McCormick v. Stephany

48 A. 25, 61 N.J. Eq. 208, 16 Dickinson 208, 1900 N.J. Ch. LEXIS 29
CourtNew Jersey Court of Chancery
DecidedDecember 26, 1900
StatusPublished
Cited by15 cases

This text of 48 A. 25 (McCormick v. Stephany) is published on Counsel Stack Legal Research, covering New Jersey Court of Chancery primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCormick v. Stephany, 48 A. 25, 61 N.J. Eq. 208, 16 Dickinson 208, 1900 N.J. Ch. LEXIS 29 (N.J. Ct. App. 1900).

Opinion

Gkey, Y. C.

There were some preliminary questions as to the construction of the lease which contains the clause giving to McCormick the right to purchase, and also the terms of his will, which were discussed and decided in the previous hearing on the application for the injunction. At the same time the alleged omission from the clause in the lease giving the right to purchase was then disposed of in the preliminary argument and opinion. McCormick v. Stephany, 12 Dick. Ch. Rep. 257. On final hearing it was admitted that in the lease the agreement clause intended to be entered into by the parties, contained the omitted words, and that it should read as follows (the words originally omitted, but now agreed to be supplied, are printed in italics) :

“And it is further agreed by and between the above parties that in case the said party of the first part should find a purchaser for the said premises, then the said party of the second part shall have the option, during the continuance of this lease, to buy of the said party of the first part the said premises for the sum of twelve thousand dollars; and in case the said party of the second part, on receiving notice that the said party of the first part has found a purchaser for the said premises, should refuse to buy the said premises at the price above mentioned, then the said party of the second part, promises and agrees, upon three months’ notice, to quit and yield up the possession of the said premises to the said party of the first part on the first day of June next following the expiration of the said three months’ notice.”

The first question to be now considered is the meaning of the phrase “found a purchaser,” because it was upon this happening that the lessee’s right to buy the property accrued.

The complainant contends that Mr. Stephany “found a purchaser” whenever, in good faith, he came to a position of willingness to sell the premises to some other person who was willing and able to buy. The defendants, on the contrary, insist that he had not “found a purchaser” until he had actually conveyed the premises to some other person.

The obvious intent of the agreement was to give to Mr. Me[214]*214Cormick a preferential right to purchase the premises of which he was in possession, whenever Mr. Stephany should find some person who was willing to pay him his price. In such case it was agreed Mr. McCormick should have the right to buy the property at the price of $12,000. The words were used in the popular sense. The purchaser was the person willing and able to purchase. The other construction would make the agreement to sell to McCormick self-destructive. To contend that McCormick’s right to purchase could only arise when Stephany had already destroyed it by conveying to someone else, is to argue that it was self-defeating from the beginning. But, in the view which this court takes of such transactions, Mr. Stephany had found a purchaser. The documentary proofs conclusively show that on November 15th, 1897, he entered into a written agreement, signed by himself and Mr. C. D. Haines, whereby he agreed to convey the “Extra Dry” to .Mr. Haines for the sum of $15,000; that on November 20th, 1897, Mr. Stephany received, endorsed and collected Mr. Haines’ check for $200, and on the same day gave a receipt for it as “on account of purchase-sum. of the ‘Extra Dr}.’ ’* By these incidents Mr. Haines had, in equity, become the purchaser, and Mr. Stephany the vendor of the premises in question. This construction comports not only with the equitable view of the action of the parties, but with their own actual interest in the premises. Mr. Stephany’s conduct, and also his letters to Mr. Haines’ counsel, show that he regarded his bargain with Haines as a concluded transaction until he afterwards found, shortly before he wrote the letter of December 27th, 1897. that Mrs. McCormick intended to insist on her right to purchase. Then, and to defeat her right to purchase, he proposed to withdraw from his bargain with Mr'. Haines.

It must be held that Mr. Stephany had so “found a purchaser” that the privilege to buy the “Extra Dry” contained in his lease to McCormick might be exercised.

The defendants also insist that Mrs. McCormick abandoned her rights to purchase the “Extra Dry” in a conversation she had with Mr. Stephany, immediately after the probate of Mr. McCormick’s will, October 20th, 1897, in discussing the man[215]*215agement of McCormick’s estate, in which she spoke of winding np the business - conducted in the “Extra Dry” because of the state of her health. Mr. Stephany informed her that several persons had applied to purchase the property, and Mrs. McCorhiick said “she wished he would sell it, because it occurred to her that the fixtures, the personal property in the ‘Extra Dry,’ could be sold to better advantage to the person who bought the real estate than to one who had to move out at the expiration of the lease.” This remark is stated to have been made in the course of a conversation wherein Mr. Stephany was, as her counsel, advising Mrs. McCormick as to matters in connection with the management of her late husband’s estate, and it is claimed that Mr. Stephany, in afterwards selling to Haines, acted on this statement, and that Mrs. McCormick is thereby estopped to assert her right to purchase.

Such a casual observation, made in the course of conversation, not directed to or specifically mentioning the privilege of purchase, which it is claimed was thus abandoned, cannot, by mere implication, be held to have had such an important result. There is no proof that Mr. Stephany was led by this remark to suppose Mrs. McCormick had abandoned her right to purchase. It is true that he dealt with Mr. Haines after the conversation with Mrs. McCormick, but this does not show that he so dealt because of that conversation. It is not a case of post hoc ergo propter hoc. On the contrary, Mr. Stephany’s own letters written to Mr. Haines’ counsel, after this conversation, indicate that he had Mrs. McCormick’s right to purchase in memory as an existing right which he feared when he dealt with Haines, but relied on her supposed poverty to prevent her assertion of it. Furthermore, at the time this conversation was had, Mrs. McCormick was consulting Mr. Stephany, as her lawyer, regarding the conduct of the business of settling her husband’s estate, If the effect of her conversation was to take from her an asset of that estate, and to give it to Mr. Stephany, or leave him free so to act as to destroy it for his own advantage, as is now claimed, he was bound to have told her that this would be the result. Mr. Stephany was also one of the executors who had joined in the proof of Mr. McCormick’s [216]*216■will.- Occupying these relations to Mr. Stephany, Mrs. McCormick was not dealing with him “at arm’s length,” but in the confidential relation of her counsel and co-executor. If her declarations of abandonment of her privilege of purchase had been even more explicit, the law would not permit Mr. Stephany to take advantage of them to his own profit, unless it should appear that Mrs. McCormick was fully advised of- their operation and effect. No such showing has been made.

The defendants further contend that the clause in the lease giving the right to purchase was a mere option, in the nature of a suggestion or proffer of sale by Mr.

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Bluebook (online)
48 A. 25, 61 N.J. Eq. 208, 16 Dickinson 208, 1900 N.J. Ch. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccormick-v-stephany-njch-1900.