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(182 N.Y.S.) (191 App. Div. 793)

CORNEY v. KLINE BLDG. & CONST. CO.

(Supreme Court, Appellate Division, Second Department. May 14, 1920.) 1. Specific performance w 105 (1)—Vendee may sue before date for passing

of title, on refusal to recognize validity of contract.

If vendor in contract for sale of land refuses to recognize its validity, vendee can sue immediately for specific performance, before contract time for passing of title; rule limiting actions at law for anticipatory breach of contract to those based on contracts to marry, for personal services,

and for the manufacture and sale of goods, not applying. 2. Specific performance en 6, 32 (1)-Contract not enforced, unless mutual in

obligation and remedy.

A contract will not be specifically enforced, unless it is mutual, not only

in its obligation, but in its remedy. 3. Specific performance w32 (3)-Contract held to possess mutuality of ob

ligation as basis for suit.

Where buyer and seller signed a contract for the sale of land, which was by its terms an "agreement” between the parties, and the buyer paid $200 as part of the consideration, the contract did not lack mutuality of

obligation, so as to bar specific performance. Appeal from Special Term, Kings County.

Action by Nehemiah P. Corney against the Kline Building & Construction Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Argued before JENKS, P. J., and MILLS, RICH, BLACKMAR, and JAYCOX, JJ.

Frank W. Holmes, of Brooklyn, for appellant.

Adolph Feldblum, of New York City (Henry Muller, of Brooklyn, on the brief), for respondent.

BLACKMAR, J. The contract for the sale of the real property was made on the 17th of June, 1919. The plaintiff, who was the purchaser, paid $200 on signing the contract; $1,200 was to be paid on June 20th; and the title was to be closed on July 15th. On June 20th, at the appointed place, the plaintiff attended and tendered the $1,200, but the defendant refused it and repudiated the contract, claiming that it could not be enforced against him. The plaintiff thereupon began this action, without awaiting the time fixed for closing the title. He obtained a judgment for specific performance according to the terms of the contract, and the defendant appeals, claiming that the action was prematurely brought.

[1] The rule which limits actions at law for anticipatory breach of contract to those based on contracts to marry, for personal services, and for the manufacture and sale of goods (Kelly v. Security Mutual Life Ins. Co., 186 N. Y. 16, 78 N. E. 584, 9 Ann. Cas. 661), does not apply to suits in equity for specific performance. If the vendor in a contract for the sale of land refuses to recognize the validity of the contract, no reason is perceived why the vendee should by delay take the risk of the complications which would result if the vendor should sell to another. A court of equity can always mold its relief, so that

For other cases see same topic & KEY-NUMBER in all key-Numbered Digests & Indexes

the contract will be enforced as made, although the action is brought, or even tried, before the date fixed for closing. There is a difference in principle between an action for damages on the theory that the contract is ended by the breach of the defendant, and a suit in equity based on the theory that the contract continues in force. The right to resort to equity to protect and enforce the contract before the time for performance is recognized in both the cases cited by the appellant, where an action for damages for an anticipatory breach of a contract of life insurance was denied. Langan v. Supreme Council, Am. L. of H., 174 N. Y. 266, 66 N. E. 932; Kelly v. Security Mutual Life Ins. Co., supra. The authorities amply sustain the doctrine in its application to an action for specific performance of a contract for the sale of real property. Payne v. Melton, 67 S. C. 233, 45 S. E. 154; Miller v. Jones, 68 W. Va. 526, 71 S. E. 248, 36 L. R. A. (N. S.) 408; Bear v. Fletcher, 252 Ill. 206, 96 N. E. 997; Bogard v. Barhan, 56 Or. 269, 108 Pac. 214; Parks v. Monroe, 99 Kan. 368, 161 Pac. 638.

[2] But the appellant claims that the contract was unilateral, in that it contained no express promise on the part of the plaintiff to purchase, and therefore, not being mutually obligatory, an action for specific performance will not lie. The rule is well settled that a contract will not be specifically enforced, unless it is mutual, not only in its obligation, but in its remedy (Wadick v. Mace, 191 N. Y. 1, 83 N. E. 571; Levin v. Dietz, 194 N. Y. 376, 87 N. E. 454, 20 L. R. A. (N. S.) 251), and the appellant invokes this rule. The question, then, is whether the contract binds, not only the seller to sell, but the buyer to buy.

[3] Both parties signed the contract. It was by its terms an “agreement” between the parties, and at the date of execution the initial payment of $200 of the consideration was made by the purchaser. Although the vendee did not in express terms promise to buy, I have no doubt that such promise is plainly implied. The signing of the contract by the vendee would be an idle act, unless he assumed some obligation by so doing. The word "agreement" itself connotes a mutual obligation. Finally, the payment by the vendee of the $200 as part of the consideration recognizes the obligation. Benedict v. Pincus, 191 N. Y. 377, 84 N. E. 284; Moran v. Standard Oil Co., 211 N. Y. 187. 105 N. E. 217.

The judgment should be affirmed, with costs. All concur.

(182 N.Y.S.) (191 App. Diy. 769)

FLINN et al. v. SPRINGSTEEL. (Supreme Court, Appellate Division, Second Department. May 14, 1920.) Evidence w113 (8)— Price received for goods by defendant admissible on

question of value.

In action for conversion, evidence as to the price received for the goods by defendant, though not conclusive as to the market value, is admissible as some evidence of value.

Putnam and Jaycox, JJ., dissenting. Appeal from Westchester County Court.

Action by William Flinn and others against Gilbert J. Springsteel for conversion of certain steel rails. Judgment for plaintiffs, and defendant appeals. Judgment and order reversed, and new trial ordered.

Argued before MILLS, RICH, PUTNAM, KELLY, and JAYCOX, JJ.

Frederick W. Clark, of Mount Vernon, for appellant.
John Ambrose Goodwin, of New York City, for respondents.

RICH, J. The Pittsburgh Contracting Company, from whom plaintiffs acquired the rails in January, 1915, had contracted for the construction of that portion of the Catskill aqueduct known as Contract 52 at Elmsford, N. Y. The construction plant was removed after the completion of the work in September, or October, 1915, and the company paid defendant, who had acquired the property in April, 1915, for the privilege of storing it until it could be loaded and shipped. A construction railroad had also been laid for the purpose of conveying materials used in the work, and defendant removed and sold a portion of the rails, amounting to about 55 long tons.

Upon the trial proof was offered on the part of the plaintiff tending to show the market value of the rails at the time of conversion. To meet tiis, after defendant had testified to the efforts he had made to sell the rails, he offered to show the price he received for them upon the sale and this evidence was excluded. We think this was error. Parmenter v. Fitzpatrick, 135 N. Y. 190, 31 N. E. 1032. While this evidence was by no means conclusive as to the market value of the rails, nevertheless it was some evidence of their value which the jury might properly have considered. Bowdish v. Page, 81 Hun, 170, 30 N. Y. Supp. 691, affirmed 153 N. Y. 104, 47 N. E. 44.

It follows, therefore, that the judgment and order must be reversed, and a new trial ordered, with costs to abide the event.

MILLS and KELLY, JJ., concur.

PUTNAM, J., votes for affirmance on the ground that the action of the trial justice in excluding the evidence of the defendant's own testimony of the private sale made by him was in accordance with the rule of Latimer v. Burrows, 163 N. Y. 7, 57 N. E. 95, and that no reversible error in the record appears.

With him JAYCOX, J., concurs.
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182 N.Y.S.-2

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(192 App. Div. 1)

FINKENBERG v. LEVINSON et al. (Supreme Court, Appellate Division, First Department. May 14, 1920.) 1. Chattel mortgages En 34–Bill of sale, with paper showing transfer as

security, constitute mortgage.

Bill of sale, purporting to be absolute conveyance, together with paper showing property was transferred as security for a debt, and that it should be retransferred on payment, construed together, show transaction

was not a sale, but a mortgage, of the chattels. 2. Chattel mortgages w255—To enforce payment of loan, sale and not de

livery of collateral will be ordered.

Where a party holding collateral security for a loan goes into a court of equity to enforce payment from collateral, court will not direct delivery of collateral to him, but will direct sale of property and discharge of loan

out of proceeds, surplus to be paid over to owners. 3. Chattel mortgages w275—Other creditor necessary party in suit to sat

isfy debt from security.

In suit by party holding collateral security to enforce payment of loan from collateral, another creditor of the debtor is a necessary party, in order that its debt may be discharged out of the proceeds of sale.

Appeal from Special Term, New York County.

Action by Leo Finkenberg against Moses Levinson and Bell G. Levinson. From an order overruling defendants' demurrer, and granting plaintiff's motion for judgment on the pleadings, defendants appeal. Order reversed, and motion for judgment denied, and defendants' cross-petition for an order sustaining demurrer and dismissing the complaint granted, with leave to plaintiff to serve amended complaint.

Argued before CLARKE, P. J., and DOWLING, SMITH, PAGE, and GREENBAUM, JJ.

Sam L. Cohen, of New York City, for appellants.
Samuel I. Goldberg, of New York City, for respondent.

PAGE, J. The defendant Moses Levirson stored certain household goods with the Liberty Storage & Warehouse Company and re ceived warehouse receipts therefor. The defendants negotiated a loan of $2,500 from the Levin-Burgh, Incorporated, and gave four promissory notes therefor. The plaintiff also loaned to the defendants the sum of $2,500, to be repaid, with interest, on or before June 1, 1917. Simultaneously with the execution and delivery of these notes defendants executed and delivered to plaintiff a bill of sale, a copy of which is annexed to the complaint, of the property stored with the Liberty Storage Warehouse as collateral security for said loans, as shown by a separate instrument annexed to the complaint as Exhibit B. At the time the bill of sale was delivered the defendant Moses Levinson delivered to the plaintiff four storage receipts issued by the said Liberty Storage & Warehouse Company covering the property embraced in the bill of sale. The complaint further alleges that no part of the $2,500 due to plaintiff has been paid, and that $1,500 only has been paid to the Levin-Burgh, Incorporated, leaving a balance due Eum For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(182 N.Y.S.) to the Levin-Burgh, Incorporated, from the defendants of $1,000. After the default in payment the plaintiff demanded the goods of the Liberty Storage & Warehouse Company, and on its refusal to deliver the same brought an action to recover the possession thereof. The Liberty Storage & Warehouse Company thereupon moved that the defendants herein be interpleaded, and an order was made to that effect. The plaintiff reframed his complaint, setting forth the facts above alleged, and demands judgment that the plaintiff be declared the true and lawful owner of said property and entitled to the possession thereof, and requiring the warehouse company to deliver over to the plaintiff the property.

[1] Although the bill of sale purports to be an absolute conveyance of the chattels to the plaintiff, Exhibit B, annexed to the complaint, shows that the property was transferred as security for a debt, and that the same should be retransferred to the defendants on the payment of the debt. Thus the two papers (Exhibits A and B), construed together, show that the real transaction was not a sale, but a mortgage on the chattels.

[2] We are not advised by the complaint whether the defendants were interpleaded under section 103 of the General Business Law (Consol. Laws, c. 20) or section 820 of the Code of Civil Procedure. The plaintiff claims that he has reframed his complaint to state a cause of action in equity instead of a cause of action at law. The facts stated in this complaint demonstrate that the plaintiff, although he might be entitled to the possession of the chattels, is not the true and lawful owner thereof, but that, if he took the same actually into his possession, he would still hold them subject to the terms of the mortgage, and where a party holding collateral security for a loan comes into a court of equity for the purpose of enforcing payment of the loan from the collateral, the court will not direct delivery of the collateral to the plaintiff, but will direct that the property be sold, and out of the proceeds of the sale the loan to be discharged and the surplus of the proceeds of the sale, if any, be paid over to the owners thereof.

[3] In an action of this character the Levin-Burgh, Incorporated, is a necessary party, in order that their debt may be discharged out of the proceeds of the sale. In my opinion, therefore, the demurrer was well founded, there is a defect of parties, and the complaint does not state a cause of action showing the defendants to be entitled to the equitable relief demanded.

The order should be reversed with $10 costs and disbursement, and the plaintiff's motion for judgment on the pleadings denied, and defendant's cross-motion for an order sustaining the demurrer and dismissing the complaint be granted, with $10 costs, with leave to the plaintiff to serve an amended complaint within 10 days. All concur.

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