Schultz v. . Griffin , 121 N.Y. 294 ( 1890 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The principal point urged for the reversal of the judgment is that the contract tendered to the defendant, whereby Longnecker agreed to pay such portion of the purchase-money as was represented by the mortgage to the Buffalo Savings Bank and the mortgage to Williams, "by assuming" those mortgages, was not a compliance with the terms upon which Schultz was employed to sell the farm. It is insisted that his authority extended only to a sale in which the purchaser should absolutely pay and discharge the mortgages, and that the agreement made by Longnecker would be satisfied by his paying the portion of the purchase-money over and above the mortgages, to Griffin personally, and by his assent to a covenant in the deed of the farm to assume the mortgages.

The agreement between Schultz and the defendant is not free from ambiguity. The price for which the farm was to be sold is fixed, and the agreement proceeds to specify that the purchase-money should be paid, a part to Griffin personally and a part on the mortgages. The language as to the payment of the mortgages may be susceptible of two meanings, according to extrinsic circumstances.

It appears that the mortgages were accompanied by bonds of Griffin. He had an interest that the mortgages should be paid to relieve him from his liability on the bonds. On the other hand, the contemplated purchaser would have an interest to apply so much of the purchase-money as was required for that purpose, to the extinguishment of the mortgages. In the absence of any circumstances indicating a different interpretation and regarding alone the language of the contract, the most natural meaning would seem to be that actual payment of the purchase-money, part to Griffin personally and part on the mortgages, was to be made before any conveyance by Griffin. It seems quite clear that if the Longnecker contract had been accepted and signed by Griffin, the latter would have been bound to convey on receiving $11,500 in cash, and the covenant of Longnecker assuming the mortgages. Such a transaction would have left Griffin still liable on his bonds, with his liability changed in equity to that of surety for Longnecker for the mortgage debts. (Ayers v. Dixon, 78 N.Y. 318.)

It does not appear whether the mortgages were or were not due. If it had appeared that they had not matured, so that they could not have been paid without the consent of the holders, we are inclined to think that the contract with Schultz would be construed as an authority to sell the land subject to the mortgages. It could not reasonably be supposed in such case that Griffin, who, as the contract shows, was seeking to sell his farm, would have inserted an impossible condition, or one which could not be performed except by the consent of the holders of the mortgages. But the case gives no light upon this point, and as the burden was upon the plaintiff to show that the contract with Longnecker was such a one as was authorized by the agreement with Griffin, we are of opinion that judgment was erroneously given for the plaintiff.

The further point is made that Schultz was not authorized to make it a condition of the sale that the conveyance should be with warranty. The defendant's counsel cites, in support of this point, Nixon v. Hyserott (5 Johns. 58), which supports his contention.

The rule that an agent to sell personal property has implied power to warrant, in the absence of any restriction, where sale with warranty is usual and customary in similar cases, was declared in Nelson v. Cowing (6 Hill, 336), substantially overruling Gibson v. Colt (7 Johns. 390).

There seems to be no well-founded distinction between real and personal property, requiring a different construction of an agency for sale in the two cases. The great preponderance of authority now is that a power without restriction to sell and convey real estate, gives authority to the agent to deliver deeds with general warranty binding on the principal, where, under the circumstances, this is the common and usual mode of assurance. (Le Roy v. Beard, 8 How. [U.S.] 451; Peters v.Farnsworth, 15 Vt. 155; Vanada v. Hopkins, 1 J.J. Marsh. 293; Taggart v. Stanbery, 2 McLean, 543; Rawle on Cov. § 20, note.)

It is sufficient, however, for the disposition of this appeal that the first point considered must prevail.

The judgment should be reversed and a new trial ordered.

All concur.

Judgment reversed.