Case ID: misc_32/html/0179-01.html
Source: Caselaw Access Project
Author: {"author": "Russell, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Rosa Strauss et al., Plaintiffs, v. Henry M. Bendheim, Defendant.
    (Supreme Court, New York Special Term,
    July, 1900.)
    Sale in action to compel specific performance — Disposition of unexpected surplus.
    Where a sale of land, directed to be made in an action brought to make a vendee specifically perform bis contract to purchase the land, unexpectedly results in a surplus over and above the sum due the vendors, the surplus belongs to the vendee and the vendors are not entitled to it, although they have been at considerable expense, in compelling by action a third party, who bought at the sale, to take title to the land, and although the vendee had agreed with the vendors that he would bid at that sale a sum sufficient to pay their claim and the costs and expenses.
    The fact that the vendee had agreed with the vendors to contribute, but bad not paid, a small sum towards the expense of compelling the third party to take the title, imposes upon the vendee nothing more than a contract liability to pay that sum to the vendors, and does not entitle the latter to take the sum out of the surplus.
    Action to compel the specific performance of a contract for the purchase of land.
    Samuel D. Levy, for plaintiffs.
    Charles A. Wendell, for defendant.
   Russell, J.

The defendant declined to .specifically perform his contract with the plaintiffs, executors, for the purchase of land in Hew York city. This action was begun to compel such performance, the defense overruled and judgment given for a .specific performance, and, in case of inability of defendant to pay, for a sale by a referee, with judgment against defendant for any deficiency and awarding to him any surplus on- the sale arising after taking out of' the proceeds the legal costs and expenses. This was manifestly the correct judgment, for plaintiffs were only entitled to the sum due on the contract with indemnity for taxable costs and disbursements. Clark v. Hall, 7 Paige, 382, 385.

Both parties then undoubtedly believed that the premises would not sell on a judicial sale for enough to cover the contract and charges. Ho appeal was taken by defendant, and he made an agreement with plaintiffs to bid on the referee’s sale enough to cover the claim, costs and expenses and paid $2,000, anticipatory of his being obliged to buy the premises in.

But on the sale by the referee an outsider, Leopold Hutter, purchased the premises at a price which raised a surplus of $1,300. He, however, declined to take title, and appealed from an order of this court requiring him .to complete his purchase. The Appellate Division reversed the order, holding that the judgment gave no power to the referee to convey title, as the beneficiaries under the will of the plaintiffs’ testator were not joined as parties to the action and the executors had only a naked power of sale. Strauss v. Bendheim, 44 App. Div. 82.

The plaintiffs appealed to the Court of Appeals, where the order of the Appellate Division was reversed and that of the Special Term affirmed, that court holding that the referee’s deed would convey a good title. 162 N. Y. 469.

Thereupon the purchaser, Hutter, performed, and the surplus of $1,300, besides some rents, awaits distribution.

The plaintiffs now move to divert this surplus from defendant to themselves, by amendment of the judgment under which the referee sold, or by supplementary direction of this court, on the ground that it is inequitable to give to defendant that surplus, gained by their steadfastness at an expense to themselves equal to the surplus, they having employed counsel at Special Term, Appellate Division and Court of Appeals in the proceedings against the purchaser, upon the promise of the defendant to compensate, or contribute to the expenses, especially as the wrongful resistance to the obligations of his contract caused all this expense. The defendant denies all agreements to contribute except as to one item of fifty dollars. This motion was referred to the justice who tried the case and directed the original judgment.

No judgment should be altered upon motion except to cure an error by which it did not correctly express the decision. The original judgment here was right. On what grounds could the plaintiffs have, at the time of its entry, asked the court to deprive the defendant of an unexpected surplus, or hold it in suspense to be charged in plaintiffs’ favor with non-taxable disbursements for counsel on further proceedings to enforce it?

Whatever ethical grounds the plaintiffs may have, by agreement with defendant that he should contribute to the expense of such proceedings, they do not reach the legal effect of a lien on the surplus. Doubtless such a contract could have been made, but it was not. As evidenced by the careful agreement in writing, after the decision of the Court of Appeals, both parties expected that the defendant must shoulder the burden of paying plaintiffs the contract sum going to them, with costs, and had no conception that a stranger would relieve him and create a fund for the benefit of either party. Defendant’s agreement after the sale to contribute to the expense of enforcing that stranger’s purchase is a simple contract only, and carries no equity beyond to the surplus, as the parties made no agreement that it should.

The motion is denied, without costs, and without prejudice to any action the plaintiffs may choose to bring to enforce their claim against defendant.

Motion denied, without costs, without prejudice to any action plaintiffs may choose to bring to enforce their claim against defendant.