Seibel v. Purchase

• Decision Date: 17 December 1904
• Citation: 134 F. 484
• Parties: SEIBEL v. PURCHASE.
• Court: U.S. District Court — District of New Jersey

134 F. 484

SEIBEL v. PURCHASE.

United States Circuit Court, D. New Jersey.

December 17, 1904

Harvey F. Carr, for plaintiff.

George A. Bourgeois and Eli H. Chandler, for defendant.

ARCHBALD District Judge.

^[1] The material facts of the case are as follows

(1) On May 4, 1901, the defendant, Selina A. Purchase, by agreement in writing, sold to the plaintiff, Henry J. Seibel, Jr., and he, on his part, agreed to purchase, for the sum of $7,000 an option or right to buy two certain houses and lots at Atlantic City, N.J., for the price of $40,000, which she had obtained from Mary B. Walton, the owner. This option was to be exercised by July 1, 1901, with the privilege of doing so however, at any time during July, August, or September provided no other purchaser was procured.

(2) On the date of the agreement with Mrs. Purchase, the plaintiff paid her $2,000 down; the remaining $5,000, by the terms of the agreement, being payable 'at the time of settlement and upon the delivery to him of a deed in fee simple for said premises clear of all encumbrances whatsoever. ' As a further assurance, it was covenanted by Mrs. Purchase that there should be conveyed to Mr. Seibel on or before July 1 1901, 'a good and valid title in fee simple free of all encumbrances,' provided he, on his part, should pay the purchase price stipulated for the property, and that, if Mrs. Walton should contest the validity of the option, 'or refuse to make title to the property upon the tender of the consideration money,' the $2,000 which he had paid should be returned. It is for the recovery of this money that the present action is brought, for which the defendant not only denies any liability, but claims by way of set-off a judgment against the plaintiff for the $5,000 additional which he was to pay.

(3) At the time of the agreement between the plaintiff and defendant with regard to the sale of the option, there was upon the property a mortgage of $17,500, which had been given by Mrs. Walton, April 24, 1900, to the executors of Henry Gerstley, deceased, and which was made payable to its terms at the expiration of three years, with interest semiannually at the rate of 5 per cent. per annum. Upon a search of the title the plaintiff discovered this mortgage, and, as it was his purpose to improve the property by putting up an apartment house, and to obtain the money to do so by an advance-money mortgage upon it, the existing mortgage was a serious obstacle from his standpoint, to the completion of the purchase. To try and obviate the difficulty, he made to Mrs. Walton, through her attorney, Mr. Townsend, a tentative proposition that, subject to the Gerstley mortgage of $17,500, she should take $23,000 for the property, of which $5,000 was to be paid in cash on or before July 1, 1901--the date to which the option was in the first instance limited-- and the balance, $18,000, on or before October 1st following, with certain adjustments as to interest, taxes, water rates, and insurance for the interim. On submission of this to Mrs. Walton, she signified that such an arrangement would be acceptable; but, so far as Mr. Seibel was concerned, the matter went no further. It will be noted that by it she would get $40,500 for the property, or $500 more than by the outstanding option with Mrs. Purchase.

(4) The same day, at an interview with Mrs. Purchase at the office of Mr. Seibel's attorneys, in Philadelphia, her attention was called to the existing incumbrance on the property, and the effort which had been made to overcome it; and it was stated that Mr. Seibel was ready to carry out the arrangement which had been submitted to Mrs. Walton, and of which she had expressed her approval, provided this would be satisfactory to Mrs. Purchase. Upon learning, however, that the $5,000 which she was still to get from Mr. Seibel for the transfer of the option would have to wait until there was a final settlement, and a clear deed given for the premises, and could not be definitely secured to her meanwhile, she said she would think it over, and subsequently declined to accede to the proposition. The plaintiff thereupon notified her by letter of June 25th that he would hold her strictly to the terms of her contract; calling her attention to the fact that she had agreed to deliver the property on July 1st free and clear of incumbrances, although there was a mortgage of $17,500 on it, which the mortgagees refused to satisfy, and stating that he was willing to cancel his contract with her on return of the $2,000 which he had paid, or, if not, that he should protect his rights in whatever way was necessary, by arrangements with Mrs. Walton or otherwise. To this Mrs. Purchase replied by letter the same day that she would be ready to keep her part of the contract, and deliver the property free of incumbrances at the time appointed, and should expect, in return, that he would adhere to his part.

(5) On June 29th, a few days later, the parties met again at the office of Mr. Townsend, in Atlantic City; Mr. Seibel being accompanied by his attorneys, and Mrs. Purchase by hers, and Mr. Townsend representing Mrs. Walton, who, though not present, was in communication with him in the building. After a general discussion of the situation, and the complication brought about by the existence of the $17,500 mortgage, it has declared by Mrs. Purchase's attorney, while admitting that it could be got out of the way, that Mrs. Purchase wanted her $5,000 without regard to it, and would insist on its being paid or secured to her, or she would not permit...