Opinion
March 15, 1933.
July 14, 1933.
Real estate — Agreement to sell — Hand money — Encumbrances payable in money — Sale of real estate free and clear of encumbrances — Rescission of contract by vendee — Recovery of hand money — Affidavit of defense — Sufficiency — Judgment for want of a sufficient affidavit of defense.
In an action of assumpsit by a vendee to recover hand money paid to a vendor on an agreement for the purchase of real estate, the plaintiff alleged in his statement of claim that the real estate was offered at public sale and that the auctioneer announced that the terms of sale were ten per cent of the purchase price when the property was "struck off," and the balance "upon the execution and delivery of a good and lawful deed on April 1, 1930, by the vendor to the purchaser, for the conveyance of said farm, free and clear of all liens and encumbrances, . . . . . . when possession shall be given." The plaintiff averred that he was the highest bidder and that the land was "knocked down" to him. Furthermore he alleged that the premises when sold and thereafter were subject to a mortgage, two judgments, and taxes, aggregating in all about $2,500, and that the vendor at no time before April 1, 1930, discharged the liens. He therefore claimed the right to rescind the contract and never tendered the purchase money. The defendant averred in her affidavit that on April 1, 1930, all of the owners joined in executing and tendering to the plaintiff a deed for the premises and that they were ready and willing, coincident with the payment of the balance of the purchase money, to pay and discharge the liens against the premises, the sum of which was much less than the balance due by the plaintiff.
Held: (1) That the payment of the balance of the consideration and the delivery of a deed free from liens and encumbrances were concurrent conditions; (2) that the vendee having failed to tender the unpaid purchase money could not recover the hand money; and (3) that the order of the court below discharging the plaintiff's rule for judgment for want of a sufficient affidavit of defense will be affirmed.
In such case, where the liens were payable in money, where the balance of the consideration due from the vendee was more than the amount of the liens, and where the vendor was ready and willing at the time fixed for the consummation of the agreement to pay the liens from the consideration, the vendee cannot justify the rescission of the contract by reason of the existence of the encumbrances.
Neither a vendor nor a vendee can enforce the agreement while he is in default. The vendee must tender the unpaid purchase money, whether he wishes to rescind or to enforce the agreement.
Orphans' court — Sale of minor's interest in real estate — Decree of court — Attack of — Fraud.
Where real estate is sold at public sale and later a petition is presented to an orphans' court by the guardian of a minor who has an interest in the real estate, for leave to join in the deed, an averment in the petition that the sale is a private sale does not constitute a fraud upon the court.
A decree of an orphans' court authorizing a sale of real estate cannot be attacked collaterally if the court has jurisdiction and the decree directing a sale is a conclusive adjudication of everything necessarily considered and determined in reaching the conclusion.
Appeal No. 9, March T., 1933, by plaintiff from judgment of C.P., Dauphin County, March T., 1930, No. 345, in the case of Fanny H. Swartz, Administratrix of the Estate of Clarence F. Swartz, deceased, v. Mrs. H.W. Crum (Sometimes known as Sarah C. Crum and Sarah E. Crum).
Before TREXLER, P.J., KELLER, CUNNINGHAM, BALDRIGE, STADTFELD, PARKER and JAMES, JJ. Affirmed.
Rule for judgment for want of a sufficient affidavit of defense in action of assumpsit to recover hand money. Before FOX, J.
The facts are stated in the opinion of the court below. The court discharged the rule. Plaintiff appealed.
Error assigned, among others, was the dismissal of the plaintiff's motion for judgment for want of a sufficient affidavit of defense.
John McI. Smith, and with him William J. Lescure, Jr., and William S. Middleton, for appellant.
George V. Hoover, for appellee.
Argued March 15, 1933.
This is an action in assumpsit by a vendee to recover hand money paid to the vendor on an agreement for the purchase of real estate and comes to us on an appeal from an order of the court of common pleas of Dauphin County discharging a rule for judgment for want of a sufficient affidavit of defense. After the action was begun, the vendee died and his administratrix was substituted as plaintiff.
The averments of the statement of claim not denied and the allegations in the affidavit of defense must therefore be treated as verity for present purposes. With that principle in mind, we will state the facts so disclosed by the pleadings. Pursuant to public advertisement, the defendant, Sarah C. Crum, on February 20, 1930, offered at public sale a farm in Dauphin County. The auctioneer announced that the terms of sale were ten per cent of the purchase price when the property was "struck off," and the balance "upon the execution and delivery of a good and lawful deed on April 1, 1930, by the vendor to the purchaser, for the conveyance of said farm, free and clear of all liens and encumbrances, . . . . . . when possession shall be given." A number of bids having been made by Clarence F. Swartz and others, the real estate was "knocked down" to Swartz for the sum of $7,960, and the purchaser paid to the defendant ten per cent of the price, or $796. At the time of the sale, the heirs of Harry W. Crum owned an undivided three-fourths and Sara Fox, a single woman, an undivided one-fourth of the property. Harry W. Crum died intestate on May 30, 1928, leaving to survive him a widow, Sarah C. Crum, the defendant, and six sons, one of whom was a minor, so that at the date of the sale, Sarah C. Crum, defendant, was the owner of an undivided one-fourth of the premises and each of her sons an undivided one-twelfth. At the time of the sale Swartz knew that defendant was not the sole owner of the farm.
The premises when sold and thereafter were subject to a mortgage, two judgments, and taxes, aggregating in all about $2,500. On April 1, 1930, all of the owners joined in executing and tendering to Swartz a deed for the premises and were ready and willing, coincident with the payment of the balance of the purchase money, to pay and discharge the liens against the premises, the sum of which was much less than the balance due. Pursuant to authority granted by the orphans' court of Dauphin County under the provisions of the "Revised Price Act", the guardian of the minor son of Harry W. Crum joined in the deed which was so tendered. The plaintiff refused to accept the deed claiming the right to rescind the contract.
We will confine our attention to the reasons assigned by the plaintiff as a basis for rescission as indicated by the statement of the questions involved. Plaintiff contends that the vendee was entitled to rescind because (1) the orphans' court proceeding was void and as a consequence no title was tendered for an undivided one-twelfth, and (2) the premises were subject to encumbrances.
It is argued by appellant that there is an inconsistency in the petition for the sale of the minor's interest in the land by reason of the fact that there had been a public sale of the premises, while the petition presented to the orphans' court was for a private sale, and that this constituted a fraud upon that court. We are unable to discover any merit in this contention. The appellant admits that a decree of the orphans' court authorizing a sale of real estate cannot be attacked collaterally if that court had jurisdiction: Gilmore v. Rodgers, 41 Pa. 120; Leedom v. Lombaert, 80 Pa. 381. A decree directing a sale is a conclusive adjudication of everything necessarily considered and determined in reaching the conclusion: Myers v. Crick, 271 Pa. 399, 402, 114 A. 255. The petition to the orphans' court was for a private sale and alleged that a better price could be obtained at private sale than at public sale. There is not any inconsistency between this averment and the fact that the premises as a whole had been previously offered at public sale. By the very terms of the "Revised Price Act", the fact that an interest is undivided may be a reason why a better price can be obtained at private than at public sale: Act June 7, 1917, P.L. 388, Sec. 20 (a), 20 PS 1761. It was, in fact, a private sale which was authorized by the orphans' court. The interest of the minor could not be sold except by authority of that court, and when such authority was invoked it was for a private sale insofar as such minor's interest was concerned. The result of the plan followed was that the minor received the benefit of a public sale of the entire premises after advertisement and received the advantage of a private sale in that the other owners agreed to a sale for the price named. We are unable to find anything in the record to indicate that any fraud was perpetrated upon the orphans' court, for that court before the decree was entered was acquainted with all the facts now presented.
With relation to the remaining contention of the appellant, it will be noted that the present action is to recover hand money and is not for specific performance, and that the vendee never tendered payment of the balance due. There is not any allegation in the statement of claim that the encumbrances could not be removed or that the purchaser had changed his position between the date of the contract and the time for performance. The payment of the balance of the consideration and the delivery of a deed free from liens and encumbrances were "concurrent conditions." "It is true that a vendor cannot rescind a contract and at the same time directly or indirectly enforce it. If by his action he fails to keep its stipulations, a rescission as to him follows and he is liable to the purchaser for the resultant injury. His breach of the agreement is as effective to prevent him from enforcing any right under it as the default of the purchaser is to deprive him of the benefit of its stipulations. Neither party can enforce the agreement while he is in default. The vendee must tender the unpaid purchase money, as a general thing, whether he wishes to rescind or to enforce the agreement; this results from the principle that a party himself in default, has no right to insist on rescission while in default": Sanders v. Brock, 230 Pa. 609, 615, 79 A. 772. In the case of Irvin v. Bleakley, 67 Pa. 24, 28, the court said: "The vendee must tender the unpaid purchase money, as a general thing, whether he wishes to rescind or enforce the agreement. . . . . . There were two other judgments against the defendant and others, amounting to some six or seven thousand dollars, which the purchase money in the hands of the plaintiffs would nearly three times over have satisfied. This was therefore no ground for a rescission; they had the means in their own hands to pay the judgments if the defendant did not satisfy them. He was not bound, however, to remove them unless he was put upon doing so by the demand of the plaintiffs of performance, and at the same time showing a readiness and willingness on their part to comply with their covenants. This they did not do. Why should the defendant have removed these liens in consideration of the plaintiffs, without knowing whether they were going to complete the contract on their part? While they did nothing towards that end, their existence did not hurt them: Hampton v. Speckenagle, 9 S. R. 212." Also see Boyd v. McCullough, 137 Pa. 7, 20 A. 630; Boyd v. Hoffman, 241 Pa. 421, 88 A. 675; McClenachen v. Malis, 310 Pa. 99, 106, 107, 164 A. 780.
The vendee Swartz having sued to recover hand money and not having tendered the balance due from him could not justify the rescission of the contract by reason of the existence of the encumbrances which were liens payable in money, the balance of the consideration then due from the vendee being more than the amount of the liens, and the vendor being ready and willing at the time fixed for the consummation of the agreement to pay such liens from the consideration.
There is not any inconsistency between the principles which we have applied and those set forth in the cases cited by appellant: Huber v. Burke, 11 S. R. 237; Gans v. Renshaw, 2 Pa. 34; Nicol v. Carr, 35 Pa. 381; Graybill v. Ruhl, 225 Pa. 417, 74 A. 239; Ritter v. Hill, 282 Pa. 115, 127 A. 455; Ford v. Hedley, 62 Pa. Super. 380. In none of these cases were the facts such as we find here. In some the encumbrances were much more than the balance of the purchase money due, and in others the encumbrances were not liens capable of satisfaction in money but were encumbrances which, on the facts presented, could not be removed as, for example, a city street laid out across the premises. In another case the title was doubtful by reason of the fact that it could not be determined without a suit whether the mortgagor in a mortgage which was a lien upon the premises had authority to execute the mortgage, and the vendee would have been exposed to litigation to maintain the title offered. The case principally relied upon by appellant is that of Ford v. Hedley, supra, decided by this court. The facts are not given in detail in the report of the case, but the lower court examined the paper books and stated that the mortgages existing at the time of the consummation of the sale were four times that of the balance due. This statement is not contradicted by appellant. Under such circumstances it is clear that the vendor could not discharge the lien from the balance of the purchase money due, and it was therefore his duty when the deed was tendered to tender a satisfaction of, or release of the lien of, such mortgages. Our Brother President Judge TREXLER very properly there said (p. 382): "Plaintiff was not required to take it subject to liens even if it was the intention of the vendor to remove the liens subsequently." Here the vendor alleges that he was ready and willing at the time fixed for the performance of the contract to discharge the liens. There is nothing in that case inconsistent with the conclusions at which we have arrived.
The reasons assigned by appellant do not justify the entering of a summary judgment. By a rehearsal of the facts as disclosed by the pleadings we do not intend to express any opinion as to the merits of the controversy. If the facts presented at trial correspond with the respective contentions of the parties as now presented, there will be important questions of fact to be submitted to a jury.
The order of the lower court is affirmed.