Court Opinion

ID: 5301867
Source: CourtListenerOpinion
Date Created: 2022-01-08 03:12:27.811901+00
Date Added: 2024-06-11T08:29:05.321413
License: Public Domain

Carswell, J.
On December 17, 1925, defendants made a written contract to sell to plaintiffs certain real property in West-bury, L. I., for $40,000. The down payment required was $4,000, which plaintiffs paid upon signing the contract. On the adjourned closing day defendants tendered a deed to plaintiffs which they rejected upon the ground that the title was unmarketable. Plaintiffs offered to comply with the contract requirements as to them if a marketable title were proffered to them. The alleged defect in defendants’ title was claimed to grow out of certain facts brought to plaintiffs’ attention. These facts cast a substantial doubt upon the validity of a deed of William Taylor on May 31, 1906, purporting to convey his undivided interest in the property in question to a predecessor in title of the defendants.
Plaintiffs brought this action to recover their down payment, their title search expenses and alleged damages or loss of profits on a resale of the property. The defendants counterclaimed for specific performance and have had judgment therefor. The judgment should be reversed, and judgment directed for plaintiffs for $4,500 to cover the $4,000 down payment and $500 title examination expenses. The alleged damages or loss of profits may not be had. The contract of resale which plaintiffs made required something other than a merely marketable title which defendants contracted to convey to plaintiffs.
The title tendered to plaintiffs was not marketable (Trimboli v. *264Kinkel, 226 N. Y. 147, 152), since a prudent man, knowing the facts, would hesitate to take it. Here plaintiffs, in the course of the search of the title, were apprised of facts which would subject them to the hazard of an adverse decision thereon, and which would affect the validity of the Taylor conveyance of May 31, 1906. That deed is at least voidable, and its validity is dependent upon whether the testimony of one set of witnesses in an incompetency inquisition in 1924, who assert incompetency of Taylor prior to 1906, be accepted, or whether the testimony of another set of witnesses who testified on this trial, and whose testimony it is claimed establishes Taylor’s competency as of 1906, be accepted. Plaintiffs are not required to purchase a lawsuit where the question of Taylor’s competency, based upon the foregoing sets of testimony, might be so decided as to invalidate Taylor’s deed of May 31, 1906. If Taylor was incompetent on May 31, 1906, and such a determination were had, the Statute of Limitations would not begin to run against him (Civ. Prac. Act, § 43). until the appointment of his committee on September 4, 1924. The testimony tending to sustain his competency as of 1906 was given in this action. Neither Taylor nor his committee was, however, a party. The testimony indicating his incompetency, not only as of 1924 but also as of prior to 1906, was given in the incompetency inquisition, which needlessly went back more than a period of two years prior to the inquisition. The alleged facts showing incompetency as of the period prior thereto, down to and including 1906, became a matter of public record and came to the notice of plaintiffs while prudently examining with respect to the validity of the title. The knowledge of which they thus became possessed they may not prudently ignore, and they are entitled to act upon it by way of rejecting the title. (Brokaw v. Duffy, 165 N. Y. 391, 400.)
The record in the incompetency proceeding was improperly admitted to establish in this action that Taylor was incompetent on May 31, 1906 (Boschen v. Stockwell, 224 N. Y. 356), but it was competent so far as the record therein revealed to plaintiffs the availability of testimony from witnesses showing Taylor’s incompetency as of and prior to May 31, 1906. It was properly received to show the nature and character of the information of which plaintiffs had become possessed in good faith and of which they had acquired actual notice which they could not safely ignore. (Brokaw v. Duffy, sufra.)
The judgment requiring specific performance by plaintiffs should be reversed upon the law and the facts, with costs, and judgment directed for plaintiffs for $4,500, with interest and costs. Findings of fact and conclusions of law inconsistent with this decision *265should be reversed and new findings will be made in accordance herewith.
Lazansky, P. J., Kapper and Scudder, JJ., concur; Hagarty, J., dissents and reads for affirmance.