Merithew v. Andrews

By the Court, Johnson, J.

Upon the facts of this case, as established by the findings of the referee, it is entirely clear that neither of his conclusions of law can be sustained.

I. The contract between the plaintiff and Ohalker, at the time the defendant purchased, and took his conveyance of the premises from Ohalker, was not void within the statute of frauds, but was a perfectly ralid and binding contract, which the plaintiff could have enforced against Ohalker. It is established, by the finding, that before Ohalker purchased in the premises, at the sale on the mortgage foreclosure, it was agreed by parol, between him and the plaintiff, that the latter should have the premises conveyed to him, upon payment to the former, of the amount of his bid, with interest and costs. The plaintiff was then in possession of a portion of the premises which he held under a contract to purchase, from a former owner.

After Ohalker had purchased and perfected his title, his parol agreement was renewed or reaffirmed -by parol, and Chalker gave up. to the plaintiff the possession of the'residue of the premises, and authorized him to keep possession and rent the same. The plaintiff, after possession was given up to him, rented a portion of the premises to a tenant. The plaintiff being thus in possession of the entire premises, proceeded to make payments according to his parol agreement, which Chalker accepted and received as payment. The amount of the bid, including- the costs of the foreclosure which the plaintiff agreed to pay, was $180.75. Of this, at the time of the- defendant’s purchase, the plaintiff had paid enough to reduce the amount remaining unpaid to $108.25. The plaintiff being thus in possession of the entire premises in accordance with his agreement, and having paid more than one third of the purchase price agreed upon, his parol agreement had been taken out of the operation of the statute of frauds, and could undoubtedly have been enforced against Chalker. (Lowry v. Tew, 3 Barb. Ch. 407. Malins v. Browne, 4 Comst. 402. Story’s Eq. § 761. 2 Parsons, on Cont. 552, 3, 4. Broivn on Stat. of Frauds, § 465, n. 3, and cases there cited.)

Authorities might -be multiplied on this point; but it is wholly unnecessary, as our statute of frauds expressly saves and reserves from its operation, the right of a- court of equity to compel the specific performance of agreements in cases of part performance of such agreements. (2 R. S. 135, § 10.) As nothing had been done to rescind or put an end to the plaintiff’s agreement, at the time of the conveyance to the defendant it was in-full force and binding between the parties to it, and capable of being enforced specifically.

2. The plaintiff being thus in possession under a contract rendered valid,- and capable of being enforced, by part performance, the question arises whether it was in the power of Chalker, by an agreement with the defendant to which the plaintiff was no party, to take away the plaintiff’s rights under his contract, or to burden them .with new and more onerous conditions. The referee held that he could, and that the plaintiff’s rights under iris agreement—conceding it to he in force—were subject to the new burdens imposed in the agreement between Chalker and the defendant, as between the plaintiff and the defendant.

This is manifestly erroneous. The plaintiff was in possession exercising acts of ownership, and the defendant coming to purchase, was bound to take "notice of his rights, whatever they might be. But in addition to this the referee expressly finds that Chalker informed the defendant fully of the agreement with the plaintiff, and what had been paid under it.

In either case, therefore, the law obliged the defendant, if he took the premises at all, to take them subject to the plaintiff’s rights. His rights existing, and in force, could not be destroyed, or in any respect injured, without his consent. The limitations which Chalker and the defendant undertook to impose were wholly inoperative as against him.

The purchaser of land in all such cases, having either constructive, or actual notice, is bound to respect the equitable rights of third persons, and to carry out the contract, upon the performance or tender of performance by such third person. (DeRuyter v. The Trustees of St. Peter’s Church, 2 Barb. Ch. 555. Champion v. Brown, 6 John. Ch. 402, 403, and cases there cited. Story’s Eq. § 784. Tuttle v. Jackson, 6 Wend. 213.)

It is now claimed on behalf of the defendant, that his judgment against Wallace was a lien upon the premises which was not affected by the foreclosure, and that his purchase from Chalker was in the nature of a redemption from the mortgage foreclosure and sale, and thus a protection against the plaintiff’s contract.

No such question appeai-s to have been raised upon the trial or decided by the referee. His decision was placed upon other grounds entirely. It is quite apparent, however, that no such thing as a redemption was contemplated between the defendant and Chalker. The defendant only paid the balance of the hid remaining unpaid by the plaintiff, and neither paid nor offered to pay the plaintiff the amount advanced by him. But in addition to this, the receipt and memorandum which the defendant took from Chalker at the time of the conveyance, shows clearly that it was a purchase upon a distinct understanding that he was to convey to the plaintiff, upon being reimbursed his purchase money, and payment by the plaintiff of certain promissory notes given by him to Wallace. The design of the defendant, in the transaction, obviously was to place himself in such a position as to .enable him to compel the plaintiff to pay these notes as a condition to his right to obtain a title under his agreement with Chalker. This was what he insisted upon when the plaintiff tendered performance of his contract with Chalker. But even then he only proposed to convey a portion of the premises, not offering even to perform the agreement he had made at the time of his ]3urchase. This scheme to make a new contract for the plaintiff without his knowledge or consent can not be allowed to prevail. It is quite clear that the defendant has no equities superior to those of the plaintiff, which should absolve him from his obligation to carry out this contract. If the plaintiff was under obligation to Wallace to pay off the mortgage and prevent its foreclosure and a sale of the premises, he was under no duty or obligation whatever to the defendant to do so, for the benefit of his judgment. The defendant has not connected himself in any manner with the contract between the plaintiff and Wallace. The transfer of the notes to him gave him no interest in that contract; and his judgment was subject to the plaintiff’s rights under it, being subsequent in point of time. The notes in the defendant’s hands are clearly no equitable lien upon the premises, as against the plaintiff.

There is no ground, therefore, on which the defendant can be excused from the performance of this agreement. Having necessarily assumed the duty of its performance, when he made his purchase with a full knowledge of the plaintiff’s rights, he should now be decreed to perform, it, inasmuch as the plaintiff is ready and willing and offers to perform on his part. The judgment must therefore be reversed, and a new-trial ordered, with costs to abide the event.

[Monroe General Term, September 5, 1865.

Judgment accordingly.

Johnson, & JD. Smith and J. 0. Smith, Justices.]