Court Opinion

ID: 6132148
Source: CourtListenerOpinion
Date Created: 2022-02-04 21:17:00.96135+00
Date Added: 2024-06-11T08:53:42.203967
License: Public Domain

Corlett, J.
(dissenting):
On the 18th day of September, 1880, the defendants William F. Wheeler, John E. Dusenbury, William A. Dusenbury and Edgar *72A. Dusenbury were tbe owners of 272 acres of land in lot twenty-two in the town of Genesee, Allegany county. On that day the defendants last-named, by the name of William F. Wheeler & Co., executed an instrument in writing to Hiram B. Burdick, as follows:
“ Received of Hiram B. Burdick, one hundred dollars, in part payment of all lands owned by us in the town of Genesee, county of Allegany, and State of New York, being the whole of said lot, except 75 acres sold to Matthew Green, and being 272 acres more or less for six dollars per acre, to be paid in annual payments of one hundred dollars each, with interest.
“A more complete contract to be hereafter executed.
“WILLIAM F. WHEELER & GO.”
“ Dated September 18, 1880.”
This was delivered to Burdick on the date of its execution.
On the same day the plaintiff furnished Burdick $100 to be used by him in making the first payment on the contract, which he did.
This money was advanced by the plaintiff in pursuance of a verbal agreement, that when Burdick obtained the contract he should execute and deliver to him the following instrument, which was executed and delivered accordingly:
“Little GeNesee, December 4, 1.880.
“ In consideration of one hundred dollars in cash paid to me, the undersigned, on the 18th day of September, 1880, by William Cranston, of the town of Genesee, county of Allegany and State of New York, I, the undersigned Hiram B. Burdick, do hereby sell and convey one-half of all my right, title and interest to a certain piece of land situate on lot twenty-two in the town of Genesee, county of Allegany and State of New York, containing two hundred and seventy-two aeres, be the same more or less.
“ The one-half interest of the same hereby conveyed being one hundred and thirty-six acres, undivided one-half interest of the whole to William Cranston above mentioned, to his heirs or assigns, and I the undersigned do hereby agree, when William F- Wheeler & Co. shall make me a complete contract, which they have agreed to do, that 1 will duly assign a one-half interest in the contract to William Crans-ton, and I, the undersigned Hiram B. Burdick, do agree to make the *73whole of the next payment due on said contract, which will be due September 18,1881, when it shall be due, and if either party shall fail to make one-half of the following payments in said contract when ■due from William F. Wheeler & Co., then the other party shall have the right to make the payments, and have the whole of said contract; nrice of said land to be six dollars per acre in said contract.
“HIRAM B. BURDICK.
“Witness — LeoNaed Willetts.”
Afterwards, and on or about the 1st day of March, 1881, the ■said Wheeler and the Dusenburys executed to the defendant Burdick a contract in writing, ante-dated, as follows :
“ Article of agreement made this 18th day of September, 1880, between William F. Wheeler, John E. Dusenbury, William A. and Edgar G. Dusenbury, all of the town of Portville, county ■of Cattaraugus, and State of New York, of the first part, and Hiram B. Burdick, of Genesee, Allegany county, and State aforesaid, of the second part, in manner following:
“ The said parties of the first part, in consideration of sixteen hundred and thirty-two dollars to them duly paid, hereby agree to sell unto the said party of the second part all of lot (22) twenty-two, town one, range two of the Holland Land Company survey, situate in the town of Genesee, Allegany county, and State of New York, containing 347 acres more or less, excepting and reserving seventy-five acres in the south-east corner of said lot, formerly contracted to Matthew Green for the sum of sixteen hundred and thirty-two dollars, which the said party of the second part agrees to pay to the party of the first part as follows: One hundred dollars on the execution of this agreement, the receipt of which is hereby acknowledged, and the remainder to be paid, one hundred dollars in each year thereafter on the eighteenth day of September, together with annual interest on all sums remaining due at the time •of each payment. Said party of the second part also agrees to pay all taxes and assessments that shall be taxed or assessed on said premises from the date hereof until said sum shall be fully paid as aforesaid.
“ And this said party of the first part on receiving such payment at the time and in the manner above mentioned, shall, at their own proper cost and expense, execute and deliver to the said party of *74the second part, or to his assigns, a good and sufficient deed of the above described premises, and the party of the second part also agree not to assign this agreement without the consent of the party of the first part, and it is agreed that the stipulations aforesaid are to apply to and bind the heirs, executors, administrators and assigns, of the respective party.
“In witness whereof, the said parties have hereunto set their hands and seals the day and year first above written.
(Signed) “ WM. F. WHEELER. [l. s.]
“ JOHN E. DUSENBURY. [n. s.]
“ YS. A. DUSENBURY. [l. s.]
“ EDGAR G. DUSENBURY. [l. s.]
“ H. B. BURDICK.” [l. s.]
On the 8th day of March, 1881, Burdick executed and delivered to the plaintiff an assignment in writing on the back of said contract as follows:
“ For and in the valuable considei'ation of one hundred in hand paid, I hereby assign one-half of all my right, title and interest in the within contract to William Cranston, of Genesee, N. Y.
“ In witness whereof, I have hereunto set my hand and seal the 8th day of March, 1881.
“ II. B. BURDICK.” [l. b.]
About the 10th day of August, 1881, the defendants combined and conspired together to cheat and defraud the plaintiff out of his interest in said contracts and land, they well knowing what his interests were. The mode of procedure agreed upon was that Burdick should execute a writing to Wheeler and the Dusenburys canceling and surrendering the land contract and all the interests under it;, that Wheeler, the Dusenburys and their wives should deed to Bur-dick.118 acres of said land, all of which was done. Hiram B. Burdick then through his brother, the defendant Wayne S. Burdick, caused said 118 acres to be deeded to his wife Kate Burdick, she having full knowledge of the fraud and being a party to it. Thereupon the defendants treated the plaintiff’s rights as extinguished.
The plaintiff tendered $200 for the payment and interest which fell due on the 18th of September, 1881, and a like amount for the payment which fell due on the 18th day of September, 1882. The *75money was refused, tbe tender has been kept good, Burdick has-' paid jiothing on the contract, and the plaintiff is treated by all the defendants as having no rights on the premises.
The above facts were found by the trial justice, and no claim is made on either side that the findings are not warranted by the evidence. The case comes before this court on the judgment-roll alone. The Special Term found among others the following-results :
“■ For conclusions of law, I find that the surrender of the contract, by the defendant Hiram B. Burdick, and the deed of Wheeler and the Dusenburys to him, and the deeds to Wayne and Kate Burdick,, respectively, are fraudulent and void, and of no effect as against the plaintiff, and do not in any manner affect his rights and interests under the contract; that the agreement of September 18,1880 (the first agreement- hereinbefore set forth), is a valid and binding agreement and in full force; that the right of the plaintiff' Cranston became fixed by the assignment made to him of an undivided' half interest under date of December 4, 1880 j that the contract subsequently executed, containing the clause or covenant that Burdick should not assign without consent, and did not operate to effect the interests and rights of Cranston, previously assigned; that whilst the conveyance and release were fraudulent and void as to the plaintiff, they are binding and valid as between the parties thereto; that the conveyance by Wheeler and the Dusenburys, and the release of the contract by Burdick to them, operated as a settlement as between them- and the payment in full as to Burdick’s interest in the contract; that by reason of said settlement he is not in default in making the payment upon the contract falling due September 18, 1881; that the plaintiff is entitled to a judgment, that the conveyance and release be adjudged fraudulent and void as far as he is concerned, and that it be further adjudged and determined that he has a contract for one undivided half of the premises described in the complaint, and will be entitled to a conveyance of such interest on paying half of the annual payments provided for in the contract.”
Both parties excepted to certain portions of the above findings. The supplemental complaint- alleges that the formal contract, executed on the 1st day of March, 1881, was to take the place of *76'the memorandum of the 18th day of September, 1880, and was dated back to that day. That memorandum was not signed by Burdick.
Before it was signed by Wheeler & Oo., a clause was inserted that a more complete contract should be made thereafter. The formal contract was, under seal, signed by all the parties, contained a provision about payment of taxes, and also an agreement on the part of Burdick not to assign the contract without the consent of the other party.
While the memorandum is silent on the subject of taxes and assignment, still it is very clear that it was the understanding between the parties that it should be put in the form it was when finally executed. The memorandum was never treated as the completed contract. Besides, there is no allegation in the complaint that the clause forbidding the assignment was improperly inserted, so that as between Wheeler, the Dusenburys and Burdick, the formal agreement fixed the rights of the parties.
The agreement of the 4th day of December, 1880,, made by Bur-dick and delivered to the plaintiff, mentions the fact that Wheeler & Co. had agreed to make a complete contract, one-half interest in which should be assigned to the plaintiff by Burdick. After that, and on the 8th day of March, 1881, the half interest was assigned on the back of the contract. It will be observed that Burdick’s agreement of the fourth of December, does not purport or assume to assign any part of the contract of Wheeler & Co. to the plaintiff. That instrument sells and conveys to the plaintiff one-half of Burdick’s interest in the land. It also provides that when he, Burdick, obtained from Wheeler & Co. a complete contract he will assign one-half of it to the plaintiff. It then proceeds and defines the rights and duties of the plaintiff and Burdick, as between themselves, including the advantages accruing to the party performing. When the plaintiff took the assignment of one-half of the complete contract it is fair to assume that he knew of the non-assignment clause. There is no finding to the effect that the plaintiff did not read or know the contents of the instrument, the one-half of which was assigned on the back of it. It is presumed that a person understands the matters in reference to which he deals. It is an elementary rule that an assignee of a contract for the sale of lands occupies no better posi*77tion than bis assignor. (Reeves v. Kimball, 40 N. Y., 299; Cutts v. Guild, 57 id., 229.)
The very most that the plaintiff can claim is that on the fourth of December Burdick had a contract with Wheeler & Co. which was assignable. That he became the owner of one-half of that contract, occupying, in reference to that one-half, as good a position as against Wheeler & Co., as Burdick would have occupied against that firm if no assignment had been made.
So far as the plaintiff and Burdick agreed to do certain things as between themselves, it cannot be claimed that Wheeler & Co. were in any way affected by it. For a breach or failure to perform the only remedy would be an action between themselves. The firm of Wheeler & Co. was never a party to those stipulations or bound by them. When Burdick became a party to the complete contract with the non-assignment- clause, he put it out of his power to place the plaintiff in such a position that he could enforce Burdick’s half against Wheeler & Co. They could never be compelled to perform a contract which was never made. It was a part of the contract between them and Burdick that there should be no other owner without their consent. It is obvious, therefore, that this entire contract could not be specifically enforced against Wheeler & Co. without Burdick’s consent.
It is a familiar rule that an assignee cannot compel specific performance when the original contract is made non-assignable. The rule is equally well settled that equity will not decree a specific performance, unless it can compel the execution of the whole contract. (Talbot v. Adams, 12 N. Y. W. Dig., 410; Sternberger v. McGovern, 56 N. Y., 12; Dixon v. Rice, 16 Hun, 422; Waterman on Specific Performance, §§ 389, 390-395.)
The only exception is when the contract is divisible, and may, therefore, be enforced in parts. (Waterman, § 395-398, inclusive.)
It is equally well settled that when a party wrongfully puts it out of his power to perform after its execution, a specific performance cannot be decreed. (Waterman, §§ 125, 127, and cases there cited.) Where an assignor has forfeited his right to a specific performance the assignee cannot enforce it. (Frazier v. Broadnax, 2 Litt. [Ky.], 249; Waterman, § 74, p. 101, cases cited in note.) Each party must be able to compel specific performance. Thus an *78infant cannot enforce as against an adult, as the latter could not against him. (Waterman, §§ 197,198.) Both parties must be bound. (Waterman, §§ 196-198.) The contract must be mutual and certain in its terms. (Burling v. King, 46 How., 452.) An enforcement cannot be compelled where the parties agree to rescind. (Monell v. Marshall, 25 How., 425, 429.) The agreement between the plaintiff and Burdick of the fourth of December clearly states the rights of the parties with reference to the land as between themselves. It shows how much was paid, who should make the next payment, also the following payments, including the rights which should accrue to the party performing in case the other failed.
There is nothing in the assignment on the back of the agreement which shows the rights of the plaintiff and Burdick as between themselves. That contract was between Wheeler, the Dusenburys and Burdick. The plaintiff was not a party to it. Neither were Wheeler & Go. parties to the agreement between the plaintiff and Burdick. That contract could not be enforced by Wheeler and the Dusenburys against the plaintiff and Burdick, or either of them; nor could it be enforced against Wheeler & Go. by the plaintiff or Burdick. There was no mutuality. Wheeler &■ Co. were not parties to that contract. No obligations under it were assumed by them, nor does it purport to confer any rights or impose any obligations upon them. If either the plaintiff or Burdick failed to pay his share of the money it would not affect them. If Burdick made default and the plaintiff paid all, and thus as between him and Burdick became entitled to the full benefits of the contract as against Burdick, it would in no way affect Wheeler & Co. Those provisions had no reference to them. They only concerned the plaintiff and Burdick in their interests as between themselves. It is perfectly obvious that no decree of specific performance could be adjudged, in favor or against Wheeler & Co., of the contract of the fourth of December. The only right which the plaintiff, in the most favorable view, acquired as against Wheeler & Co. by that instrument, was that of owner of the one undivided half of Burdick’s interest in his contract with them. It is perfectly clear that the plaintiff could not enforce specifically against Wheeler & Go. that undivided half interest without Burdick’s consent.
Their contract was entire. The one undivided half could not be *79•enforced specifically against Wheeler & Co. They never made any such agreement. Suppose that Burdick had fully performed on his part his contract with Wheeler & Co., and then demanded the execution of two deeds, one of the undivided half to the plaintiff and the other to himself, it is self-evident that on their refusal to comply the court could not compel them. The conclusive answer would be that they never made any such • contract. Specific performance is a remedy to compel, the fulfillment of a contract as made ; the court cannot make or change a contract and then enforce it. (Vallette v. Whitewater Canal Co., 4 McLean, 192; Cassady v. Woodbury County, 13 Iowa, 113; Haskell v. Allen, 23 Maine, 448; Grey v. Tubbs, 43 Cal., 359; Phil., etc., R. R. Co. v. Lehigh, etc., Co., 36 Pa. St., 204.)
This entire contract could not be separated into two parts by one of the parties to it, and then the other party be compelled to perform the halves. If for any reason one-half of the contract was extinguished a specific performance of the other half could not be decreed. At the time the contract of December fourth was made the plaintiff and Burdick may have been in doubt as to the value of the land contract. A good many years would elapse by its terms before Wheeler & Co. could be compelled to execute a de^d. They never could be so compelled, unless payments were made as provided for in the contract. A default might result in the loss of the land, including all previous payments The plaintiff and Burdick therefore .were careful to insert in the agreement between themselves which of them should make the payments and in what proportion, also to provide that if one failed to fully perform on his part the other might and thus obtain the benefits of the whole contract. The effect of the contract between themselves, on the one failing to make prompt payment, was substantially the same as it would be in case of default in making payment on Wheeler & Co’s, contract.
It is not perceived that there is anything in the nature of a forfeiture in those provisions. It was proper to provide that if one failed the other could step in and make full payments and receive the full benefit of the contract. It falls within the principle decided in Robinson v. Cropsey (2 Edw. Chan. Rep., 138), and that class of causes. The contention on the part of the plaintiff is that, as between the plaintiff and Burdick, all of Bur-*80dick’s rights in the contract were extinguished by the fraudulent settlement, and that the plaintiff became the sole owner as against him; in other words, placed in such a position that under the contract of December fourth he could make the payments as they fell due, and receive the full benefits of the contract. The claim of the learned counsel being that the necessary and logical result of the finding of the trial justice was to entitle the plaintiff to the whole of the land instead of one-half, on the assumption that the whole of the contract inured to the plaintiff’s benefit. It is difficut to answer the logic of the learned counsel for the plaintiff in support of this position. If the conclusions of the learned trial justice and a majority of this court at the General Term are correct, that is, if a decree of specific performance can be made securing to the plaintiff the benefits and advantages of one-half the contract, there appears to be no good reason why he should not be decreed the benefits of his whole contract. Burdick, by his fraudulent settlement voluntarily extinguished all his rights in the contract he deprived himself of the power to enforce. After that fraudulent settlement he was in no position to say to the plaintiff, “ I have settled my part of the contract and have got what satisfies me on the settlement therefore you never can get only one-half, whether I make any payments according to our contract or not.” The plaintiff’s conclusive answer would be, “You have, by your fraud, prevented the possibility of my obtaining the full benefits of the contract; you have voluntarily extinguished your power for the purpose of defrauding me. I shall therefore proceed upon the assumption that you have neglected and refused to make your part of the payments; I will go on and make them as provided by the contract in case of your default, and will thus obtain all the advantages.” Suppose the plaintiff occupied a position where he could enforce the entire contract as against the Dusenburys, he certainly could not be prevented from doing so by the fraudulent act of Burdick. It seems to be very clear that if a decree can be made in the nature of a specific performance the plaintiff is entitled by the decree to the full benefits of his entire contract, and he has a right to treat Burdick’s interests in it as extinguished by his fraud. The difficulty is in finding the power to make such a decree against Wheeler & Co. and the Dusenburys. A breach, of Burdick’s contract with *81tbe plaintiff would not create a cause of action in tbe plaintiff’s favor against third persons who were not parties to tbe contract. Burdick’s breach could not operate as an assignment of tbe other half of tbe contract to tbe plaintiff so as to make him tbe owner of tbe whole contract as against Wheeler & Co., at any rate not until after tbe happening of tbe events which, by tbe contract, would make the plaintiff owner as against Burdick.
On the 10th day of August, 1881, at tbe time of tbe fraudulent settlement, no default bad been made by Burdick. Tbe time for bis payment bad not come. There was nothing then due upon the contract. Burdick owned one-half of it and the plaintiff tbe other. Tbe trial justice found, among other facts, that on tbe fraudulent settlement Burdick executed and delivered to Wheeler and tbe Dusenburys an instrument in writing, canceling and surrendering tbe said contract and releasing and transferring to them all Ms rights, title cmd interest in said land and contract.
It thus appears that on tbe lOtbday of August, 1881, Burdick while owner of half the contract canceled all bis rights and interest in tbe land and contra^^ That whole settlement has been adjudged void as against tbe Jm'tiff. But Burdick’s interests in tbe contract have not been revived or restored as against Wheeler and tbe Dusenburys. In consummating this fraud on tbe plaintiff Burdick extinguished his half of tbe contract. As between him and Wheeler & Co. be bad power to do so. His one-half interest has never been revived or restored. In committing the fraud upon tbe plaintiff be, so to speak, killed bis interest — his half is dead an,d cannot be restored to life by tbe court. It never assumed to do so.
Suppose Burdick at tbe time of this settlement bad owned tbe whole instead of one-half of tbe contract, that settlement would of course have ended it, so that tbe court could not restore or revive it in whole or in part. Although this settlement was void as against tbe plaintiff, it was valid as between Burdick and Wheeler & Co. (Robinson v. Stewart, 10 N. Y., 189-196.)
There is nothing in the pleadings or findings asking the restoration to Burdick or anybody else of his half of tbe contract. As this contract was entire, it is self-evident one-half being dead and extinguished that tbe other half — tbe surviving part — cannot be specifically enforced under the well established principles of law as *82above stated. Tlie extinguishment of the undivided half destroyed the whole to such extent as to prevent specific performance.
The plaintiff has. remedies which will secure him full redress, but specific performance is not one of them. It is not necessary to say that if the plaintiff had ever been in a position to enforce his agreement with Burdick, giving him the whole premises in case of Burdick’s default against Wheeler and the Dusenburys, that right would not be taken away by the fraudulent transaction between themselves and Burdick. In other words, that fraud created a cause of action, but did not create a contract which could be specifically enforced. Wheeler, the Dusenburys and Burdick are jointly and severally liable to the plaintiff for all damages sustained by him by their fraud of the tenth of August. Whether Wheeler & Co. were liable to the plaintiff in any form of action before the commission of that fraud, it is not important to inquire. The moment they fraudulently combined with Burdick to cheat the plaintiff, and consummated their fraud to the plaintiff’s damage, they created a joint and several cause of action against themselves in favor of the plaint’Ig* the full extent of all the damage he sustained thereby, to the-' ^fcft of his entire interest in the contract with Burdick. ".00
The plaintiff may also pursue and obtain the one-half of the interest acquired by Burdick in this fraudulent settlement. His interest in the contract, for which he paid nothing, was agreed upon as 118 acres of the land, of which he received a deed, after-wards causing it to be conveyed to a fraudulent grantee, his wife. This 118 acres was treated by the conspirators as the value of Burdick’s interest in the contract. While as against the plaintiff the whole arrangement was void, yet he has a right to elect to accept 'the 118 acres as the value of his and Burdick’s in the contract. Although Burdick intended to exclude the plaintiff from all benefits, he had no power to do so. It inured to the plaintiff’s benefit at his election. The property obtained by Burdick, the proceeds of the fraud against the plaintiff, can be followed and reclaimed as against Burdick or his fraudulent grantees.
It is a familiar rule that under such circumstances the property may be pursued and recovered from every one except a 'bona, fide purchaser. (Mitchell v. Reed, 61 N. Y., 123; S. C., 84 id., 556; *83Newton v. Porter, 69 id., 133; Hooley v. Gieve, 7 Abb. N. C., 271; Slade v. Van, Vechten, 11 Paige, 21; Dutton v. Willner, 52 N. Y., 312, 319; Case v. Carroll, 35 id., 385; Conkey v. Bond, 36 id., 427; Moore v. Moore, 5 id., 256.)
If the plaintiff pursues the property he will be entitled to a deed •of the one undivided half of the 118 acres, one-half of the rents and profits since the 10th day of August, 1881; also fifty dollars, with interest, being one-half of the hundred dollars advanced by the plaintiff on the contract. In this way Burdick would gain nothing hy his fraud and the plaintiff would obtain his share of the proceeds.
If the plaintiff, at the time of the fraud, had been the owner of the whole contract as against Burdick, and if it had been assignable so that he could have enforced it as an entirety against Wheeler & Co., as well as against Burdick, then it is very clear that the court upon adjudging the whole scheme void as against the plaintiff (all the parties being before it), could adjudge a specific performance in 'the plaintiff’s favor. As it is, there are insurmountable obstacles in the way, one is that he only owned one-half of the contract, the •other half halCu;','en extinguished and never restored to life. Another is thJ^ar i&'fetinguished half was made non-assignable, ■therefore not enforceable to that extent, specifically, against Wheeler •& Co., in favor of an assignee.
Another is that the fraudulent settlement was not in furtherance •or performance of the contract, but in violation and extinguishment of it, to the extent of Burdick’s interest. The contract is entire. The one-half cannot be specifically enforced as it is impossible to enforce the other half.
If the plaintiff should prefer to proceed to recover damages in fraud instead of following the 118 acres, he should be allowed to move at Special Term to amend as to parties and allegations in such ■a way as he may be advised to make his action available. Although this action is one in equity, and no damages are demanded, •still as the acts of fraud, the rights of the parties, including the property involved, are fully stated in the complaint, no good reason is perceived why the action may not be retained and proper amendments made at Special Term without bringing a new action. If, however, the plaintiff elects to proceed for damages and is advised that the proper amendments cannot be made in this action, *84be should be allowed to discontinue this action without costs or prejudice to bringing another action for damages. If he elects to follow the land the pleadings are sufficient to entitle him to the relief above indicated. (Price v. Palmer, 23 Hun, 504; Code, § 1207; Murtha v. Curley, 12 Abb. N. C., 12; Beach v. Cooke, 28 N. Y., 508; Marquat v. Marquat, 12 id., 336; Jackson v. Andrews, 59 id. 244.) In that e/ent he should be entitled to the costs of this action including the appeal. In case amendments are made, and it proceeds as an action for damages, costs should abide the event. The plaintiff should notify the defendant’s attorney of the course he elects to pursue within twenty days after the decision of this appeal.
This judgment should be reversed, with the right to the plaintiff to proceed as indicated in this opinion, or modified as above stated at the plaintiff’s election.
Judgment modified so as to direct that the money heretofore tendered by the plaintiff to the defendants Wheeler and Dusen-burys be paid into court to the credit of the action within twenty days, and as so modified judgment affirmed, without costs to either party.