Warren v. Banning

FOLLETT, J.

It is settled in this state that the equitable rules applicable to a suit to compel a vendee to specifically perform his executory contract to purchase land are also applicable to an action at law brought by him against his vendor, to recover money paid on such a contract, on the ground of the inability of the vendor to vest the vendee with á good or marketable title. Moore v. Williams, 115 N. Y. 586, 22 N. E. Rep. 233; Methodist E. C. Home v. Thompson, 108 N. Y. 618, 15 N. E. Rep. 193; Burwell v. Jackson, 9 N. Y. 535-542. Under this rule, facts which would be a good defense to a suit in equity brought to compel a. vendee to take the title are sufficient to sustain an action at law brought by him to recover from his vendor money paid on an executory contract. Another rule should be brought to mind before entering upon the consideration of the rights of these litigants, which is that a party to an executory contract for the sale of land has not an absolute right to a specific performance of the contract, but such relief is granted or refused according to the circumstances of each ease. Peters v. Delaplaine, 49 N. Y. 362; Day v. Hunt, 112 N. Y. 191, 19 N. E. Rep. 414; Hayes v. Nourse, 114 N. Y. 595-605, 22 N. E. Rep. 40; Fry, Spec. Perf. (3d Amer. Ed.) p. 10, § 25; Pom. Spec. Perf. p. 4, § 4; Id. p. 47, § 35; Story, Eq. Jur. (13th Ed.) §§ 161-742.

At the time the sale was made the right of the defendant to sell under the power in the will was involved in two actions, which were being then actively litigated, In one of them a receiver of the rents and profits of this and other lands had been appointed, -with the assent of the parties to the action; was in possession, through tenants, who had been directed to attorn to him. By the printed terms of sale the purchaser was to become entitled to the rents and profits from and after the date of the acceptance of the deed. It is not apparent how the plaintiffs’ testator could have acquired the possession of the property, or the right to collect the rents and profits, without procuring, through the aid of the courts, a discharge of the receiver. This the purchaser was under no obligation to do. Kopp v. Kopp, 48 Hun, 532, 1 N. Y. Supp. 261. It Avas averred on the one side, in these actions, and denied on the other, that the estate of Abner Mellen, Sr., had been settled, the debts and legacies paid, and that the devisees mentioned in the fifth clause of the will had elected to hold the land, as such. This was an issue of fact to be determined bjr oral evidence. If it is true that the estate had been entirely settled, and the devisees had elected to hold the land, as such, the power of sale AA’as extinguished. Sweeney v. Warren, 127 N. Y. 426, 28 N. E. Rep. 413. A prudent person, ivith knowledge of the litigatian pending in respect to this property, would neither have purchased it at a fair price, nor loaned any considerable sum of money secured by a mortgage upon it. The defendant had personal knowledge of all these facts, which, he must have known, would, if brought to the attention of persons proposing to purchase, have affected the price of the property. Upon the trial of this action the defendant was a witness on his own behalf. He did not claim to have disclosed the situation of the property, nor did he offer any explanation of his conduct. He did not testify that the estate of the testator had not been settled, nor that the sale was made for the purpose of settling the affairs of the estate. The failure of the defendant to disclose these facts and circumstances would have been a good defense to a suit brought by him to compel the. vendee to complete his purchase. Shiringly v. Stratton, 1 Brown, Ch. 440; Drysdale v. Mace, 5 De Gex, M. & G. 103; Cathcart v. Robinson, 5 Pet. 263-275; Miller v. Chetwood, 2 N. J. Eq. 199; Margraf v. Muir, 57 N. Y. 155; Jones v. Rimmer, 14 Ch. Div. 588; Livingston v. Iron Co., 2 Paige, 390; Dart, Vend. (6th Ed.) 112; Baskcomb v. Beckwith, L. R. 8 Eq. 100. In the last case Lord Romilly said:

“It is of the greatest importance that it should be understood that the most perfect truth and the fullest disclosure should take place in all cases where the specific performance of a contract is required, and that if this fails, even without any intentional suppression, the court will grant relief to the man who has been thereby deceived, provided he has acted reasonably and openly. ”

An attempt is made to bring the case at bar within the rule laid down in Hayes v. Nourse, 114 N. Y. 595, 22 N. E. Rep. 40, but the facts in the two cases are entirely dissimilar. In the case cited the notice of the pendency of the action related to a suit in which no steps had been taken for 46 years, and for 61 years the vendor and his predecessors in the title had been in the undisputed possession of the property. Under the rule declared in Moore v. Williams, supra, and kindred cases, the plaintiffs established the right to recover the money paid on the contract, and the expense incurred in searching the titles.

The general rule is tha't, in case a person refuses to pay money to one entitled toit, the person in default is chargeable with the legal rate of interest as damages, and we see no reason why this rule should not be applied in this case. The seventh clause of the conditions of sale exempts the vendor from the payment of interest on the deposit during the time that may elapse between the date of the deposit and the execution of the contract, but it does not relieve him in case of his inability to cony out the contract,’ and the vendee becomes entitled to a return of his money. The general rule is that executors are personally liable on contracts entered into by them in respect to the estate of their testators. New v. Nicoll, 73 N. Y. 127. But, without discussing the question of liability of those acting by virtue of powers, it is sufficient to say that a person acting in a representative capacity is liable to the person injured by his misrepresentation or concealment when it is his duty to speak. Cullen v. Thompson, 4 Macq. H. L. Cas. 441, 9 Jur. (N. S.) 85; Evans, Prin. & Ag. 390. The vice of this contract lies in the failure of the defendant to disclose that which it was his duty to make known, which was his personal act, and for which he is liable to the party injured. We have.not failed to observe that the 26th and 30th paragraphs of the complaint were stricken out on the trial, and that the case is to be treated as though those allegations had never been made. Section 1815 of the Code of Civil Procedure provides that when it is uncertain whether an executor is liable as such, or individually, an action may be brought against him in both capacities, and a judgment rendered against him as executor or individually, but that in such a case the judgment must distinctly show in which capacity the defendant is adjudged liable. The facts of this case justified a judgment against the defendant individually.

None of the exceptions taken to the rulings on the trial, or to the refusals of the court to find facts and conclusions of law, have any merit, and they require no discussion. The judgment is right, and it should be a (firmed, with costs. All concur.