Case Name: STEINER v. FOURTH PRESBYTERIAN CHURCH
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1897-05-14
Citations: 45 N.Y.S. 524
Docket Number: 
Parties: STEINER v. FOURTH PRESBYTERIAN CHURCH.
Judges: 
Reporter: West's New York Supplement
Volume: 45
Pages: 524–530

Head Matter:
(17 App. Div. 500.)
STEINER v. FOURTH PRESBYTERIAN CHURCH.
(Supreme Court, Appellate Division, First Department.
May 14, 1897.)
Vendor and Purchaser— Performance of Contract.
Plaintiff agreed to buy land from defendant, the deed to be delivered and the price paid on March 1,1894. On that day it was found that the premises were subject to restrictive covenants, and a postponement wras taken to March 20th; it being agreed that the title should be closed as of March 1st. Finally it was decided to submit the matter to the supreme court, and an opinion was handed down, in June following, holding that plaintiff should be relieved from his contract. In the meanwhile plaintiff had advanced money to defendant on account of the purchase price, which it was agreed should be without prejudice. At the request of defendant no judgment was entered on the decision of the court, but the parties met on October 12th to carry out the contract of sale. At that meeting the parties considered only their rights under the original contract, and no suggestion was made as to a new contract. Meld that, since the delay in completing the contract was not due to the default of plaintiff and. the property was all the while in the possession of defendant, plaintiff was not chargeable with the expense of carrying the property during that time.
Ingraham and Parker, JJ., dissenting.
Appeal from trial.term, Hew York county.
Action by David Steiner against the Fourth Presbyterian Church, Thirty-Fourth Street, a religious corporation, to recover money alleged to have been received by defendant for plaintiff’s use. From a judgment entered on a verdict in favor of plaintiff, and from an order denying a motion for a new trial, defendant appeals.
Affirmed.
A contract was entered into between the parties, by which the church agreed to convey to Steiner certain premises on Thirty-Fourth street, in consideration of the sum of $190,000, to be paid upon delivery of the deed on the 1st day of March, 1894. When the time for closing of the title arrived, it was found that the premises were incumbered by restrictive covenants, and thereupon an adjournment was taken to March 20, 1894. It was provided in the written consent of postponement that the transfer on the 20th day of March was “to pe then made as of March 1st, 1894.” Finally it was decided to submit the matter to the general term of the supreme court upon an agreed state of facts, "and the matter stood in abeyance without further adjournment. Meantime the church, having engaged in the erection of a new edifice, required funds, and for that purpose a mortgage was placed upon the premises, and in addition thereto Steiner advanced further moneys on account of the purchase price, which it was agreed should be without prejudice, to the extent of $35,000. The general term, in June, 1894, handed down an opinion, holding that Steiner should not be compelled to perform, and was entitled to recover the sum which he had paid on the contract, with interest and costs. 79 Hun, 314, 29 N. Y. Supp. 488. Although a proposed judgment and order embodying the general term decision was forwarded to the counsel for the church on September 1¡ 1894, it was on their request not entered, but instead an appointment was made to carry out the contract of sale for September 12th. As matter of fact, no judgment was entered canceling the contract. On October 12, 1894, the parties met pursuant to appointment, and then a dispute arose as to whether the transaction was to be closed as of March 1st or October 12th, and as to whether the plaintiff should be charged with the watchman’s services, insurance, interest, etc., in the meantime. It was urged by counsel for the church that the order of the court on the application to sell the property provided that it should be sold for a fixed sum and closed on the 1st of March, and that they could not make any other arrangement whereby the church would incur the additional expense of carrying the property beyond the date for the delivery of the deed. Mr. Steiner claimed that, as he was not in possession of thd property, and was not responsible for the delay, such expense should be borne by the church. The understanding under which .Mr. Steiner paid the money which he did for these expenses in addition to the consideration price is in dispute. According to the plaintiff, the money was not paid to the church upon the understanding that it was not to be regarded as a voluntary payment, but was to abide the decision of the question whether the title was to be closed as of March 1st or 'October 12th, and that this question should be submitted to the court in an action. A subsidiary question was raised as to the right to recover $177.23 which was paid after the action was commenced ahd forwarded with a letter which reads: “This amount is to form part of the present litigation between the church and David Steiner, and is accepted subject to the same controversy, namely, if Mr. Steiner was entitled to a deed as of the time of closing, to wit, the 12th of October, 1894, the church is to return the amount. If, however, Mr. Steiner was bound to accept the deed as of the 1st day of March, 1894, the church is entitled to the amount.” The plaintiff, having paid the amount, subject, as he claims, to the understanding that the right of the church to retain it was to be left to the court, brought this action to have the question determined; and at the close of the testimony the learned trial judge charged the jury, among other things, as follows: “The question for you to determine is whether, when this demand for interest and other expenses was made on the 12th of October, that it was made upon an agreement that it was so paid, with a view to the submission to a court subsequently of the right to exact it, and whether there was an understanding among the parties-that it was to be retained by the church only in case it should be ultimately decided they had a right to it. * * * If you find in favor of the plaintiff, upon that dispute, as to the agreement, then the question, of course, will arise, was the church entitled to it? Upon that question I instruct you, as a matter of law, that the defendants were not entitled to demand it at that time.” The jury having found in favor of the plaintiff, the church appeals from the judgment entered upon such verdict.
Argued before RUMSEY, PATTERSON, O’BRIEN, INGRAHAM, and PARKER, JJ.
Henry Thompson, for appellant.
Emanuel J. Myers, for respondent.

Opinion:
O'BRIEN, J.
The abstract propositions of law for which the appellant contends, and most of which were charged by the court, are unexceptionable, namely, that, the title of the premises having proved defective, the plaintiff had the right on the 12th of October, 1894, to refuse to carry out the contract, and to receive from the defendant the amount of his advances with interest; that on that date the question whether the sale should be concluded or not depended upon the subsequent agreement of the parties; that the defendant could not compel the plaintiff to take the title to the property on the 12th of October, nor could the plaintiff compel the defendant to transfer the title to him and bear the expense of carrying the property from March 1st to October 12th. Whether the sale should be consum- . mated, or not, depended upon the subsequent agreement of the parties. In other words, either party, in October, could have treated the contract as ended, or they could have treated it as still existing, or they could have entered into a new and entirely different contract. If, on that day, the church had elected to rescind, and, in the place of the old, had substituted a new, agreement, under the terms of which the payment was required of not only the original consideration price, but, in addition, what it had cost to carry the property, then the plaintiff would have no legal right to recover back the amount so agreed to be paid. We think, however, it clearly appears, and the case was tried upon that theory, that neither of the parties had ever elected to rescind the contract, and, though there never had been any formal adjournments after the 20th of March, and pending the determination of the case as submitted to the general term, there is but one inference from the facts, and that is that both treated the contract as a still-subsisting .one. When the parties met in October, there was no suggestion of entering into a new agreement, but they were discussing their respective rights as parties bound by a contract; and as appears from the testimony both of Mr. Myers and Mr. Cuming, the counsel for the plaintiff and defendant, respectively, the dispute centered upon the question as to whether the title, which, under the contract, one was to buy and the other to sell, was to be closed as of the 1st of March or the 12th of October. That the parties had the right to regard the contract as still existing between them, and could have agreed that the question of their rights thereunder should be submitted to the court, is not open for serious discussion. Upon the conflict in the testimony, the trial judge properly submitted the question as to whether, by arrangement between the parties, it was left to the court, to decide who was to stand the expense of carrying the title, and correctly instructed the jury that, in order to entitle the plaintiff to recover back the money then paid, he must establish to their satisfaction that "it was received under an agreement that it should be paid in case the court decided that the church was not entitled to it." The jury having found that such an agreement was made, it brings us to a consideration of whether, treating the original contract, as the parties themselves did, as still existing, the church could insist upon the payment of the expenses of carrying the property pending the dispute as to marketability of the title. '
Considering that the church was in possession, and had the benefits, if any, resulting therefrom, and that the plaintiff was not in default at any time, it is difficult to determine upon what principle-of law a conclusion other than that reached by the learned trial judge could be arrived at,—that the defendant was not entitled to exact such payment from Mr. Steiner. The latter was entitled to a deed "free from incumbrance," and until the tender of such conveyance, with the corresponding ability to convey, the vendee could not be placed in default. It was, tin effect, this question of whether Steiner had unreasonably refused to perform that was submitted to the general term. That court, as we have stated, decided that his objections were good, and left him free to rescind the contract and get back what he had paid thereon if he so elected. As stated, however, neither side claimed that the contract was extinguished by the result of the proceedings in court, but, on the contrary, performance was tendered by both parties, and, Steiner having concluded to take notwithstanding the restrictions, the meeting in October was with a view to carrying out the contract; and, standing in this attitude to each other, the counsel for the church insisted that the order of the court authorizing the sale defined the duties of the trustees, and that by such order they were required to close the title as of March 1st, and were bound to collect the principal sum as of that date, with interest thereon accruing from the postponement of such payment, without regard to the cause of such delay. The fallacy of this contention, we think, lies in a failure to recognize that it was not the purchaser who was in default, but the church; and the question upon whom should fall any expense resulting from the delay must necessarily be determined, if it is to be determined at all, by a consideration of who was responsible or caused the delay. Therefore, when the parties met in October, after the lapse of several months from the original date, the question to be answered was, which of the contracting parties was in default, and to whom was the delay attributable? We think the obvious answer to these questions is that the default and the delay are both to be attributed to the church, and we can think of no good reason why, upon so concluding, the other contracting party should be charged with the expenses caused thereby.
With respect to the larger item of interest, that, in the absence of contract, is only awarded as damages upon the default of a party to meet his obligations. "Generally speaking, interest is allowed as damages for default in the payment of money at a specified time." 11 Am. & Eng. Enc. Law, tit. "Interest," 383, 389; Cutter v. Mayor, etc., 92 N. Y. 171. In Fry, Spec. Perf. (3d Ed.) p. 620, § 1399, it is said:
"Now, it is obviously inequitable, in the absence of express and distinct stipulation, that either party to the contract should at one and the same time enjoy the benefits flowing from possession of the property and those flowing from possession of the purchase money. The estate and the purchase money are things mutually exclusive. 'You cannot,' said Knight Bruce, in a case arising out of the sale of some slob lands in Chichester harbor, 'have both money and mud.' And so neither party can at the same time be entitled both to interest and the lands."
See, also, Id. § 1404.
The question, therefore, as to whether there was an agreement that the payment made by Steiner was not to be voluntary, but was to be received by the church subject to determination by the court as to whether it had the right legally to exact it, was, upon conflicting evidence, properly submitted as a question of fact to the jury, and the learned trial judge was right in holding that, if the plaintiff es tablished the existence of such an agreement, then, as a matter of law, in closing the contract, the church having remained in possession of the property, and being in default and unable to tender the deed contracted for, it had no right, standing upon the contract which it had entered into, to exact the payment of the expenses incident to the delay between the original date and the time when the title was finally closed.
The judgment and order should be affirmed, with costs.
RTJMSEY and PATTERSON, JJ., concur.