World Exhibit Corp. v. City Bank Farmers Trust Co.

270 A.D. 654, 61 N.Y.S.2d 889
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMay 6, 1946
StatusPublished
Cited by9 cases

This text of 270 A.D. 654 (World Exhibit Corp. v. City Bank Farmers Trust Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
World Exhibit Corp. v. City Bank Farmers Trust Co., 270 A.D. 654, 61 N.Y.S.2d 889 (N.Y. Ct. App. 1946).

Opinions

Carswell, J.

On July 25, 1944, defendant’s predecessor, pursuant to an option in a lease, sold to its tenant a private-amusement park, situated in Coney Island, for $275,000. The purchaser made a down payment of $60,000. The vendor was to take back a purchase money mortgage of $125,000, and the balance of $90,000 was to be paid on the closing day, September 15, 1944. On the day the contract was signed, it was assigned by the tenant to Sally L. Draisin to the knowledge of the vendor. On September 14, 1944, it was assigned by Draisin to the Brooklyn Amusement Corporation. On" the same day that corporation also received a similar assignment directly from (¡he tenant, or assignor of Draisin.

On August 12, 1944, a fire destroyed 40% of the improvements on the. property. The closing day was adjourned to September 29, 1944, and in the meantime the vendor became entitled to and later received $153,000 of insurance for the property destroyed and damaged. On the closing day the [656]*656Brooklyn Amusement Corporation, hereinafter called the vendee, demanded title with an abatement of $140,000, which was conceded to be a proper amount, if there were to be an abatement.

The vendor refused to convey on these terms, tendered a deed and demanded the full purchase price. The vendee rejected the vendor’s terms, whereupon the vendor made a second tender, i.e., an offer to return the $60,000 down payment and pay $1,000 to cover the cost of title search. The vendee refused this offer and insisted upon a deed with an abatement of $140,000. By mesne assignments the contract and rights thereunder were assigned by the vendee to the plaintiff. It brought this action on May 31, 1945, and obtained a judgment requiring specific performance of the contract with an abatement of $140,000..

The defendant appeals and asserts that the rights of the parties are to be determined by section 240-a of the Real Property Law (L. 1936, ch. 731), and that its offer complied with that statute. The vendee insists that the contract contains engagements which preclude the statute having any effect herein. The contract provided: “ In the event for any reason the Seller is unable to cause to be conveyed marketable title to the premises or otherwise to comply with this agreement, the only obligation of the Seller hereunder shall be to refund the amounts paid by the Purchaser to the Seller under this agreement and the expenses paid by the Purchaser for a title search * * *.

The risk of loss or damage to said premises by fire, until the delivery of said deed, is assumed by the Seller.” (Italics ours.)

If the contract were silent on the subject of risk of loss in the event of damage to the premises by fire before the law day, under Sewell v. Underhill (197 N. Y. 168, 170), in the absence of a statute, such a loss would fall on the vendee and specific performance of the contract could be had. Recognizing the authority of Sewell v. Underhill (supra), effect was given to a similar risk of loss clause in a contract in Polisiuk v. Mayers (205 App. Div. 573). There the burden of the loss having been assumed by specific engagement by the vendor, specific performance with an abatement was enforced in favor of the vendee. Unless the authority of that case has been impaired by later cases or by the statute, the judgment herein is correct”.

The appellant asserts that the Polisiuk case has been overruled, in effect, by Brownell v. Board of Education (239 N. Y. 369). But, in Reife v. Osmers (252 N. Y. 320, 323), after noting criticism of the English rule, enforced in Sewell v. Underhill (supra), upon which the decision in Polisiuk v. Mayers was [657]*657based in part, the court stated: “ That doctrine was not weakened in Brownell v. Board of Education (239 N. Y. 369, 374). There the parties by the terms of their contract took themselves out of the rule.” The provision referred to was a liquidated damage clause that fixed with precision the rights of the parties in the event that a fire occurred and property damage ensued.

To sustain further its contention, the appellant refers to the citation in the Brownell case of two Massachusetts cases, and points out that the basis of their doctrine was Hawkes v. Kehoe (193 Mass. 419). Appellant fails to state, however, that the Massachusetts rule is dissimilar to the New York rule, and that the doctrine of the cases cited is distinguished in the Hawkes case from Allyn v. Allyn (154 Mass. 570). There a special agreement in respect of who was to bear the risk of loss in the event of the destruction of the property by fire was enforced, and the burden was borne by the vendor. Thus the very cases cited and relied on in Massachusetts recognize that by special covenant the risk of loss can be placed upon the vendor and he can be required to perform the contract just as in Polisiuk v. Mayers (supra). Hence, in the light of the foregoing, the language of the Brownell case, referring to the Massachusetts cases, is to be confined to a situation where the parties have made specific provision on this phase. Moreover, the criticism in Williston on Contracts (Rev. ed., Vol. 4), in the footnote to section 935 (n. 4), is directed primarily to the English rule upon which the Polisiuk case is founded and has no pertinency to cases in New York, where imperative authority requires effect to be given to that English rule.

Appellant invokes from the above-quoted contract a clause which excuses the seller in the event it is unable to convey a marketable title “ or otherwise to comply with this agreement ”. This provision is of no avail to the vendor where it is able to give a marketable title. General language must be confined in its meaning by the specific enumeration which precedes it.' If, for instance, title could not be conveyed because the property was taken in whole or part by eminent domain, such an occurrence would come within the phrase “ or otherwise to comply ’ ’, being a form of inability to convey title other than from inability because of a defect rendering the title unmarketable. This interpretation excludes failure to perform by reason of destruction of the property by fire. Any doubt as to the propriety of such a construction vanishes under the impact of the next succeeding language, which specifically pro[658]*658vides that in the event of such an occurrence “ The risk of loss or damage ” is to be borne by the seller." This, of course, means that the seller is subject to the obligations arising from the contract, under the then existing law, which obligations require the seller to respond to the buyer. This specific language relating to the effect of a fire takes precedence over any other general language. As the specific language does not excuse but instead affirmatively imposes obligations on the seller, the preceding general language may not be invoked to excuse the seller. The cases appellant invokes are not to the contrary. They concern contracts with different provisions, and none of them has a provision like “ The risk of loss or damage ” clause in the instant contract. To be sure, the contract in the Polisiuk case did not have a provision of this character, but that is of no importance as the provision itself does not have the effect for which the appellant contends, which view would make the specific and pertinent risk of loss or damage clause meaningless.

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Bluebook (online)
270 A.D. 654, 61 N.Y.S.2d 889, Counsel Stack Legal Research, https://law.counselstack.com/opinion/world-exhibit-corp-v-city-bank-farmers-trust-co-nyappdiv-1946.