
    Isaac Schreiber, Appellant, v. Julia Elkin, Respondent.
    First Department,
    March 15, 1907.
    Vendor and purchaser — contract to convey title free from incumbrances — failure of vendor to clear title.
    In an action by a vendee for specific performance or for damages on a breach of a contract to convey lands, it appeared that the -property was to be conveyed free of incumbrances except as specifically stated, and' also free from orders of the tenement house department to date of contract, which orders, if any, were to be removed by the vendor. - It was shown that the premises were subject to a lease then unexpired; which contained a clause that in the event of a ■ sale by the owner the lessee would surrender the uuexpired term for a sum stated.. It also.appeared that the tenant had offered to surrender and that the vendor had actually^ ousted him, but made no effort to clear the title of the tenement house department orders. On all the evidence,
    
      Held, that a finding that the vendor was unable in good faith to complete her contract was not warranted by the evidence, and that the plaintiff was entitled either to specific performance or to damages.
    Ingraham, J., and Patterson, P. J., dissented, with qpinion.
    Appeal by the plaintiff, Isaac Schreiber, from a judgment of the Supreme Court entered in the office of the clerk of the county of New York on the 13th day of September, 1906, upon the decision of the court rendered after a trial at the New York Special Term.
    
      Charles Strauss, for the appellant.
    
      Stillman F. Kneeland, for the respondent.
   Scott, J.:

Plaintiff sues for specific performance by a vendor of a contract for the sale of real estate, or for compensatory damages, which upon the trial were stipulated to be $4,000. The court awarded plaintiff a judgment for the amount paid down on the contract and the expense of examining the title, and from this judgment plaintiff appeals. The sole question in the case is whether the evidence justified the finding that defendant was in good faith unable to comply with the contract. If it does not, the plaintiff is entitled either to performance or to compensatory damages. The contract provided that the property should be conveyed free of all incumbrances,. except some specifically stated, and also free from all .orders of the tenement house department up to the date of the contract as to which, if there were any, the vendor agreed that she would cause them to be satisfied and removed. It appeared, upon an examination of the title, that in addition ta the specified incumbrances, the property was incumbered by a lease held by one Weinstein, and that there were a number of tenement house orders against the property, none of which were serious or of such a nature that they could not have been complied with at comparatively small expense. The vendee refused to take the title incumbered by the lease and the violation orders, and insisted that it was the vendor’s duty to clear the title in these respects. The vendor did not -clear it, and, so far as appears, made no effort to do so, and the question is whether or not she acted in good faith in this regard. The lease, dated on March 25, 1904, was for the term of five years from April 1, 1904, but contained a clause to the effect that in the event of any sale of the aforesaid premises and on payment to the lessees of a sum specified in another clause, they would execute and deliver to the land-" lord a properly acknowledged surrender of lease, granting and conveying unto the landlord any unexpired term of the lease. This clause seems to have established a conditional limitation of. the term, "so as to put it within the power of the vendor to terminate the lease if she had seen fit to do so. (Miller v. Levi, 44 N. Y. 489.) In point of fact the tenant, on the day first fixed for closing the Contract, and again on the trial, offered to surrender the lease, and it appears that before the trial took place the vendor had actually ousted him. The landlord held $500 deposited by .the tenant as security for his fulfillment of the covenants of the lease, and it was therein provided that if the.landlord.should sell the premises during the first year of the lessee’s term (as she would have done if she had completed her contract with plaintiff) the tenant should receive an indemnity of $600. The date first fixed for the completion of the contract was December 20, 1904, when there attended at the place agreed upon the vendor and the vendee and their attorneys, the vendor’s husband and Weinstein, the- tenant. The vendee made tender of performance, but demanded that the lease and the violation orders be removed. The tenant offered to surrender the lease, but a discussion arose as to the violations, the vendor claiming that it was the duty of the tenant to remove them. The tenant, apparently recognizing this obligation, offered to leave in the landlord’s hands, to secure the removal, the sum of $300 in addition to the- $500 then - on deposit with her. This offer does not seem to. have been satisfactory to the vendor, and an adjournment was had Until December twenty-seventh, with a view, of having the title cleared up, but when that day arrived nothing had been done by the vendor, and, só far as appears, no effort had' been made by. her to do anything towards removing the incumbrances. The vendor offered to allow the vendee, out of the purchase money, $500, the amount deposited by the tenant as security, and $600, 'the-amount to be paid the lessee " as . indemnity upon surrendering his lease, leaving the véndee to. settle with the tenant as to the surrender of the lease and the removal of the violation orders. 'This the v-endee' refused to accept and, as we think, justifiably. The vendor thereupon made no further effort to clear the title, offering to return to the vendee his down payment'and expenses, which was refused by the vendee, who thereupon began this, action. Upon these facts we are unable to agree with the court below that the vendor showed herself to be unable in good faith to complete • her contract'. On-the contrary, it is quite evident that, if slie liád desired to do. so, she could have cleared the title and made a good conveyance; and there are not lacking in the evidence suggestions that her real reason for refusing was that she had repented of her bargain. Under these circumstances the • plaintiff vras entitled either to a specific performance or to compensatory damages.

The judgment should _ be reversed and- a new trial granted, with costs to appellant to abide the event.

McLaughlin and Clarke, JJ., concurred; Patterson, P. J., and Ingraham, J.,„ dissented.

Ingraham; J. (dissenting):

I think this judgment should be affirmed, as I think it appears' that, neither the plaintiff nor the defendant was ready or Willing to complete the performance of the contract. .When the contract was to be completed, the tenant attended Witfi. the defendant ready, and willing to surrender his lease upon payment of the amount to Which he was entitled on the surrender. The defendant then offered to pay or deposit with the plaintiff. In relation to the violations of the Tenement House Act it appeared that the plaintiff offered to deposit a sum of money which was assumed would make the changes required by the tenement house commissioner. The property was in the possession of a tenant who was bound to make these -changes under his lease. He had failed to do so, and when the vendor offered to deposit the money sufficient to make the changes, I think the defendant at least showed'his good faith and justified the court in finding that he was then in good faith ready and willing to complete the contract. Ho objection was made to the amount, and the notice of the tenement house commissioner merely required certain changes to be made to make the property conform to the requirements of the law. On the subsequent day to which the closing of the matter had been adjourned the tenant did not appear, but the defendant renewed the offer to allow to the plaintiff the amount required to be paid to the tenant under the lease for the surrender of it, and also an amount sufficient to reimburse the plaintiff for any changes that he would have to make in consequence of the violation of the Tenement- House Act. This was again refused by the plaintiff who then brought this action. Under these circumstances I think the court was justified in finding that the defendant offered in good faith to do all that he could to comply with the contract, and that the plaintiff was limited to a recovery of the amount that he had actually expended in carrying out the contract.

Patterson, P. J"., concurred.

Judgment reversed, new trial ordered, costs to appellant to abide event. 
      
       See Laws, of 1901, chap. 834, as amd,-—[Rep.
     