Court Opinion

ID: 5409832
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:07:19.242078+00
Date Added: 2024-06-11T08:30:44.561975
License: Public Domain

Blanchard, J. (dissenting.)
The defendants appeal from a judgment in favor of the plaintiff, in an action brought to recover $2,000, paid upon the execution of a contract between the plaintiff’s assignor and the defendants, whereby the defendants agreed to sell to the plaintiff’s assignor certain real property, “ subject to a first mortgage in the sum of twenty-six thousand five' hundred ($26,500) dollars, bear-' ing interest at the rate of five (5$) per cent per annum, due December 1st, 1907.” The plaintiff’s assignor refused to accept title upon the ground that the mortgage contained the following clause: “It is hereby further agreed by the parties hereto that if at any time or times before said bond is paid any law or laws be enacted, reducing the taxable value of land by deducting therefrom any lien thereon, or changing the laws in relation to taxes on debts secured by mortgages or the manner of collecting such taxes, the mortgagors agree to *267pay to the mortgagee a sum equal to the tax or burden imposed by said law or laws on the holder of the said bond and this mortgage, in addition to the interest provided to be paid in said bond, within ten days after said tax is made payable by said law or laws, unless the amount of said tax, added to the amount of interest provided for in said bond, exceed legal interest, or unless the payment of said tax by the mortgagors or owner of the land is prohibited by law. If the amount of said tax and the interest aforesaid exceed legal interest, or if such payment by the mortgagors or owner of the land is prohibited by law, then said bond and this mortgage shall become due and payable at the expiration of thirty days after the enactment of any such law or laws. The additional amounts which may, under the foregoing provisions, become due and payable shall be regarded as interest and shall be part of the debt secured by said bond and this mortgage, and all the provisions in reference to default m payment of interest contained shall apply to such additional amounts. If a law be enacted under which the mortgagors shall be liable to pay an additional sum under the foregoing provisions, the mortgagors may pay off said bond at any time before maturity, if said mortgagors give to the holder thereof three months’ prior notice in writing of the intention to do so. If said notice be given, said bond and this mortgage shall then become due and payable, as if the time fixed in the notice had been named in the bond as the time for the payment of said principal sum.”
The description of the mortgage contained in the contract, in so far as it stated, unconditionally, that the rate of interest was five per cent, and that it became due December 1, 1907, was incorrect. In Schiff v. Tamor, 104 App. Div. 42, action was brought to compel the specific performance of a contract for the purchase of real estate. By the terms of the contract, the defendants were to assume a mortgage of $18,000 and the plaintiff stipulated that “the principal sum of ” this mortgage should “ be extended, prior to the closing of title thereunder, for not less than three years, at the same rate of interest, by an extension in writing executed by the holder thereof and duly acknowledged.” *268The defendants offered to perform, but the plaintiff produced an extension coupled with a provision similar to the one under discussion in the present case. The defendants refused to accept the conveyance. In affirming the order dismissing the complaint, the learned court said (44, 45): “While * * * and this court will hardly take judicial notice of the improbability of the legislature enacting any revenue measure within the scope of its constitutional powers for the sake of working a forfeiture upon persons who have lawfully contracted and who have shown a willingness to perform within the fair intent of their contracts. The contract of the defendants was for an unconditional extension of the mortgage just as it then existed for a period of three years. This was a condition precedent to the right of the plaintiff to performance and it was not satisfied by an extension which might upon a contingency increase the interest from four to six per cent, or make the mortgage fall due in a less period than three years.” Upon these grounds it seems that the incorrect description of the mortgage in the present case is sufficient reason for rescinding the contract and recovering the sum paid thereunder.
Blanck v. Sadlier, 153 N. Y. 551, is not inconsistent with this conclusion. In that case the vendee sought to rescind the contract and recover the part-payment, on the ground that the terms of sale under which the receiver had sold the realty described the encumbrance as a mortgage for $16,000 at five per cent., having three years to run; while in fact, the mortgage was payable in “ gold coin of the United States of the present standard of weight and fineness.” The description in the terms of sale was silent as to this detail. In the present case, however, the language of the contract is a positive mis-description of the important facts of interest and due day. Andrews, O. J., giving the opinion of the court in Blanck v. Sadlier, supra (at p. 558) said: “How, under the laws of the United States the paper currency of the government and silver coins are exchangeable at the treasury for gold coin at their nominal amount and, as shown in the opinion of Judge Ingraham, the faith of the government of the United States is plighted by solemn and repeated *269declarations by Congress and the various departments of government to maintain the parity of all the currency issued by the government. The only hazard which the plaintiff would assume in taking the premises subject to the mortgage in question, beyond what would exist if the mortgage was payable without specification of the medium of payment, is the contingency that the United States government would violate its plighted faith and within the three years which the mortgage has to run, refuse to redeem its obligations in gold. We think this possibility is quite too remote to justify the assumption that the contract was made in reference to the mortgage being payable generally in lawful currency and not in a particular kind of lawful money.”
The clause under discussion in the present contract far from being a provision against a violation of plighted faith by the government, was a provision against a revenue measure which was inhibited by no legislative declarations, and was safely within constitutional powers.
The judgment should be affirmed with costs.
Judgment reversed and new trial granted, with costs to appellants to abide event.