N. E. D. Holding Co. v. McKinley

By contract, dated April 4, 1925, the Young Men's Christian Association of White Plains agreed to sell certain real estate to the defendant Eugene F. McKinley for $145,800, of which $20,000 was to be paid in cash on the signing of the contract, and the residue $125,800 in cash two years later, April 4, 1927, on the delivery of the deed. During the intervening period the seller was to retain possession, paying interest to the buyer on the amount of the deposit.

On November 21, 1925, McKinley, who held the contract not only for himself, but also for certain co-adventurers, the defendants Day and others, signed a note or memorandum of resale to the plaintiff. The memorandum reads as follows:

"Received of N.E.D. Holding Co. of White Plains the sum of ($100.00) one hundred dollars as binder on the following transaction:

"Sale by me Eugene F. McKinley of White Plains of a plot owned by me and briefly described as follows:

"The Y.M.C.A. corner on Mamaroneck Ave. to Martine Ave., being about 55 x 225.

"Terms as follows: Price $165,000.00

Paid in cash herewith $100.00

To be paid in cash on Monday, Nov. 23, 1925, as binder $2500.00

To be paid in cash at time of signing contract $22,400.00

To be paid in cash on delivery of deed, By purchaser executing a mortgage to seller in the amount of $ to run for a term of years at 6%.

Binder to be signed Monday, 10 A.M. Nov. 23.

Contract to be signed on or before Dec. 17, 1925, at the office of E.F. McKinley, White Plains, N.Y. at 11 A.M.

Deed to be delivered on or before at the office of

"Signed EUGENE F. McKINLEY

"In presence of WILLIAM BARRETT.

Purchaser to pay for drawing bond and mortgage, mortgage tax, revenue stamps on bond, and recording fee. The broker is who is entitled to regular commissions."

At the foot of this document there was signed two days later the supplemental memorandum following:

"The within closing is hereby adjourned to Nov. 28, 1925, or before by mutual consent.

"Nov. 23, 1925. E.F. McKINLEY."

The complaint alleges that the plaintiff demanded of McKinley that he enter into a formal contract in accordance with the preliminary agreement and that he refused to do so, and gave notice he would not perform. It alleges that the defendants Day and others claim an interest in the first contract, the one between the association and McKinley. It prays for judgment that the association specifically perform its contract with McKinley, that McKinley and the other defendants specifically perform the contract with the plaintiff, and for other relief. A motion by some of the defendants for judgment on the pleadings, denied at Special Term, was granted by the Appellate Division on the ground that some of the terms of a complete agreement were absent from the writing.

We cannot say as an inference of law from the mere inspection of the writing that anything of substance was left open to be agreed upon thereafter. The parties evidently thought they were bound, for they described the writing as a binder (cf. Ellis v.Miller, 164 N.Y. 434, 438). We are not to strain for a construction that will defeat their expectation. The price is stated in terms of money ($165,000). The presumption is that money was to be the medium of payment, and that the final payment was to be made at the delivery of the deed. The plaintiff tenders money as part of its complaint. Much is made by the defendants of the fact that the memorandum is written upon a stereotyped form which leaves a blank for the amount of a purchase-money mortgage. Since the blank was not filled, it may be rejected as surplusage if the parties so intended (Grady v. Fazzolari, 134 App. Div. 589; cf. Williston, Contracts, §§ 1141, 1909). Rejection becomes the easier in the light of the attendant circumstances. The entire payment was to be cash under the contract between McKinley and his own vendor, the owner of the land. The inference is natural that a cash payment was to be made under the contract of resale. The blank may be corroboration, in connection with other evidence, that some other form of payment was considered or expected. It is no evidence of itself, and surely none that is conclusive.

The memorandum does not fail of its effect as a token of a contract because a date was not fixed in it for the delivery of the deed, if none had been fixed already in the preliminary agreement (Berman Stores Co. v. Hirsh, 240 N.Y. 209;Mesibov, Glinert Levy v. Cohen Bros. Mfg. Co., 245 N.Y. 305). No doubt, the expectation was that a date would be supplied at the signing of the formal contract. If agreement were then to fail, delivery would be due within a reasonable time, to be fixed with due regard to the situation of the title as it was known to the parties (cf. Schnitzer v. Lang, 239 N.Y. 1, 5). Details of that order may be left open for future specification without destruction of the contract and of every remedy thereunder (Ansorge v. Kane, 244 N.Y. 395, 399; Spiritusfabriek Astra v. Sugar Products Co., 176 App. Div. 829, 831; 221 N.Y. 581). Seller and buyer accept by implication as to such matters the test of the reasonable or the customary if no other is available. It is all a question of degree (1 Williston, Contracts, § 48; cf.Keystone Hardware Co. v. Tague, 246 N.Y. 79, decided herewith).

We do not say as a matter of law that the note or memorandum states the whole agreement of the parties. We do not say that it does not. Since the writing is not the contract, but only a note or memorandum of a contract, parol evidence will be admissible in support of the defendants' claim that its terms are incomplete (Mesibov, Glinert Levy v. Cohen Bros. Mfg. Co., supra, p. 313). The defendants will be at liberty to show that by the true agreement of the parties other terms of payment than those apparent from the writing had already been arranged or were reserved for arrangement in the future. Such a showing will condemn the writing as defective and inadequate. The trial and not the pleadings must settle these disputes.

The judgment of the Appellate Division should be reversed and the order of the Special Term affirmed with costs in the Appellate Division and in this court.

POUND, CRANE, LEHMAN, KELLOGG and O'BRIEN, JJ., concur; ANDREWS, J., absent.

Judgment accordingly.