McCormick v. Stephany

• Decision Date: 30 November 1898
• Parties: McCORMICK v. STEPHANY et al.
• Court: New Jersey Court of Chancery

41 A. 840

57 N.J.E 257

McCORMICK

v. STEPHANY et al.

Court of Chancery of New Jersey.

Nov. 30, 1898.

(Syllabus by the Court.)

Bill by Viola McCormlck against Louise Stephany and others for injunction and for specific performance. Injunction advised.

August Stephany was in his lifetime the owner of a saloon property in Atlantic City, known as the "Extra Dry." By a written lease under seal of both parties, dated June, 1897, he demised this property to one George McCormick, who entered into possession. There were in the lease covenants not to assign, nor underlet, nor to use for any other purpose than a saloon and dwelling, etc., with a further agreement in these words: "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 that in case the said party of the first part has found a purchaser for the said premises, the said party of the second part should refuse to buy the said premises, at the price above mentioned, then the said party of the second part promises and agrees, upon three months' notice in writing, to quit and yield up the possession of the said premises to the said party of the first part, on the first day of June nest following the expiration of the said three-months notice." In October, 1897, McCormick, the lessor, died, testate, making his wife, the complainant, sole devisee and legatee for life of his estate, with full power of disposition, and a limitation over to others upon his wife's death. He further directed that upon his death the business that he was carrying on in Atlantic City should be discontinued and wound up by his executors. He appointed his wife and Mr. Stephany executors. Shortly after Mr. McConnick'a death, Mr. Stephany, by his attorney, served a notice upon Mrs. McCormick claiming that the lease had become null and void, because, as he insisted, the direction in McCormick's will to discontinue the business was a breach of the covenant, not to use the premises for any other purpose than a saloon, etc., and for this reason Mr. Stephany demanded possession of the premises. The complainant, Mrs. McCormick, on the other hand, contends that Mr. Stephany, on a transaction looking to a sale of the premises, had "found a purchaser," in one Haines, under the terms of the option in the lease above quoted, and that this gave her a right to tender Mr. Stephany the $12,000 purchase money, and have him convey the premises to her, under the above-quoted terms made in the lease. She alleges that she did make such a tender, accompanied by a written notice, a copy whereof is annexed to her bill, in which she denied any breach of the lease, and notified Mr. Stephany that she exercised the option to purchase the property for $12,000, and states "that this sum will be paid upon execution and tender of deed with full covenants." On May 18, 1898, a like tender was made, demanding a "deed of conveyance, with full covenants, free of all incumbrances." These demands were refused, upon the ground that the complainant was not entitled to any conveyance. In June, 1898, Mr. Stephany demanded payment of the rent, with notice to quit within three days, etc., and, for want of such payment, levied a distress warrant The complainant then filed her bill in this court, seeking to restrain the prosecution of the collection of the rent, and to specifically enforce the agreement of sale. Almost immediately upon the filing of the bill, Mr. Stephany died, intestate, leaving, him surviving, the defendants, his widow, Louise Stephany, and his children and heirs at law, Robert E. Stephany, William Stephany, Albert Stephany, Minnie and Ida Stephany, the last three of whom are minors. The widow, Louise Stephany, took out letters of administration upon the estate of the decedent. The complainant, in July, 1898, upon Mr. Stephany's death, filed a new bill, against the widow and heirs, tendering herself ready to pay the $12,000, and praying answer from the widow and heirs at law without oath, and that the defendants may be decreed specifically to perform the agreement upon payment to them of the $12,000 purchase money, and that meanwhile they may be restrained from proceeding with the distraint, or to interfere with the property or possession of the demised premises by the complainant On filing the bill and affidavits annexed, an order to show cause was allowed why an injunction should not issue, according to the prayer of the bill. On the coming in of the order, the defendants filed affidavits, stating: That Mr. Stephany, prior to making the above-quoted lease, had entered into a previous lease, for the same premises, containing the following provisions: "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, than 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 fiisc part the said premises for the sum of twelve thousand dollars, and that in case the said party of the second part, on receiving notice that the said party of the first part has found a purchaser for the said premises, should refuse to buy the said premises, at the price above mentioned, then the said party of the second part promises and agrees, upon three months' notice, to quit and yield up the possession of the said premises to the said party of the first part, on the first day of June next following the expiration of the said three-months notice." And looking to the making of the lease of June 1, 1897, McCormick and Stephany had agreed that the same provision concerning the sale of the premises should be inserted in the lease of June 1, 1897. That the previous lease was handed to a stenographer for the purpose of copying the option provision; and that, in making the copy, the stenographer mistakenly omitted from the new lease that line in the old one which is above given in italics. That the parties never in fact agreed for an option upon the terms stated in the lease of June 1, 1897, if that option is to be construed as vesting in the lessee a right to buy the property at the price named in case the lessor should find a purchaser. The stenographer who wrote the lease supports this explanation as in accordance with his instructions, and testified that he made the mistaken omission. The defendants' affidavits further state that Mr. Stephany never sold or conveyed the demised premises to Haines, or to any one else, but, on the contrary, continued seised of them at the time of his death; that no notice was ever given the McCormicks by Stephany that he had found a purchaser according to the terms of the lease. The widow of Mr. Stephany also testified that she never made any agreement to convey; that she is unwilling to release her dower, and refuses to do so; and that the lease and option were given without her knowledge or consent,

C. L. Cole, for complainant.

Robert E. Stephany and George A. Bourgeois, for defendants.

GREY, V. C. (after stating the facts). This case is before me upon the coming in of the order to show cause whether an injunction should not issue restraining the defendants from enforcing their distraint for rent, and from interfering with the complainant's possession of the demised premises and of the goods seized under the distraint. The complainant's defense to the distraint is based solely upon her claim that, by the terms of the lease, she is entitled to exercise an option to purchase; that she has done this; and that the defendants, who hold the legal title, are bound to convey to her, and therefore may not equitably enforce the distraint for rent which came to be due siuce the demand made for a conveyence (for which she proffered herself ready to pay), or take any steps to interfere with her possession of the premises. The defendants deny that the complainant has any right to a conveyance, either under the lease or otherwise. The complainant must therefore, in order to maintain her claim to the restraint she seeks, sustain her right to the conveyance demanded by her bill.

That there was a mistaken omission in the option clause of the lease is, I think, fully proven by the uncontradicted affidavits filed by the defendants, and among them of the typewriter who made the omission. This mistake was in the written expression of the contract, the proofs showing that it did not set forth the intent of the parties, and also what that intent was. Such a mistake may be set up as a defense in a suit for specific performance. Hawralty v. AVarren, 18 N. J. Eq. 127. But the utmost effect the proofs of the mistake can have is to require the court to consider the contract as if the omitted words were inserted. If this clause be amended by putting in the omitted words, it does not, in the present attitude of the case, affect the complainant's right of performance. The first part of the paragraph is an absolute agreement that, if the lessor finds a purchaser for the premises, the lessee shall have the option during the continuance of the lease to buy at the price named. Under this the complainant seeks to enforce a conveyance to herself. The succeeding clause where the omission occurs only becomes...