Cochran v. Taylor

• Citation: 273 N.Y. 172,7 N.E.2d 89
• Parties: COCHRAN v. TAYLOR.
• Decision Date: 09 March 1937
• Court: New York Court of Appeals

273 N.Y. 172
7 N.E.2d 89

COCHRAN
v.
TAYLOR.

Court of Appeals of New York.

March 9, 1937.

Action for specific performance by John K. Cochran against Mabel N. Taylor. From a judgment of the Appellate Division (248 App.Div. 669, 289 N.Y.S. 911), which affirmed, by a divided court, a judgment of the Supreme Court (156 Misc. 750, 282 N.Y.S. 530), dismissing plaintiff's complaint on the merits, plaintiff appeals.

Reversed, and new trial granted.

[7 N.E.2d 89]

Appeal from Supreme Court, Appellate Division, Fourth Department.
John W. Hollis, of Hornell, for appellant.

Francis B. O'Connor, of Wellsville, for respondent.

RIPPEY, Judge.

On October 20, 1934, an agreement in writing and under seal was executed in duplicate, duty acknowledged and delivered by and between defendant and one William B. Chenault, whereby the former gave to Chenault an option to buy certain real and personal property located in Allegany county, N.Y., for $115,000 at any time within 120 days thereafter upon terms and conditions therein specified, and agreed to sell and convey the same to Chenault on condition that Chenault should, within such period of time, give her written notice of his intention to buy. On November 13, 1934, defendant notified Chenault that she revoked, rescinded, and withdrew the offer to sell on the ground, as she asserted, that the contract was without consideration and was obtained from her through duress, fraud, and undue influence. Chenault assigned all of his interest in the agreement to plaintiff on December 21, 1934, and on January 11, 1935, the latter served the required notice of his election to buy. Complying with the provisions of the agreement, plaintiff demanded delivery within thirty days of abstracts of title and of a suitable instrument of conveyance. Upon refusal of defendant to perform, this action for specific performance was brought.

The answer put in issue the material allegations of the complaint. Additionally, defendant set up, as defenses, (1) that the agreement was only an offer to sell, was without consideration, and was revoked and withdrawn before acceptance and prior to the time of assignment to plaintiff who took the assignment with knowledge of the withdrawal and revocation; (2) that the option was not assignable and plaintiff acquired no interest by the assignment; and (3) that defendant's signature to the instrument and its delivery by her were obtained through imposition, fraud, and undue influence. A counterclaim was interposed for damages arising out of the recording of the instruments which, it was asserted, prevented defendant from disposing of her property and from enjoying the full use and benefit thereof, all of which was put in issue by the reply.

The trial court found that there was no valid acceptance or tender of performance by plaintiff or by Chenault and sustained the first two defenses mentioned. No finding or decision was made on the material question of fact as to whether the execution and delivery of the instrument were procured, as defendant asserts, by plaintiff or by Chenault or by both through imposition, undue influence, or fraud. The trial court specifically stated in his opinion that he limited his decision to holding that the option was nudum pactum, that defendant had a right to withdraw, revoke and cancel it, and that, since the option by its terms involved the extension of credit to Chenault, it was not assignable to plaintiff or, in any event, enforceable by plaintiff without a tender of a bond executed by Chenault. Judgment was entered dismissing the complaint, with costs. The Appellate Division in the Fourth Department affirmed by a divided court upon the findings of fact as made by the trial court. The judgment appealed from cannot be sustained unless it can be held, as matter of law, that the option was without consideration, was not assignable, and was not accepted according to its terms.

It is the rule that an offer or an option, not under seal or given for a consideration, may be revoked at any time before acceptance. 1 Williston on Contracts (Rev.Ed.1936) § 55; Petterson v. Pattberg, 248 N.Y. 86, 88, 161 N.E. 428; Boston & M. R. v. Bartlett, 3 Cush.(Mass,) 224. That rule has no application here. In the instant case the agreememt was under seal and the receipt of a consideration was acknowledged and confessed. In the body of the instrument the parties recited that they attached their seals, thereby establishing their intention concerning the sealing of the instrument, and, at the end, added the seal in the form required by section 44 of the General Construction Law (Consol.Laws, c. 22). It cannot be successfully argued that the agreement was not a sealed instrument carrying with it all the force and implications attributable to an instrument so executed. The cases of Matter of Pirie, 198 N.Y. 209, 91 N.E. 587,19 Ann.Cas. 672, and Empire Trust Co. v. Heinze, 242 N.Y. 475, 152 N.E. 266, hold nothing to the contrary. In the Pirie Case the seal was present but an expression of intent to make the instrument one under seal was

[7 N.E.2d 91]

lacking. In the Heinze Case the intention was expressed but the seal was lacking.

Prior to the time the law required consideration to support a contract, the seal was used conclusively to establish the authenticity and binding effect of the instrument to which it was attached. 1 Williston on Contracts (Rev.Ed.1936), §§ 109, 217. The use and binding effect of the seal dates back to at least 2900 B. C. Report Law Revision Commission, 1936, Legislative Document No. 65D, p. 155. Williston points out (section 217) that, long before the action of assumpsit was developed, a promise under seal but without consideration was binding and that it was binding by its own force by the common law (section 109). It is agreed upon substantially universal authority that a statement of consideration in a sealed instrument is unnecessary. Thomason v. Bescher, 176 N.C. 622, 97 S.E. 654,2 A.L.R. 631, note. It is also frequently stated by the courts that a sealed instrument carries with it a presumption that it is given for a valid consideration without the necessity of a recital of the consideration therein and that...