Harris v. Shorall

• Decision Date: 01 March 1921
• Citation: Harris v. Shorall, 230 N.Y. 343 (N.Y. 1921)
• Parties: HARRIS v. SHORALL et al.
• Court: New York Court of Appeals Court of Appeals

230 N.Y. 343

130 N.E. 572

HARRIS

v.SHORALL et al.

Court of Appeals of New York.

March 1, 1921.

Action by Albert W. Harris against Alex.P. Shorall and another.From a judgment of the Appellate Division, Third Department(188 App. Div. 330,177 N. Y. Supp. 214), reversing a judgment of the Trial Term, without a jury, in favor of plaintiff, and dismissing the complaint, plaintiff appeals.

Reversed, and judgment of Trial Term modified and affirmed.

Appeal from Supreme Court, Appellate Division, Third department.

Erskine C. Rogers, of Hudson Falls, for appellant.

Walter A. Chambers, of Glen Falls, for respondents.

POUND, J.

This is an action for the specific performance of a contract under seal, dated January 19, 1918, whereby plaintiff agreed to sell and defendants to buy certain real estate in the village of Hudson Falls for $16,000.Of this amount $500 was paid on the execution of the contract; $4,500 was to be paid on February 15, 1918, when the deed was to be delivered.The property was subject to a mortgage of $11,000 held by the Albany City Savings Institution.The deed was to be given subject to the mortgage, but plaintiff agreed ‘to procure from said bank an extension of the payment of said mortgage for at least two years from this date, or to procure some other person to hold said mortgage for that time’; otherwise the agreement was to become void and plaintiff was to return the $500 cash payment.The deed was to provide that defendants assumed and agreed to pay the mortgage.Before the law day, plaintiff ascertained from the bank that it would extend to February 15, 1920, the payment of only $10,000 of the $11,000 mortgage.Plaintiff thereupon orally agreed with the defendants to take their mortgage as security for the remaining $1,000 and to pay $1,000 to the bank in reduction of the mortgage held by the bank.

The trial court found that on February 15, when plaintiff tendered performance under the original contract as modified by the oral agreement, defendants refused to accept the deed and to perform on their part, on the ground that it might impair their credit if they were to place a second mortgage on the property; that they refused to complete the contract because the bank had not extended the time for payment of the full amount of the mortgage; that they also refused to grant any extension of time to plaintiff to enable him to perform according to the original contract; that shortly after February 15plaintiff paid $1,000 to the bank to apply on its mortgage, having previously thereto agreed with the bank to make the payment in connection with obtaining the extension of time for the payment of the $10,000.On the trial plaintiff offered to pay the bank mortgage in full, and in place thereof to take defendants' mortgage on the premises for $11,000, payable February 15, 1920.This offer was outside the agreement of the parties in either form.Time was not the essence of the contract; no damage would have resulted if performance had been delayed as plaintiff requested on the law day.

The complaint alleges performance by the plaintiff of the modified agreement, and demands judgment that defendants perform on their part.The answer is a denial of the material allegations of the complaint.The statute of frauds is not pleaded, nor is it alleged as a defense that the modified agreement was not under seal.Crane v. Powell, 139 N. Y. 379, 34 N. E. 911;Matthews v. Matthews, 154 N. Y. 288, 48 N. E. 531.

The trial court held that the contract under seal had been modified by the oral contract, and as thus modified had been fully performed by plaintiff.It also held that plaintiff, having relied on the oral agreement, was entitled to time in which to perform the original contract.Imperator Realty Co. v. Tull, 228 N. Y. 447, 127 N. E. 263.It directed defendants to execute their mortgage for $1,000, and gave them an option to execute their mortgage for $11,000 instead, in which case plaintiff should therewith obtain a discharge of the bank mortgage.

[1] The Appellate Division reversed the judgment entered on the decision of the trial court without disturbing its findings of fact, and dismissed the complaint, taking the view that plaintiff was not on February 15 literally and immediately prepared to perform either the original contract or the modified contract.As a bare fact, this is not disputed.The extension agreement of the bank was not executed until September 10, 1918, and the unexecuted extension agreement presented on the law day contained certain provisions whereby the loan might be called in before the expiration of the two years, which might have been objectionable, but on the evidence for the plaintiff which the trial justice accepted and on which he made his findings of fact the defendants' objections were directed entirely to the disadvantages to them of having a second mortgage on the property.They thought that, although it would not increase their indebtedness, it would make it more difficult for them to borrow money on the security of the real estate, and would thus injuriously affect their business standing.If they had objected to the form of the extension agreement, or that it was not executed, the difficulties might have been overcome by a short postponement which plaintiff requested and which they refused to consider.Higgins v. Eagleton, 155 N. Y. 466, 50 N. E. 287.The allegations of the complaint are general, but not insufficient to cover the facts found.Courts do not arbitrarily refuse specific performance of an agreement for the sale of real estate when equity seems to demand that the parties be compelled to carry out such agreement, even though one party may not be instantly ready with complete performance on his part.Especially is this the rule, almost of right, where one of the parties has partly performed or changed his position in reliance on the contract, and common justice forbids that the other party should, on some technicality which may be obviated without prejudice to any substantial interest, refuse to comply with its provisions.

The questions in the case are more substantial than the objections as to practice thus suggested.Did the parties modify the contract under seal by the subsequent parol agreement?Or were...