Case Name: The Leibinger & Oehm Brewing Company, Respondent, v., Frederick H. Ernst, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896-12
Citations: 10 A.D. 459
Docket Number: 
Parties: The Leibinger & Oehm Brewing Company, Respondent, v., Frederick H. Ernst, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 10
Pages: 459–463

Head Matter:
The Leibinger & Oehm Brewing Company, Respondent, v., Frederick H. Ernst, Appellant.
Contract of sale—am acceptance of the title, with an incumbrance not contemplated by the contract, is a consideration for an agreement to pay part of the purchase, price of the land to a third party.
Frederick H. Ernst, who owned a lot and building, part of which was occupied as a saloon by one Luhersen, upon whose license and fixtures a brewing company held a mortgage, entered into negotiations with one Scholch for the sale of the entire property, which resulted in a contract for the sale of the property and the saloon and business for §6,500, of which §100 was to go to Luhersen, whose interest was sold subject to a lien of §1,000 in favor of the brewing company. When the sale was closed Luhersen had already been paid twenty-five dollars, and Ernst had in his possession a bill of sale executed by Luhersen (who was not present), ready for delivery to the purchaser, who said that he would pay the remaining §75 of the. §100 coming to Luhersen to the brewing company, his creditor, to which Ernst objected, and took the-money, giving to the purchaser a receipt which stated that the defendant had received from Luhersen the sum of seventy-five dollars, which was to be paid to the brewing company as part payment for goods sold by it to Luhersen.
At this time the property of Luhersen was subject to liens.in favor of the brewing company in excess of §1,000, the amount which was contemplated by the original contract of sale, and Luhersen was, therefore, not only not in a position to carry out the contract, but was liable in damages to the purchaser in an amount in excess of the seventy-five dollars.
In an action brought by the brewing company against Ernst to recover the amount so receipted for by him, Held, that the plaintiff was entitled to recover this sum from the defendant; That, as Luhersen had failed to perform the contract, the purchaser, Scholch, was in a position to refuse to complete his purchase or to make any new conditions under which he would take the property;
That, as the property which the purchaser was to acquire was subject to liens held by the brewing company, it directly inured to the benefit of the purchaser that the seventy-five dollars should be paid to that company.
That, as Brhst had received seventy-five dollars, to which neither he nor his tenant Luhersen was entitled under the original agreement, this constituted an ample consideration for Ernst’s promise that he would pay that sum to the brewing company.
Appeal by the defendant, Frederick H. Ernst, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 10th day of March, 1896, upon the verdict of a jury rendered after a trial at a Trial Term of the Supreme Court held in and for the county of Kings, and also from an order bearing date the 6tli day of March, 1896, and entered in said clerk’s office denying the defendant’s motion for a new trial made upon the minutes.
This action was brought for the purpose of recovering seventy-five dollars, the amount set forth in a receipt signed by the defendant and set forth in the opinion.
Hermon H. Shook, for the appellant.
Edaward M. Grout, for the respondent.

Opinion:
Cullen, J.:
In June, 1893, the defendant Ernst, a lawyer, was the owner of a lot and building on Wyckoff avenue in the city of Brooklyn, part of which building was occupied as a saloon and the remainder as a dwelling house. One Luhersen carried outlie business in the saloon and was the owner of the fixtures and license. At this time one Scholch negotiated witli the defendant and with Luhersen for the purchase of the premises and the business. This negotiation terminated in an oral agreement for the purchase of the saloon, the license, the business and the real estate for $6,500, subject, as the witness Hallheimer testifies, to an incumbrance on the saloon and business in favor of the plaintiff for the sum of $1,000. The only written agreement between the parties was a contract for the sale of the real estate for $6,400 between Scholch and. the defendant. This left $100 to go to Luhersen for the saloon, fixtures, license and business. It subsequently appeared that the amount owing to the plaintiff was about $1,300 and interest, secured by a chattel mortgage for $1,000 and a pledge of the license. Negotiations were had between the plaintiff and Luhersen, looking towards a reduction of the plaintiff's claim, but the parties reached no definite determination. When the agreement for purchase came to be closed, Luhersen was not present, but the defendant had in his possession a bill of sale executed by Luhersen, ready for delivery to the purchaser. Twenty-five dollars had' already been paid to Luhersen on account uf the sale. Hallheimer, the attorney for the purchaser and for the present plaintiff, testifies that he stated he would send the remaining $75 to the plaintiff to apply on its claim; that the defendant said that he (defendant) might as well send it, that it would look better; and that Hallheimer replied that the defendant might do so, if he would give him a certificate of deposit so that he (Hallheimer) could prove at all times that the money would be sent. The defendant thereupon drew up and executed the following receipt and delivered it to Hallheimer:
" New Yoke, Jivne 16í/¿, 1893.
" Received from Martin F. Luhersen the sum of $75.00, to be paid to Leibinger & Oelnn Brewing Co., Brooklyn, N. Y., as part payment for goods sold and delivered by said Brewing Co., to said Luhersen.
" FRED'K H. ERNST."
The defendant denied this statement of Hallheimer. He testified that after the delivery of the deed of the real estate, Hallheimer asked for the bill of sale from Luhersen and said that the remainder of the purchase money should go to the brewing company (the plaintiff) ; that the defendant replied that he had no knowledge of that fact and would not deliver the bill of sale without receiving the money; that Hallheimer and the purchaser then stated that Luhersen had agreed that the money should be paid to the jilaintiff; that on that statement he agreed to hold the sum till Luhersen could be brought into the office and give defendant directions as to the application of the money; that thereupon he took the money and gave the receipt; that Luhersen subsequently demanded of him the money and he paid it to him. The defendant gave no testimony contradicting the plain tiff's evidence as to the original negotiations between the parties and the state of the accounts between the plaintiff and Luhersen. The cause was submitted to the jury under instructions that if they found that the defendant, in consideration of the receipt of the money, agreed to turn it over to the plaintiff, he was liable therefor; otherwise not.
On a previous trial of this action the court directed a verdict in favor of the plaintiff. On appeal the judgment was reversed. (89 Hun, 156.) It was held that the trial court erred in excluding evidence of the parol agreement between the parties at the time of the execution of the receipt, and also that the promise alleged to have been made by the defendant was without consideration. The first question does not arise on this appeal, as the evidence previously excluded was admitted on the last trial, and the terms of the agreement between the parties were submitted to the jury to determine as a question of fact. But the second question still remains, as I do not see that the evidence given on the present trial is more favorable to the plaintiff in this respect than that adduced on the former trial. On the former trial it was testified that the amount due on the mortgage was $1,384.10. It now appears that there was $1,000 and interest due on the mortgage, and $300 due on the license. I am, however, of opinion that the learned General Term misconceived the facts. Luhersen had agreed to sell the saloon, license, fixtures, etc.— subject to a lien thereon for $1,000 — for the sum of $100, and had received $25 of that sum. When the property was about to be transferred Luhersen was unable to cany out his contract, for the property was subject to liens in excess of $1,300. He, therefore, was not only not entitled to receive the remainder of the purchase money ($15), but was liable in damages to the purchaser. It was, therefore, entirely within the power of the purchaser to refuse to complete his purchase, or to make any new conditions upon which he would take the property. As the property he was to acquire was subject to liens held by the plaintiff, he was interested in reducing the amount of those liens. It directly inured to Ins benefit that the $15 should be paid to the plaintiff. The defendant received $15, to which neither he nor his principal was entitled under the original agreement. This constituted ample consideration for the agreement to pay that sum to the plaintiff. The learned General Term seems to have been under the impression that the purchaser took the property subject to no greater incumbrance than that originally agreed upon. Were this the case, there plainly would have been no consideration for the agreement to apply the $75 on the mortgage, for in such case the purchaser would really obtain the property for $75 less than he agreed to pay for it. But as a matter of fact, on this evidence, even with the application of this $75 to plaintiff's claim, the purchaser has to pay for the property over $200 more than he originally bargained for.
The judgment and order appealed from should be affirmed, with costs.
All concurred.
Judgment and order affirmed, with costs.