McClenachan v. Malis
| Decision Date | 09 January 1933 |
| Docket Number | 256 |
| Citation | 310 Pa. 99,164 A. 780 |
| Parties | McClenachan v. Malis, Admrx. et al., Appellants |
| Court | Pennsylvania Supreme Court |
Argued December 9, 1932
Appeal, No. 256, Jan. T., 1932, by defendants, from judgment of C.P. No. 1, Sept. T., 1926, No. 14161, in case of E. B McClenachan v. Aranka Malis, administratrix of estate of Jacob K. Malis, deceased, and Samuel Goldberg. Reversed.
Assumpsit on agreement of sale. Before McDEVITT, J.
The opinion of the Supreme Court states the facts.
Verdict for plaintiff for $43,000 and judgment thereon. Defendants appealed.
Error assigned, inter alia, was judgment, quoting record.
Judgment reversed, new trial ordered.
Robert T. McCracken, with him David S. Malis and Charles Edwin Fox, for appellants. -- Plaintiff could not convey free and clear of encumbrance: Hoover v. Pontz, 271 Pa. 285; Rugg v. Realty Co., 261 Pa. 453.
If a vendee performs or tenders performance and the vendor is unable to perform his part, the vendee may rescind: Erie v. Vincent, 8 Watts 510; Stitzel v. Kopp, 9 W. & S. 29.
The purchase money was not sufficient to pay the encumbrance: Croskey v. Stockley, 85 Pa.Super. 498.
It was intended that the $30,000 remain as a lien and not be paid in cash: Schweyer v. Walbert, 190 Pa. 334.
Clarence G. Myers, with him James L. Rankin and Duane, Morris & Heckscher, for appellee. -- Where covenants are mutual and to be performed at the same time, plaintiff need only aver a readiness and willingness to perform: Williams v. Bentley, 27 Pa. 294; Douglas v. Hustead, 216 Pa. 292; Boyd v. Hoffman, 241 Pa. 421.
If the vendor is ready and willing to pay off and satisfy such encumbrances, and has it within his power to compel their immediate satisfaction he may do so out of the proceeds or with the aid of the proceeds coming to him at settlement: Moore v. Shelly, 2 Watts 256; Irvin v. Bleakley, 67 Pa. 24.
Plaintiff offered to convey an insurable title in accordance with the agreement of sale: Baker v. Kaplan, 282 Pa. 239; Perkinpine v. Hogan, 47 Pa.Super. 22.
Objections appearing on a preliminary settlement certificate are not conclusive.
When parties have by their conduct placed their own interpretation upon an agreement, the court will not, in the absence of fraud or mistake, interfere with that interpretation: Phila. v. Coal Co., 290 Pa. 87.
Before FRAZER, C.J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.
This is a suit by a vendor against his vendees for the purchase price of real estate in the City of Chester, less $3,000 paid on account. The plaintiff has judgment. Defendants have appealed. Though in form assumpsit, in fact the vendor seeks specific performance, asking payment of the agreed consideration in exchange for his deed. By their agreement, the equitable estate in the land passed to defendants, plaintiff holding the legal title for them, the equitable property in the consideration passing to plaintiff; the suit, therefore, is governed by well-settled equitable principles: Hoover v. Pontz, 271 Pa. 285, 114 A. 522; Coates v. Cotteral, 290 Pa. 237, 138 A. 756; cf. Bohlen v. Black, 237 Pa. 399, 85 A. 470.
The defense was that plaintiff could not make a title insurable clear of encumbrances by any title company doing business in Chester. The alleged circumstance, creating the difficulty, was said to grow out of the following clause in the habendum of a deed dated December 16, 1812: "under and subject to the payment of the yearly rent of six pence as hereafter to grow due and payable." The record contains nothing to show (and witnesses testified that no information about it could be found) when or how or in whose favor the charge was created. There was evidence that in another deed dated February 12, 1783, a larger lot including that in suit, was conveyed "under the yearly rent of one shilling lawful money of America payable unto the said Jonas Sanderland [not a party to the deed] his heirs and assigns on the 25th of March yearly forever." With no more information than those recitals give, the parties have referred to the rent, in the record and briefs, as a ground rent; for convenience, we shall retain that designation, without, however, intimating that it was a ground rent, as that term is technically well understood in this Commonwealth: Ingersoll v. Sergeant, 1 Whart. 337; Wallace v. Harmstad, 44 Pa. 492.
The agreement of sale was made September 25, 1925. The parties agreed to perform "within ninety days from date hereof, said time to be [of] the essence of this agreement, unless extended by mutual consent in writing endorsed hereon." On December 5, 1925, and on March 11, 1926, each time, in consideration of the payment of $200, plaintiff granted defendants a ninety-day extension for performance, bringing the time to June 25, 1926. On June 23d, by writing, they again extended the time to July 1, 1926. Defendants' pleadings admit that all three extensions were granted at their request.
On June 5, 1926, defendants ordered from the Real Esstate Title Insurance and Trust Company of Philadelphia, a title search, pursuant to which that company issued its settlement certificate dated June 18th. Among "encumbrances and claims" noted on it was "Grd. rent 6 pence as mentioned in deed [book] L, page 77" (the deed first quoted above). A mortgage for $17,000 made by plaintiff to Cambridge Trust Company, and past due, was also noted. That certificate was not conclusive that the encumbrances existed: Groskin v. Knight, 290 Pa. 274, 138 A. 843.
The purchase price of $46,000 was payable $2,000 immediately, $1,000 in thirty days (which was also paid), $13,000 at settlement, $30,000 secured by first mortgage payable in three years. The agreement also provided:
Trial errors resulted in the treatment of the ground rent as affected by the agreement of sale. If the title companies in Chester, or the Philadelphia Company to whom defendant applied, as doing business in Chester, would insure the title clear of encumbrances, notwithstanding the rent recited on the search, defendants were required to take it, because they had agreed to do so: Baker v. Kaplan, 282 Pa. 239, 127 A. 623. In plaintiff's view of the case, that was the paramount issue on trial. The assignments of error complaining that evidence to prove their willingness so to insure was admitted, and that plaintiff had himself obtained such insurance when he purchased, are overruled.
The evidence will support a finding that on June 23, 1926 (two days before the second extension of ninety days expired), one of defendants took the settlement certificate to plaintiff in Chester, who, with the defendant, then took it to the Delaware County Trust Company, which had insured the title to plaintiff, clear, when he purchased the property. The title officer of that company, in his presence, telephoned to the Real Estate Title Insurance and Trust Company in Philadelphia and then wrote to that company a letter of indemnity agreeing to indemnify it for removing the objection from the search, the "indemnity to extend [even] to any future insurance you may be called upon to issue by reason of issuing the present insurance." That letter was handed to the defendant who had also heard it dictated. On behalf of plaintiff, it is contended that the defendant should have presented the letter to the Philadelphia Company, and that, if he had, it would at once have removed the objection from the settlement certificate. A witness representing the Real Estate Title Insurance and Trust Company testified that the company would have insured the title clear of that rent on receipt of that letter. Defendants did not present the letter, and, on call at the trial, produced it and it is in evidence. At this point it may be remarked (in view of the position apparently taken by defendants at the settlement to be referred to later), that fair dealing required the defendant to present that letter to the company promptly, or to decline to accept it; if he had presented it the rent would have been taken off the search and would have disappeared as an obstacle to the settlement. If he had declined to accept it, plaintiff might easily have met the objection. As the case is governed by equitable principles, the letter must be treated as delivered, with the result, if the jury should credit the evidence, that there was no basis for the objection on which defendants claimed the right to rescind. Witnesses representing the title companies in Chester (other than the Delaware County Trust Company which had already insured it, clear, to plaintiff) testified that their companies would have insured the title, clear of the rent, on receipt of a similar letter from the Delaware County Trust Company which it was willing to issue. On July 1...
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