Hannan v. Wilson

• Citation: 139 A. 165
• Decision Date: 26 October 1927
• Docket Number: No. 98.,98.
• Parties: HANNAN v. WILSON.
• Court: United States State Supreme Court (New Jersey)

139 A. 165

HANNAN

v. WILSON.

No. 98.

Court of Errors and Appeals of New Jersey.

Oct. 26, 1927.

(Syllabus by the Court.)

Appeal from Court of Chancery.

Suit by Kate Hannan against Margaret E. Wilson for specific performance. From a decree for complainant (136 A. 499), defendant appeals. Reversed.

William M. Beard, of Westfield, for appellant.

E. A. Merrill, of Westfleld, for respondent.

PARKER, J. This is an action under the Declaratory Judgments Act of 1924 (P. L. p. 312). See McCrory Stores Corp. v. Braunstein (N. J. Err. & App.) 134 A. 752. The suit originated in the Court of Chancery, and the main question propounded to the court was, in substance, whether section 45 of the Chancery Act of 1902 (1 C. S. 1910, p. 426), making a decree of the Court of Chancery for the conveyance of land tantamount, in some cases, to the conveyance itself, may, in a case of specific performance of a contract to purchase and pay for land, be invoked by a vendor as transferring his title as against a vendee who declines to take and pay for the tendered deed, even after decree requiring him to do so. Up to this time, the statute seems never to have been applied except in favor of a vendee against a vendor, so far as our reported cases show. Price v. Sisson, 13 N. J. Eq. 168, affirmed 17 N. J. Eq. 475; Fee v. Sharkey, 59 N. J. Eq. 284, 44 A. 673, affirmed 60 N. J. Eq. 446, 45 A. 1091; White v. White, 61 N. J. Eq. 629, 47 A. 628; Goldstein v. Curtis, 65 N. J. Eq. 382, 59 A. 639; White v. Smith (N. J. Ch.) 60 A. 399; Compagnie Universelle v. U. S. Service Corp., 84 N. J. Eq. 604, 95 A. 187, affirmed 85 N. J. Eq. 601, 96 A. 292; McVoy v. Baumann, 93 N. J. Eq. 360, 638, 117 A. 717; Baumann v. Naugle, 97 N. J. Eq. 110, 127 A. 263; Baker v. Baker, 97 N. J. Eq. 306, 127 A. 657.

A glance at the history of the present litigation may be of service. The respondent, Hannan, is the vendor, and had an agreement in writing with the appellant Wilson to convey land to her for $750. Deed was tendered, and refused on the ground of defective title. Respondent filed a bill to compel Mrs. Wilson to take and pay for the deed, and secured a decree requiring her to do so. On appeal to this court, the decree was affirmed. Hannan v. Wilson (N. J. Err. & App.) 135 A. 809. That decree required complainant to keep her tender good by depositing the deed in escrow, which was done; and required defendant within 10 days after notice thereof to pay the balance of the purchase price, which was not done. This, of course, left the defendant in contempt of the decree, and, we take it, amenable to proceedings in contempt, or by way of sequestration of property, under section 46 of the Chancery Act, 1 C. S. 1910, p. 427. Complainant's counsel did not resort to either remedy, but for some reason which does not appear in the case invoked the Declaratory Judgments Act, ubi supra, and by a new bill propounded two questions to the Court of Chancery. The second depends on the first and is not argued on this appeal, and hence we disregard it. The first question was:

"When, if at all, did title vest in the defendant, Margaret E. Wilson, under the terms of the statute, being section 45 of the Chancery Act, C. S. 426?"

To this the decree in the present suit replied:

"(1) The intent of section 45 of the Chancery Act (1 C. S. 426), when invoked by a successful complainant in a suit for the specific performance of a contract to convey lands, is to give effect to the decree of the court, irrespective of whether such complainant is vendee or vendor.

"(2) The decree in this cause having directed compliance therewith by a time appointed, and complainant having complied, title to the lands agreed to be conveyed vested in the vendee at the time appointed, by force of the statute, notwithstanding the vendor was complainant and the vendee was defendant, and notwithstanding the defendant failed to comply. Compliance with the decree by complainant is a condition precedent, and if complainant shall not comply by the time appointed such noncompliance is a breach of the contract, and the statute may not be invoked; in such case, therefore, the statute will not operate to vest title in the vendee. But if defendant only shall not comply with the decree by the time appointed, such failure will not deprive the complainant of the benefit of the decree, and title will, nevertheless, vest in the vendee at the time appointed, by force of the statute."

This brings us to a consideration of the statute itself. It is the crux of the case, for two reasons: First, the inquiry under the Declaratory Judgments Act is directed solely to the effect of this statute, quite apart from any general principles of equity; and secondly, because without it, and under such general principles, there would be no transfer of legal title worked by the decree, which formerly operated only in personam. This is distinctly laid down by Professor Pomeroy in his Equity Jurisprudence, where in several places we find it sharply stated that the transfer of the title is solely the creature of statute. See sections 170, 428, 1317; also, 21 C. J. 691. We are liable to lose sight of this distinction by reason of the fact that our statute is a very old one, going back to 1799. Pat. p. 433, § 47. It stood unchanged until the Revision of 1877; R. S. 1821, p. 499; Elm. Dig. p. 59. In 1852 section 6 of a supplement to the Chancery Act (P. L. p. 256) was couched in somewhat similar terms, and covered in addition the contingency of disability of the party ordered to convey. These two sections stood together until 1877 (see Nix. Dig. 1868, pp. 112, 117) when they were consolidated by the revisers (Rev. 1877, p. 115, § 63) and in this form the section went into the Chancery Act of 1902. This history was traced by Vice Chancellor Stevenson in Amparo Mining Co. v. Fidelity Trust Co., 74 N. J. Eq. at page 205, 71 A. 605. The language as it has stood since 1877 is as follows: (1. C. S. 1910, p. 426, §45):

"Where a decree of the Court of Chancery shall be made for a conveyance, release or acquittance of lands or any interest therein, and the party against whom the said decree shall pass, shall not comply therewith by the time appointed, then such decree shall be considered and taken, in all courts of law and equity, to have the same operation and effect, and be as available as if the conveyance, release or acquittance had been executed conformably to such decree, and this, notwithstanding any disability of such party by infancy, lunacy, coverture or otherwise."

Certain words in this statute have been italicized by us, in order to assist in pointing out what we consider its obvious intent, viz., to transfer title from, and not to, a "party against whom the decree shall pass"; to vest a suitor with a title on his own prayer, and not a defendant with a title against his will and over his resistance.

(1) The decree is called a decree "for a conveyance"; language inappropriate to a situation in which the complainant tenders a conveyance and defendant is required to pay for it.

(2) The "party against whom the decree shall pass" is the party against whom a decree for a conveyance shall pass, i. e., the party directed to convey.

(3) This is corroborated by the words "such party" in the concluding clause, which divests him of the title, notwithstanding legal disability to convey.

(4) The statute deals with a refusal to execute a deed, not a refusal to accept it.

(5) The statute provides that the decree operates as a conveyance at law as well as in equity.

No doubt the party declared by the chancery decree to be entitled to the land may then assert his title in ejectment or in trespass. It has been held in the Court of Chancery that he has such a legal title as will support an action of partition. White v. Smith (N. J. Ch.) 60 A. 399. But we are quite unable to see how a contract vendee, who has been decreed to accept and pay for a deed and has refused, is entitled to maintain ejectment or any other form of action at law against any one; and if not at law, he stands, under the statute, no better off in equity.

Another glance at the text of Professor Pomeroy's great work will show that there is no indication of any state statute having the effect claimed by respondent. In section 170, supra, he speaks of divesting the title of the defendant in favor of the plaintiff; a "decree that a conveyance of lands should be made by the defendant to the plaintiff;" and so on. Similar language will be found in sections 428 and 1317, already cited. The converse proposition, that a complainant's title will be divested on his own application, is nowhere mentioned.

The operation of the statute in partition proceedings is illustrative of the underlying thought of the Legislature. Before the statute, a judgment or decree in partition created no new title, but merely effected a change of possession. 20 R. C. L. 780; 30 Cyc. 308...