Opinion
September 29, 1986
Appeal from the Supreme Court, Kings County (Hurowitz, J.).
Judgment reversed, on the law and the facts, with costs, the plaintiff is awarded judgment on its cause of action for specific performance, the cause of action for an accounting is severed, and the matter is remitted to the Supreme Court, Kings County, for the entry of an appropriate judgment and further proceedings on the plaintiff's cause of action for an accounting.
Where a contract for the conveyance of real property does not contain a specific declaration that time is of the essence, the law permits the parties a reasonable time in which to tender performance, regardless of whether the contract designates a specific date on which such performance is to be tendered (see, Grace v Nappa, 46 N.Y.2d 560, 565; Mader v Mader, 101 A.D.2d 881, 882). When this matter was before us on a prior appeal, we held that neither the original contract nor the contract as modified contained the requisite declaration making time of the essence, nor had the defendants served upon the plaintiff a clear, unequivocal notice to that effect (see, 4200 Ave. K Realty Corp. v 4200 Realty Co., 89 A.D.2d 978). Moreover, paragraph 60 of the contract effectively permitted the purchaser to adjourn the closing date for as much as 10 days with impunity. Thus, the plaintiff purchaser's assertion that it was prepared to close as of January 7, 1980, which was within 10 days of the law day fixed in the contract, as amended, was timely, and we cannot agree with the trial court's conclusion that the brief delay was attributable to bad faith on the part of the plaintiff purchaser. It appears, rather, that the adjournment was occasioned by the need to secure the consent of the mortgagee bank to the transfer, and there is simply no evidence of criminal, immoral or unconscionable conduct which would warrant the denial of the equitable remedy of specific performance (see, National Distillers Chem. Corp. v Seyopp Corp., 17 N.Y.2d 12, 15; Seagirt Realty Corp. v Chazanof, 13 N.Y.2d 282). In addition, the defendant sellers failed to demonstrate any substantial prejudice or injury resulting from the delay so as to warrant the denial of specific performance (see, Black v National Org., 104 A.D.2d 1016).
Accordingly, the plaintiff established its entitlement to specific performance, and the matter must be remitted for entry of an appropriate judgment and for further proceedings on the plaintiff's cause of action for an accounting. A court granting the equitable remedy of specific performance will, so far as possible, place the parties in the same situation as they would have been had the contract been performed according to its terms (Worrall v Munn, 38 N.Y. 137, 142; see also, Bostwick v Beach, 103 N.Y. 414, 423; Matter of 50-05 43rd Ave. [Canfield Props. Corp. — Harris], 271 App. Div. 44, lv dismissed 296 N.Y. 824; Bregman v Meehan, 125 Misc.2d 332, 337-338; Special or Consequential Damages Recoverable, on Account of Delay in Delivering Possession, by Purchaser of Real Property Awarded Specific Performance, Ann., 11 ALR4th 891; Specific performance: compensation or damages awarded purchaser for delay in conveyance of land, Ann., 7 ALR2d 1204). Generally, the seller, as trustee of the real property for the benefit of the purchaser, as trustee of the real property for the benefit of the purchaser, is liable to account for the rents and profits derived therefrom, and the purchaser, as trustee of the purchaser money for the benefit of the seller, is liable to account for the interest accruing thereon (see, Worrall v Munn, supra). Therefore, appropriate adjustments may be made to both the purchaser and seller upon the granting of specific performance (see, Margo Props. v Nelson, 99 A.D.2d 1029; Cross Props. v Brook Realty Co., 76 A.D.2d 445; Cross Props. v Brook Realty Co., 113 A.D.2d 863; Ragette v Zimmer, 98 App. Div. 619). In this case, the accounting should take into consideration, inter alia, the rents and profits received by the defendant sellers during the period from the date on which the closing should have occurred through the date title is actually conveyed, losses sustained by the plaintiff purchaser by reason of the delay, necessary expenditures by the sellers for the maintenance and operation of the premises, e.g., mortgage payments, property taxes, insurance and repairs, and the benefit to the plaintiff purchaser by reason of its retention and use of the purchase money, less the down payment, during the period of delay (see, Duane Sales v Carmel, 57 A.D.2d 1003, revd on other grounds 49 N.Y.2d 862). Bracken, J.P., Brown, Weinstein and Spatt, JJ., concur.