21 Jones & S. 211 53 N.Y. Super. Ct. 211

THOMAS C. CLARK, Appellant, v. JOSEPH BLUMENTHAL, et al., Respondents.

Contract under seal for the sale of real estate—reformation by substitution of one person for another as vendor—liability of one not aparty to contract.

Where the person executing the contract for the sale of real estate as vendor, is the one in whom the legal title is vested, the facts that the property was purchased with the money of another, that that other person collected the rents, received the money paid on the contract, and was the real principal in the transaction, and that the party signing the contract as vendor held it only as agent of that other, do not warrant the reformation of the contract, by substituting such other person in the contract as the vendor.

One not a party to such contract cannot be held liable on it, although he was in fact the principal of the party executing it, and the party executing it was in fact his agent, where, on the face of the contract the party executing it so executed it on his own behalf. The case at bar is controlled by this principle, notwithstanding the facts above set forth.

*212Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.

Decided May 3, 1886.

Appeal from judgment dismissing complaint on trial before the court, without a jury.

This action was brought to reform a. contract under seal, for the sale and purchase of certain real estate, and to recover damages for its breach. The contract was entered into between defendant Weinberg, party of the first part, and the plaintiff, party of the second part, and was for the sale by Weinberg to the plaintiff, and the purchase by plaintiff from Weinberg of said real estate. It was signed as follows :

“Jacob B. Weinberg, [seal]

Pr Joseph Blumenthal. [seal] Thomas 0. Clark, [seal] ”

The contract called for the payment of $1,000 on its execution. This sum was paid to, and received by Blumenthal. The reformation asked for was to substitute Blumenthal in the place of Weinberg as the vendor, and the damages were sought to be recovered from Blumenthal.

Other facts appear in the opinion.

T. M. Tyng, attorney and of counsel for appellant,

on the questions considered by the court, argued :—I. Upon the foregoing facts the plaintiff was entitled to judgment reforming the contract, so as make to Blumenthal thp party of the first part therein. The proof is uncontradicted that Clark intended to make his contract with the true owner of the land, a contract behind which there would be some responsibility ; that he was led by Blumenthal’s fraud and concealment to believe the irresponsible Weinberg to be the true owner of the land ; that he was induced by the same fraud to accept and deal with Weinberg as his vendor ; and that he would not have made Ms contract with Weinberg had he known of Blumen*213thal’s actual ownership thereof (Albany Savings Bank v. Burdick, 87 N. Y. 40 ; Paine v. Jones, 75 Ib. 593 ; Andrews v. Ins. Co., 18 Week. Dig. 192; Barthlomew v. Ins. Co., 41 Hun, 263 ; Story’s Equity, §§ 162, 191). •

II. But if the contract cannot be technically reformed, yet the defendant, Blumenthal, on the facts above mentioned, was collaterally responsible for its performance. It is conceded that the plaintiff could not sue Blumenthal at law for breach of a covenant made by his agent Weinberg, under Ms own seal (Briggs v. Partridge, 64 N. Y. 357 ; Tuthill v. Wilson, 90 Ib. 423). But equity can afford the plaintiff the same right to pursue the undisclosed principal that the plaintiff would have had by a direct action at law, if no seal had been affixed to the instrument (Story Agency, §§ 160, 162, 191).

Simson Wolf, attorney, and Joseph Ullman, of counsel for respondent Blumenthal, and Joseph Ullman, attorney and of counsel for respondent Weinberg,

on the questions considered by the couri, argued: argued: A contract cannot be reformed except between the original parties (Cady v. Potter, 55 Barb. 463 ; Casler v. Sitts, 6 Hun, 659 ; 5 Wait’s Actions and Def. 451, § 8 ; Adams’ Equity, 349 [6 Am. ed., 1873] ; Story’s Equity, § 165). The plaintiff was not in fact deceived or mistaken when he signed the agreement. Evidence of such mistake must be of the very strongest character (Bartholomew v. Insurance Co., 34 Hun, 263).

II. The contract bemg in the name of Weinberg, and under seal, there can be no recovery against Blumenthal, admitting him to be the real principal (Briggs v. Partridge, 64 N. Y. 357 ; Kiersted v. Orange R. R., 69 Ib. 343 ; Schaeffer v. Henkel, 75 Ib. 378 ; Williams v. Gillies, 75 Ib. 197 ; Squier v. Norris, 1 Lans. 282 ; Tuthill v. Wilson, 90 N. Y. 423). These cases recognize no distinction in this respect between law and equity. The plamtiff has no remedy in such case either at law or in eqffity.

III. There could be no recovery agamst Blumenthal, *214even were the contract not under seal. He is admittedly not the legal owner of the property, and no trust results in his favor, though he paid the consideration on its purchase by Weinberg (1 R. S. 728, § 51; 7Ed. Vol. 2, p. 3180). Under the statute, he had no interest whatever in the premises legal or equitable. __ He cannot therefore be said to be a “principal.” To hold him as such would be a clear evasion of the statute (Tuthill v. Wilson, 90 N. Y. 423).

IV. Blumenthal cannot be held as agent for an undisclosed principal, because the principal was disclosed on the face of the contract (Whitford v. Laidler, 94 N. Y. 145). Hecannót beheld as principal,-because 1. The contract was under seal; 2. He was not a principal.

By the Court

Ingraham, J

It is very clear that the plaintiff was not entitled to have the contract set forth in the complaint reformed, by inserting Blumenthal’s name in the contract as one of the contracting parties in place of Weinberg. There was no mutual mistake of fact as to the parties to the contract. According to plaintiff’s allegation in the complaint, Blumenthal stated and represented to plaintiff, and caused plaintiff to believe that Weinberg was the true, lawful and equitable owner of said premises, and it was the intention of the parties to make the contract between plaintiff as the purchaser, and the owner of the property as the seller.

It appeared on the trial that the defendant, Weinberg, was the legal owner of the property, and the facts that the property had been purchased with Blumenthal’s money, and that Blumenthal collected the rents of the premises by the permission of Weinberg, did not make Blumenthal the owner.

There was no mistake of fact, or fraud, that would justify the court in changing a contract made by Weinberg, to convey property he owned and which he only could convey, to a contract by Blumenthal, who could convey no title to the property, and who, from the facts *215proved on the trial had no title to the property itself. Nor did the facts proved on the trial show any liability on the part of Blumenthal to pay any damage sustained by plaintiff in consequence of a breach of the contract by Weinberg. The contract was between Jacob Weinberg, of the first part, and Clark, the plaintiff, of the second part, and by that agreement, the party of the first part, Weinberg, agreed to sell to the party of the second part six lots of land in the city of New York, for the sum of $72,000, and it was under seal. The contract was the contract of Weinberg, the legal owner of the premises. Blumenthal did not, on the face of the agreement, undertake to sell the property or make any contract with the plaintiff, and the only facts upon which the plaintiff claims that the defendant Blumenthal is liable, is that Weinberg held the property as the agent of Blumenthal, and that Blumenthal received the money for the property and was the real principal in the transaction.

It is settled in this state, that a contract under seal, made by an agent in his own name, for- the purchase and sale of lands, is the contract of the agent only, and no one but the party to the contract is liable to be sued upon it (Briggs v. Partridge, 64 N. Y. 357 ; Tuthill v. Wilson, 90 Ib. 423; Williams v. Gillies, 75 Ib. 197).

It appears from the report of the case of Briggs v. Partridge in the court below (39 Super. Ct. 339), that the action was an action in equity for the specific performance, by defendants, as vendees of a contract for the sale of land, and it appeared that the contract sued on was made by Hurlburd as vendee, and was under seal; that Hurlburd was acting solely for, and under direction of Partridge the defendant, who paid or caused to be paid the first payment under the contract; and that said Huiiburd was the agent and trustee of Partridge in the transaction, and the plaintiff asked in that case, if necessary, for the reformation of the written agreement, to enforce which the action was brought. The court dismissed the complaint, which dismissal was sustained by the court of *216appeals, the court saying : “We find no authority for the proposition that a contract under seal may be turned into the simple contract of a person not in any way appearing on its face to be a party to or interested in it, on proof de hors the instrument, that the nominal party was acting as the agent of another,” and cites with approval the rule as declared by Chief Justice Shaw in Huntington v. Knox (7 Cushing, 374), “where a contract is made by deed under seal, on technical grounds no one but the party to the deed is liable to be sued upon it, and, therefore, if made by an attorney or agent it must be made in the name of the principal, in order that he may be a party, because otherwise he is not bound by the deed.”

Plaintiff claims, however, that although the defendant Blumenthal would not be liable at law for a breach of covenant made by his agent Weinberg under his own seal, equity can afford the plaintiff the same right to pursue the undisclosed principal that the plaintiff would have had by direct action at law, had no seal been affixed. to the instrument, and cites as authority for such an action, Story on Agency, §§ 160,162. In section 162, the learned author says: “Indeed, it maybe asserted as a general rule that in all cases where an agent has contracted within the sphere of his agency, and the principal is not by the .form of the contract bound at law, a court of equity will enforce it against the principal,” and cites to sustain that proposition, Clark, executors, &c. v. Vanreinsdyk (9 Cranch, 153); and Dubois v. The Delaware & Hudson Canal Co. (4 Wend. 285).

In the case of Clark, executors, &c. v. Vanreinsdyk, the contract sued on was a bill of exchange not under seal, and in the case of Dubois v. The Delaware & H. Canal Co., the contract on its face appears to be a contract of the Delaware & H. Canal Co., and was signed, Morris „ Woertz, agent for Delaware & Hudson Canal Co., and the action was not in equity, but was an action of assumpsit.

Briggs v. Partridge (supra) was an action for reformation of a contract for specific performance and for dam*217ages, and was consequently an action in equity like the case at bar, and the court of appeals held in that action plaintiff could not recover.

Williams v. Gillies (supra) was an action in equity for the foreclosure of a mortgage, and where it was proved that the defendant sought to be charged with a covenant in a deed, was one of a copartnership, and that the property was taken in the name of his copartner for the benefit of Gillies, the party sought to be charged. The court reaffirmed Briggs v. Partridge, and held that the oral agreement to enter into a contract to purchase lands, would not bind the principal upon the contract entered into by the agent in his own name under seal. The case of Tuthill v. Wilson (90 N. Y. 423), was an action in equity to foreclose a mortgage where the plaintiffs sought to hold for the deficiency, the real purchaser of the property, the deed to which was taken in the name of the agent, and the action was stated by the complaint as brought against Wilson, as the purchaser from the beginning, and the court held that Wilson could not be held liable upon the original contract of his agent, for the reason that the contract was under seal, signed and delivered by both vendor and vendee, and Wilson could not be made liable upon its covenants.

We are of the opinion that in this state it is now settled that neither in law nor in equity can a contract under seal, made by an agent in his own name, for the purchase of lands, be enforced as the simple contract of the real principal when he shall be discovered.

The case was rightly, disposed of at special term, and the judgment appealed from must be affirmed, with costs.

Sedgwick, Ch. J., and Freedman, J., concurred.

Clark v. Blumenthal
21 Jones & S. 211 53 N.Y. Super. Ct. 211

Case Details

Clark v. Blumenthal
Decision Date
May 3, 1886

21 Jones & S. 211

53 N.Y. Super. Ct. 211

New York



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