Case Name: STERNBERGER against McGOVERN
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1874-02
Citations: 15 Abb. Pr. 257
Docket Number: 
Parties: STERNBERGER against McGOVERN.
Judges: 
Reporter: Abbott's Practice Reports
Volume: 15
Pages: 257–272

Head Matter:
STERNBERGER against McGOVERN.
Court of Appeals ;
February, 1874.
Reversing 4 Daly, 456.
Specific Performance. — Pecuniary Award- in Lieu of Dower.—Pleading.—Joinder of Legal and Equitable Causes of Action.—Dismissal of Complaint.
It seems, that a contract by which A. agrees to sell and convey his land to B. for a specified sura, to be paid in part by B.’s conveying other land to A., and B. agrees to sell and convey such other land to A., for a specified price to be paid by A.’s said conveyance to B., is an agreement for an exchange, not for sales; and if one party proves unable to convey title, he cannot be compelled specifically to-perform as to his purchase of the other parcel.
Whether specific performance with money compensation for an inchoate right of dower, can be awarded in case of an exchange of lands as well as in case of a purchase,—Query ?
Plaintiffs and defendant agreed to exchange certain parcels of real estate, but the defendant, being unable to fulfill his agreement on account of the refusal of his wife to release her dower (although he in good faith endeavored tc induce her to do so),—Reid, that the defendant should not be compelled to give a deed by himself, and indemnify the plaintiff against his wife’s contingent right of dower, but the plaintiffs would be given damages for the breach of the contract.
As the Code of Procedure authorizes the uniting in the same complaint of. causes of action both legal and equitable where they arise out of the same transaction, if the complaint states facts giving an equitable cause of action and also a legal cause of action arising out of the same transaction, a party is entitled to have the issues iu both causes tried, if necessary to obtain his rights, and although he fail to make out a case for purely equitable relief, yet if he prore facts showing a legal cause of action his complaint should not be dismissed, but money damages awarded him.
Appeal from a judgment.
This action was brought in the Hew York common pleas by Mayer Sternberger, Simon Sternberger and Raphael Buckman against Owen McGovern, for the purpose of foreclosing a vendor’s lien for the purchase money claimed to be due on a sale of real estate in the city of Hew York. The facts of the case were as follows:
On March 16, 1872, the plaintiffs and defendant executed a written instrument by which the plaintiffs agreed to sell to the defendant certain land situated in Thompson-street in Hew York city, “for the price of one hundred and twenty-five thousand dollars payable as follows twenty thousand dollars by the assumption by the purchaser of two mortgages on the premises ; sixty-four thousand five hundred dollars by a deed from the defendant and his wife of a piece of land at Mott Haven “hereinafter more particularly described,” and the balance, forty thousand five hundred dollars, by the bond of the defendant secured by a mortgage on the Thompson-street property. By the same instrument the defendant agreed to sell to the plaintiffs the Mott Haven property before mentioned, “at the price or consideration of eighty-two thousand five hundred dollars,” of which eighteen thousand was to be paid by the assumption by them of a mortgage for that amount, and the balance “ by the deed hereinbefore mentioned.” The instrument provided a time and place at which the deeds were “to be exchanged,” and provided for their form and manner of execution. By a subsequent mutual agreement in writing the time for the comple tion of the contract was changed to a more distant day, and on that day, and at the appointed place, the plaintiffs had ready for delivery to the defendant a deed duly executed, and tendered performance of the agreement on their part. The defendant did not attend at the time and place agreed upon, and wholly failed to perform the agreement on his part. The defendant was unable to make a conveyance of the premises he had contracted to convey, by reason of his wife’s refusal to join in a conveyance thereof, or to release her inchoate right of dower therein, although he in good faith endeavored to induce her to do so. This fact was known to the plaintiffs before the action was brought.
The complaint treated the agreement as an agreement by the defendant to purchase the Thompson-street property for one hundred and twenty-five thousand dollars, and plaintiffs tender as passing the title to the defendant, and asked that it should be sold under the direction of the court, and the net proceeds thereof be paid to the plaintiffs and credited upon the amount due for purchase money, and that they might have judgment against the defendant for one hundred and five thousand dollars (the amount of the purchase money less the . mortgages on the property), and interest, &c.
The common pleas at special term sustained the view of the agreement taken by the complaint, and held that the plaintiffs were entitled to a specific performance thereof, and to insist that the defendant should accept the conveyance tendered, and pay the consideration money of one hundred and twenty-five thousand dollars, and that the plaintiffs had a lien on the property for the payment thereof, and ordered a reference to compute the amount due, and that if within ten days from.the coming in and confirmation of the referee’s report, the defendant should fail to. pay the amount re ported due, that the referee should sell the premises at public auction or so much thereof as should be sufficient for the payment of the amount due from the defendant with interest, &c.
On appeal from the judgment entered on that decision, the court at general term held, reversing the judgment of the special term, that the agreement was not one for a sale of land but for an exchange ; that as the plaintiffs had not parted with the possession of the property,'they could not maintain an action to enforce a vendor’s lien for the price, and that, as the inability of the defendant to perform specifically was known to the plaintiffs before the action was brought (and was stated in the complaint), there was no case presented for the interposition of a court of equity, and the complaint should have been dismissed and the plaintiffs left to bring an action at law for damages (see the case at general term, reported in 4 Daly, 456). From the judgment entered on that decision this appeal was taken to the court of appeals.
Everett P. Wheeler, for the appellants.
I. The ■ judgment of the special term, was correct. 1. If A. agrees to sell to B., and B. to buy of A., any specific property, real or personal, and B., at the time fixed for the completion of the contract, fails to perform, A. has the right: First, to retain his ownership of the thing agreed to be sold, and bring an action for damages caused by B.’s non-performance ; or, Second, to hold for B.’s benefit the thing agreed to be sold, and to bring an action against him for the price. This rule is well settled as to personal property (see 3 Pars. on Con. 209; Bement v. Smith, 15 Wend., 493). As to real property a difficulty was at first raised, owing to some supposed embarrassment from the doctrines as to the transier of title to real estate. But the courts finally settled the reasonable principle, that the effect of the suit for the price following the tender of the deed was to vest the title to the land in the grantee ’ named in the deed. His contract to accept it, followed by the election of the vendor to insist on such acceptance, as expressed by bringing his action for the price, is equivalent to an actual acceptance (Richards v. Edick, 17 Barb., 260 ; Franchot v. Leach, 5 Cow., 506; Johnson v. Wygant, 11 Wend., 48 ; Shannon v. Comstock, 21 Id., 461; Parker v. Parmele, 20 Johns., 130; Alna v. Plummer, 4 Greenl., 258). This is analogous to the well- settled rule that in equity the vendee is considered as the owner of the land, and the vendor before conveyance as holding the legal title in trust for his benefit. The vendee’s interest therefore descends to his heirs, and does not pass'to his executors (Champion v. Brown, 6 Johns. Ch., 398; Havens v. Patterson, 43 N. Y., 218, 221). 2. If, under-the contract, the price is to be paid, not in money, but in some other property, or if, in other words, the contract is for an exchange of one piece of property for another, the party who is ready and willing to. perform on his part has the same option as that, stated under the first rule. 3. In the latter case A. recovers the value of the piece of property which B. has agreed to convey to him. 4. If this value is fixed by the contract, such valuation is at least prima facie the measure of his recovery (Thomas v. Dickinson, 12 N. Y., 364; S. C., on new trial, 23 Barb., 431; Johnson v. Hathorn, 2 Abb. Ct. App. Dec., 465 ; S. C., 3 Keyes, 126, and 2 Id., 476). 5. The inability of B. to do the specific thing agreed to be done, does not excuse him. This elementary proposition is really the turning. point of the case. The defendant agreed to pay part of the consideration money by conveying the Mott Haven property. He agreed that his wife should sign the deed. He is bound by this contract. True, the court will not shut him up in jail for non-performance. But it will require him to pay the valúe of the land which he has agreed to convey. “Money answereth all things.” For the sake of public policy, coercion upon the wife, through the husband, will not be employed. But the inability of the husband is in no other respect a defense (Phelps v. Pumpelly, 40 N. Y., 59 ; Chitty Con., 740 ; McNeil v. Reid, 5 Bing., 68 ; Worsley v. Wood, 6 Term Rep., 710 ; see also, School District v. Dauchy, 25 Conn., 530; Tompkins v. Dudley, 25 N. Y., 272). 6. If the payment in the case stated in the second rule is to be made, partly by the conveyance of property and partly by the bond or note of B., and he neglect or refuse to give such bond, the amount for which such bond or note was to be given becomes payable at once (Chitty Con., 441; 3 Pars. Con., 211; Hanna v. Mills, 21 Wend., 90). 7. In all cases where the vendor retains possession of the thing sold, he has a lien upon it for the unpaid purchase money (2 Story Eq., § 1216; Benj. on S., 657). The doubt arose whether equity would follow the common law, which terminated the lien when the vendor delivered possession to the vendee. It was finally decided that equity would recognize and enforce such a lien where land, was the subject matter of the contract, although the vendor parted with the possession. It was argued below that no such lien exists where the purchase price is to be paid in land. The true doctrine of the cases on the subject is this: Where the vendor has accepted securities of any description, other than the personal obligation of the vendee, in payment of the price, the lien is gone, because the price is paid. If the defendant had conveyed the Mott Haven property, and given his bond secured by mortgage on the Thompson-street property, he would have paid the price. For any failure of title to the Mott Haven property, the Sternbergers would have been confined to their remedy on- the defendant’s warranty. But the land has not been conveyed. The bond and mortgage have not been given. All that the vendor now has is the vendee’s personal obligation to pay the purchase money ; and it is perfectly well settled that this does not discharge the lien (2 Story Eq., § 1226; Sug. Ven. & Pur., ch. 19, §§ 13, 15 [pp. 675, 676, 14 Eng. ed.]; Winter v. Lord Anson, 3 Russ., 488; Garson v. Green, 1 Johns. Ch., 308; Manly v. Slason, 21 Vt., 271).
II. Should the court, however, be of opinion that the plaintiffs have no lien in this case, they have a clear right to judgment for the unpaid purchase money, as shown by the cases already cited. The defendant, by going into the trial before a single judge without demanding a jury and without objection, waived a jury (Greason v. Keteltas, 17 N. Y., 491; Davis v. Morris, 36 Id., 569 ; Barlow v. Scott, 24 Id., 40; Moffat v. Moffat, 10 Bosw., 468, 492). The cases cited by the defendant hold, that where the plaintiff neither avers nor proves facts sufficient to entitle him to a judgment at law, the judge cannot refer the case to enable the plaintiff to prove and recover damages. They hold that the legal remedy in such case is not within the scope of the case made by the complaint. But the court of appeals held unanimously, in Bradley v. Aldrich, 40 N. Y., 504, one of the cases cited by defendant, that the plaintiff might, by proper averments in his complaint, unite the legal and equitable causes of action. So, also, Johnson v. Hathorn, 2 Abb. Ct. App. Dec., 465. In such a case, even if the defendant had demanded a jury trial, and this had been improperly denied, he is not entitled to dismiss the complaint, but only to have the case sent to a jury to be tried (Stevenson v. Buxton, 37 Barb., 13; Genet v. Howland, 45 Id., 573).
III. The plaintiffs were entitled to a specific performance of the contract of the defendant to convey the Mott Haven property so far as he could do so,—i. e., to a conveyance by himself and compensation for the refusal of his wife to join in the deed (Story Eq., §§ 778, 779; Harsha v. Reid, 45 N. Y., 415 ; Waters v. Travis, 9 Johns., 450 ; Vorhees v. De Meyer, 2 Barb., 37 ; Fry on Spec. Perf., § 209; Story Eq., § 736a ; Worrall v. Munn, 5 N. Y., 229 ; White v. Schuyler, 1 Abb. Pr. N. S., 300 ; McCrea v. Purmort, 16 Wend., 460; In re Hunter, 1 Edw. Ch., 1; Lobdell v. Lobdell,. 36 N. Y., 327; Sands v. Crooke, 46 Id., 564 ; Story Eq., § 775; Davis v. Hone, 2 Schoals. & L., 341; Seymour v. Delancey, 3 Cow., 445).
T. C. T. Buckley, for respondent:
I. Ho case is made for equitable relief; at all events, to the extent asked for. 1. The contract not having been executed, the .court will not decree in favor of a lien with the incident of foreclosure and sale, unless it be a case in which the contract would be decreed to be specifically performed (Clark v. Hall, 7 Paige, 385). 2. The agreements being mutual, and the defendant being, without fault, unable to convey the Mott Haven property free from his wife’s dower, and plaintiffs being unwilling to take it with that incumbrance, the court in the exercise of its discretion would not compel specific performance, where that would involve the husband in the necessity of procuring his wife’s release of dower, under the penalty of being mulcted with the purchase price (Story Eq. Juris., § 731; 1 Sugd. on Vend., 7 Am. ed., 232, marg. paging, and cases cited; Hill. on Vend., 57). 3. There can be. no lien except where the purchase money is payable in cash, as that term is understood in the law (Hoyt v. Van Alstyne, 15 Barb., 568; see, also, 11 N. Y. Leg. Obs., 258). 4. At all events, so far as the portion of the contract price represented by the Mott Haven property is concerned there can be no lien (McKillip v. McKillip, 8 Barb., 552, 558; Coit v. Fougera, 36 Id., 195; Hare v. Van Deusen, 32 Id., 95 ; Arlin v. Brown, 44 N. H., 102; Chapman v. Beardsley, 31 Conn., 115). 5. It is clear ' that the plaintiffs have now no better claim for a lien than they would have, in case the defendant' had, in fact, taken their deed of the Thompson-street property and had failed to convey in exchange the Mott Haven property, and to execute the purchase-money mortgage as agreed. But the authorities are uniform that a vendor who takes, or agrees to take in payment, ° instead of cash, chattels, or securities, such as a mortgage on other land, or a mortgage even on the land sold, will be deemed to have waived the security of his vendor’s lien (Fish v. Howland, 1 Paige, 20, 30 ; Coit v. Fougera, 36 Barb., 195; Selby v. Stanley, 4 Min., 65 ; Baum v. Grigsby, 21 Cal., 172; Camden v. Vail, 23 Id., 633 ; Mattix v. Wells, 18 Ind., 141).
See also Hale v. Omaha National Bank, 49 N. Y., 626, reversing 33 N. Y. Superior Ct. (1 Jones & S.), 40.

Opinion:
Grover, J.
The different conclusions arrived at by the special and general terms arose from the different construction of the contract of the parties which was respectively adopted. The special term held that the contract of the plaintiffs to sell and convey to the defendant the Thompson-street property for one hundred and twenty-five thousand dollars, was an independent contract not affected by that "part relating to the Mott Haven property otherwise than by giving the defendant the right of paying a part of the one hundred and twenty-five, thousand dollars by conveying the same to the two plaintiffs at the price specified. If this is the true construction, the judgment of the special term to the effect that the plaintiffs were entitled to a specific performance as to the Thompson-street property, irrespective of the ability of the defendant to perform that part of the contract relating to the Mott Haven property, was correct; and the only remaining question would be whether the mode of enforcing performance of this contract was proper under the facts of the case. The general term construed the contract as entire, in substance ;—one for the exchange of the one property for the other, and the giving the bond and mortg'age by the defendant to the plaintiffs upon the Thompson-street property, as the mode by which the estimated excess of the value of that over that of the .Mott Haven property was to be adjusted. If this is the true construction it is obvious that a specific performance of the contract as to the Thompson-street property could not be enforced against the defendant, while he was unable to perform as to the Mott Haven property. In other words, the defendant having, by this construction, agreed to exchange the Mott Haven property for the Thompson-street property, and to give the plaintiffs a mortgage upon the latter for its estimated excess in value over that of the former,—and, being unable to give a good title to the Mott Haven property, or such title as the plaintiffs were willing to accept,'—could not be compelled to take title to the Thompson-street property, .and pay the sum in cash therefor which had been inserted in the contract as its price, but which was inserted as a mode of arriving at the difference in value of the respective properties.
I think the construction adopted by the general term was the one that was intended by the parties; that the contract was one for an exchange ;—not one binding the defendant to purchase the Thompson-street property, giving him an option to pay a large portion' of the purchase money by conveying the Mott Haven property as provided by the contract, or of paying that portion in money; and binding the plaintffs to purchase the Mott Haven property, giving them an option of paying, therefor, by conveying the Thompson-street property, or in cash :—in other words, not a contract binding each to purchase the property of the other, at the prices named in the contract, but bindihg neither to sell unless he chose. The language of the contract shows that this was not the intention of the parties. By that, each of the parties expressly agree to sell and convey their respective property as specified in the contract. It is much more explicit in this respect than in the agreement to purchase that being left to inference from the general language of the contract. To construe the contract as requiring each to purchase at the option of the other, but requiring neither to convey unless he chose so to do, would wholly defeat the intention of the parties, and yet this is the result of the construction adopted by the special term. By that, the defendant was held bound to take the Thompson-street property, and in case of failure to convey, as specified, the Mott Haven property, to pay the sum specified as the value of the former in cash. Under this construction, the plaintiffs, if unable to give title to the Thompson-street property, might have been compelled to take the Mott Haven and pay cash therefor. As above remarked, this would entirely defeat the intention of the parties, as appears from the language of the entire contract. That shows that the object was to exchange the one property for the other, the defendant paying the estimated excess in the value of the plaintiffs' property to them. This being so, the contract was entire, and a specific performance of a part only cannot be awarded. This shows that the judgment of the special term was erroneous.
But the counsel for the appellants insists that assuming this to be the true construction, he was entitled to a specific performance of the entire contract, and that, as the defendant had agreed that his wife should unite in the conveyance of the Mott Haven property so as to bar her right of dower, and it appearing that she refused so to do, he was entitled to a conveyance from the defendant of the property, and to have deducted from the price the value of the inchoate right of dower. Ho such claim was made upon the trial, but if the plaintiffs are entitled to this relief they can obtain it upon a new trial. The question must therefore be decided. The counsel cites numerous authorities showing that where a vendor is unable to perform the entire contract, the purchaser may, if he chooses, enforce performance of that part which the vendor can" perform, and recover compensation for the part unperformed. I have examined these, and find that in general they are cases where there is a failure of title in the vendor to a part of the premises agreed to be conveyed, and where a proper deduction from the purchase price can be ascertained and determined, so as to do complete justice between the parties in the case before the court. Where this cannot be substantially done it is obvious that specific performance ought not to be decreed, as this should be done only where the court can see that the ends of justice require it. In Peters v. Delaplaine,. 49 N. Y., 362,—which was an action for- specific performance, and where the question was whether the action was barred by the statute of limitations, and whether the relief should not be denied on the ground of delay in commencing the action, which was attempted to be excused by reason of the inability of the defendant to procure a release of dower from his wife at the time the premises should have been conveyed,—it is said, page 368, " The seller could not- have compelled thé purchaser to accept such defective title with indemnity for the incumbrance, but the latter had an option to accept it -or rely upon his action for damages. He could have brought his action for specific performance at once, and taken such judgment as would have secured to him the full benefit of his contract, and the property for which he contracted for." Citing several authorities. What follows shows that, in the opinion of the learned judge, the vendor in such a case would be compelled to convey, and in some form not specified indemnify the pur chaser against the contingent rights of dower of the wife. In Woodbury v. Luddy, 14 Allen, 1, it was held, that the purchaser might, in such a case, compel the vendor to convey with a deduction from the price of the fair value of the inchoate right of dower of his wife who refused to release the same, but that such deduction was not the difference in the market value of the property with a perfect title and its value subject to such right, and that the value of this right should be determined by the tables of mortality. In Davis v. Parker, Id., 94, a similar judgment was given. The point was not directly involved in Peters v. Delaplaine, supra, nor have I found any case in this State in which it has been determined in an action for a specific performance, that a purchaser may compel a vendor, unable to procure his wife to release her (>dower, to convey subject to such right, and abate from the price such a sum as the court determined was its value. But be this as it may the application of the doctrine in this case would work injustice. Here the parties have agreed to exchange in substance one parcel of real estate for another, and contracted for the payment by the defendant to the plaintiffs of the estimated excess in value of their parcel by giving a second mortgage thereon payable in future, the value placed upon each parcel not being its estimated cash value but its relative value with the other parcel, no cash payable by either. Under such a contract, to require the defendant to convey the Mott Haven property to the plaintiffs, and pay such compensation as the court should determine its market value was impaired by the outstanding inchoate right of dower, or such sum as the real value of such right, ascertained by the tables of mortality, would be harsh and oppressive. The defendant never made a contract to do this. To charge him with the difference in the market value would be unjust, as it is obvious that this incumbrance upon the title would impair that to a much greater extent than the real value of the right. To compel him in effect to purchase the right by paying the plaintiff therefor its value determined by the tables of survivor-ship and mortality, would in a case like this be unjust. He, as we have seen, contracted for an exchange of his property for that of the plaintiff. Under such a contract he ought not to be compelled to take the risk of the loss to which the application of those tables to this particular case might subject him. These tables, when applied to a great number of cases, will in the aggregate show correct results. Hence they may be used by life insurance companies with safety in fixing their rates, and are resorted to by courts when the probable duration of life must be determined in adjusting the rights of parties. But to determine the value of the inchoate right of dower in this way for the purpose of enforcing the specific performance of a contract for the ex-" change of real estate with compensation, would be unsustained by precedent or sound principle. My conclusion therefore is that upon the facts found by the special term the plaintiff was not entitled to the specific performance of the contract or any part of it. The plaintiff must resort to his legal remedy for the damages, if any, that he has sustained from the defendant's breach of the contract. The remaining question is whether the general term ought not' to have ordered a new trial instead of giving final judgment dismissing the complaint. It appears from the opinions that the latter course was adopted for the reason that it appeared upon the trial that the plaintiffs were aware, at the time of the commencement of the action, that the defendant could not perform the contract, and that in such a case equity would not retain the suit for the purpose of awarding damages which could be recovered in an action at law. This was the rule prior to the adoption of the Code (Morse v. Elmendorf, 11 Paige, 277). But the Code authorizes the uniting in the complaint of causes of action both legal and equitable arising out of the same transaction (Bradley v. Aldrich, 40 N. Y., 504, 512). The facts constituting these causes of action must be stated in the complaint, The court held in that case that no facts constituting a legal cause of action were stated in the complaint, and that as the plaintiff failed to prove the equitable cause of action stated, the complaint was properly dismissed. .
This shows that where the complaint states facts giving an equitable cause of action, and also a legal cause of action arising out of the same transaction, the party is entitled to have both tried if necessary to obtain his rights. That is this case. The complaint sets out the contract, and alleges a tender of performance by the plaintiff and a breach by the defendant, and demands judgment for one hundred and twenty-five thousand dollars, and other relief. True, he demands- equitable relief based upon the ground that he was entitled to a specific performance of that part of the contract relating to the Thompson-streét property. He railed in showing a right to this. He then had a right to a trial of his claim for damages sustained by the breach. True, the mode of trial may be different. The former must be tried by the court or a referee unless some question or questions of fact involved are ordered by the court to be tried by jury. Either party has the right to a jury trial of the latter. This creates no practical difficulty. The one issue may be tried by the court and the other by jury if the ends of justice require the trial of both, or both may be tried by the court or a referee if the parties so desire. The judgment of the general and special terms must be reversed and a new-trial ordered, costs to abide event.
Folger and A. S. Johnson, JJ., concurred.