Opinion
02-28-1899
THOMPSON v. KEELER et al.
Edwin Robert Walker and James Buchanan, for complainant. Prank S. Katzenbach, for defendants.
Bill by Susan Thompson against Charles W. Keeler and others to enforce specific performance of an agreement to sell land. Decree for plaintiff.
Edwin Robert Walker and James Buchanan, for complainant.
Prank S. Katzenbach, for defendants.
REED, V. C. Charles W. Keeler, on January 20, 1891, was the owner of a house used as a tavern, with a tract of land of about 15 acres, in Mercer county, N. J. On that day he agreed with Christopher Thompson, the then husband of the. complainant, to sell to him the said tavern and lot of land in consideration of the sum of $8,000, to be paid as follows: $25 on executing the agreement, $475 on the 1st of April, 1891, $500 on the 1st of October, 1891, and $7,000 to be secured by the bond of Christopher Thompson, to run for one year; bearing 5 per cent interest, with a purchase-money mortgage of the same date and tenor. The deed and mortgage were to be executed and delivered on October 1, 1891. On the same day on which this agreement was executed, Mr. Keeler made a lease of the said premises to Christopher Thompson for the term of six months from the 1st day of April, 1891, for the rental of $200, to be paid in equal monthly payments, with a provision that, if any rents should be due and unpaid, the lease to become void, and it should become lawful for Mr. Keeler to re-enter said premises, and remove all persons therefrom, or proceed by action for the recovery of possession thereof. Twenty-five dollars were paid at the time of the execution of the agreement, namely, on January 20, 1891. Four hundred and seventy-five dollars were paid on the 1st of April, at which time Christopher Thompson entered into possession of the property. About, or soon after, his entry, he assigned his interest in the agreement or lease to his daughter, Lucilla Bailey Thompson, with the consent of Mr. Keeler, and I think it is sufficiently proven that she thereafter assigned the said interest to the complainant, Susan Thompson. After the Thompsons had taken possession on the 1st of April, 1891, they found the house in a dilapidated condition, and proposed to remodel it. They informed Mr. Keeler of their wish, and that, if they incurred the expense necessary for this work, they would be unable to make the October payment of $500. Mr. Keeler assented to the postponement of the time of payment for one year from October 1st. The work of remodeling was begun, and a large sum was expended in completing the work. Indeed, thereafter money seems to have been expended upon the place for different improvements for the amount of the expense of which the complainant exhibitsbills amounting to $3,200, which bills, she says, do not represent all of the money so expended. Affairs remained in this condition until 1894, in April of which year Christopher Thompson died. Mrs. Thompson continued to pay $400 a year to Mr. Keeler, and to occupy and keep in repair and improve the property. On April 1, 1894, there was a written extension of the lease and agreement made for one year, the previous extension having been by parol. On April 1, 1895, there was an extension of the lease, but no extension of the agreement for a year. Affairs then continued as before until 1897, when Mr. Keeler gave to Mrs. Thompson a notice to quit on April 1, 1898. He caused a new lease to be prepared, in which the rental was raised from $400 to $500. This lease Mrs. Thompson refused to sign. In June, 1898, Keeler was told that Mrs. Thompson was willing to pay the $500, the remaining portion of the cash payment for the deed, and to give the mortgage for $7,000, but Mr. Keeler declared that he would not accept the same or make a deed. Mrs. Thompson then ceased making the monthly payments after April 30, 1898, and in October Mr. Keeler Issued a distress warrant for five months' rent, amounting to $166.66, which was levied upon her personal property upon the premises. This bill is filed to enjoin the execution of this distress warrant, to compel a specific performance of the contract to convey the property, or for an accounting for the expense of the improvements put upon the premises during the occupancy of the Thompsons.
There is nothing in the agreement to sell which makes time of the essence of the contract. That, under the circumstances, it should not be so regarded, is apparent from the conduct of the vendor in postponing the time of execution from October, 1891, first to October, 1892, and then to April, 1895. Nor is it proved to my satisfaction that since April, 1895, circumstances have so changed that the enforcement of the performance of the contract has become inequitable. The testimony in respect to the relative value of the property on April 1, 1895, and at the time of the filing of this bill, does not convince me that the inherent value of the property has materially increased between those dates.
The right of the complainant to a decree of specific performance depends upon whether she has ever consented to the rescission of the agreement to convey, or she has been guilty of such laches in failing to pursue her remedy, after being informed by Mr. Keeler that he did not Intend to convey, as to lose her right to enforce the agreement. As has been already stated, when the last extension of both lease and agreement expired, on April 1, 1895, a new extension of the lease was made, but there was no extension of the time for the performance of the agreement. Mr. Hamill had acted for both parties in drawing the papers in 1891, and to him the rent was paid during the period of occupation by Mr. and Mrs. Thompson, Mr. Hamill says that when he found that the Thompsons were not complying with the terms of the agreement, he spoke to Mr. Walker (who had been employed by them as their attorney), and in effect said to him that, if the Thompsons had rights after the expiration of the year (meaning 1895, to April 1st of which year the last extension reached), they had better be looked after, and not allowed to drift along. He says that he again spoke to Mr. Walker after Mrs. Thompson had refused to sign the new lease on April 1, 1898. He says that the first conversation occurred with Mr. Walker between 1895 and 1896. Mr. Walker says that he was at Mr. Hamill's office, with Mrs. Thompson and Mr. Keeler, he thinks, in April, 1895, or it might have been in 1894. He says that Mrs. Thompson and he Insisted upon her right to a conveyance; that she was indebted at the time for the building, and she preferred to use the money paid for the building, and not to take up the deed at that time; and Mr. Keeler said that all he wanted was that the women should live up to their agreement; that that was all right; that they were to go on as they were for another year, or words to that effect. I think that this interview occurred at or before April 1, 1894, before the last extension of the agreement was signed. Mr. Walker says he was not called in again until 1898. Mr. Walker also says that what Mr. Hamill said to him was that he had advised the ladies that in whatever rights they had under the agreement they should be protected by their own counsel. Now, if the case stood alone upon these bare facts, namely, that Mr. Keeler, while extending the lease on April 1, 1895, refused to extend the time for executing the agreement, the failure of the complainant to enforce her right to a deed for over three years would present a clear instance of laches which would defeat her present suit. There are, however, other features in the case which are urged in excuse of this delay. Exactly what occurred on April 1, 1895, when the lease, and not the agreement, was extended, does not distinctly appear. Neither Mr. Hamill nor Mr. Chamberlain recalls with distinctness what took place, aside from the execution of the extension of the lease. Mrs. Thompson and her daughter both testified that from the time they began to improve the property up to quite a late day Mr. Keeler repeatedly said that it would be all right, that all he wanted was for them to execute their contract, and that this continued long after he had refused to give a written extension of the time for the performance of the agreement of April, 1895. There are circumstances which seem to show the likelihood of this testimony being true. Mr. Keeler had given them a notice to quit in April, 1894, but they say he told them that it was a mere matter of form, and he did, in fact, afterwards sign an extension of both lease and agreement until April 1, 1895. Mr. Keeler went to Europe in the summer of 1896. Before he went,he admittedly visited the tavern, where he saw the complainant and her daughter, and they say he again said to them that all he wanted was for them to keep the contract. Mr. Keeler denies that he said that, hut Mr. Robbing says that he was painting over the porch of the tavern in June, 1896; that he saw Mr. Keeler there, and heard a few words spoken by him, as he was leaving the house. He heard him say, "'Never mind about the deed; that is all right; you will have no trouble about that;' and Mrs. Thompson said 'Very well,' or something similar to that. 1 don't remember the words." Mr. Robbins seems to be entirely disconnected from the parties in the cause. Now, discounting the coloring given to the testimony by present interest, yet the circumstances seem to show that while Mr. Keeler, in 1894, notified Mrs. Thompson to quit, and in 1895 refused to sign an extension of the agreement, yet he, by his acts and words, afterwards left them in the belief that he would not insist upon his strict legal right to declare the agreement off. It is, to my mind, very significant also, that he never made any tender of the deed, or demanded payment of the $500, or the execution of the mortgage. Huffman v. Hummer, 18 N. J. Eq. 83-91; Schloetterer v. Wagner (N. J. Ch.) 21 Atl. 863. As also remarked, Mrs. Thompson made improvements up to a late day. As late as 1897 they built out a pier, and erected a balcony. Now, Mr. Keeler must have known of this, and must have known that they did this work in the belief that they were still in a position to take the title to the improved property upon performance of the terms of the agreement. Laches is no defense to one who had recently recognized the validity of the contract by acting under it, or by overlooking the complainant's laches, and has thus waived his right of rescission. 22 Am. & Eng. Enc. Law, 1050. It seems to me that, taking Into consideration the position of the parties, their relative business knowledge, their manifestly friendly relations up to a late day, it would not be equitable to deprive Mrs. Thompson of the money she has paid upon the contract, and the value of the improvements she has put upon the property, by refusing to give her the benefit of her agreement. I think she has clearly never agreed to a rescission of the contract, and I think her laches has been sufficiently explained.
In framing a decree, the equities between the parties should be adjusted as follows: The lease and the agreement exist concurrently, and the money that she paid monthly was paid technically as rent, and was to remunerate Mr. Keeler for the use of the property, or the interest upon the amount to be secured by the $7,000 mortgage. The monthly payments fixed by the lease should be paid up to the time when the deed is executed. The money which Mr. Keeler paid to take up a note given by Mr. Thompson for work on the property, and which note Mr. Keeler had indorsed, is not so connected with this agreement as to become a factor in shaping a decree. I will advise a decree that upon the payment of these monthly payments up to the time of the execution of a deed by Mr. Keeler to Susan Thompson, and upon the payment of $500 in cash, and the execution by her of a bond and mortgage for $7,000 on or before April 1st next Charles Keeler shall execute a deed to her for the said premises. The injunction restraining the sale of the goods of the complainant under the distress warrant will be continued until April 1st, with leave to the defendants, in case the complainant does not comply with the conditions imposed in this decree within the time, to move for a discharge of the injunction and the dismissal of the bill.