Steiner v. Fourth Presbyterian Church

O’Brien, J.:

. The abstract propositions of law for which the appellant contends, and most of which were charged by the court, are' unexceptionable, •namely, that the title of the premises having proved defective, the plaintiff had the right, on the 12th of October, 1894, to refuse to • carry out the contract and to receive from the defendant the amount of his advances with interest, and that on that daté the question whether the sale should be concluded or not depended upon the subsequent agreement of the parties; that the defendant could not compel the plaintiff to take the title to the property on the twelfth of October, nor could the plaintiff compel the defendant to transfer the title to him and bear the expense of carrying the property from March first to October twelfth. Whether the sale should be consummated or not depended upon the subsequent agreement of the parties. In other words, either ¡Darty in October could- have treated the contract as ended, or they could have treated it as still existing, or they could have entered into a new and entirely different contract. If, on that day, the church had elected to rescind, and in the place of the old, had substituted a new agreement under the terms of which the payment was required of not only the original consideration price, but, in addition, of what it had cost to carry the property, then the plaintiff would have no legal right to recover back the amount so agreed to be paid. We think, however, that it clearly appears, and the case was tried upon that theory, that neither of the parties had ever elected to rescind the contract; and though there never had been any formal adjournments after the twentieth of March, and pending the determination of the case as submitted to the General Term, there is but one inference from the facts, and that is, that both treated the contract as a still subsisting one. When the parties met in October there was no suggestion of entering into a new agreement, but they were discussing their respective rights as parties bound by a contract; and, as appears from the testimony both of Mr. Myers and Mr. Cuming, the counsel for the plaintiff and defendant respectively, the dispute centered upon the question as to whether the title which, under the contract, one was to buy and the other to sell, was to be closed as of the first of March or the twelfth of October.

That the parties had the right to regard the contract as still existing between them, and could have agreed that the question of their rights thereunder should be submitted to the court, is not open for serious discussion. Upon the conflict in the testimony, the trial judge properly submitted the question as to whethei1, by arrangement between the parties, it was left to the court to decide who was to stand the expense of carrying the title, and correctly instructed the jury that, in order to entitle the plaintiff to recover back the money then paid, he must establish to their satisfaction that “ it was received under an agreement that it should be repaid in case the court decided the Church was not entitled to it.” The jury having found that 'such an agreement was made, it brings us to a consideration of whether, treating the original contract as the parties themselves did, as still existing, the church could insist upon the payment of the expenses of carrying the property pending the dispute as to the marketability of the title.

Considering that the church was in possession and had the benefits, if any, resulting therefrom, and that the plaintiff was not in default at any time, it is difficult to determine upon what principle of law .a conclusion other than that reached by the. learned trial judge could , be arrived at, viz., that the defendant was not. entitled to exact such payment from Mr. Stqiner. The latter was entitled to a deed “ free from incumbrance,” and until the tender of such conveyance with the corresponding ability to convey, the vendee could not be placed in default. It was, in effect, this question of whether Steiner had unreasonably refused to perform that was submitted to the General Term.. That court, as we have stated, decided that his objections were good, and.left him free to rescind the contract and get back what he had paid thereon if he so elected. As stated,, however, .neither side claimed that the contract was extinguished by the result of the proceedings in court, but, on the contrary, performance was tendered by both parties; and Steiner having concluded to take, notwithstanding the restrictions, the meeting in October was with a view to carrying out the contract; and, standing in this attitude to each other, the counsel for the church insisted that the order of the court authorizing the sale defined the duties of the trustees, and that by such order they were required to close the title as of March first, and were bound to collect the principal sum as of that date, with interest thereon accruing from the postponement of such payment, without regard to the cause of such delay. The fallacy of this • contention, we think, lies in a failure to recognize that it. was not the purchaser who was in default, but the church; and the question,’ upon whom should fall any expense resulting from the delay, must necessarily be determined, if.it is to be determined at all, by a consideration of' who was responsible or caused the delay. .Therefore, when the parties met in October, after the lapse of several months-from the original date, the question to be answered was, which of the contracting parties was in default, and to whom was the delay attributable? We think the obvious answer to these questions is, that the default and the delay are both to be attributed to the church; and we can think of no good reason why, upon so concluding, the other contracting party should be charged with the expenses caused thereby.

With respect to the larger item of interest, that, in the absence of contract, is only awarded as damages upon the default of a party to meet his obligations. Generally speaking, “ interest is allowable as damages for default in the performance of a contract to pay money.” (11 Am. & Eng. Ency. of Law, tit. “ Interest,” 383, 389; Cutter v. The Mayor, 92 N. Y. 171.) In Fi-y on Specific Performance (3d ed., p. 620, § 1399) it is said: “Now it is obviously inequitable, in the absence of express and distinct stipulation, that either party to the contract should at one and the same time enjoy the benefits flowing from possession of the property and those flowing from possession of the purchase money. The estate and the purchase money are things mutually exclusive. ‘You cannot,’ said Knight Bruce, in a case arising out of the sale of some slob lands in Chichester harbour, ‘ have both money and mud.’ And so, neither party can at the same time be entitled both to interest and to rents.” (See, also, id. § 1404.)

The question, therefore, as to whether there was an. agreement that the payment made by Steiner was not to be voluntary, but was to be received by the church subject to determination by the court as to whether it had the right legally to exact it, was, upon conflicting evidence, properly submitted as a question of fact to the jury, and the learned trial judge was right in holding that if the plaintiff established the existence of such an agreement, then, as a matter of law, in closing the contract, the church having remained in possession of the property, and being in default and unable to tender the deed contracted for, it had no right, standing upon the contract which it had entered into, to exact the payment of the expenses incident to the delay between the original date and the time when the title was finally closed.

The judgment and order should be affirmed, with costs.

Rumsbt and Patterson, JJ., concurred; Ingraham and Parker, JJ., dissented.