Case ID: ad_115/html/0608-01.html
Source: Caselaw Access Project
Author: {"author": "Miller, J.: ,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Title Guarantee and Trust Company, Appellant, v. Joseph Wesolick, Respondent.
    Second Department,
    November 16, 1906.
    Contract — agreement to pay for search of title whether lender makes advances.or hot—when objections to title not unreasonable.
    Although the application for a loan upon real estate from a title guarantee company .provides, that the company’s charges for 'drawing the mortgage and searching the title are to be paid, “whether the title is accepted'or declined;” the lender cannot refuse title capriciously and recover the chárges. But the burden is upon the borrower to show that the title was refused without cause,.
    When it appears that the refusal was based on an uncaitceled Ms pendens filed' for some violation of the Tenement House Act, the refusal cannot, in the absence of evidence of bad faith, be 'said to have been, capricious.
    Appeal by the .plaintiff, the Title Guai’antee and. Trust Company, from a judgment of the Municipal Court of the city of Hew Yofkj borough of Brooklyn, in favor of the defendant, rendered on the 23d day of February, 1906. '
    
      Albert A. Hovell, for the appellant.
    
    
      Edward G. Nelson, for the respondent. .
   Miller, J.: ,

The plaintiff seeks in this action to recover certain fees for draw-* ing a mortgage.and for'"making a,search and a survey pursuant to the application of the defendant to plaintiff for a loan, and appeals to this court from the judgment of the Municipal Court dismissing its' complaint. The application for the loan, signed by the defendant, contained the following provision : It is understood that the Company’s charges are to be paid whether the title is accepted or declined.” The title was declined by the plaintiff which refused to make the loan. The validity of the reasons assigned' by the plaintiff for refusing to make the loan is not clearly shown, doubtless owing to the fact that the appellant’s counsel labored under the belief upon the trial, as he apparently has upon this appeal, that in some way the title to real property was involved and that the Municipal Court did not have jurisdiction to try such issue. We do not think that the provision of the application to the effect that the charges were to be paid whether the title was accepted or declined gave the plaintiff the right to recover for such charges in case it refused to make the loan capriciously, in bad faith and without substantial reason, but the burden of showing that such refusal was capricious rested upon the defendant who asserts it. The plaintiff made a prima facie case by proving the performance of the services pursuant to the agreement to pay whether title was accepted or declined.- The reasons assigned for rejecting the title were three, viz. : First, a misdescription of the premises contained in the .deeds ; second, the absence of proof that the grantors named in one of the deeds in the chain of title were all of the heirs at law of the deceased grantee named in the deed immediately prior thereto, and, third, that there was an uncanceled lis pendens which had been filed against the property in an action brought for some violation of the Tenement House Act. It may be assumed that the first and second objections are shown to have been untenable, and still there is nothing in the record before us to show that the third objection was not a sufficient reason for refusing to accept the title. It is stated in the respondent’s brief that said lis pendens has since been canceled, but the record is barren of any facts respecting it, except the . statement that it was uncanceled of record and that the action was brought for some violation of the Tenement House Act. Section 129 of the Tenement House Act (Laws of 1901, chap. 334) provides that every fine imposed by judgment for a violation of the provisions of the act shall be a lien upon the premises in relation to which the fine is' imposed. In the absence of any evidence to establish the claim of bad faith we do not think that the plaintiff’s refusal to accept title because of said un canceled lis pendens can bé said to have been capricious or without substantial reason.

The -judgment of the Municipal Court must be reversed and a new trial ordered, costs to abide the event.

Hirschberg, P. J., Jenks, Hooker and Gaynor, JJ., concurred.

Judgment of the Municipal Court reversad and new trial ordered, costs to abide the event.