Opinion
05-01-1901
BROOKS v. WENTZ et al.
Robert H. McCarter, for complainant. James Steen and Edmund Wilson, for defendants.
Bill by Ruth Brooks against John L. Wentz and others for specific performance of an option to convey land. Decree for plaintiff.
Robert H. McCarter, for complainant.
James Steen and Edmund Wilson, for defendants.
STEVENS, V. C. This is a suit for the specific performance of an accepted option to convey land. Performance is resisted on the ground (1) that the land is not described with sufficient definiteness; (2) that the contract was in whole or part abandoned; (3) that, if decreed, it can only be on the terms of reviving certain incumbrances which prior to October 1, 1890, rested on the land.
As to the first defense, it seems clear that it is not sustained. There is no difficulty in ascertaining exactly what land Lovatt, the owner, agreed to convey. Reasonable certainty in the description is all that is required. Robeson v. Hornbaker, 3 N. J. Eq. 60; Huffman v. Hummer, 18 N. J. Eq. 83; King v. Ruckman, 21 N. J. Eq. 606; Id., 24 N. J. Eq. 556; Shardlow v. Cotterell, 20 Ch. Div. 90.
The second defense is equally unsustained. The letters of July 18th and 23d, written by Mr. Brooks, and the notice served upon Mr. Steen on October 1st, only a few days before Dr. Wentz took his deed, show plainly that there was no abandonment of any right which the agreement gave.
The only question about which I have had any doubt is that which relates to the rights of the parties as affected by the situation of the property with respect to incumbrances. The facts pertinent to this part of the case are the following: On August 24, 1899, John T. Lovatt, being the owner of several parcels of real estate at Red Bank, all of them heavily incumbered, entered into a written agreement with the complainant, Ruth L. Brooks, to convey to her a country place, near Red Bank, for 811,000. The conveyance was actually made on September 8, 1899. By the same agreement he gave her the option of purchasing for the price of $4,000 what was described as "the balance of the 'Hill Property,' so called," lying immediately to the north of the property conveyed, and containing about 4 acres. The survey shows 3.64 acres. The option was "to remain in operation one year," but written notice that Mrs. Brooks desired to avail herself of it was to be given at least 30 days prior to the expiration of the year. Notice in writing to that effect was given on July 23, 1900, and thereupon Lovatt became absolutely bound to convey. Hawralty v. Warren, 18 N. J. Eq. 124, 90 Am. Dec. 613. At the time when the agreement was made, and up to the latter part of September, 1900, the land was incumbered by four mortgages and two judgments. The mortgages originally amounted to $20,800, and covered other lands as well as the locus in quo, but they had been paid in part. The judgments amounted to $3,475.05. There was, in addition, another mortgage for $3,642, which did not cover the locus in quo, but did cover part of the other lands. The option to Mrs. Brooks was given, as I have said, on August 24, 1899. Before it was accepted, Mr. Lovatt, the owner, by a writing dated April 20, 1900, agreed to convey the lands covered by this option, and an adjoining piece of land containing about six acres, to Dr. Wentz, for the price of $10,000. Neither Dr. Wentz nor Mr. Lovatt were sworn, and so we do not know positively whether Lovatt then stated to Wentz that he had given this option. The agreement does not mention it. This is, however, immaterial to the present inquiry, because it conclusively appears that Mr. Steen, who acted as attorney for Wentz, very early in the transaction, and before any money was paid to Lovatt or on his account, got actual knowledge of it. With this knowledge, and with knowledge, too, by Mrs.Steen, that the complainant had accepted the option, Lovatt gave a deed to Wentz, some time between October 1 and October 8, 1900. The insistment is, of course, that Wentz, taking with notice, is bound to convey the land mentioned in the option, just as Lovatt would have been bound to convey had he remained the owner.
The reason why Lovatt did not convey to Mrs. Brooks was that the option called for "a deed of warranty, with full covenants, conveying the property free and clear of all incumbrances." Such a title Lovatt though he was unable to give. The evidence is that the incumbrancers refused to release the four-acre tract on receipt of the price of $4,000, although they were willing to release the ten-acre tract (which included the four-acre tract) on receiving the price of $10,000. Dr. Wentz's attorney had tried to secure an assignment of the option of Mrs. Brooks, and had failed, and the only explanation that suggests itself of his willingness to take title when he knew that Mrs. Brooks had a superior claim, which she would not surrender, is that he knew that she had refused to take an incumbered title, and that he may have thought that she would not, perhaps, under the circumstances, be willing to sue for specific performance against the view of her then attorney, Mr. Degnan, who seems to have supposed that her remedy was, under the circumstances, a suit at law for damages. But while Mr. Degnan had during the summer expressed this view to Mr. Steen, not as the opinion of Mrs. Brooks, but as his own opinion, he, on October 1st, only five or six days before the conveyance to Dr. Wentz was made, pursuant to the explicit direction of Mrs. Brooks, served a notice on Mr. Steen, which took away all semblance of right on his (Steen's) part to suppose that Mrs. Brooks' claim would in any respect be given up. Probably it was thought that Dr. Wentz would not be seriously injured, because he would, in any event, receive the price of the property, and might, in acquiring title, be in a better position to negotiate. He desired to utilize the hill for a stand pipe to be erected by a water company in which lie was interested, and the risk he may have thought was worth taking. His position in the matter is such that I do not think he is entitled to any special consideration at the hands of a court of equity,—to anything more than his legal rights.
Now, it is perfectly well settled that if an owner agree to sell, and then conveys, in breach of his agreement, to a third party having notice, the grantee stands in no more favorable position than the grantor. This is conceded. But it is said that if the court decrees performance it should, as against the complainant, regard the incumbrances which rested upon the property just before Lovatt conveyed as still subsisting. The situation was this: On October 6th or 7th the attorney of Lovatt and Wentz got together the incumbrancers or their representatives, and obtained from them releases, or, in the case of the bank judgment, a promise of release. Mr. Steen, on behalf of Dr. Wentz, then produced the $10,000, and this was divided among the incumbraucers. All the releases but two were, in terms, made to Lovatt. Two, however,—a small judgment for $106, and a mortgage for $1,300, on which $700 was paid, both held by Julia T. Lovatt,—were released to Dr. Wentz. The contention of Dr. Wentz is that by the agreement of April 20, 1900, he became the equitable owner of the land, and that when his money was paid it was really paid to protect his interest as such, and that he thereupon became entitled to be subrogated to the rights of the incumbrancers to the extent of his payment. Passing by other objections to this argument, it is plain that on the theory that Wentz became the equitable owner of the land by mere force of the agreement, and notwithstanding the prior right of Mrs. Brooks, Lovatt became the equitable owner of the money; and so it was not Wentz's money that paid the incumbrancers, but Lovatt's. In Duncan v. Smith, 31 N. J. Law, 325, 329, it is said by Beasley, C. J., that the general rule is "that, whenever the money due upon a mortgage is paid, it will operate in law either as a discharge or an assignment, as will best subserve the purposes of justice and the just intent of the party"; and in Wade v. Miller, 32 N. J. Law, 296, 308, the same judge, after remarking that the rule is not founded on any secret or undisclosed intention of the person interested, but is always rested on an intention to be deduced from the facts of the case, continues as follows: "If the owner of an equity of redemption should acquire the mortgage title, and should then cancel it upon the record, no circumstance would remain from which an inference could be drawn of an intent to keep alive such an estate, and consequently a merger would inevitably be effected."
Now, judged by this rule, it seems to me perfectly clear that in the present case it was the intention to discharge the liens upon the ten-acre tract, and not to keep them alive. Plainly, it was beneficial to Dr. Wentz to discharge them upon the six-acre tract, and so an intention to discharge them as to this tract would be inferred, and no different intention appears with respect to the four-acre tract. But we have conclusive evidence of intention outside of this. In the first place, in the case of the mortgages not paid in full, the releases are, in terms, a discharge of the land from the lien; in the second place, in the case of the Davis mortgage, the largest of all that was paid in full and was canceled of record; and, in the third place, Dr. Wentz's attorney, so far from declaring that there was any idea of keeping the incumbrances alive, says that he refused to pay over the purchase money, except as it might be applied in his presence to secure releases. Itmust be remembered, too, that the debts so paid were all the personal debts of the mortgagor whose money went to pay them, and whose interest it was not to keep them alive. On the reasoning of the above cases, and of Adams v. Angell, 5 Ch. Div. 634, I must hold that the lien is extinguished.
Under these circumstances, I think there is no ground for the application of the doctrine either of subrogation or of equitable assignment. Dr. Wentz, taking with notice, became constructively a trustee for the complainant. She has done nothing to discharge the trust, and the situation is the same now that it was at the time of the conveyance. The complainant is entitled to relief.