Upon the coming in of the report, the vendee, defendant, filed a petition alleging surprise in the consideration by the master of certain testimony and praying leave to adduce further testimony in rebuttal thereof. The case was referred back to the master, who heard the additional testimony and reported that his first conclusion was in no way changed thereby; whereupon the Vice Chancellor, after hearing exceptions to both reports, overruled the exceptions and made the decree now appealed from.

[1, 2] While the same result was reached in both reports, it is not rested on the same grounds in both. In the first report the master relied mainly on the rule propounded by the late Vice Chancellor Van Fleet in Peeler v. Levy, 26 N. J. Eq. 330, to the effect that compensation will generally "be denied where the party asking it had notice at the time the contract was made, that the vendor was agreeing for more than he could give or convey, and it appears the vendee has not, in consequence of the contract, placed himself in a situation from which he cannot extricate himself without loss." The evidence showed clearly to his mind (as it does to ours) that such a situation existed in the case. In the second report the master found the same state of facts, especially that the vendee knew that as to the 14-acre tract vendor had either a defective title or none at all, "and that the same did not enter materially into the transaction, ** except that Ely was desirous of obtaining from the complainant whatever title or interest the latter possessed therein"; also "that the consideration agreed to be paid by Ely referred to the premises sold independently of the 14-acre tract, and that the value of the latter did not form part of such consideration."

We come to the conclusion that the decree below should be affirmed, but prefer to rest out decision upon the second point rather than the first. Beyond noting the later case of White v. Weaver, 68 N. J. Eq. 644, 646, 61 Atl. 25, where Vice Chancellor Reed refused to follow the rule just quoted from Peeler v. Levy, and his opinion was adopted by this court, we express here no opinion on the correctness of the rule quoted above from

by the master, the case is quite clear that defendant knew before signing the contract of the defective title to the smaller tract; that complainant's agent offered it to him substantially as a bonus for buying the larger one; and that even its location was not known with any precision. Its value as appraised by the master was only $280, or $20 an acre. The purchase price for both tracts stated in the contract was $4,500. We think the evidence fully supports the view taken by the master that in the dealings between the parties the purchase price was fixed as a valuation of the 91-acre tract, and that the other was disregarded as an element of value. Plainly it would be inequitable to award a deduction under such circumstances, and the court properly decreed that vendor should convey his right, title, and interest in the smaller tract and receive the full purchase price, with proper allowances for taxes and interest based on defendant's possession under the contract.

The other points argued for a reversal are that it was error to admit testimony touching transactions which occurred prior to execution of the contract, because they were obnoxious to the rule excluding parol evidence tending to vary or contradict the terms of the contract; that no interest should have been charged against appellant for any time prior to the date when it was definitely ascertained in court that vendor's title to the smaller tract was defective; and that appellant should not have been charged with costs below. As to the evidence objected to, it was clearly competent, not as varying or contradicting the contract, but to show the defendant's knowledge of facts at the time he entered into it, just as he himself would have been entitled to put in similar antecedent transactions to show, let us say, fraud of complainant. And where, as in this case, the vendee himself prays a conveyance of the larger tract with an allowance for the smaller, and stipulates for a reference to ascertain what deduction, "if any," should be made for the failure of title to the smaller, parol evidence is not only proper, but important, on the question of the figure cut by the smaller tract in the estimation of the parties; the contract itself being silent on this point.

[3] As to interest on the purchase price, defendant went into possession of the large tract under the express stipulation of the contract that he should do so, and an agreement to pay $100 cash, which he paid, $900 in 60 days, and a month later a purchase money mortgage for the remainder. Under the well-recognized rule he was the equitable owner of the land and the vendor of the purchase money. Haughwout v. Murphy, 22 N. J. Eq. 531, 546. Being in possession, the vendee received the benefit of the land, and,

on the other hand, vendor, who did not receive the purchase money, is entitled to interest on it from the date when it should have been paid in cash or mortgage. King v. Ruckman, 24 N. J. Eq. 298, 301; Brown v. Norcross, 59 N. J. Eq. 427, 45 Atl. 605. No point is made of the taxes; naturally a purchaser in possession should pay current taxes.

It is argued that interest should not begin to run until the judicial ascertainment that vendor could not convey complete title; but to this we cannot agree. The hearing and decree in this cause establish the status of the parties as of the time when the contract should have been performed, and that time was the date fixed in the contract, when, as found in the case, both parties knew that there was a failure of title, and that it was immaterial to defendant, and he should have accepted a deed for the first tract and what vendor had to give in relation to the second. The same reasoning disposes of the claim that costs should run only from the date when the hearing began. We may add that defendant was comfortably in possession, when the bill was filed, of the 91-acre tract upon a payment of $100 only. He could have filed a bill himself, and, as he wished a deed to the 91-acre tract irrespective of the other, should have done so. Instead, he preferred to occupy the land without paying for it, and thus forced complainant to his bill. Under such circumstances it is eminently proper that he pay costs.

The decree will be affirmed.

(91 N. J. Eq. 97)

KELLY et al. v. CHINICH et al.

The opinion of Vice Chancellor Foster was as follows:

The bill in this cause is filed to compel the specific performance of a contract for the purchase of real estate in the village of South Orange. It is entirely a fact case, and the question to be determined is whether the parties ever entered into the contract in question.

It appears that some time prior to October 23, 1917, complainants, through Stern & Cohn, real estate agents, had offered to sell the premises in question to defendants, and that defendlearned from him that the lands were located ants visited the property with Mr. Cohn, and in South Orange. On October 23, 1917, the parties and the agents met at the office of Charles F. Herr, counsel for defendants, and had drafts of the contract of sale prepared. When the description of the property was read, one of the defendants raised the question whethin the village of South Orange that would preer there were any building restrictions in force vent defendants from building a four-story apartment house on the lands. They were to pay $9,000 for the land, and had told complainants they intended to build thereon an apartment house that would cost about $90,000. When the question about the building restrictions was raised, one or both complainants asin the village that would interfere with the sured defendants that there were no restrictions height of their building, and it is at this point that the controversy between the parties arises.

According to complainants' version, defendants were satisfied with the assurances that complainants gave them that there were no restrictions in the village to interfere with the height of their contemplated building, and the suggestion was made that the parties sign the copies of the contract and the check for $300 to cover the first payment called for by the contract, and that the copies of the contract and the check should be left with Mr. Herr for a day or two, in order that defendants could call on the proper authority in South Orange and learn that there were no laws or ordinances

Nov. 17, 1919.)

(Syllabus by the Court.)

ESCROWS 3-GRANTOR'S ATTORNEY AGENT MAY ACT AS DEPOSITARY.

Defendants' version of what happened when the copies of the contract and the check were signed differs very materially from that of comthe question of the building restriction they plainants. They state that when they raised were unwilling to sign the contract until all doubts on the subject were removed, but that they were induced to sign the papers when

Judge Herr remarked, "What's the use of losing time; * you can sign and leave your check for the first payment with me, and I will hold the papers till you tell me to turn them over;" that Densky, one of the defendants, still hesitated, and finally he said to Judge Herr, "All right; you are my lawyer, and if you keep it till we find out, we will do as you say;" and that Judge Herr then said to defendants, "You are to be the sole judges as to whether the papers will be delivered;" and defendants claim it was upon this assurance that they signed the papers and check.

While Judge Herr corroborates defendants regarding the above particulars, his memory about many other details of the transactions is very poor, and he pleads that he is a very busy man, as the reason for his failure to recall other details of the transaction. Complainants deny that any such statements were made by defendants or Judge Herr in their hearing. Defendants further claim that the papers were not to be delivered until they were satisfied that there would be no trouble in erecting the building. This complainants also deny.

A day or two later defendants called on Mr. Schwarze, the inspector of buildings for the village of South Orange, and informed him of their proposed building plans, and asked if there were any restrictions that would interfere with the height of their building; they say Mr. Schwarze told them, "You can't build such a building in South Orange;" that there was not a four-story building in the village: that, even if he were to grant them a permit, the trustees of the village could hold a meeting and stop the construction of the building, and he told them, when he learned of the estimated cost, that they were taking a big chance. Defendants, on leaving Schwarze, walked through the village, as he had suggested, and did not see a four-story building. They then returned to Newark, and went to Judge Herr's office, and told him they were satisfied they would have trouble in South Orange, and asked for the return of the check, which was given them, and their signatures were torn from the copies of the contract. They did not communicate with complainants, or tell them the result of their investigations.

Mr. Schwarze was called as a witness by complainants, and he positively contradicts the defendants in every essential particular. He testifies that defendants called on him and informed him of their building project, and inquired about restrictions limiting its height; that he took the trouble to look up the matter, and made inquiries of other officials, and assured them that there was nothing to prevent them from erecting their contemplated building; that there were no restrictions affecting the height, and that they could build it as high as they pleased, provided they conformed with the requirements of the building ordinance relating to the character of the materials used in the building. He denies telling defendants the trustecs might or could interfere with or stop their building operations. Mr. Schwarze was an exceptionally competent, disinterested witness. He did not know any of the parties, had met defendants only when they called on him in October, 1917, and had never met either of complainants until the day before the hearing. He impressed me as telling the truth, and as

being wholly uninformed and indifferent about what any other witness had stated at the hearing.

There is another significant circumstance in connection with what occurred in Judge Herr's office when the papers were signed. Stern & Cohn, the real estate agents, were present, and their version of the matter agrees with complainants'. Stern understood, however, that the papers were not to be delivered until defendants learned that there was no restriction against the height of their contemplated building; while Cohn understood the papers and check were to be delivered as soon as defendants learned there was no regulation of the village that would prevent the erection of a four-story building.

Cohn was the active man in effecting the sale of the property, and he states that, after the check and contracts were signed, complainants took him into one of Judge Herr's rooms and gave him a written agreement to pay the agents a commission of 22 per cent. for effecting the sale. Stern thinks this agreement was given them just before the contract was signed, while Cohn is positive it was given afterwards. If Cohn's version is correct, it may have been that, while he and complainants were in one room and Judge Herr and defendants in another room, some of the remarks it is claimed Judge Herr and defendants made to each other about the papers were actually exchanged; but there is nothing in the proofs to show that such remarks were ever brought to complainants' at

tention.

In view of all the circumstances, the improbability of complainants, without consideration, tying up property worth $9,000 for months under what, according to defendant's statements, amounted to a mere option to purchase or not, as defendants saw fit, and in view of the fact that complainants must have considered the contract closed when they gave the agents a written agreement to pay them a commission for having effected the sale, and particularly in view of defendants' deliberate false testimony about the result of their interview with the inspector of buildings, coupled with the fact that defendants have made no effort to show that there is any law or ordinance that would prevent or interfere with the building they claim they intended to erect, I have reached the conclusion that complainants' version of the matter is the correct and truthful one, and that defendants have merely used the question of a building restriction as a subterfuge, to escape the performance of the contract, possibly because they could not obtain the building loan they desired, or possibly because they realized, as Mr. Schwarze told them, they were taking a big chance in erecting such an expensive apartment house in South Orange. Whatever their reason, I am satisfied defendants have not told the truth, and have not acted in good faith towards complainants.

They permitted complainants to become liable for the payment of the agents' commission. They held complainants' property for several days under contract, after they had decided not to buy it, and never informed complainants that they had decided not to purchase the property. If they held it under any such conditions as they claim, they do not explain why they did not have this condition written in