By the contract the defendants were to assume the mortgage of $11,000 then held by the bank, if the time of payment was extended two years. The bank having refused to extend the mortgage for more than $10,000, it was agreed between the parties, before the law day, that the defendants would either pay $1,000 additional cash to reduce the mortgage to $10,000 or would give an additional mortgage for $1,000, if the plaintiff reduced the bank mortgage to that amount, but the defendants at the time left it uncertain which alternative they would meet but before the law day they agreed to give the additional mortgage for $1,000. This agreement was not in writing and was not a legal modification of the original contract under seal, but it was relied upon by the plaintiff and excused the plaintiff from not tendering on the law day the full performance of the written agreement. On the law day the defendants refused to recognize a modification of the contract and insisted upon its performance as written. The plaintiff asked additional time so that he could obtain an extension by the bank of the $11,000 mortgage. The defendants refused and demanded a return of the money which they had paid upon the contract. It is evident the defendants’ position was technical and unfair and was taken for the purpose of escaping from a contract which to.them had become burdensome. They cannot escape in that way. The effect of the verbal transaction, and what took place on the law day, was to give the plaintiff a reasonable time in which to perform the written contract. It is urged that the clause in the extension agreement by which, in case of adverse legislation within the two years, the bank can declare the mortgage due, is inconsistent with the written agreement which contemplated an extension upon the same terms. That position is probably correct but was not raised on the law day. Nevertheless we are in a court of equity, and the *337defendants should not be required to perform the contract with this objectionable provision in it. The plaintiff has paid $1,000 upon the mortgage in order to meet the terms of extension required by the bank. The wrongful acts of the defendants have naturally created a situation where the contract cannot be literally performed by the plaintiff, but its spirit can be met and specific performance had without violence and in the interest of substantial justice. The original agreement did not contemplate,that the defendants were to give a new mortgage, and they make the excuse that a mortgage executed by them may hurt their credit. That is the only objection raised by them. This objection can be met by the plaintiff tendering to the defendants, within a reasonable time, the extension of time for the $10,000 mortgage and a deed of the property subject to that mortgage and subject to a mortgage given by the plaintiff for $1,000, due at the same time. These conditions are a substantial and equitable compliance with the terms of the contract.
I, therefore, favor a modification and affirmance of the judgment as modified, without costs, as follows: By adding thereto a provision that if within ten days after the service of a copy of the decision herein the defendants serve upon the plaintiff a notice that they prefer that the $1,000 mortgage shall exist against the property before it is conveyed to them, that such request shall be observed and that the rights and equities of the parties be adjusted as of the law day, the plaintiff accounting for the net rentals and income of the property, from which is to be deducted interest upon the balance of the unpaid purchase price. The amount remaining to the credit of the defendants is to be applied in reduction of the $1,000 directed to be paid or secured. If the plaintiff neglects to tender the performance as provided herein within thirty days after service of a copy of the decision herein and the adjustment of the net rentals and interest, then the judgment should be reversed and the complaint dismissed, with costs to the appellants.
Lyon, J., concurred.
Judgment reversed and complaint dismissed, with costs.