Appeal from Special Term, New York County.
Action by Alven Beveridge against the West Side Construction Company and Jacob Axelrod to set aside a provision in a contract for the sale of real property, and to recover back the amount paid thereon. From a judgment for plaintiff, defendants appeal. Reversed.
[114 N.Y.S. 522] Franc, Neuman & Neugrass (David Leventritt, of counsel, and James J. Franc and Frederick Neuman, on the brief), for appellants.
John P. Everett, for respondent.
Argued before PATTERSON, P. J., and INGRAHAM, LAUGHLIN, CLARKE, and SCOTT, JJ.
Belle G. Beveridge, plaintiff's wife and assignor, entered into a contract in writing with the defendant West Side Construction Company for the purchase and sale of a piece of real estate, with a building thereon in process of construction, known as Beverly Hall, No. 316 West Ninety-Fourth street, for $117,500, and defendant Axelrod, the president of said company, entered into a separate agreement under which he guaranteed the faithful performance of the contract by the said company. The contract was executed on the 26th day of August, 1902, and the date for closing was the 1st of December, 1902, with a proviso for an extension not exceeding 60 days from said date. Payment was provided for as follows: By the payment of $2,500 in cash upon the execution and delivery of the agreement, receipt whereof was acknowledged; by taking the premises subject to a first mortgage of $80,000; by the execution and delivery by the purchaser of a bond secured by a second purchase-money mortgage for $14,000; by the execution and delivery by the purchaser of a deed of the premises No. 244 West 102d street, subject only to a mortgage of $24,000, the equity in said property being so fixed at the sum of $11,000. Said deed was to be executed and delivered as soon as a second [114 N.Y.S. 523] and third mortgage, then liens upon said premises, should have been paid off and satisfied. The contract provided that:
" If said conveyance of said premises subject to said mortgage of only $24,000 is not made on or before the 1st day of October, the party of the first part shall retain as liquidated damages for such failure the said sum of $2,500, and thereupon this contract shall terminate, and neither party shall have any further claim against the other by reason of the provisions of this agreement."
By the purchaser paying the balance, to wit, the sum of $10,000, in cash upon the execution and delivery of the deed to the premises No. 316 West Ninety-Fourth street, interest and insurance was to be adjusted as to each of the premises above mentioned as of the dates of the conveyance of the title, but at the time of closing of the title to 316 West Ninety-Fourth street. The contract further set forth:
" It is further provided that if, after the conveyance of said premises 244 West 102nd street to the party of the first part by the party of the second part, the party of the second part shall fail to carry out the provisions of this contract on her part to be performed, provided a good marketable title to said premises 316 West 94th street is tendered her, the party of the first part shall retain the said premises 244 West 102nd street and all payments in cash on account of the purchase price of 316 West 94th street, as liquidated damages for the non-fulfillment of this contract, and thereupon neither party shall have any further claim against the other by reason of this agreement, which shall thereupon terminate. If, however, the party of the first part shall fail to perform and discharge the agreement on its part to be performed, or shall fail to tender a marketable title of the premises 316 West 94th street, as hereinbefore provided, said party of the first part shall repay to the party of the second part all payments in cash theretofore made on account of the purchase of said premises 316 West 94th street and shall also reconvey to the party of the second part the said premises 244 West 102nd street, subject to said mortgage of $24,000, or if the said premises have been sold by a bona fide sale, the party of the first part shall account to the party of the second part for the proceeds of sale over and above the said mortgage of $24,000."
There was a further provision in regard to taxes and also in regard to taking possession of the 102d street house immediately by a caretaker, and the party of the second part was given the right by her agents to take charge of the renting of the apartments in the Ninety-Fourth street house, all rents to be turned over to the party of the first part to be applied on this contract.
The West 102d street house was conveyed on September 24, 1902, and so before the 1st day of October, 1902, the date fixed by the contract, and on November 11, 1902, and before the date of closing, was sold for $28,500 subject to the mortgage of $24,000. An adjournment of the date of closing was had as provided in the contract, but the plaintiff's assignor breached the contract, as found by the court in the following language:
" That the said Belle G. Beveridge voluntarily and causelessly refused to complete on her part the performance of the said Beverly Hall contract, but defaulted in the performance thereof."
The court also found:
" That the premises No. 316 West Ninty-Fourth street, known as ‘ Beverly Hall,’ were completely and entirely finished by the defendant West Side [114 N.Y.S. 524] Construction Company prior to the 2d day of February, 1903, and in the manner ...