Gendelman v. Mongillo , 96 Conn. 541 ( 1921 )

In the memorandum we find the place, 6 Washington Place; the price, $3,000; the time for performance, within two months from November 21st, 1919; the terms of payment, $1,000 cash, the balance $50 every six months, which is to be secured by mortgage, with the provision of allowing a month in which to straighten out the interest on the mortgage.

I do not think that, as language is ordinarily understood in real estate transactions, there can be any question as to what the parties meant, and as to the sufficiency of this meaning to enable the court to render a decree with moral certainty that it is, in all essentials of such a transaction, what the parties intended and described.

It is claimed that the allegations in the complaint, that the premises are subject to a mortgage for $800, which it was agreed the plaintiff should assume as part payment of the purchase piece, entirely contradict and render uncertain the application of the contract to the terms of payment. I do not regard this as at all serious or embarrassing to the court. The object of the contract was to give a good title for $3,000, $1,000 down and the rest on a mortgage payable $50 every six months; of that there can be no question. Under the contract it was the duty of the vendors to transfer the property free of this mortgage; it would make no financial difference to the vendors, or to the vendee, whether a mortgage of $2,000 was given for a clear title and the $800 mortgage discharged by the vendors, or whether, instead of a $2,000 mortgage to the vendors, the $800 was assumed by the vendee and the other $1,200 given in a mortgage over and above the existing mortgage of $800. There was not a dollar's variance in the substance of the transaction, whichever way it was done; the only practical difference at all being that, if the plaintiff assumed the $800, it made it a trifle easier for the vendors by obviating the necessity of clearing up the $800 at the time of the conveyance. If the vendee is raising no objection to the assumption of the $800 mortgage by agreement with the vendors, and it does not appear that this agreement was not subsequent to the memorandum, the arrangement certainly does not violate the essential spirit of the written contract. I do not think, moreover, that the defendants themselves saw any difficulty in the terms of payment, and that their demurrer was really framed for the purpose of raising the question as to the identity of the real estate to be sold.

Courts of equity treat this matter of mortgages on land contracted to be sold, with great freedom. "While the seller cannot compel the purchaser to take an estate with a defective title, the purchaser may compel the vendor to give him the estate with such title as he has." 25 Rawle C. L. p. 275. In an action by the vendor for specific performance, the existence of mortgages to an amount less than the purchase price does not constitute a bar to the action, where the discharge of the mortgage can be provided by the decree to be procured out of the purchase price. 36 Cyc. 639. And in 36 Cyc. p. 745, it is said: "In a suit either by vendor or vendee, where the encumbrances can be discharged by mere payment thereof, and are not larger in amount than the purchase-money due, the court in its decree may direct the payment of a sufficient part of the purchase-money for the purpose to the holders of the encumbrances instead of to the vendor, even though said holders are not before the court; or the court may authorize the vendee to remove the lien on failure of the vendor to remove it, and to reimburse himself out of his deferred payments of the purchase-price."Foor v. Mechanics Bank Trust Co., 144 Ky. 682,139 S.W. 840; Amer. Eng. Anno. Cases, 1913A, 714, and note on page 718. In this note it is said: "To the rule that the existence of a lien on the property is a bar to an action for specific performance, there is an important qualification. `Where an incumbrance can be removed merely by the application of the purchase money, and the court is able to provide for the conveyance of a clear title to the vendee, the mere fact that incumbrances exist which the plaintiff (vendor) has not removed, or even is unable to remove without the application of the purchase money for that purpose, will not prevent a decree for a specific purformance.' [Citing Guild v. Atchison, T. S. F. R. Co.,57 Kan. 70, 45 P. 821; 33 L.R.A. 77.] As is held in the [Foor] case, the fact that there is a mortgage or other lien on the property is not a bar to the action if the lien can be discharged out of the purchase money." Citing numerous cases. In the same note it is said: "But the rule that the court can direct the application of the purchase money to the satisfaction of the liens has been applied even where specific performance was sought by the purchasers. Grant v. Beronio,97 Cal. 496, 32 P. 556; . . . Hunt v. Smith,139 Ill. 296, 28 N.E. 809." The foregoing is well-settled doctrine in New York. Webster v. KingsCounty Trust Co., 145 N.Y. 275, 39 N.E. 964; Pelletreau v. Brennan, 113 N.Y. App. Div. 806,99 N.Y.S. 955. See also Ives v. Hazard, 4 Rawle I. 14.

In the present case it is the vendee who is bringing the action. If — as is clear from the above cases — the vendee cannot be heard to complain where his contract was for a clear title, provided it was practicable for the court, by application of the purchase price, to clear off a mortgage, much less could the vendor complain, where the vendee is seeking to get the land, though incumbered with a mortgage; and it makes no difference whether the mortgage is mentioned in the contract or not; the court has full power to grant the remedy in such cases, provided only the purchase price equals or exceeds the incumbrances, and by its decree it can substantially carry out the agreement of the parties. Purcell v. Burns, 39 Conn. 434;Shelinsky v. Foster, 87 Conn. 90, 87 A. 35.

The trial court was in error in sustaining the demurrer for this ground of ambiguity and indefiniteness with reference to the terms of the contract as relating to payments, and I cannot agree with the majority upon this part of the opinion, which is the basis of the decision.

In this opinion CURTIS J., concurred.