
    Henry Van Schaick, Plaintiff, v. Louis Lese, Defendant.
    (Supreme Court, New York Special Term,
    May, 1900.)
    1. Marketable title — Condition subsequent as a restriction on fee and as an “ incumbrance.”
    A condition in a deed, providing that the estate granted should revert to the grantors if the premises were used for any of certain purposes prohibited by its terms, when accompanied by the grantee’s covenant for himself, his heirs and assigns, that he would not so use them, and construed in view of the circumstances that- the premises were a part of a tract of city lots, and that the condition was imposed for the benefit of all prospective purchasers of lots in the tract, must be deemed a condition subsequent, and a purchaser from one holding under such a deed and who has agreed to give a title in fee-simple, free from all incumbrances, may properly reject the title.
    Such a condition is also to be deemed an “ incumbrance ” where the purposes prohibited injuriously restrict the use to which the premises might otherwise have lawfully been put.
    3. Deed — When to individuals and not to trustees.
    ' A deed describing the grantees therein as trustees of a land association, but granting and conveying the premises “ to the parties of the second part, their heirs and assigns forever ”, and reading in the habendum clause “to the parties of the second part, the survivor of them, his heirs and assigns, to their own proper use, benefit and be-hoof as joint tenants ”, is not a deed to the grantees as trustees, but to them as individuals.
    3. Damages — When liquidated damages must yield to compensatory.
    Where a vendor affirms the validity of his executory agreement to sell and convey real estate by suing upon it, and is defeated for a defect in his title, the vendee is entitled to compensatory damages, and the vendor cannot limit his liability to the stipulated damages fixed by the executory agreement, in case he should elect tó declare the same void.
    Action to compel specific .performance of an agreement for the, purchase of real property.
    
      Ezekiel Fixman, for plaintiff.
    Emanuel Austen (John D. Connolly, of counsel), for defendant.
   Freedman, J.

This action is brought by the plaintiff to compel the defendant to specifically perform an agreement for the purchase of real property. There is no substantial dispute as to the facts in the case.

The agreement in question was dated May 18, 1898. It provides for the sale by the plaintiff to the defendant of a lot of land on the south side of One Hundred and Sixth street, in the city of New York, at an agreed price of $11,000.

The defendant paid the sum of $500 down, and was to execute a purchase-money mortgage for the sum of $9,000, and pay the sum of $1,500 in cash at the time of the delivery of the deed. The property was to be conveyed to him free and clear of all incumbrances, and it was also provided in the agreement as follows: And it is expressly understood and agreed, however, that in case the party of the first part is ready to deliver the deed of said premises previous to said 1st day of October, 1898, that the said party of the first part shall give notice to said party of the second part of his readiness, said notice to be in writing, and to be mailed to him at his residence, No. 231 East Sixtieth street, New York city, and thirty days from the date of such notice, provided such thirty days shall not extend beyond the 1st day of October, 1898, and in which event, on said 1st day of October, 1898, the party of the second part, shall close this contract by executing and delivering to the party of the first part said bond and mortgage above specified, and pay him the balance of $1,500 as above specified.

“ And it is also expressly understood and agreed by and between the parties hereto, that in case the party of the first part is unable .to close this contract by the 1st day of October, 1898, by reason of his inability to procure the signature of his wife to a deed of said premises, then this contract shall be deemed cancelled and void and of no effect, and the party of the first part shall return to the party of the second part the $500 this day paid on the execution of this contract, with interest thereon from the date hereof until the time of such payment, together with a counsel fee for the examination of the title to said premises of $75, which sum is hereby fixed and agreed upon between the parties hereto as the stipulated damages to be paid by the party of the first part to the party of the second part in the event that he, the party of the first part, is unable" to carry out the terms and conditions of this contract on his part by reason of the inability to procure said signature of his wife to said deed, or for any other cause or reason.”

It appears that pursuant to the foregoing provisions in the contract, the plaintiff notified the defendant in writing of his readiness to perform the contract, naming July 11, 1898, as the time for closing the title, that such time was adjourned by consent until July 18, 1898, that on the last named day the parties met and the plaintiff’s attorney then tendered a deed duly executed, which deed if the plaintiff’s title was a fee-simple free from all incumbrances, would have been a compliance with the terms of the contract of sale. That the defendant was also at that time and place ready to consummate the purchase, that there was a mutual tender, that the plaintiff insisted on his ability to convey the premises according to his agreement, that the defendant insisted that the title of the plaintiff was not a fee-simple free from all incumbrances, as the premises were covered by a condition subsequent and a covenant against nuisances contained in prior deeds of said premises, and that the defendant was willing to perform said contract on his part on receiving from the plaintiff a deed free and clear from all incumbrances. Upon the refusal of the defendant to accept the deed tendered by the plaintiff this action was brought. It was admitted upon the trial that 'the defendant procured the title to- the premises to be examined at the expense of twenty dollars and forty cents, and that such sum, together with the further sum of $150 for counsel fee for such examination, was a reasonable charge for such services.

It was also admitted that the title to the premises in question was sufficient in one Gustavus A. Hollins, who acquired title thereto in 1851.

From the record evidence introduced it appears that Hollins conveyed the premises aforesaid by deed dated November 30, 1851, to “ Elias Mooney, James F. Stanbury, and, Joseph Queripel, Trustees of the New York City Land Association, No. 1,” that Mooney and wife, Stansbury and wife, .and Queripel and wife conveyed to one George Haws, in July, 1853, and that plaintiff took title through Haws.

The deed from Mooney, Stansbury and Queripel contained the following clause: “ Provided, nevertheless, that this deed is given on the express condition that the same shall be void and the estate hereby granted revert to the parties of the first part, their heirs and assigns, if the said premises shall be used or appropriated in any manner hereinafter prohibited. And the said party of the second part, for himself, his heirs and assigns, doth covenant and agree that the above-described premises shall not, nor shall any part thereof, be at any time hereafter used, occupied or kept as a distillery, foundry, blacksmith shop> slaughter house, coal yard, or for brewing, soap boiling, bone boiling, trying fat, the use of steam power, a piggery, or any act or business or use that is considered a nuisance to desirable places of residence, or that shall be offensive and annoying to persons there residing.”

The defendant in his answer, and upon the trial, urges two objections against the title, and such objections seem to be valid and well founded.

They are, first, that the plaintiff is not seized of an estate in fee-simple, and, second, that the premises are not free and clear from incumbrances.

It is apparent that the deed from Mooney, S'tansbury and Queripel to Haws was delivered upon a condition subsequent. The provision incorporated therein is not, as contended by the plaintiff, a mere covenant running with the land, and does not fall within the class of cases cited by him. In the cases cited by the plaintiff’s attorney, none contained such a plain and explicit condition as in the deed in the case at bar, viz.: “ That this deed is on the express condition that the same shall be void, and the estate hereby granted ■ shall revert, etc.”

A mere right of re-entry, reserved to a grantor, has been held to be a mere right of action, and not an interest in the land (Berenbroick v. St. Luke’s Hospital, 23 App. Div. 343); and while “ Mere words in a deed will not be deemed sufficient to- constitute a condition subsequent, entailing the consequences of a forfeiture of the estate, unless it appears from proof that this was the distinct intention of the grantor and a necessary understanding of the instrument, the understanding may be sought, however, in the other words of the clause and by reference to the surrounding circumstances.” Post v. Weil, 115 N. Y. 361.

Applying that rule to the case at bar, there is every indication from the circumstances surrounding the grant herein, from Mooney, Stansbury and Queripel to Haws, that the condition in their deed was imposed as á part of the consideration, and that such restriction was evidently designed for the benefit of persons acquiring title to the several lots in the tract owned by thtem, which, at the time of the conveyance by them to Haws, consisted of 10S lots lying between Fourth and Fifth avenues and One Hundred and Third and One Hundred and Sixth streets, of which the lot-in question was one. The restriction imposed was a reciprocal inducement to each purchaser to take title, and the grantees were so restricted in the use of the land as to prevent them from appropriating it to the purposes prohibited in the deeds. The provision incorporated in such deed was, therefore, plainly a condition subsequent, and upon failure to comply therewith a reversion became possible.

That their intention was to reserve to themselves a more effectual remedy than that which a mere covenant would give is further evidenced by the fact that the provision aforesaid was inserted as well as an express covenant on the part of the grantee, who was made to covenant and agree for himself and his heirs and assigns ” that the premises should not be used- for any of the prohibited purposes.

This view was practically admitted by the plaintiff, who submitted upon the trial and placed in evidence certain alleged releases from the so-called “ substituted trustee of the deceased grantees named in the deed from Hollins to Mooney, Stansbury and Queripel, and also from certain of the heirs-at-law of the surviving joint tenant, and had the latter release been executed by all the heirs-at-law of the survivor of the joint tenants there is no doubt but that it would have been effectual and conferred good title upon the plaintiff, but it appears that one of such heirs-at-law is an infant, and, therefore, has not joined in the release and the right of such infant to any claim upon said premises in case of a violation of any of the conditions mentioned in the deed is still in existence. Heither is the release executed by Moses H. Stansbury as “ substituted trustee ” sufficient to release the premises from the conditions imposed by the deed from Mooney, Stansbury and Queripel to Haws, for the reason that although the deed to them, in describing the parties of the second part, reads as follows: “ Elias O. Mooney, James F. Stansbury and Joseph Queripel, Trustees of the Hew York City Land Association Ho. 1,” the granting clause “ grants and conveys to the parties of the second part, their heirs and assigns forever, all,” etc., and the habendum clause reads, “ to the parties of the second part, the survivor of them, his heirs and assigns, to their ovm proper use, benefit and behoof as joint tenants.”

The deed, therefore, is not to them “ as trustees ”; the premises are not conveyed to them or their successors, and the word “ successors ” is not found in the habendum clause. It imposes no duties upon the grantees as trustees, nor is there any person or corporation named therein as cestwi que trust. It must be held, then, that the conveyance was to Mooney, Stansbury and Queripel as individuals, and the words, “ Trustees, &c.,” are merely descriptio persones. This is further borne out by the fact that, in the deed from Mooney, Stansbury and Queripel to Haws, each of the wives of the grantors unite with them in its execution, and such deed is executed by all the parties as individuals, and the reverter therein mentioned and provided for is to “ the parties of the first part, their heirs and assigns,” and it does not appear that the premises reverted to trustees or that the trustees had any power to release the estate from the conditions and limitations imposed therein. The second objection interposed by the defendant is equally fatal to the plaintiff’s recovery herein. The premises are not free and clear from incumbrances, as the deed from Mooney, Stansbury and ■Queripel, through whom plaintiff obtains title, contains a covenant which restricts the uses to which the premises might otherwise lawfully be put. Any right existing in another, whereby the owner is restricted in the enjoyment of his property, has been held to be within the meaning of the term “ incumbrance.” Raynor v. Lyon, 46 Hun, 227; Reynolds v. Cleary, 61 id. 590; Kountze v. Helmuth, 67 id. 343; S. C., 140 N. Y. 432; Fourth Presbyterian Church v. Steiner, 79 Hun, 314. It is claimed by the plaintiff that the restriction must be such as to lessen the value of the land. Assuming that to be true, there is sufficient testimony in this case to warrant the finding that the limitation appearing upon the record of this title injuriously affects the value of the premises. The testimony on the part of" the plaintiff was directed towards showing that the neighborhood where these premises were situated was occupied by what are known as “flat” houses, and that the defendant intended to build that kind of a house, and had contracted for the purchase of the premises in question solely for that purpose, and that for that reason the value of the property was not diminished or affected by any of the restrictions named in the deed aforesaid. As to that, one restriction only need be mentioned to show the fallacy of the plaintiff’s position. Among the prohibitions named is that of “ the use of steam power.” That language is broad and is not limited in its application. The “ use of steam power ” is absolutely forbidden. Under the modern method of construction, the use of steam power in so-called flat houses has become almost a necessity. Elevators are run, and hot water and heat are furnished the inmates of such houses thereby, and it needs no argument to show that its employment being prohibited would limit the sale and. affect the value of the premises in an injurious manner. From all the facts -and circumstances in this case it is clear that the defendant was justified in refusing the title offered him by the plaintiff. The plaintiff claims that in case it is found that the defendant is entitled to a judgment herein, he is not entitled to costs, nor to more than the sum of seventy-five dollars damages by reason of the clause in the contract limiting the defendant’s damages to that" sum as stipulated damages in the event of the failure^ of the plaintiff to pass the title “ for any cause.” By the terms of his contract the plaintiff had a right to cancel and declare the contract void for any reason, and in that event he was required to restore to the defendant the sum of $500, paid at the execution of the contract, and the further sum of seventy-five dollars, fixed and agreed upon by the parties as stipulated damages. Had the plaintiff availed himself of this right there would be reason in claiming that his liability to the defendant should be limited to the sum fixed by the agreement as damages for his failure to convey, but such provision applied only in case the plaintiff declared the contract cancelled and void. This he did not do. On the contrary, he notified the defendant of his readiness to convey, and subsequently brought suit to compel the defendant to take title, thereby asserting that the contract was valid and enforcible. After such notification the defendant caused the title to be searched, expending therefor the sum of $170.40 in fees and expenses, which sum the plaintiff concedes is reasonable in amount, and the defendant is entitled to a judgment for that amount together with the sum of $500, the sum paid by him at the time the contract was executed, and set up in his counterclaim herein, with costs of this action.

Ordered accordingly.  