Opinion
Argued May 17, 1912
Decided June 4, 1912
Edward R. O'Malley and Julius A. Schreiber for appellants.
Alfred H. Martin for respondent.
This is an action at law by the vendee in a contract for the purchase and sale of certain real estate in Buffalo to recover from the vendors a part of the purchase money paid under the contract.
The answer interposed a denial of the allegation in the complaint that the defendants were unable to convey a good title free of incumbrances to the premises contracted to be conveyed and also set up a counterclaim praying for specific performance.
The case was tried by consent before the court without a jury.
The difference between the parties related (1) to the validity of the defendants' title to the premises agreed to be conveyed; and (2) to the existence of a mortgage lien thereon which the defendants claimed had been released.
The trial court held that the defendants' title was good but that there was a mortgage lien upon the property originally amounting to upwards of $10,000 on which there remained unpaid $81.00 or thereabouts.
It was also found that the defendants had recorded a release of this mortgage lien pending the trial of the action. The trial judge must have deemed this release unavailable to the defendants as he awarded judgment against them for the entire amount of the purchase money paid to the defendants up to the time when the plaintiff undertook to rescind the contract, together with interest, amounting in all to $4,418.24 and costs.
I am of opinion that the plaintiff was not in a position to maintain an action for the purchase money.
There is no finding that he was ready and willing to perform the contract on his part when he notified the defendants that the contract was abrogated, canceled and annulled by reason of their refusal to procure an additional deed of the land and an additional release of the mortgage lien, both of which he demanded. On the contrary, it appears that the plaintiff was unwilling to perform the contract unless both these instruments were furnished. The finding of the trial court is to the effect that the defendants' title was good without any additional deed. Upon the theory on which the case was decided the plaintiff was wrong in demanding such deed, while the defendants were wrong in refusing to furnish the additional release from the mortgage. Under these circumstances the plaintiff as long as he insisted upon the additional deed could not rescind the contract. He asked too much. In order to maintain this action for the purchase money paid he was bound to show a readiness to perform on his part upon the defendants' compliance with the only demand which the court held he was entitled to make — to wit, the production of a full release from the mortgage lien. He never avowed his willingness to do this, but continued to insist upon an additional conveyance to make the title good — which the court had held was not needed.
Notwithstanding the fact that this was an action at law, the defendants could interpose an equitable counterclaim for specific performance as they did; and if it shall appear upon the new trial, which I think we must order, that the position of the parties has not changed so as to make it inequitable, the defendants can invoke in their behalf the operation of the general rule in equity that it is a sufficient answer to a claim for rescission that a party is able to make his title good before decree. ( Schiffer v. Dietz, 83 N.Y. 300, 312; Hepburn v. Dunlop, 1 Wheaton [U.S.], 179.) The lien of the mortgage was for an insignificant amount and if it has been disposed of by the additional release recorded since this suit was begun there would appear to be no obstacle to the performance of the contract with entire justice to both parties upon such conditions as to costs as shall appear fair and equitable to the trial court.
For these reasons I advise a reversal of the judgment and a new trial, with costs to abide the event.
CULLEN, Ch. J., HAIGHT, WERNER, HISCOCK, CHASE and COLLIN JJ., concur.
Judgment reversed, etc.