Case ID: ny-st-rep_6/html/0652-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Brady, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William A. Ladd, App’lt, v. Anna L. Stevenson et al., Resp’ts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed March 3, 1887.)
    
    1. Specific performance—Breach of contract—Security for same.
    When the contract provides for the giving of security for the performance of the contract, on failure to perform, this does not create any lien, mortgage or interest binding or eifectiug any of the real property belonging to the party liable for the breach.
    2. Same—3 R. S., (7th ed.), p. 2326, § 6—Statute of frauds.
    Specific performance is not decreed in doubtful cases and certainly never when a decree would be in contravention of the statute of frauds. 3 R. S. (7th ed.), p. 2326. This relief might be given on proper terms in any case and doubtless would, but whatever is done must be voluntary and not due to coercion.
    3. Same—Written contract—Paroi evidence.
    The use of the words, • ‘ satisfactory security ” in a written contract will be construed as providing for any security which ought to be regarded as satisfactory, and the words will be used in their ordinary sense. Parol evidence will not be admitted to explain- what kind of security was intended.
    Appeal from a judgment at special term.
    
      G. H. Forster, for app’lt; E. Ellery Anderson, for resp’ts*
   Brady, J.

The plaintiff and the defendant Willett entered into an agreement by which, under circumstances therein disclosed, the latter agreed, for certain considerations, to pay a loan made by the plaintiff to the Highland Chemical and Mining Company, and in which employment was secured to the plaintiff for a period named, at a salary specified.

The agreement then contained this clause, showing in part the obligations assumed by the defendant Willett, namely:

Third. In case he shall discharge said Ladd before the expiration of the term above mentioned, or shall otherwise fail to perform this agreement, to give said Ladd satisfactory . security for the repayment of said loan by the installments above mentioned, or to pay the same forthwith in cash.”

The plaintiff alleged that the loan was not paid; that no security was given as promised, and that he had been discharged by tne defendant Willett, thus presenting all the elements to show a breach of the contract. He also alleged that the defendant Willett had an interest in certain parcels of real estate which were described, and that this was the only property he had to his knowledge or information!

The prayer of the complaint is as follows:

“Wherefore, the plaintiff demands judgment against the defendant that he specifically perform the said agreement and that he execute a mortgage upon the above described real estate and property for the repayment of said $12,500, with- interest, by installments as aforesaid, and that the defendant and all persons claiming under him subsequent to the commencement of this action be barred and foreclosed of all right, claim, lien and. equity of redemption in the said premises, and that the said premises be decreed to be sold according to law; that the moneys arising from the sale be brought into court; that the plaintiff be paid therefrom the said sum of $12,500, with interest thereon, and the costs and expenses of this action; that the defendant be adjudged to pay any deficiency which may remain, and that a receiver be appointed of said real estate and property, and that the plaintiff have such other and such further judgment or relief in the premises as may be just and equitable.

It is not necessary in expressing the views entertained of this case to refer to the many incidents connected with its progress to a former judgment, and the proceedings for the intervention of other persons who, at their own solicitation, became defendants to protect their interests, inasmuch as the learned justice presiding in the court below dismissed the complaint upon the ground that the plaintiff was not entitled to demand as security a mortgage on the defendant Willett’s real estate or interest in it if he had any. He found, in other words, as a conclusion of law, that the plaintiff under the agreement did not acquire any lien, mortgage or interest which bound or affected any of the premises described in the complaint. This conclusion seems to be abundantly sustained by the rule promulgated in Wright v. Weeks (25 N. Y., 153), which, like this, was an action for specific performance. The agreement sought to be enforced in that case provided for the sale of the premises mentioned at.a sum stated “upon the terms as specified.” And the attempt was made to prove by paroi what the terms were, but unsuccessfully, the evidence having been rejected' and the judgment was sustained. It was held that such a contract could not be specifically enforced, unless it stated fully all the terms and subject-matter to be affected. If any of these were omitted, and resort must be had for exemplification to paroi evidence, it- could not be sustained. Foot v. Webb, 59 Barb., 38. See also Wehl v. Von Der Wahllbebe, 2 Lans., 267.

Here, although provision is made for satisfactory security, it is not stated of what it shall consist, and as full compliance with the agreement might be accomplished by some security other than a mortgage on real estate, the proposition that real estate can be demanded and enforced by a decree for specific performance, is at once and successfully answered. Indeed, in reference to transactions purely commercial, such security is rarely given. It is generally consummated by endorsement or bonds or other collaterals negotiable in character and readily converted into cash".

The mischief which'must ensue if such a provision constitute a lien on real estate has been illustrated herein by the result of lis pendens filed, which affected several pieces of property, thus creating a general and not a specific lien on one piece only. Assuming that the party contracting to secure owns or has an interest in several pieces of property, which of them has he agreed to mortgage ? If it does not appear, how can the court declare that by the agreement any one to be selected is the one referred to, or in contemplation of the parties, or indeed select any one at all on principle?

Specific performance is not decreed in doubtful cases, and certainly never when a decree would be in contravention of a statute which proclaims that no interest in lands other than leases for a term of years not exceeding one year, shall be created, granted, assigned, surrendered or declared unless by act or operation of law or by deed, or conveyance in writing subscribed by the party creating, granting, assigning, surrendering or declaring the same, or by his lawful agent, thereunto authorized by writing. Section 6, page 2326, vol. 3d., Rev. Stat. (7th ed., Banks Bros.).

The plaintiff sought to establish the right asserted by paroi, and this was an admission of the omission from the written paper of a necessary element. It is true that some negotiation relating to payment of a part of the sum took place between the parties through their respective attorneys, but this was a concession only in regard to the subject embraced in the negotiation, and was not intended to enlarge the agreement in respect to the kind of security, which must be given or the plaintiff had the right to demand. It nowhere appears in the correspondence that such a change of provision was in contemplation, and if there were, it is not so stated or expressed as to avoid the effect of the Statute of Frauds. It is true that the plaintiff ought to' have the protection which security would give him, but his right to it rests upon an agreement most infelicitous and unavailable for the reason stated. The addition of a few words in the agreement would have given it to him, and the failure to insert them would seem to indicate that real estate as the object in view was not in the minds of the parties, and that the words as to security were used in their ordinary sense and provided for any security which ought to be regarded as satisfactory.

It might be said in conclusion that the assumption that there was herein such a part performance of the contract as removed it from the Statute of Frauds is erroneous.

All that was done was to obtain relief from the operation of the Us pendens which the court refused to discharge, and which as the result shows the plaintiff had no right to file. This relief might be given on proper terms in any case, and doubtless would, but whatsoever was done was coerced and therefore not voluntary, the Us pendens standing in the way of any transfer or disposition of the property offered free from encumbrances. It was said by Earl, J., in Miller v. Ball (64 N. Y., 291), That it was not always easy to determine whether there has been a sufficient part performance of a paroi agreement for the sale of land in the sense of courts of equity to free it from the operation of the Statute of Frauds, but that the general rule was that nothing is to be considered as a part performance which does not put the party in a situation which is a fraud upon him unless the agreement is performed. The payment of the consideration alone in a case where its recovery would fully indemnify the party paying, would not be a sufficient part performance within the rule and neither would mere possession be, without other circumstances of hardship or fraud

In this case none of these elements are proved, and the contract was devoid of that certainty which existed in all the cases of part performance, namely: the description, general or special, of the land sold and intended to be conveyed. Not only that, but it was marked by the uncertainty also that any land was intended to be granted or encumbered.

The only possession the plaintiff ever had of any real estate, was that obtained by filing the Us pendens—not against one piece of property, but all the defendant Willett had, and for the reason that the right to any one piece was not and could not be shown by the agreement.

The consideration of this record therefore develops no reason for disturbing the judgment, . and it should be affirmed with costs.

Daniels and Bartlett, JJ., concur.