
    GEORGE PEABODY WETMORE, Appellant, v. CATHARINE W. BRUCE, Respondent.
    
      Vendor and vendee—Real estate—Incumbrances—Qourt-yard—Recovery of deposit.
    
    Under a contract to sell and convey, free and clear of all incumbrances, the contract is conclusive on the right of the vendee to receive the property thus clear.
    A restriction which prevents the vendee from using a portion of the frontage otherwise than for a court-yard, is an incumbrance which, under the contract, absolves him from completing tire purchase.
    The vendee being absolved from completing the purchase, may recover from the vendor money paid, pursuant to the contract of sale, on account of the purchase to the auctioneer who conducted the sale on behalf of the vendor.
    By the contract, the specific performance whereof by the vendee (the defendant) was sought in this action, the vendor (the plaintiff) contracted to sell to the defendant certain premises known as No. 19 Washington Square North, and to give her a good title in fee simple, free and clear of all incumbrances, except a certain mortgage. The property was sold at auction, and the contract was in the form of terms of sale, with a memorandum subjoined, signed by the defendant, to the effect that she had purchased the property of the plaintiff for the price therein named, and agreeing to comply with the terms and conditions of sale as set forth in the terms of sale. Pursuant to one of those terms, and as required thereby, she paid to the auctioneer who conducted the sale the sum of $5,200, being ten per cent, of the purchase money. On examination of the title, it was found that there was a restriction which restricted the use of the frontage of the premises, to the depth of twelve feet, to the purposes of a court-yard only. Thereupon the defendant refused to complete, and demanded back her ten per cent.
    
      Held, 1st. That by the terms of the contract the defendant was conclusively entitled to a title free from incumbrances of every kind and quality. 2d. That the restriction was an incumbrance, free from which she was entitled, under the contract, to have the property conveyed. 3d. That defendant could counterclaim against plaintiff the ten per cent, paid by her, and the expenses of examining the title; and a judgment in her favor therefor was not erroneous.
    Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.
    
      Decided December 30, 1886.
    Appeal from judgment in favor of defendant entered on the decision of the judge at special term.
    The action was brought to compel the specific performance by the defendant (the vendee) of a contract for the sale of certain real estate in New York city, to wit, number 19 Washington Square (North). The sale was made at auction. The contract took the form of terms of sale, with a memorandum subjoined, -signed by the defendant, to the effect that she had purchased the property of the plaintiff for the price therein named, and agreeing to comply with the terms and conditions of sale as set forth in the terms of sale. By tlie terms of sale the property sold consisted of premises fronting on Washington Square, North, having a frontage thereon of 28 feet 2 inches, and having a width in rear of 28 feet l-¡- inches, and being bounded on the -sides by lines at right angles to Washington Square, North, running north on the east side 143 feet 8f inches, and on the west side 141 feet 10 inches. The terms of sale also contained the following clause: “ Ten per cent, of the purchase money, and the auctioneers’ fee of fifteen dollars on each lot, separately sold, to be paid to the auctioneers this day, together with the Exchange fee of three dollars, and for which their receipt will be given.” The defendant purchased the property for $52,000, and paid to the auctioneers who conducted the sale, pursuant to and as required by the terms of sale, ten per cent, of the purchase money, amounting to $5,200.
    Other facts appear in the opinion.
    
      A. P. and W. Man, attorneys, and William Man, of counsel for appellant, argued:
    I. The defendant cannot succeed on the defense of the court-yard agreement, as she had notice of it when she purchased. She twice visited the premises before purchasing, and of course could not go into the house without seeing that it was set back from the street, with a twelve-foot courtyard, and that every house in the block fronting on the square was set back in the same way. And also all the houses on the next block, easterly, fronting on the park, between Fifth avenue and University Place, are set back in the same way. The contract diagram and the posters and handbills used on the sale show that there was a court-yard of twelve feet. It was for the defendant to make out her defense. She must show not only the restriction and that it is a damage, but she must show that she had no knowledge of it, nor any notice to put her on inquiry. The plaintiff proved his title, and the defendant is proving affirmatively an easement of other parties upon plaintiff’s land. She must prove all the facts requisite to that defense (Stevens v. Hauser, 37 N. Y. 302). The very foundation of a defense of this kind, refusal to perform by vendee by reason of a defect in the article sold, is lack of knowledge thereof at the time of purchase. The court of appeals says in Riggs v. Pursell (66 N. Y. 199), that the purchasers in a similar case “ are chargeable with knowledge of what was apparent and obvious upon the premises.”
    II. The restriction is not in fact a damage, but is a benefit to the premises in question. A court-yard agreement is not an incumbrance in the absence of proof of actual damage (Riggs v. Pursell, 66 N. Y. 193). It was therefore necessary for the defendant to show affirmatively that in this case the agreement is a damage; the burden of proof is on her, and a clear case should be shown, not merely a possibility. Remote possibilities are not to be taken into consideration (Post v. Bernheimer, 31 Hun, 247). The objection must be a substantial one (Hellreigel v. Manning, 97 N. Y. 56). The. finding of the court below, that there was actual damage is against the evidence. (The evidence was here analyzed at large.) Even defendant’s witnesses admit that the court-yard appreciates the value of the property for dwelling-house purposes, and only depreciates it for business purposes. The property being a dwelling-house, it must be assumed that defendant purchased it for that purpose, there being no evidence to the contrary.
    HI. Again, should this block front ever change its character and become business property, the restriction will be rendered nugatory by the altered circumstances, as, for instance, if a railroad station be put in the square (Trustees Columbia College v. Thacher, 87 N. Y. 311; 1 Story Eq. Jur. [10th ed.], § 750).
    IY. The court erred in giving judgment against the plaintiff for the $5,200 deposited by the defendant on her purchase with the auctioneer. The money was deposited with the auctioneers. They acted as stakeholders. The plaintiff could not get the money, except by surrender to him of their receipt, held by the defendant, with her endorsement or direction to the auctioneers to pay it to the vendor. There was no evidence that the plaintiff ever had the receipt, or that the defendant ever tendered it, nor that she had not, in fact, received her money back from Ludlow & Co. The auctioneer in such circumstances is as much the purchaser’s agent as the vendor’s. To establish her right of action for the deposit, the defendant must show that she had at least demanded back her money before suit brought, and offered to surrender the receipt.
    
      De Witt, Lockman & De Witt, attorneys, and Charles Jones, of counsel for respondent, argued:
    I. In every contract for the sale of land there is an implied warranty on the part of the vendor that he has a good title to that which he assumes to sell, unless such warranty is expressly excluded by the terms of the contract (Burwell v. Jackson, 5 Selderi, 535). And in the present case, by the express terms of the contract, the lot and house were sold by a title in fee simple, and were to be conveyed free and clear of all incumbrances, except a mortgage for $40,000, which the defendant was to assume.
    LE. The court-yard agreement made by the former owner of this lot and the adjoining lots fronting on the street is an incumbrance on the lot in question (Trustees v. Lynch, 70 N. Y. 440; Lattimer v. Livermore, 72 Ib. 174; Phoenix Ins. Co. v. Continental Ins. Co., 87 Ib. 400; Perkins v. Coddington, 4 Robt. 647; Du Bois v. Darling, 44 Super. Ct. 436; Roberts v. Levy, 3 Abb. N. S. 311; 
      Anon., 2 Abb. N. C. 56; Matter of Whitlock, 32 Barb. 28; Estate of Sarah Anders, 12 Phila. (Pa.) 45.
    IDE. The court found that the defendant, at the time of and prior to the sale, had no notice of the restrictions and incumbrances created by the court-yard agreement. The agreement is not mentioned in the terms of sale, and it is not pretended that any notice was given of it at the time of or prior to the sale. All the evidence on the subject is, that the defendant visited and examined the house twice. Of course, she might have seen that there was a court-yard; and it also appears by the diagram that the house was set back twelve feet from the street. But this does not show, or tend to show, that there was an agreement that bound the property in perpetuity, nor was it sufficient to put her on the inquiry as to whether there was any such agreement. And this is so, especially as by the terms of sale the property was to be conveyed free and clear of all incumbrances, except the one specified mortgage. The defendant had the right to rely upon the contract, and to insist upon the title which the vendor had agreed to give, even if she had notice.
    IV. The court also found that the restrictions and incumbrances created by the court-yard agreement are a damage to the lot of land in question, and injure its salability and marketability. This fact was found upon conflicting evidence, and in such a case the finding will not be disturbed by the appellate court. This rule was applied in a case where the finding of the referee was supported by the testimony of one witness only, and there were four witnesses to the contract (Wright v. Saunders, 65 Barb. 214). And so the rule is that “ witnesses are not counted but weighed.”
    It is sufficient for the defendant’s case that there are some who think the restrictions injurious to the property, for its marketability is thereby impaired. Those who so think will not give the full value, or the same price that they would if it was unrestricted. This, of itself, makes the testimony of the defendant’s witnesses conclusive on the question.
   Ingraham, J.

The court below found that the defendant had entered into a written contract with the plaintiff by which she agreed to purchase of the plaintiff the premises No. 19 Washington Square, North, in the city of New York for the price of $52,000. The said property was sold by a good title in fee simple, and was to be conveyed by a warranty deed free and clear of all incumbrances, except a certain mortgage. The defendant refused to accept the title to the premises on the ground, among others, that the premises in question were subject to a restriction hereafter referred to.

The court further found that in the year 1827, an agreement was made between the owners of all the lots fronting on the said street between Fifth Avenue and McDougal Street, by which they mutually covenanted and agreed to and with each other that they would not at any time thereafter erect, or build, or cause or permit, or suffer, to be erected or built, any house, wall, fence, or other building, the front or other wall whereof shall approach nearer to said street than twelve feet in any part of said lots so that a space or area of twelve feet in depth and the entire breadth of each of the said lots in front of the buildings, and between them and the said street, shall be forever left open for court yards, and that plaintiff’s title to said lot of land and house is subject to an incumbrance and restriction created by the said covenant and agreement, which still continues in full force and effect.

The court further found that the restriction and incumbrance created by the said covenant and agreement, were a damage to said lot of land, an injury to its salability and marketability, and that the defendant at the time of and prior to the sale had no notice of such restriction and incumbrances.

We have examined the testimony taken at the trial and are satisfied that the findings are sustained by the evidence.

That this covenant imposed a restriction in perpetuity upon the plaintiff’s lot cannot be disputed (Trustees v. Lynch, 70 N. Y. 440).

The defendant was entitled by the contract to a good title to the premises purchased in fee simple, free and clear of all incumbrances except the mortgage mentioned, and plaintiff seeks to compel her to take the premises from twelve feet of which she is restricted from building.

The parties have made their contract. The defendant purchased the plot of ground free of incumbrances, that is, free to be used in a.ny way that she desired, and I do not see how it can be said to be a compliance with that contract to give her a piece of land a considerable portion of which she cannot use. It is no answer to say that the incumbrance or restriction would make some people give more for the land because there was also a restriction on. other property in the neighborhood. The answer to that proposition is, that the land with such a restriction was not the land that defendant had agreed to purchase, and plaintiff is not entitled to a specific performance of the contract where the vendor has failed to show that he has a marketable title, or where other grounds appear which in equity and good conscience require that the contract should not be specifically performed (Peters v. Delaplaine, 49 N. Y. 362).

The case of Riggs v. Pursell (66 N. Y. 199), is cited as an authority for the proposition that such a restriction is not an incumbrance upon the property. In that case however, the defendant became the purchaser at a judicial sale. It was a lease only of the premises that was purchased, and the decision seems to be based upon the ground that the purchaser claiming to be discharged from his contract under a judicial sale, should make out a fair and plain case for relief. If he gets what he bargained for he must complete the purchase and take his deed, and in some cases the court will compel him to take a compensation for any deficiency. We know of no instance in which that rule has been applied to the purchase of the fee at private sale, where the vendor agrees to give a good title in fee simple free of all incumbrances ; and when Riggs v. Pursell was before the court of appeals on the second appeal, it was held on the facts then presented, that the restriction was a material defect in the title.

In this case the court has found as a fact that the restriction was a damage to the land, and if the rule laid down in Riggs v. Pursell should be taken to apply to the sale of the property in fee, this restriction having caused the deterioration in the value of the property, would be an incumbrance.

We think therefore that plaintiff failed to tender a deed conveying the property agreed to be sold free of incumbrances, and that the court below was right in refusing to decree a specific performance.

We are also of the opinion that upon tire points presented no error was committed in giving judgment against the plaintiff for the $5,200 deposited with the auctioneer by the defendant on her purchase and for the expenses incurred in the examination of the title.

It is well settled that where the vendor has failed to complete his contract the defendant is entitled to recover the amount paid on the contract and the expenses incurred in the examination of the title to the property, and the payment to the auctioneer was a payment for the benefit of the plaintiff under the terms of the sale.

Judgment should be affirmed with costs.

Sedgwick, Ch. J.—I concur with Judge Ingraham, on the ground that the contract is conclusive as to the defendant’s right to have a title free from incumbrance of every kind and quality, and also with his view as to the counter-claim.

Freedman, J.—I concur on the same ground.  