Plaintiffs, husband and wife, are the contract purchasers of a 300-acre dairy farm in the Town of Fort Covington, Franklin County, under a land contract dated February 4, 1984 with Gaetan A. Yelle and Solange M. Yelle,
Adirondack took possession of the farm and prepared to perform under the terms of the contract until on or about July 27, 1984. On that date, Adirondack, along with plaintiffs, received notice that Ronald N. Booth and Debra L. Booth,
However, as a result of the Booths' claim of title, Adirondack was unable to obtain the requisite financing for its proposed operation of the farm, and, consequently, it stopped all payments of rents and taxes on the farm in August 1984, contending that a cloud on the title excused its performance. It should also be noted that in June 1984, the Booths commenced a separate contempt proceeding against Gaetan Yelle in Bankruptcy Court, alleging that he violated the automatic stay provisions contained in the Bankruptcy Act (11 USC § 362) by selling the farm to plaintiffs. This action was dismissed by the Bankruptcy Court on September 14, 1984 in a decision that found no equitable interest in the farm by the Booths on the date they filed their petition in bankruptcy due to their abandonment of the property; upon appeal, this decision was affirmed by the United States District Court for the District of Vermont on March 21, 1985. In the meantime, and in January 1984, the within action for damages for breach of contract was commenced and reached for trial in September 1985, resulting in a decision by Supreme Court in favor of plaintiffs against both defendants for money damages and, in addition, specific performance of the contract.
On this ensuing appeal, defendants contend (1) that the
First, on the issue of the failure to pay the mortgage tax, it seems clear that the land contract herein is an instrument constituting a "mortgage" within the meaning of Tax Law § 250, since it is provided that "[e]xecutory contracts for the sale of real property under which the vendee has or is entitled to possession shall be deemed to be mortgages for the purposes of this article" (Tax Law § 250 [emphasis supplied]), and by its terms, the contract in question is an integrated executory contract of sale rather than a valid present lease and an executory contract for the sale of the premises in futuro (see, Matter of Rogers v Graves, 279 N.Y. 375). As such, the contract could have been recorded as a mortgage upon payment of the requisite recording tax if Adirondack, as the vendee, had sought the protection of the recording act.
However, the contract was not recorded. Notably, it was admitted as an existing agreement by defendants in their pleadings, introduced into evidence at the trial without objection by defendants, and the failure to record was never raised as a defense or issue until after the close of the evidence and both sides rested. Moreover, plaintiffs offered to record the contract and pay the recording tax nunc pro tunc should Supreme Court have found payment necessary, a procedure acquiesced in by defendants.
Specifically, defendants' argument to Supreme Court was in the form of a motion to dismiss for failure of plaintiffs to comply with the provisions of Tax Law § 258, which, in part, provides that: "No mortgage of real property which is subject to the taxes imposed by this article shall be * * * received in evidence in any action or proceeding * * * unless the taxes imposed thereon by this article shall have been paid * * * No judgment or final order in any action or proceeding shall be made for * * * the enforcement of any mortgage which is subject to any tax imposed by this article * * * unless the taxes imposed * * * shall have been paid". Thus, defendants argue that the contract cannot be enforced and should not have been received into evidence at trial.
In construing Tax Law § 258, this court stated in Matter of Downtown Athletic Club v State Tax Commn. (280 App Div 363)
Furthermore, Adirondack's anticipatory breach of contract was without legal justification. In order for plaintiffs to be entitled to specific performance, they were required to show that they tendered performance on Law Day, or, tender being excused because of anticipatory breach by defendants (see, Cooper v Bosse, 85 A.D.2d 616, 618), they were nevertheless ready, willing and able to perform their obligations under the contract on Law Day by conveying the title to and quantity of land for which they contracted (see, Jewell v Rowe, 119 A.D.2d 634, 635; 62 NY Jur, Vendor and Purchaser, § 177, at 465-466 ). An examination of the situation on Law Day, May 1, 1985, requires us to conclude that plaintiffs are entitled to the relief they seek. The Booths' action against plaintiffs was dismissed by stipulation on January 4, 1985, and the dismissal of the contempt proceeding against Gaetan Yelle was affirmed March 21, 1985. The contempt proceeding, in any event, would not affect plaintiffs' title since the prior judgment in Bankruptcy Court, as affirmed on appeal to the Federal District Court, is res judicata as to the marketability of title until reversed upon appeal (cf., Duverney v State of New York, 96 Misc.2d 898, 910, affd 76 A.D.2d 962, lv dismissed 51 N.Y.2d 703, 744; United Artists Corp. v No. 731 Seventh Ave. Rest., 75 Misc.2d 717, 718). Moreover, even if the Booths had a further
Finally, we find the award and amount of damages fully supported by the record, and the determination of the rate and date of payment of interest within the proper exercise of the discretion of Supreme Court (see, CPLR 5001).
Judgment affirmed, with costs.