McCormick v. Stephany

• Decision Date: 26 December 1900
• Citation: 61 N.J.E. 208,48 A. 25
• Parties: McCORMICK v. STEPHANY et al.
• Court: New Jersey Court of Chancery

48 A. 25

61 N.J.E. 208

McCORMICK

v. STEPHANY et al.

Court of Chancery of New Jersey.

Dec. 26, 1900.

Bill by Viola McCormick against Louise Stephany and others. Decree for complainant.

The complainant, in the present condition of the pleadings, appears as executrix of the last will of George McCormick, and as residuary devisee and legatee under that will. She seeks to obtain a decree for the specific performance of a contract made by August Stephany in his lifetime for the conveyance of a hotel property in Atlantic City known as the "Extra Dry." Mr. Stephany died intestate. The complainant makes defendants the administratrix of Mr. Stephany, and also his widow and children, and by a recent amendment the residuary devisees of the fee of George McCormick's lands are also made parties to this suit. The contract for conveyance was one of the clauses of a lease of the premises in question, made in June, 1897, by Mr. Stephany to Mr. McCormick. By mistake certain words were omitted which ought to have been inserted. The completed clause is hereinafter set forth. Mr. McCormick entered into possession, and in October, 1897, died testate, during the term, giving all his estate to his widow, the complainant, for life, with full power of disposal, and a limitation over upon her death to the parties brought in by the recent amendment. It is claimed by the complainant that in November, 1897, Mr. Stephany "found a purchaser" for the premises, within the meaning of the phrase used in the lease. The complainant thereupon on December 22, 1897, gave written notice to Mr. Stephany that she would exercise the option to purchase the premises in question for the $12,000, and that sum would be paid on tender of a deed "with full covenants." On May 18, 1898, the complainant tendered to Mr. Stephany the purchase money, $12,000, and demanded a deed "with full covenants free of all incumbrances." On May 19, 1898, Mr. Stephany refused to make a deed with full covenants free of all incumbrances to Mrs. McCormick, giving his reason therefor in a written notice addressed to her: "Because you are not entitled to a conveyance of the property above mentioned, either under the said lease or under any other covenant." On June 9, 1898, Mr. Stephany demanded in writing payment of rent or that complainant quit the premises, and threatened proceedings to dispossess her. A distraint levy appears to have been made the same day for rent claimed to have come due June 1, 1898. On June 4, 1898, the complainant filed her bill against Mr. Stephany alone, praying a decree for specific performance by the delivery to her of a deed "with full covenants" conveying the premises upon her payment of the $12,000, which she tendered to the defendants, and that the enforcement of the distress and the proceedings to dispossess her might be enjoined. Mr. Stephany shortly after died intestate. The defendant Louise Stephany, his widow, was appointed administratrix, etc. He left five children, to whom his estate in the Extra Dry descended subject to the widow's dower. On July 22, 1898, the complainant abandoned the first bill against Mr. Stephany, and filed a new one (the original bill in this cause), having the same object, against his widow and heirs at law. An order to show cause was allowed, and on the coming in of the order the defendants presented affidavits denying the equities set up by the complainant, and raising a number of questions, which were disposed of, and a preliminary injunction was granted. See McCormick v. Stephany, 57 N. J. Eq. 257, 41 Atl. 840. In this new bill, filed July 22, 1898, the complainant prays a decree that the defendants deliver "a good and sufficient deed for the premises" upon payment, etc., and does not ask that the deed shall contain any covenant.

Since the hearing of the application for the preliminary injunction the defendants have filed their joint and several answer to the original bill, admitting that Mr. Stephany in his lifetime demised the Extra Dry to Mr. McCormick in his lifetime, but denying that it was with the privilege of purchasing during the continuance of the lease for the sum of $12,000. They admit that McCormick continued in possession as tenant under the lease until his death. They deny in detail the allegations of the bill going to show that Mr. Stephany had "found a purchaser" for the premises for the price of $15,000. They admit service of demands of performance by complainant, and for rent, and of notice to quit, and the issue of the distress warrant by defendant. They deny that the complainant at any time, either before or since Mr. McCormick's death, "accepted the offer of the option contained in the said lease," and allege that she has "at all times waived, refused, and rejected the same." They further answer that Mrs. Stephany has never agreed to convey her right of dower, and has always been unwilling to do so. They further, by cross bill, set up the mistake in the omission from the lease of the clause relating to the action of the party of the second part on receiving notice, etc., and pray that the lease and agreement for purchase may be reformed by inserting it in its proper place. After the opinion reported in 57 N. J. Eq. 257, 41 Atl. 840. was pronounced, the complainant filed a supplemental bill reciting the allegations of the original bill, and averring by way of supplement that in January, 1898, Mr. Stephany and his wife had mortgaged the Extra Dry, and also other lands of Mr. Stephany, to one Burges, and that Mr. Robert E. Stephany, as solicitor for the mortgagee, had filed a bill in this court to foreclose that mortgage, and had made Mrs. Stephany a defendant, as dowress, had prosecuted the bill to decree, execution and sale, and that at the sale Mr. Robert E. Stephany, as agent for his mother, had in her name purchased all of the mortgaged premises, including the Extra Dry, at one bid of $1,100, and that the sale was reported to this court; that afterwards a statement and affidavit were filed to the effect that the bidder was financially unable to pay the purchase price, and that, without any order in the cause, all the mortgaged premises excepting the Extra Dry were readvertlsed. The complainant further alleges in her supplemental bill that Mr. Robert E. Stephany admitted shortly after the first advertisement that the foreclosure was an amicable one, designed to put the title of all Mr. Stephany's lands in the name of Mrs. Stephany; that the claim that she was financially unable to pay her bid of $1,100 was false; and that the abandonment of the first sale, which included the Extra Dry, and its omission from the second advertisement, was in accordance with a purpose and plan conceived by Mr. Stephany in his lifetime, and continued by Mrs. Stephany and bis heirs since his death, whereby Mrs. Stephany should, by her refusal to convey her dower right in the Extra Dry to the complainant, according to the contract, prevent her from securing the benefits of that bargain. The complainant again tenders performance by payment of the agreed price, or to pay $1,100 to Mrs. Stephany to enable her to complete her purchase and take title to the premises, with a prayer for conveyance without covenants as in the original bill, not only against the heirs, but also against Mrs. Stephany; that the actions of the defendants be declared to be a fraudulent contrivance to keep alive her dower right as against the estate agreed to be conveyed to Mr. McCormick, and that the heirs be decreed to convey the premises with an Indemnity against the dower right. To the supplemental bill the defendant Louise Stephany, the dowress, files her separate answer, admitting the mortgage to Burges, and the proceedings in this court to foreclose it; that the other mortgaged premises and the Extra Dry were put up at one bid; that Mrs. Stephany bid them in as stated in the supplemental bill. Her answer declares she has no knowledge of the affidavits for resale, and denies the readvertisement without any order of the court, and recites an order for resale, made December 13, 1898, and alleges that Burges on December 15, 1898, released the Extra Dry from the lien of his mortgage, and that the sheriff at the resale excepted the Extra Dry, and did not sell it. She denies knowledge of any admissions by Mr. Robert E. Stephany as to the object of the first advertised sale, and declares the latter was not, in that matter, her solicitor. She further denies any plan or contrivance to defraud the complainant out of the benefit of the contract of sale. The heirs at law, by their guardian, and the administratrix of Mr. Stephany, file a similar answer. Issue has been joined, and the cause has come to hearing on the merits.

Thompson & Cole, for complainant.

Robert E. Stephany, for defendants.

GREY, V. C. (after stating the facts). There were some preliminary questions as to the construction of the lease which contains the clause giving to McCormick the right to purchase, and also the terms of his will, which were discussed and decided in the previous hearing on the application for the injunction. At the same time the alleged omission from the clause in the lease giving the right to purchase was then disposed of in the preliminary argument and opinion. McCormick v. Stephany, 57 N. J. Eq. 257, 41 Atl. 840. On final hearing it was admitted that in the lease the agreement clause intended to be entered into by the parties contained the omitted words, and that it should read as follows. The words originally omitted, but now agreed to be supplied, are printed in italics: "And it is further agreed by and between the above parties that, in case the said party of the first part should find a purchaser for the said premises, then the said party of the second part shall have the option, during the continuance of this lease, to buy of the said party of the first part the said premises for the sum of twelve thousand dollars; and in case the said party of...