Case Name: OSCAR SCHMIDT, Respondent v. CHARLES H. REED, et al., Appellants
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1890-05-05
Citations: 26 Jones & S. 570
Docket Number: 
Parties: OSCAR SCHMIDT, Respondent v. CHARLES H. REED, et al., Appellants.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 58
Pages: 570–574

Head Matter:
OSCAR SCHMIDT, Respondent v. CHARLES H. REED, et al., Appellants.
Time, may be made of the essence of the contract, although not, expressly stated so to be in the contract itself. Contract for sale of real estate calling for payment by the vendee of a part of the purchase money by the assumption of a mortgage having a certain time to run, effect of vendoi's being unable to convey subject to such a mortgage on the law day, although he shortly after became able to do so—Specific performance, action or counter-claim for by vendor when relief not granted in above put case— Vendee, when he may recover his deposit and expenses of examination of title in a case as above put.
Before Sedgwick, Ch. J., and Freedman, J.
Decided May 5, 1890.
Plaintiff as vendee and defendants as vendors entered into a contract for the sale and purchase of certain lands on October 18, 1888. Plaintiff was to pay the purchase money partly in cash and partly by taking the premises subject to a mortgage for $22,500, bearing interest at five per cent and having five years to run from November 1,1886. The deed was to be delivered on November 15, 1888. On November 12th plaintiff discovered that the mortgage was due November 1, 1889. He immediately on that day (November 12th) gave notice thereof to defendants ; and also that he would insist on the production, on the day fixed for the closing of the title, of an extension of the mortgage to the period mentioned in the contract. On the 14th of November defendants’ attorney (having in the meantime ascertained that there would be some delay in procuring an extension of the mortgage communicated that fact to plaintiff’s attorney who then still insisted that the extension should be ready at the time fixed for the closing of the title) called on plaintiff’s attorney and offered to give ample security that the plaintiff would not be called on to pay the mortgage until the time mentioned in the contract, and asked for an extension of the time of closing, which request was refused by plaintiff’s attorney.
On November 15th, the plaintiff and his attorney, appeared at the place specified in the contract for the closing of the title and tendered the money called for by the contract. The defendants stated that they had not yet obtained an extension of the mortgage ; that they expected to procure it, and tendered a deed of the premises, containing a provision providing for the assumption of the mortgage maturing November 1, 1889, and a covenant on the part of the defendants that they would procure an extension or hold plaintiff harmless, in case the payment of the mortgage was called for pursuant to its terms. The plain tiff ref used this deed and demanded return of the money paid by him on signing the contract, and refused to extend the time for performance of the contract.
On November 23d, a deed, executed by the mortgagee extending the time for payment to November 1, 1891, was by the defendants’ attorney tendered to the plaintiff, which he refused, and on the same day this action was commenced by plaintiff to recover back his deposit, a reasonable counsel fee for searching the title and the disbursements incurred in and about the same. The defendants by their answer claimed a specific performance by the plaintiff.
The action was tried as an equity action at an equity special term before the court without a jury.
. The learned judge before whom the cause was tried, held that by the demands made by plaintiff on the 12th and 14th days of November, time became of the essence of the contract; also held that defendants had not shown themselves entitled to equitable relief and that to grant it would not be in accordance with public policy, and found in favor of plaintiff for his claim for his deposit and the expenses of examining the title, and against defendants on their claim for a specific performance. From this judgment entered on the findings the defendants appealed.
William C. Reddy, for appellants.
Henry C. Botty, for-respondent.

Opinion:
Per Curiam.
The judgment should be affirmed, with costs, upon the opinion of the learned judge at special term.
Note.—If the opinion of the judge at special term had been received by the reporters in season the case would have been reported in full. As the questions involved are of general interest it has been deemed proper to report the opinion of the Court below here. A perusal of the opinion will, it is hoped, confirm the views of the reporters. The opinion, after reciting the facts, as set forth in the head note, was as follows:—
" O' Cobmak, J.—The defendants rely in their defence chiefly on the allegation that they were not guilty of any fraud or misrepresentation, as to the date on which payment of the mortgage became due, and that they did not in terms assert that it became due on the day mentioned in the contract, and they also aver that, on being informed that the mortgage in fact was payable in 1889, two years before the date set forth in the agreement, they used reasonable diligence in procuring a deed from the mortgagee extending the time of payment, and that they did actually procure such deed, and tendered it to the plaintiff on November 23d, eight days after the date specified in the agreement of sale for closing the contract.
" The evidence does not, in my opinion, sustain a charge of laches on the part of the plaintiff, or of any delay in acquainting himself as to the contents of the mortgage in question. He was justified in assuming for the time that the defendants, in executing their contract, did not err in the statement made therein as to the time of the maturity of a mortgage on their own property. On ascertaining the error, the attorney for the plaintiff lost no time in informing the attorney for the defendants of the condition of affairs.
" Neither am I satisfied that a charge of laches can well be sustained against the defendants for delay in securing the extension of time from the mortgagee, for payment of the mortgage, after they had received such information.
" The main question seems to be whether the plaintiff, having given notice to the defendants that he would require formal, exact, and final execution of the contract, and the production of the deed extending the time for payment of the mortgage, to the date set forth in the contract, and that he would accept of no substitute for that deed, and also that he would require the transaction to be closed on the day mentioned in the contract, and would not consent or submit to any further delay, was justified in law and equity in taking that position. If so, the plaintiff must succeed in this action. If, on the other hand, a court of equity, on the facts of this case, has power, and, in the exercise of its discretion, ought to relieve the defendants, then the question will be whether they have shown themselves to be deserving of equitable relief, and whether it would be in accordance with public policy to grant it.
" There are no authoritative decisions of the courts of this state, laying down a hard and fast rule of law for cases of this nature. Each case must, in great degree, be decided according to its own peculiar features, and on its own facts.
" The time for closing contracts for the sale of land, when clearly and distinctly expressed in the contract itself, although not expressly stated as being of the essence of the contract, cannot be treated as mere surplusage, without any force or intent or meaning. It can, in my opinion, be made essential to the contract by the distinct demand of either party that the express terms of the contract in that respect be carried out. The plaintiff had the right to demand that the contract should, in that and in all other respects, be carried out according to its terms, and on such demand being made, it becomes of the essence of the contract. If the defendants were in doubt before, or at the time when the contract was executed, as to the time when the mortgage fell due, it was their duty to make speedy inquiry on the subject, so as to correct their error if any, in time. In failing to do so, and leaving a question of such manifest importance in doubt, up to a few days before the time fixed for closing the transaction, I think the defendants failed in their duty, and in the vigilance which should be require of them even if it were only for their own protection.
" In the various transactions which take place in this city, asto the sale and transfer of real estate, cases of this nature frequently arise, and it is important that the law on these subjects should be, as far as possible, clear uniform, and capable of practicable application. To hold that no importance should be attached to the time specifically fixed in the contract of sale, for the closing of the transaction, by exchange of deeds, etc., would be, in my opinion, dangerous, and tending to the growth of habits of looseness and uncertainty. In the transaction of such business, mutual courtesy is often needed, and often freely given. But such courtesy may be withheld without violation of law, and the injurious consequences that may ensue do not constitute a cause of action at law, or sustain a claim for equitable relief. .
" Applying the rules of law and equity to the special facts in the case at bar, I hold that the defendants are chiefly responsible for the delay in closing the contract at the time specified therein. That the plaintiff had a right to demand a deed from the mortgagee, extending the time for the payment of the principal of the mortgage to the date mentioned in the contract. That the defendants were primarily responsible for the correctness of the date set forth in the contract. That, under all the circumstances, the plaintiff had the lawful right to require the closing of the sale at the time specified in the contract, and was under no legal obligation to extend the time.
" In the case at bar, the'plaintiff distinctly refused to agree to any further extension, and announced that he would rest on his strict rights'under the contract.
" That the defendants were unable to carry out their part of the contract on the day required by the contract, was their misfortune, and to some extent their fault. They ought to have had more accurate knowledge of the material condition of their own title, and they ought not to have made themselves responsible by contract, for the accuracy of a statement of fact, in the contract, which would naturally be an important element, inducing the plaintiff to the purchase.
"• Judgment should be for the plaintiff and against the defendants, denying the equitable relief claimed by them.
" The plaintiff should have his costs in the action."