In Lakoschowsky v. Utopia Land Co. (125 App. Div. 827), where the action was brought to recover back an amount which had been paid upon the execution of a contract to purchase land, and in monthly installments, the vendee having failed to continue his payments as agreed, this court said: "When he sued, therefore, he was in the position of a vendee who has declined to pay the purchase money in the manner and at the times specified in the contract.Summary of this case from Beveridge v. West Side Construction Co.
May 8, 1908.
Emanuel Jacobus, for the appellant.
Paul Gross, for the respondent.
The defendant appeals from the determination of the Appellate Term affirming a judgment of the Municipal Court in favor of the plaintiff. The action is brought to recover the amount paid on a contract for the purchase of real estate. On June 4, 1904, the plaintiff entered into a written contract to purchase a lot of land from defendant for the sum of three hundred dollars, of which fifteen dollars was paid on the execution of the contract, and the balance was to be paid in monthly installments of five dollars each, the plaintiff being entitled to receive a deed when the whole purchase price should be so paid. The contract contained a clause by which it was agreed "that if default be made in fulfilling this agreement or any part thereof on the part of the party of the second part (plaintiff herein), then in such case the parties of the first part (defendant herein) and their assigns shall be at liberty to consider this contract forfeited and annulled, and dispose of the said land to any other person in the same manner as if this contract had never been made, and in such case the party of the second part hereby agrees to forfeit all the payment rights hereunder." The plaintiff paid his installments of five dollars per month regularly down to and including June 4, 1905, paying in all one hundred and ten dollars. According to the story told by plaintiff and his wife, he offered through his wife to pay a further installment of five dollars in July and again in August and September, but the payment was refused by the person in charge of defendant's office who told plaintiff's wife that plaintiff would be notified when the company was ready to receive further payments. The trial justice accepted this story as we do for the purpose of this appeal. The plaintiff apparently made no further efforts to pay installments until April, 1906, when he sent to defendant a check for five dollars. At this time he owed on his contract nine installments of five dollars each, or forty-five dollars.
It appears that on February 26, 1906, a circular letter had been sent out to purchasers announcing a change in the management of the company and stating that it was then in better financial standing than it had been for a long time. It further announced that the new board found upon the books a number of lot purchasers who were in arrears, and that a resolution had been passed that arrears must be paid up without delay, and unless this was done that steps would be taken to lapse the contracts according to the terms thereof. On March tenth a second notice seems to have been sent to plaintiff demanding the payment of arrears and saying that unless payments were made by March 29, 1906, the contracts in default might be lapsed and the money theretofore paid declared forfeited. It does not clearly appear whether plaintiff received either of these notices. On March 30, 1906, a third notice was sent stating that a resolution had been passed that all payments due under contracts must be paid on or before April 10, 1906, otherwise the contracts shall be declared null and void and payments theretofore made forfeited. This notice was sent by registered letter and apparently was not received by plaintiff, although shortly afterwards he sent a check for five dollars. In the letter returning this check and which he certainly received, plaintiff was advised that he then owed nine installments, and that the company would not accept less than six months' payments at the present time, without prejudice to demanding the full number of payments due. Plaintiff apparently never paid or tendered anything more, or made any offer to do so, but on December 8, 1906, commenced this action to recover the $110 paid. The theory of the action appears to be that by refusing to accept the installments due in July, August and September the defendant violated and repudiated its contract, and that thereby plaintiff was entitled to treat it as rescinded and to recover back what had been paid on account of the consideration. It is quite clear that the refusal of the defendant to receive the July, August and September installments did not constitute breaches of the contract so as to entitle the plaintiff to rescind and sue, for while it was the plaintiff's duty to pay monthly, there was no reciprocal duty on the part of defendant to accept the payment, since such refusal could not damage plaintiff. The refusal did not amount to a repudiation or rescission of the contract, and that was not given as a reason for the refusal. Assuming as true all that plaintiff claims, the most that can be said for the refusal to accept payments of the installments, and that with some hesitation, is that it suspended his obligation to make further payments until he should be notified of defendant's readiness to receive them, which occurred when the letter of February 26, 1906, was received. Even with that concession the plaintiff was in arrears when he brought this action. The company certainly cannot be accused of having taken any unfair advantage. It gave him ample notice and opportunity to pay up and he persistently refused to do so. When he sued, therefore, he was in the position of a vendee who has declined to pay the purchase money in the manner and at the times specified in the contract. He has, therefore, no cause of action either to recover back the money already paid or to ask for damages for defendant's refusal to go on with the contract. What his rights might have been if he had claimed that the refusal to accept installments in July, August and September suspended his obligation to pay further installments until he received notice from the company that it was prepared to receive such payments, we do not now consider, since he did not take that position and did not offer to continue payment in installments after he had received such notice. The determination of the Appellate Term and the judgment of the Municipal Court must be reversed and a new trial granted, with costs to the appellant in this court and the courts below to abide the event.
INGRAHAM, McLAUGHLIN, LAUGHLIN and HOUGHTON, JJ., concurred.
Determination and judgment reversed, new trial ordered, with costs in all courts to appellant to abide event.