Opinion
03-02-1914
BRISBANE v. SULLIVAN et al.
Adrian Riker, of Newark, for complainant. Randolph Perkins, of Jersey City, for defendants.
Suit for specific performance by Arthur Brisbane against James A. Sullivan and others. Decree for complainant.
Adrian Riker, of Newark, for complainant. Randolph Perkins, of Jersey City, for defendants.
HOWELL, V. C. This is a suit for the specific performance of an agreement to convey lands. On July 8, 1889, the lands in question belonged to Thomas H. N. Wilks. On that day he died, leaving a will in and by which he devised the said property to Dora E. Wilks for the term of her natural life, and at her death to the heirs of her body born in lawful wedlock, with a devise over in case of failure of issue. Dora E. Wilkes subsequently married William P. Kastenhuber; she has become the mother of two children, born in lawful wedlock, both of whom are infants under the age of 21 years. Mr. and Mrs. Kastenhuber and the two children are living. Mrs. Kastenhuber, the life tenant, allowed the taxes assessed by the city of Jersey City against said premises to remain unpaid. Thereupon they were sold, and by direction of the circuit court of Hudson county a deed therefor was delivered to Charles R. Dieffenbach, the purchaser at the tax sale. He subsequently conveyed the same to William P. Kastenhuber, the husband of the life tenant, and they joined in a conveyance to James Billington, who in turn conveyed the same to the defendant Ella J. Sullivan. Miss Sullivan took title, not for herself, but for her brother, the defendant James A. Sullivan, who advanced the purchase money. James A. Sullivan thereupon made the contract in question on July 19, 1910. By this contract he agreed that he would convey the premises in question to Bennett Milnor, in consideration of the sum of $4,800, by deed, "of full covenant and warranty, free from all incumbrance, except a mortgage of $2,000 held by Jennie Turner," on or before September 1st next ensuing, the date thereof, with stipulations concerning the method of the payment of the purchase money. Milnor was acting for the complainant, and he subsequently made an assignment in writing to him of all his interest in the said contract. After the contract had been executed, and while it was in the way of performance, it was discovered that there were serious defects in the defendant's title. These defects are set out in a report made to the Title Guaranty Company which had undertaken to guarantee the title to the complainant, which report is annexed to the answer and is admitted in evidence under a stipulation filed on the day of the hearing. One of the serious objections is that title was made by virtue of a proceeding taken under what is known in this state as the Martin Act, which proceedings are admitted by the said stipulation to be informal and not binding upon the Kastenhuber children.
The objections to the title made it necessary to postpone the performance of the contract, and it was postponed by writing until October 1, 1910, and subsequently to October 15, 1910. The complainant filed his original bill for the specific performance on February 28, 1911. At that time he had beeninformed of the exact state of the title and knew that the defendant Sullivan had at most only a right which depended upon the life of Mrs. Kastenhuber, and that this right possibly depended upon informal proceedings under the taxing laws which were not binding upon the Kastenhuber children. He subsequently filed an amended bill in which he states that he has elected to accept from the Sullivans such title as they are able to convey to him, and he tenders himself ready and willing to pay to them a proportionate part of the purchase money agreed upon to be ascertained by the court, or, in other words, he proposed to take such title as the Sullivans can give him, with a deduction from the purchase price for the value of that portion of the estate which cannot be conveyed.
Specific performance of this contract is resisted upon the grounds above indicated, and upon the further ground contained in the list of objections that there are a judgment and several criminal recognizances uncanceled of record which may be liens upon the land. Inasmuch as there is no testimony whatever in the case of the facts relating to the judgment and recognizances, I shall assume that they are included rather as a makeweight. As to the estate which the Sullivans now have in the premises, the defendants say that it is very uncertain and doubtful whether they have an unquestionable title for the life of Mrs. Kastenhuber, arguing that when Mr. Kastenhuber made his deed to Billington, Mrs. Kastenhuber joined in the conveyance merely to release her right of dower. But this cannot be the case; she either had a life estate in the whole property or she had not; if she had a life estate in the whole property, and the tax proceedings did not affect it because of their irregularity, she was left at their termination in the same position as if there had been no tax proceedings, and her joint deed with her husband would operate to convey any interest that she might have, either as life tenant or doweress, or otherwise, and because of her execution of the deed to Billington, the Sullivans undoubtedly have the right to the possession of the premises during the life of Mrs. Kastenhuber. Therefore the only title which the Sullivans became possessed of was a right to enjoy the rents, issues, and profits of the premises during the lifetime only of Mrs. Kastenhuber; and they therefore cannot comply specifically with the agreement that Mr. Sullivan entered into to convey title to the premises. It is true that the agreement does not contain the phrase "good title," yet it does contain a covenant to "well and sufficiently convey" to Milnor "his heirs and assigns by deed of full covenant and warranty, free from all incumbrance except," etc. This means that the vendor is bound to make a good title. Lounsbery v. Locander, 25 N. J. Eq. 554; Skinner v. Christie, 52 N. J. Eq. 720, 29 Atl. 772; Meyer v. Madreperla, 68 N. J. Law, 258, 53 Atl. 477, 96 Am. St. Rep. 536 (Court of Errors and Appeals). Under no circumstances, therefore, could the vendor succeed on a bill for specific performance; but the position of the vendee is different.
The vendor having agreed that he would make a good title, and finding it impossible to do so, must, at the call of the vendee, convey what interest he has and receive the purchase money, less an abatement thereof equal to the value of the interest not conveyed. This was held in the recent case of Farrell v. Bork, 76 N. J. Eq. 615, 79 Atl. 897, affirmed 76 N. J. Eq. 615, 79 Atl. 897. There the vendor had title to only a three-fourths interest in the lands in question. He contracted to convey the entire title. The vendee elected to accept such title as the vendor could convey, and it was held that he was entitled to a decree for the specific performance of the contract, less one-fourth of the title upon payment of three-fourths of the purchase money. This was in 1910, but long prior to that it was held by our appellate court, in Lounsbery v. Locander (1874), supra, that a purchaser on a bill for specific performance filed by the vendor would not be compelled to accept compensation or indemnity, but that on a bill by the purchaser the vendor would be required to allow compensation if he should be able to make title for a part but not for the whole, and if the purchaser consents to accept part performance with such compensation. A similar ruling was made in this court in Borden v. Curtis, 48 N. J. Eq. 128, 21 Atl. 472; and in Keator v. Brown, 57 N. J. Eq. 600, 42 Atl. 278.
The English cases disclose a similarity of judicial thought, as will appear by an examination of the cases from those courts cited in the brief on behalf of the complainant. Nelthrope v. Holgate, 1 Coll. 204; Barnes v. Wood, L. R. 8 Eq. 424; Barker v. Cox, L. R. 4 C. D. 464.
This rule seems to prevail whether the deficiency relates to either the quantity or the quality of the estate; that is, to the physical amount or the tenure of the holding. In Tobin v. Larkin, 183 Mass. 389, 67 N. E. 340, the deficiency was one-twelfth part of the property which the vendor did not own, but the rule was enforced against him; and in Barnes v. Wood, supra, the husband, who had only an estate pur auter vie, contracted to convey the fee. The purchaser elected to take what title he could give, with a proper allowance by way of compensation for the deficiency. In that case Vice Chancellor James says:
"The plaintiff entered into a contract with him in ignorance of any defect in title. The husband, therefore, would be bound to convey whatever interest he had. The defendant is bound to the same extent, and it is for the court to find out in the best way it can how compensation can be made. There must be a declaration that the plaintiff is entitled to a specific performance of his contract to the extent of Springer's interest, with a reference to inquirewhat compensation should be made for the outstanding interest."
My conclusion, therefore, is that the complainant is entitled to a decree that the defendants Sullivan and sister convey to the complainant whatever interest they have as life tenants during the life of Mrs. Kastenhuber, or otherwise, and it only remains to ascertain what deduction should be made from the agreed purchase money to compensate the complainant for the deficiency in the title. This can easily be determined by ascertaining the value of the life estate and deducting the amount from the total purchase money, which will leave the sum to be allowed for compensation.
But in this adjustment of the equities between the parties the complainant must give up his claim for a warranty deed, or must submit himself to a perpetual injunction, to be provided for in the decree, against bringing any action, ether at law or in equity, for a violation of any express or implied covenants on the part of the vendor touching the land in question. If the vendee intended to pay the whole of the purchase money he might possibly be remitted to his remedy on the covenants, but inasmuch as he is now being compensated for the breach of the covenants, he cannot insist upon their insertion in the deed, or on any right of action in respect thereof.