Opinion
March 6, 1908.
J.A. Seidman, for the appellant.
Charles L. Hoffman and Henry A. Friedman, for the respondents.
I think that the obligation of the defendants is to be determined by reading the contract and the agreement together. ( Hine v. Bowe, 114 N.Y. 350; Knowles v. Toone, 96 id. 534.) The contract provides that if the title prove unmarketable, or if the seller fail without her fault to obtain title "the sum of One thousand dollars hereby deposited shall be returned * * * and this contract shall then be null and void. * * * The price is Fifty-eight thousand five hundred dollars ($58,000 sic) payable as follows: One thousand dollars deposited in escrow with Pollak Deutsch on signing of this contract, the receipt whereof is hereby acknowledged." And indorsed on the agreement is an acknowledgment of "chk. for $1,000 deposit in accordance with terms of within contract to be held in escrow by us until delivery of deed according to terms of contract." In addition to this articulation of the two writings it appears that this agreement was indorsed at the time of the delivery of the check and on the day of the execution of the contract and that the payees were the attorneys acting for the vendor. Indeed, the plaintiff, after stating the deposit, pleads the contract and avers "in and by the said contract the said Tame Shapiro agreed that the said sum of One Thousand Dollars so deposited shall be returned," etc. The complaint is not confined to action for the return of a deposit for a violation of the terms thereof or for a conversion, but after stating the preliminary facts avers that at no time was Shapiro the owner of the premises and did not before the beginning of the action obtain title thereto, "and that the said Mechanics and Traders' Realty Company without any fault on its part failed to obtain a deed," and that it had demanded the return of the check or its value and the refusal of the defendants. In other words, here is a declaration of the failure on the part of the vendor to perform her contract. I think then that this check represented a deposit on this executory contract as a part payment to Shapiro if she could give a marketable title; if she could not, or if she could not without her fault obtain the title, then the $1,000 was to be returned to the realty company. And the action should be regarded as one to work a practical rescission of the contract on the ground of a failure of the vendor to perform and to recover the deposit paid thereon. The law day was June fourteenth, but the parties then assembled did not perform. By common consent the passing of title was put off so that the several lis pendens might be canceled. It does not appear that either on that day or thereafter, at least so far as the vendee, the realty company, was concerned, any law day was set either by agreement or by due notice. This omission makes the position of either party vulnerable, so far as this record is concerned, when either assumes to act as if the contract had been broken by the other. The plaintiff could not recover her deposit for a breach of the contract without proof of her assignor's readiness and willingness to perform and of its demand for performance. ( Hartley v. James, 50 N.Y. 38.) The vendor would be in no position to assert her right to the deposit as forfeited by the vendee's fault without proof on her part of tender and demand for performance. When the performance was deferred by common consent without day then the feature of a reasonable time after June fourteenth appeared. The vendee could not declare as for a breach until she had proved that she had conformed to the rule of Hartley v. James ( supra) within a reasonable time after June fourteenth and had thus put the vendor in default, unless she showed express refusal of the vendor or that the latter had made performance impossible by her own act. On the other hand, the vendor could not apply the deposit as upon a breach of the contract by the vendee unless she had proved that she had made a tender and demand upon the vendor within such reasonable time and thus had put the vendor in default. But for a complication about to be stated, the contract must be regarded as still open, and the right to the $1,000 undetermined and dependent on the further relative acts and omissions of the parties. The complication is this: The law day originally fixed, as I have said, was June fourteenth. It appeared that the vendee conveyed the property to a third person on June twenty-ninth of the same year. She thereby put it out of her power to perform. If at the time of such conveyance the reasonable time in which the vendee might avail itself of the contract was still running, then it might use for a breach of the contract without demand of performance. ( Hartley v. James, supra, 43.) Before, then, the defendants can assert that the money belonged to their client (and they assert no other right therein), in the face of this proof that their client made her performance impossible and in the absence of any proof that she had put the vendee in default, they must establish that when their client conveyed the property the reasonable time wherein the vendor might avail itself of the contract had expired. There is no proof that the vendor complied with her obligation before she made this conveyance. The letter of her attorneys of June twentieth does not suffice, because it is not a tender and demand, and also because it is addressed to the vendee's attorney. ( Darrow v. Cornell, 30 App. Div. 115.) The demand on the defendants on June fourteenth, after the parties had separated, for the return of the money represented by the check, was not in effect a rescission of the contract because the vendee then expressly avowed its desire to perform and simply insisted that the cashing of the check was a variation of the terms of the agreement under which it was delivered. The mere fact that the vendor did not have the title to the realty on June fourteenth or thereafter cannot avail the plaintiff because it does not appear that such objection was ever made, but the indications are that the vendee was willing to take the title direct from the contractor with the vendee. If the objection had been made, it presumably could have been obviated forthwith, and on the other hand a conveyance from the contractor with the vendor, without request for conveyance from the vendor herself, would have been a substantial performance. ( Bigler v. Morgan, 77 N.Y. 312.)
The judgment and order must be reversed and a new trial be granted, costs to abide the event.
WOODWARD, HOOKER, GAYNOR and RICH, JJ., concurred.
Judgment and order reversed and new trial granted, costs to abide the event.