time is not specifically made the essence of the contract, the vendor's title is not unmarketable because, at the time fixed for closing the contract, there exists against the land an unpaid mortgage or mortgages, providing in amount they are less than the amount due from the vendee, and the

to convey land by a good and sufficient deed free from all encumbrances, the vendee is entitled to an unencumbered title at the time the deed is tendered to him in fulfilment of the contract, and where there are mortgages standing against the land, it is not sufficient that the vendor, at the time he tendered a deed, had in his possession discharges of the mortgages which he was authorized to record as soon as he received the purchase price, and in such case the vendee is entitled to recover the amount he has paid on the purchase price although at the time fixed for completing the transaction he was financially unable to perform. Greenberg v. Lannigan (1928) - Mass. 161 N. E. 882.

And see Webster v. Kings County Trust Co. (1895) 145 N. Y. 275, 39 N. E. 964, wherein the court said: "We entertain no doubt that, in general, a contract to convey land free from encumbrance would not be satisfied by a tender of a conveyance subject to unsatisfied and unpaid mortgages, although the purchaser was permitted to deduct an equivalent from the purchase money. The vendor under such a contract cannot impose upon the purchaser the burden of paying the mortgages and procuring their satisfaction, even though the mortgages are presently due and payable. But the purchaser may dispense with this duty resting on the vendor, and by his conduct put himself in a position where an allowance out of the purchase money will be all that he can equitably demand."

61 Union Bag & Paper Corp. v. Bischoff (1918; D. C.) 255 Fed. 187, holding that, where the vendor is entitled to a release of the property in question from an outstanding mortgage, the existence of this mortgage is not a valid objection to carrying out the contract on the part of the vendee, providing he actually receives the property free from the mortgage lien.

Griesemer v. Hammond (1912) 18

Cal. App. 535, 123 Pac. 818, holding that the title was not defective because of the existence against it of a trust deed, where a reconveyance by the trustee was tendered, although the purchase money was relied upon to pay the indebtedness secured thereby.

Andrew v. Babcock (1893) 63 Conn. 109, 26 Atl. 715. The court said: "The established principle is that where a contract is entered into in good faith, and time is not of its essence, and is not made material by the offer to fulfil by the other party and a request for a conveyance, the vendor will be allowed reasonable time and opportunity to perfect his title, however defective it may have been at the time of the agreement. All that is necessary is that the plaintiff [vendor] is able to make a stipulated title at the time when, by the terms of the agreement, or by the equities of the particular case, he is required to make the conveyance to entitle himself to the consideration."

Sharp v. Bremer (1921) 192 Iowa, 797, 185 N. W. 449.

Grimshaw v. Hart (1843) 6 Rob. (La.) 265, holding that where the mortgagee intervened in an action by the vendor for the specific performance of the contract, and offered to release his claims on the vendee's compliance with the sale, the latter will be required to perform.

Galvin v. Collins (1880) 128 Mass. 525, holding that a mortgage against the premises does not constitute a defect in the title, where it is made to appear that the mortgagee is in a position to discharge the mortgage and willing to do so at any time when the amount thereof was paid to him, it further appearing that the vendor was in a position, upon the vendee complying with the contract, to secure the discharge of this mortgage.

Johnson v. Herbst (1918) 140 Minn. 147, 167 N. W. 356; McChesney v. Oppek (1923) 156 Minn. 260, 194 N. W. 882, holding that mortgages standing against the property may be satisfied out of the purchase price. The

seeking to compel specific performance of a contract is required to show that he has been in no default in not having performed the agreement, and that he has taken all proper steps

court said that this is a common way of closing land sales.

Martin v. Stone (1899) 79 Mo. App. 309, holding that the existence of a mortgage on the land contracted to be sold is no ground for rejection of the title by the vendee, where the vendor's purpose was to use a part of the purchase price to pay off the encumbrance, and the holder of the mortgage was present, and ready to execute a release on payment of the amount of his claim.

Kullman v. Cox (1899) 42 App. Div. 620, 59 N. Y. Supp. 12 (affirmed in (1901) 167 N. Y. 411, 53 L.R.A. 884, 60 N. E. 744); Carr v. Dooley (1897) 19 Misc. 553, 43 N. Y. Supp. 399, holding that it is only necessary that the property shall be free and clear at the time for closing the contract, for the vendor is not bound to raise the money and pay the encumbrance in advance. If he produces the holder of the lien ready to satisfy the same on payment of the money secured thereby, he can rely on the purchase money as a fund from which such payment can be made. The court added, however: "The vendee cannot be compelled to take a title different from that he contracted for. The defendant offered to allow the plaintiff to retain sufficient of the purchase money in his hands until satisfaction pieces of the outstanding mortgages were obtained. The objection to this was that the mortgagee was absent in Europe, and there was no one present on her behalf with the necessary releases. Besides, two of the mortgages were not then due, and there were no means of compelling their satisfaction. The plaintiff was under no obligation to await the defendant's convenience, or the return of the mortgagee, and had the right to insist upon performance at the appointed time."

Glaser v. Eisen Realty Co. (1921) 187 N. Y. Supp. 171, holding that the existence of an encumbrance against the property does not make the title defective, where the vendor is in a position to remove the same on the day fixed for the performance of the executory contract for the sale of the land.

toward the performance on his part, or a reasonable and just excuse for nonperformance, the vendor, without making such a showing, is not entitled to a decree of specific performance,

Rinaldo v. Hausmann (1876) 52 How. Pr. (N. Y.) 190, holding that the existence of encumbrances against the property is not a valid objection to the title by a vendee, where, at the time fixed for closing the contract, the holders of the liens attend with the vendor, who is ready and willing to satisfy their liens simultaneously with the closing of the title.

Keating v. Gunther (1890) 57 Hun, 591, 32 N. Y. S. R. 1112, 10 N. Y. Supp. 734 (affirmed in (1891) 129 N. Y. 659, 30 N. E. 65), holding that the vendee was not excused from performing a contract for the purchase of land because of the existence of two past-due mortgages thereon, of which he had knowledge, and which he also knew were to be satisfied out of the purchase price, which far exceeded the amount of the mortgages.

In Karker v. Haverly (1867) 50 Barb. (N. Y.) 79, in an action at law to recover liquidated damages for breach of a contract to convey land and give a good title free from encumbrances, it is held that where the objection of the vendee to the title tendered was the existence of an encumbrance against the property, and it appeared that the mortgagee had been present at the place agreed upon for closing the transaction for the larger share of the day fixed by the contract, in order to discharge the mortgage if the vendee performed, and the vendee did not offer to perform until after the mortgagee had left, and then refused to wait while the vendor secured the reattendance of the mortgagee, the vendor agreeing to secure his reattendance by midnight, it was held that the vendee had waived strict

performance by the vendor, and was not entitled to recover.

Riley v. Wheat (1922) 45 S. D. 320, 187 N. W. 425.

Stokes v. Waller (1921) Tex. Civ. App., 230 S. W. 1085, holding that the vendor sufficiently offered to comply with the contract by tendering a proper title, where he secured the release of an outstanding lien, deposited it and a deed of conveyance with a bank, and he and his agent offered to deliver the release and the deed on

where he is to convey the property free of all encumbrances, if the property remains encumbered by mortgages. 62 Also, that the vendor cannot excuse the failure to tender a deed free from encumbrances by tendering a deed subject to a mortgage then matured, and offering to deduct an equivalent amount from the purchase money, 63

Applying the rule that a mere encumbrance upon real estate, which may readily be removed and discharged out of the purchase money, payment of the balance of the consid. eration. The court said that such offer was one of substantial compliance with the contract of sale, and was sufficient.

Clark v. Hutzler (1898) 96 Va. 73, 30 S. E. 469, holding that it is sufficient if the vendor stands ready to record releases of mortgages when the transaction is closed. He need not record them prior to that time.

Sachs v. Owings (1917) 121 Va. 162, 92 S. E. 997, holding it not to be a valid objection to the title that there are encumbrances against the property, where the amount unpaid thereon is presently payable, and the vendee can apply the unpaid purchase money to the removal thereof.

Davis v. Beury (1922) 134 Va. 322, 114 S. E. 773 (rehearing denied in (1922) 134 Va. 353, 115 S. E. 527), holding that encumbrances do not render a title unmarketable where they may be removed by application of a definite portion of the purchase money.

Woodman v. Blue Grass. Land Co. (1905) 125 Wis. 489, 103 N. W. 236, 104 N. W. 920, holding that where all the encumbrances on the land were due and payable, and in amount were less than the sum the vendee was to pay on delivery of the contract, and they were payable out of the purchase money simultaneously with the making of the conveyance, they did not render the title unmarketable.

It is held in Crump v. McNeill (1919) 14 Alberta L. R. 206, that a mortgage upon the premises does not preclude the vendor's right to a decree for specific performance, providing he is in a position to give title when time for performance arrives.

In Baxter v. Derkasz (1925) - Sask. [1925] 4 D. L. R. 801, [1925] 3

is not a bar to specific performance, it is held to be sufficient for the vendor in a contract made in good faith, if he is able to make a stipulated title at the time when, by the terms of his agreement, or by the equities of the particular case, he is required to make the conveyance in order to entitle himself to the consideration. If the vendor is able to perform at the time. of the final judgment, he is entitled to relief, although he may not have been in a situation to perform at the time he brought his suit. However, West. Week. Rep. 593, the vendee is held required to perform, notwithstanding that, at the time of the commencement of the action against him by the vendor, there existed against the property contracted to be sold to him, as well as other property, a mortgage in amount exceeding the amount he was owing on the contract. This holding is based, in part, upon the ground that the existence of such a mortgage does not constitute a defect in the title, but is only a matter of conveyance, it being assumed that, the mortgage being due, the vendor has a right to compel the mortgagee to take his money, and, until the contrary is shown, that he also has the ability to pay it. In this case the vendor finally secured from the mortgagee a release of the property from the mortgage.

62 Bothwell v. Schmidt (1911) 248 Ill. 586, 94 N. E. 82.

63 Webster v. Kings County Trust Co. (1895) 145 N. Y. 275, 39 N. E. 964.

64 Dresel v. Jordan (1870) 104 Mass. 416; Baldwin v. Salter (1840) 8 Paige (N. Y.) 473; Hudson v. Max Meadows Land & Improv. Co. (1899) 97 Va. 343, 33 S. E. 586; Armstrong v. Maryland Coal Co. (1910) 67 W. Va. 589, 69 S. E. 195; Wynn v. Morgan (1802) 7 Ves. Jr. 202, 32 Eng. Reprint, 82. And see to the same effect, Stevenson v. Maxwell (1849) 2 N. Y. 408; Bruce v. Tilson (1862) 25 N. Y. 198; Oakey v. Cook (1886) 41 N. J. Eq. 364, 7 Atl. 495; Watts v. Waddle (1832) 6 Pet. (U. S.) 389, 8 L. ed. 437; Hepburn v. Dunlop (1816) 1 Wheat. (U. S.) 179, 4 L. ed. 65; Hepburn v. Auld (1809) 5 Cranch (U. S.) 262, 3 L. ed. 96; Townshend v. Goodfellow (1889) 40 Minn. 312, 3 L.R.A. 739, 12 Am. St. Rep. 736, 41 N. W. 1056.

Wren v. Cooksey (1912) 147 Ky. 825,

it is improper for a court of equity to grant relief to the vendor in a case of this character on condition that he will, within a certain time, cause the 145 S. W. 1116, holding that specific performance of a contract for the sale of real property will not be denied the vendor merely because the property is encumbered by a mortgage, where it may be discharged out of the part of the purchase price still due.

In Strickland v. Barber (1889) 76 Mich. 310, 43 N. W. 449, where a decree for specific performance required the vendee to perform, but permitted the amount of an encumbrance to be deducted from the purchase price, it appeared that the vendee knew of the existence of this encumbrance at the time he entered into the contract, and made no objection thereto, and did not set it up as a defense in his answer.

In Oakey v. Cook (1386) 41 N. J. Eq. 350, 7 Atl. 495, where there was a contract for the exchange of land, each property being under encumbrance, and the agreement was to furnish good title satisfactory to the other party, and the change of possession was actually effected, and there was nothing in the contract or the acts of the parties to show that time was regarded as the essence thereof, it was held that performance was to be mutual and dependent upon contemporaneous performance by the other party to the contract, and hence, where one party claimed rescission on the ground that he had tendered performance and the other party had failed to comply therewith, which claim was not sustained, it was held that it was sufficient for the other party to the contract, in a bill for specific performance, to tender performance in the bill. The relief given was such as to protect each party as to the encumbrances, in accordance with the terms of the contract.

Guynet v. Mantel (1854) 4 Duer (N. Y.) 86, holding that the existence of a mortgage of $1,000 upon a part of the land which was sold for $50,000 does not entitle the vendee to refuse to perform, where the vendor, upon making a tender of a good and sufficient deed of the land at the time mentioned in the contract, offered to deduct from the sum payable the amount of the encumbrance.

The rule is stated in Farmers Tobacco Warehouse Co. v. Eastern Caro

encumbrances to be paid, and file the releases thereof with the clerk of the court. 65 And it has been held that the right of the vendor, in a proceedlina Warehouse Corp. (1923) 185 N. C. 518, 117 S. E. 625: "While the existence of an encumbrance inherent in the property as an easement, substantially impairing its value, or a moneyed lien for a substantial sum, unknown at the time of the contract or indeterminate in amount, has been held to interfere with the conveyance of a marketable title (particularly where there is an express covenant against encumbrances), a mortgage or deed of trust to secure a definite sum of money, which is known to exist at the time of the contract, is not regarded as such an encumbrance, in the strict sense of the term, nor will its existence always justify an avoidance of the agreement on the part of the vendee. Thus, where it is made to appear before a court having jurisdiction of the question that the encumbrance complained of is less than the purchase price, or where, being a docketed judgment, the amount is amply secured on appeal in the case, or where, being of small proportional amount, full and adequate protection. can be afforded, it is held that specific performance will be enforced, the decree making proper provision for the relief of the property; a position especially insistent where the vendee has gone into possession fully aware of the alleged encumbrance, and has been exercising over the property full control as owner."

But compare with Greenberg v. Lannigan (Mass.) supra, holding that, where mortgages were not discharged at the time the parties met to close the transaction, the vendee was entitled to rescind the contract, although the mortgages actually had been discharged and the unrecorded discharges were in the possession of the vendor.

65 Bothwell v. Schmidt (1911) 248 Ill. 586, 94 N. E. 82. The court said: "The contract specifically provided. that the conveyance should be made free and clear of all encumbrances. The [vendor] has apparently made no effort to secure the release of these mortgages. By this decree he is given forty days to do that which he should have done theretofore. If he fails within that time to secure the release

ing for specific performance, to have the amount of encumbrances deducted from the purchase price, does not apply where he brings an action at law to recover the amount of the purchase price on the ground of a tender of performance. 66 It seems that the existence of a mortgage against land sold by executory contract will not afford to the vendee grounds for the recovery of the amount he has paid upon the purchase price, where the vendor was in a position to secure the discharge of the mortgage at the time he received notice from the vendee of of the mortgages, the decree necessarily becomes a nullity. The necessity of making such a provision before specific performance could be decreed shows conclusively that the [vendor] is in no position to demand the relief prayed."

66 Willingham Loan & T. Co. v. Moore (1925) 160 Ga. 550, 128 S. E. 751, holding that, in a proceeding by the vendor for the specific performance of a contract for the purchase of land against which there existed an encumbrance which it was his duty to remove, before he was entitled to recover, it was necessary to show that the encumbrance had been removed or released, or the court might decree the removal thereof before the vendee would be compelled to pay any of the purchase money. This might be done where the outstanding mortgage was for a less amount than the purchase money.

And see Pedlar v. Ryder (1915) Sask., 8 West. Week. Rep. 559, 24 D. L. R. 427, stating the rule that the vendor is not entitled to an order directing the purchaser to pay the purchase money, or any instalment thereof, if his title is defective.

Knight v. Cushing (1912) 4 Alberta L. R. 123, 1 D. L. R. 331, holding that the vendee was entitled to refuse to make payment on the purchase price, where the property was encumbered by a mortgage, and there was no provision by which the mortgagee could be compelled to accept payment prior to the maturity of the mortgage, and there was a provision in the contract authorizing the vendee to pay the purchase price and receive a conveyance prior to such time; it was, however, held that the vendor might provide indemnity to protect the vendee from

his refusal further to carry out the contract. 67 On the other hand, the fact that there are unpaid mature mortgages standing against the land the vendor has contracted to sell precludes the forfeiture by him of the amount the vendee has paid on the purchase price, on the ground of the failure of the latter to accept the title he tendered him. 68

The essential condition of the rule permitting the vendor to force his title upon the vendee, where he is in a position to secure the discharge or release of mortgages standing against

having to pay more than his contract called for, because of the mortgagee's refusal to accept prior payment.

And see Huber v. Burke (1824) 11 Serg. & R. (Pa.) 238. The court, after referring to the fact that there were encumbrances which were not removed when the suit was brought, said: "Although this may have been no objection to the action with a view to damages, yet, where the action is for the purchase money, the plaintiff should leave nothing undone, the omission of which might be construed into an acquiescence in the defendant's determination not to execute the contract in specie; and it would be inequitable that the vendee should pay without having received any title at all, or that the vendor should recover, without having done all he could to make a good one. Chancery will not execute the contract before the vendee has had an opportunity to receive all he bargained for. The vendor should, therefore, complete the removal of encumbrances, so that he may be in a condition to tender a title, at least, before suit is brought, notwithstanding he may have been discharged by the vendee." But that court may do complete justice by taking care of these matters in the de

cree.

67 Claude v. Richardson (1905) 127 Iowa, 623, 103 N. W. 991.

68 Cooper v. Rutland (1914) 99 S. C. 83, 82 S. E. 994.

Weinheimer v. Ross (1912) 205 N. Y. 518, 98 N. E. 145 (reargument denied in (1912) 206 N. Y. 682, 99 N. E. 1119), holding that an outstanding mortgage, the release of which may be procured, does not render the title defective.