Opinion
09-19-1905
ROCHE v. OSBORNE.
E. C. and A. W. Harris, for complainant. A. E. Vanderpool, for defendant.
Action by Charles W. L. Roche against David L. Osborne for specific performance. Decree for complainant.
E. C. and A. W. Harris, for complainant. A. E. Vanderpool, for defendant.
PITNEY, V. C. (orally). This is a bill for the specific performance of a contract entered into on the 3d day of February, 1905, between the parties to this action. The contract is in writing, and duly executed by each of them. It is complete in all its parts. There seems to be nothing omitted that is necessary or proper. By it the complainant agreed to convey to the defendant a house and lot in the city of East Orange, which is described with sufficient particularity, for the sum of $8,100, and by it the defendant agreed to convey to the complainant another tract of land situate in the same neighborhood in the city of Orange for the sum of $7,500. The payment was not to be in cash. Both properties were to be conveyed, subject to a mortgage, and I will try and state the details with accuracy, but subject to correction.
The complainant's property was to be put in at $8,100, less a $4,000 mortgage put upon it by the complainant. The defendant's property was put in at $7,500, less a $2,500 mortgage on that, making what the defendant conveyed to the complainant $5,000 and what the complainant conveyed to the defendant $4,100, after deducting the mortgages mentioned which were already on the premises. That left $000 to be paid by the complainant to the defendant, and that was arranged to be paid in cash, $100 at date of the delivery of the contract, $400 in cash at the delivery of the deed, and $400 in a mortgage on the property which he got from the defendant, a considerable mortgage, of $400. There is a very proper provision in the contract for arranging for the interest and insurance, interest already accrued and insurance. From a glance at the contract I think it is a very complete one, and it is not open to any criticism whatever. It provided for the transaction to be closed 12 days later, on the 15th of February, at the office of Carl H. Stiger, real estate broker, in East Orange, a matter of two miles from the city of Newark. But both parties seem subsequently to have recognized the propriety of its being done in a lawyer's office here in Newark. There-were searches to be made down to the moment of the transfer of the papers, there was the interest to be arranged, there was an inspection of the mortgages, and all that sort of thing, and each party had employed a lawyer. The complainant had employed Mr. Harris, whose office is in the Prudential Building, in this city; and the defendant had employed Mr. McKirgan, whose office is at Summit, N. J. I do not know as it appeared that Mr. McKirgan had any headquarters in this city. And so the lawyers came into contact at once with regard to the searches against the properties. Mr. McKirgan, the counsel for the defendant, furnished Mr. Harris with an abstract of the title of the defendant's property, and I suppose, although it does not appear directly in evidence, that the same thing was done by Mr. Harris to Mr. McKirgan.
Now before coming to what occurred on the day in question, the 15th of February, it is proper to say that the deed, the contract, is not only complete, but it is fair in all its parts. Both the men wore living in the neighborhood. The defendant was living in his home, I believe. The complainant's house was leased out. The sale was negotiated by Mr. Stiger as agent for both parties. They both agree to that. The defendant swears on the stand in corroboration of Mr. Stiger that he was acting in the ordinary way as a broker for both parties. There is not the least hint of any misrepresentation, any concealment, or anything said or done by either party to the other which would be considered as obnoxious to the finest sense of equity of the finest equity judge that the country has ever produced. There was a perfectly fail bargain made, as far as the evidence goes Both of them were grown men, perfectly able to take care of themselves, and, so far as appears, the defendant somewhat of a dealer in real estate, because he appears by the evidence to have had real estate in various parts of the country. The complainant appears to have been a New York business man who was goingback and forth to New York every day.
On the 15th of February, the clay when the contract was to be performed, the complainant went to the office of his counsel in Newark, Mr. Harris, and Mr. Stiger himself happened to be or went to the office of Mr. Cross, a real estate agent in Newark. The complainant, however, early in the morning, at 9 o'clock, went with his deed already executed, as he says (it has not been produced—it matters not), to the office of Mr. Stiger, in East Orange, and left word there that the transaction would be completed at the office of Mr. Harris in Newark. I presume, though it was not testified to, that he had received notice from Mr. Harris that there were taxes in arrear on this property, because Mr. Harris says he had made a search and found taxes with interest on February 15, 1005, of $435.54, in arrear, and water rent of $104.50, which must be paid. At any rate I suppose the complainant may have heard of that, because he stopped at Mr. Stiger's office that morning and said the affair would be closed at Newark. Mr. McKirgan was not called as a witness, but it is fair to infer that Mr. McKirgan so understood, although there is no direct proof of it, because the defendant called up Mr. Stiger on the phone from Mr. Stiger's office in East Orange, learning where he was, I suppose, from Mr. Stiger's clerk— called him up and said that his lawyer, Mr. McKirgan, could not get there this morning, and therefore he wanted an adjournment for two days. Now there is not the least doubt about that fact. It is not disputed. The defendant admits that he did call up Mr. Stiger, and he does not dispute the accuracy of Mr. Stiger's statement of what occurred, and, more than that, he adds that that afternoon he got a letter from his counsel saying that he could not attend that morning, but asked for the postponement for two days. So there is no kind of doubt at all that the postponement was at the request of the defendant. That little postponement arising out of the inability of his counsel to attend to the transfer of the title on the day named in the contract may have worked a considerable of injury to the defendant, but the complainant is not to blame for that. Then, besides all that, Mr. Harris swears that he was called up on the phone by the defendant shortly after Mr. Stiger was, and was asked by him to put the transaction off for two days, as I recollect the evidence—I don't want to be too sure about it—because Mr. McKirgan could not attend. I believe that is Mr. Harris' evidence. Then the complainant was there ready with the money, the money he had to pay. He was there ready to execute the mortgage. He had the deed all ready to execute, but that is a matter of no consequence. He was there, ready and willing to convey, but the defendant was not. And it is perfectly well settled that in a court of equity the mere tender of money in greenbacks, or gold, or what not, or having the deed already executed and acknowledged in such manner as to stand the test of close scrutiny, is not important when the other side is not ready. Now the defendant was not ready that day. He did attend at Mr. Stiger's office, but he was not ready, and he phoned to Newark for a postponement, and, while he says he does not recollect having phoned to anybody but Mr. Stiger, I am quite sure Mr. Harris did not manufacture what he said in his testimony, and the gentleman over the phone talking to him said he was the defendant, and the defendant was in Stiger's office where the phone came from, and the charitable view of it is—the endeavor of the court always is to reconcile evidence— that he had forgotten that he had also called up Mr. Harris.
Now up to that point the complainant is entirely right in court in every way. He was ready to perform his contract, convey his land, and accept the conveyance of the other, and the fact that it was not done that morning is altogether the fault of the defendant, a very small fault, a matter of no consequence, a day or two under those circumstances, and the complainant was perfectly willing to accord him two days. And the evidence of the defendant is that it was put off until half past 4 o'clock in the evening at Mr. Stiger's office at East Orange. But here is where the trouble comes in—the matter set up by the answer—and which is evidently the trouble in the whole case, so far as the court can take notice of. The defendant, when he entered into this contract, knew that there were two mortgages on his property to be conveyed, not only the mortgage of $2,500, which was acknowledged to be known, on record and provided for in this contract, but another mortgage of $2,000 put on it the July previous to a Mr. Hoyt, not recorded, and he was obliged to take care of that mortgage, and the holder of it was a friend of his, and he thought that he could get that friend to cancel that mortgage and take another on the property the complainant agreed to convey, subject to the $2,500 already on it —on the property of the complainant to be conveyed to the defendant. At any rate defendant expected to make an arrangement with the holder of that mortgage, and he went to see him or the holder of the mortgage came to see him, having heard about it, and he found the holder of the mortgage would not take such a mortgage, hence all these tears. That was the real reason why the trade did not go through. And the holder of that mortgage hastened down to Newark on the 16th, between the 15th and 17th, the very next day, and put it on record at half past 9 o'clock in the morning. Now, unless defendant could dispose of that mortgage, the contract could not be completed. Some arrangements must be made. And that situation was made known the next day, Wednesday, or some time, 17th, Friday, some time was made known to complainant, and theaffair flattened out Now this failure was the fault of the defendant, altogether the fault of the defendant. He made a contract to convey land which was not really in his power to convey on those terms.
But the complainant immediately set about trying to remedy it; and on the 20th of February, three days after the 17th, he writes to the defendant a letter: "I would thank you to make an engagement [and keep it], so that we can close this matter up according to contract, if possible, and, if not, as nearly to it as you can. I am willing to do whatever I can in a reasonable way to help you out of the position you have placed yourself in, provided you show a willingness to do your part; otherwise I shall have to insist upon your carrying out the letter of the agreement. Please, therefore, arrange with Mr. Stiger for a meeting to-morrow [Tuesday] afternoon at the office of Mr. Harris in Newark, and, if you desire, have your attorney accompany you. Three o'clock will suit me. Mr. Stiger is to call me up at noon about it, and I will keep any appointment he makes." A very fair and proper letter for one business man to write to another. He says: "You have got yourself in a scrape about this mortgage. I will see what I can do toward helping you out. Meet me. Let us consider and look at the thing in its worst aspect; see if some arrangement cannot be made by which you can perform your contract entered into with me." Then on the 4th of March he writes another letter: "Mr. McKirgan [that is the lawyer of the defendant] advises me that you will not carry out your contract with me because Mr. Hoyt refuses to cancel the second mortgage which he holds against your Oakwood property, and which you say he promised to do and take a second mortgage on other property instead, but which Mr. Hoyt tells me he never agreed to do, and would not do now anyhow, because of the way in which he considers you have treated him." Now I suppose, reading between the lines, that Mr. Hoyt thought that the defendant was going to switch this thing through and give him the go-by, and leave his mortgage out in the cold, without giving him any notice. Now that is what I suppose that means. No proof of it here except Mr. Hoyt says he heard of it, and called on the defendant himself. The defendant says he told Hoyt—I am not going into the evidence now, but the evidence in this letter, and from all the evidence—that Mr. Hoyt thought that, if he had not got his mortgage on just as he did, the property would have been conveyed away and his mortgage left out in the cold. "However," the letter continues, "be this as it may. I have made such arrangements that it is necessary for me to insist upon you carrying out your contract with me, and, in order to further your ability to do so on account of the present conditions, I am willing to take back a second mortgage on your farm at New Providence and on the East Orange property which is to be deeded to you for the amount necessary to equalize the difference that would be coming to me on account of this additional mortgage against your property. I will wait until Tuesday for you to carry out your contract with me, subject to this change, and, if you do not do so at that time, I will feel compelled to bring suit for damages against you at once thereafter, as I will feel that you are inclined to make excuses to get out of the contract which you have made with me, and, by not fulfilling which, you will show yourself entirely regardless of the inconvenience and damage you will have put me to. Awaiting your immediate reply, I remain," etc.
Now there is an offer to indemnify him against the $2,500 mortgage, extra $2,500 mortgage on the defendant's property, which was to be left over by the contract, and to indemnify him against the $2,000 additional mortgage, by taking a back mortgage on his New Providence land. No explanation has been made, although this letter was admitted to have been received by the defendant, and, although it was read here in court, no explanation is made of his refusal to accept that way out of a scrape. It was, in fact, a transfer of the $2,500 or $2,000 onto the New Providence property. Now the reason for it which the court may guess at or infer, or read between the lines, is this: An attempt was made by the defendant to prove that this was a hard bargain; that the trade was unequal; that the complainant got the best of it. It is not set up in the answer that there was anything hard about it, or that there was any such great difference as would strike the court as rendering the contract unfair; but here were two men dealing in property, made a fair, open trade, both with their eyes open, both entirely competent and able to take care of themselves, as I have so frequently remarked, and it turns out that, when this gentleman with the unrecorded mortgage comes along and is asked to transfer it over, he looks at the property that the complainant is going to convey to the defendant, and he says, "I won't take a second mortgage on that," and hints to the defendant that he has made a mistake, that he has made a bad bargain, and he gets sick of it, and wants to back out. Now the simple question is whether or not there is anything in this case upon which the court can say, with anything like a regard to judicial fairness, that there is anything in this contract or in the circumstances to enable the court to let up, so to speak, and relieve this defendant of his obligation. Why, I presume there never was a trade yet made that there was not a difference somewhere, or each one thought he was getting some advantage by the trade, and the party who wants the property that he has bargained for wants that property. The other fellow gets sick of it, and don't want the property he has bargained for, and he wants to back out Now if the court went intoall those things in every case it would never arrive at a conclusion. The circumstances which induce the court to lay its hands on on account of hardship are not found in those lines at all. They are something quite different; and I have been looking at the authorities here cited by my friend, the defendant—Stoutenburg v. Tomkins, and other cases. They are different cases entirely, particularly Stoutenburg v. Tomkins, which goes about as far as any in laying down the rules, and with great accuracy, by Chancellor Williamson. Such a case as this has never been considered by the court as sufficient. Where one party has made some false representations, or one party is deficient in ability to take care of himself and conies in, and there is proof that he is weak-minded, or easily misled, and all that sort of thing, why that is another thing; but there is nothing of that kind here. Therefore I find no defense at all for this gentleman. He has put himself in a scrape, where he is bound to convey this property free and clear of incumbrance, except $2,500. It is mortgaged for $4,500, and he is in the lurch $2,000. It is his duty, his contractional duty, to remove that mortgage. If he does not do it, this court has the power to give a decree against him for $2,000, or such sum of money as the master may find at a particular day when the decree is to be made will be necessary to lift it. It will be something less than that, I believe. So I think the complainant is entitled to a decree.
I took occasion during the argument to state why this court will entertain jurisdiction of a bill for specific performance by vendor against vendee, but this is not vendor against vendee. It is vendee against vendor. But the remarks I made apply here. This is a contract that ought to be carried through in the presence of the court or one of its officers, a master of the court necessarily and properly. Then, if this had been an action at law to recover the difference in money here, if it had been a plain money case, why the party would have been entitled to recover the amount of purchase money that was to be paid, the vendor would be entitled to recover against vendee the purchase money the vendee agreed to pay, and, when that purchase money was paid and collected, then the vendee would be entitled to the conveyance; but here it is vendee against vendor, and it is not a case for damages at all, and it is not a case where the point made by the learned counsel, with confidence that the remedy is at law, applies in the least. To hold that the proper remedy here is at law is simply to hold that the Court of Chancery never will entertain a decree for specific performance by either vendee against vendor or vendor against vendee, and the only question as I see from the start is whether the fact that this gentleman finds himself in the predicament of having disenabled himself in conveying this property by putting the mortgage on is an excuse. Now there are a line of cases on that subject, and I should have been very glad to have been furnished with them. But my recollection of them, general recollection from reading on that subject, is that there is no case that would cover this point, no case that would allow the defendant who deliberately, with his eyes open, agrees to make a conveyance of this kind to avoid being compelled to specifically perform it, if the complainant is willing to risk the cost, and all that part of a decree against him for the amount of the money which is necessary to relieve the title. But the whole hardship is taken away by the complainant's offer to take a mortgage, a counter mortgage, on other property which the defendant owns. I don't say that he is bound to do that in his decree. I don't know what the offer of the bill is, whether you offer to do it, whether you have examined the title, and all that sort of thing, to see if it is proper for you to do it. I will hear counsel on the terms of the decree, but the ultimate decree is that the defendant pay the money; that he discharge that mortgage and perform his contract.
My opinion is that the complainant is entitled to a decree for specific performance, and to costs and counsel fee.