Holden v. . Efficient Craftsman Corp. , 234 N.Y. 437 ( 1923 )

The action is for specific performance, and, if that relief be impossible, then for damages as a substitute.

Plaintiff was an officer of a corporation which had sold a tract of land to the defendant corporation. He had been given an option in writing, which was his personally, to buy back one of the lots for $500 above the mortgages upon it. The option was for ninety days, and expired by its terms in February, 1919. The defendant held the tract for the purpose of resale. As lots were sold from time to time, there was need, to effectuate the sales, of releasing a blanket mortgage to a proportionate extent. The defendant's president asked the plaintiff to aid in procuring these releases and also in kindred matters, and promised in consideration of such aid that the option would be kept alive. The promise was renewed from time to time, the last promise of extension being in the fall of 1919. The term of extension was not definitely stated, but performance was not to be due till the close of the transactions in which the plaintiff's aid had been enlisted. In December, 1919, while those transactions were still in progress, the defendant corporation conveyed the lot in controversy, the subject-matter of the option, to the defendant Laura C. Phelan, the wife of its president, who then reconveyed it to the defendant Anna M. Kreuter, the sister and agent of the treasurer. Plaintiff learned of these conveyances on February 19, 1919. On February 28 he was notified by the grantee, Miss Kreuter, that the lot had been sold, and on March 10 the deed was made to the purchaser, one Oldrin. This action was begun on March 16. Oldrin is not a party. The court held that specific performance would be inequitable, but that plaintiff had suffered damage in the sum of $2,500 which should be made a lien on the land. It was also adjudged that the plaintiff might hold possession until the payment of the lien, unless the defendants gave an undertaking to secure him against loss.

The defendants insist that at the time of the conveyances the option had expired. We think their argument must fail. The plaintiff was induced to postpone tender by the repeated assurance that the option would be kept alive. We are not required to hold that the result was a new contract modifying by oral promise the terms of the written option. At least, the seller became estopped to terminate the contract without reasonable notice that would put the buyer in default (ImperatorRealty Co. Inc., v. Tull, 228 N.Y. 447; Thomson v. Poor,147 N.Y. 402, 409).

The plaintiff having suffered a wrong, there remains the question of his remedy.

The action was not begun till the land had been sold to Oldrin, who is not before the court. Neither judgment for specific performance nor any form of relief affecting title or possession may be granted in his absence (Saperstein v. Mechanics Farmers Sav. Bank of Albany, 228 N.Y. 257).

If Oldrin, however, were here, the lien for damages could not stand. The judgment does not give a choice either to submit to the lien or to convey. The plaintiff's right is unconditioned. He receives, not a money judgment against a seller in default, but a specific lien upon the land which is to follow it in the ownership of subsequent grantees. There is no authority for such relief. A vendee has a lien for payments made on account of the purchase price. To that extent, he has equitable rights or interests in the subject-matter of the contract analogous to those of ownership. The lien does not extend to the profits of the bargain (Elterman v. Hyman, 192 N.Y. 113; Davis v.Rosenzweig Realty Co., 192 N.Y. 128).

We see no need for another trial. The complaint prays judgment in the alternative for specific performance or for damages (Sternberger v. McGovern, 56 N.Y. 12; Saperstein v. M. F. Sav. Bank, supra, at p. 262). No demand was made by the defendants for a jury trial if the plaintiff failed to establish his right to the equitable remedy (Cummings v. Bway.-94th St.Realty Co., 233 N.Y. 407, 412; DiMenna v. Cooper EvansCo., 220 N.Y. 391, 395, 396; Bradley C. Co. v. Pacheteau,175 N.Y. 492). The case in all its aspects was submitted to the trial judge for the rendition of any judgment consistent with the facts.

The judgment of the Appellate Division and that of the Special Term should be modified by providing that the plaintiff recover the sum of $2,500 from the defendant Efficient Craftsman Corporation and by striking out provisions for other relief, and as so modified affirmed, without costs in any court.

HISCOCK, Ch. J., HOGAN, POUND, McLAUGHLIN, CRANE and ANDREWS, JJ., concur.

Judgments modified, etc.