessitating a postponement to the following Thursday, February 19,1920. On the day set misunderstandings arose preventing settlement, whereupon plaintiff declared the contract cancelled and defendants the following day recorded the agreement of sale. Since that' time no fur [146] ther efforts were made by either party to effect the transfer and, on March 15, 1920, the present bill for cancellation of the recorded agreement was filed and, on March 19, 1920, plaintiff conveyed the property to a third person. The court below, after hearing, found neither party ready to perform on the day fixed for settlement and withheld a decree for thirty days to allow the parties to comply with the agreement. At the end of the period fixed by the court, nothing further having been done to adjust the controversy, a decree was entered dismissing the bill. Plaintiff appealed. We find ample evidence in the record to sustain the conclusion reached by the court below that neither party was actually ready to proceed with the settlement on the day agreed upon. The legal conclusion drawn from that fact, however, was erroneous. Had defendants filed a cross bill, praying specific performance of the contract, the court below could properly have made equitable disposition of the controversy. It is now too late, however, for defendants to secure that character of relief and to permit them to maintain of record the cloud on the title resulting from the recording of the agreement would be inequitable. Whether defendants are entitled to a return of the hand-money will depend on the evidence produced in the trial of that issue, if an action for that purpose is commenced. As the evidence then produced may materially vary from that now before us we refrain from expressing an opinion on the question. The decree of the court below is reversed and it is further ordered that the agreement of November 19, 1919, herein referred to, be cancelled and stricken from the record in Deed Book, Vol. 2002, page 225, in the office of the Recorder of Deeds of Allegheny County, without prejudice, however, to defendants to sue at law t'o recover the $1,500 paid as hand-money; each party to pay one-half the costs.