#### Fred Heller, Appellant, vs. Michael F. McGuin, Appellee.

Opinion filed February 21, 1914.

1. Specific performance — when a contract and lease must be considered together. Where the parties to a contract for the sale of land execute a lease for the purpose of putting the proposed vendee in possession until such time as the proposed vendor shall be able to perfect his title and make the conveyance, the contract and lease must be considered together in determining the rights of the parties.

2. Same — fact that vendor did not have title when contract was made does not defeat specific performance. The fact that .the vendor did not have anything but a tax title to the land at the time he contracted to convey a good merchantable title by a warranty deed and furnish proper evidence of title does not defeat his right to specific performance, where the vendee knew the facts when the contract was made and where the vendor had perfected his title at the time the bill was filed, which was within'the time fixed by the contract for performance.

3. Same — court cannot arbitrarily refuse to specifically enforce contract. While the remedy of specific performance is not strictly a matter of right, yet the court cannot arbitrarily' refuse to grant relief where the facts and circumstances and the rules of equity would justify granting it.

Appeal from the Superior Court of Cook county; the Hon. Marcus Kavanagil, Judge, presiding.

William S. Corbin, for appellant.

Edmund S. Cummings, for appellee.

Mr. Justice Farmer

delivered the opinion of the court:

Appellant, Fred Heller, is the owner of lot 10, block 145, in Maywood, Cook county, Illinois, except a certain railroad right of way which crosses the same. On August 1, 1911, appellant and his wife entered into a contract with Michael F. McGuin, appellee, by the terms of which appellant and his wife agreed to sell, and appellee agreed to buy, *589the above described lot for the agreed sum of $2500. By the terms of the contract appellant and his wife agreed to convey to appellee a good, merchantable title by warranty deed, with release of dower and homestead rights, but subject to all taxes and assessments levied or becoming due subsequent to 1910, and subject also to any party-wall agreements or building or building-line restrictions of record. The contract acknowledged receipt of the payment of $25 by the appellee as earnest money, to be applied on the purchase price when the sale was consummated. Appellee agreed to pay the further sum of $2475 in five days after the title had been examined and found good or accepted by him, provided appellant delivered to him a good and sufficient warranty deed conveying a good and merchantable title. The contract further provided that “a certificate of title issued by the registrar of titles of Cook county, or complete merchantable abstract of title or merchantable copy brought down to the date hereof, or merchantable title guaranty policy, shall be furnished by the vendor within the time mentioned in lease of said lot 10 of even date herewith between the parties hereto.” The contract further provided that upon an abstract or copy being furnished, the vendee should, within ten days after receipt of same, notify the vendor or his agent of objections to the title, if any, and if none, stating ,the abstract to be satisfactory, that if material defects in the title be found and reported and the same be not cured within sixty days from date of notice the contract should at appellee’s option become void and the earnest money be returned, or appellee might elect to take the property as it then was, upon giving notice to the vendor of his intention so to do within ten days after the expiration of the first sixty days. The contract further provided: “Should purchaser fail to perform contract promptly at time and manner herein specified, earnest money shall, at option of vendor, be retained by vendor as liquidated damages, and this contract shall thereupon become *590and be null and void. Time is the essence of the contract and all conditions thereof.” On the same day, August i, 1911, the parties entered into a lease of the premises for a period of three years, with an option-on the part of appellee to renew said lease upon the same terms and conditions and for the same length of time upon giving appellant thirty days’ notice, in writing, of his intention so to do. The rent reserved was $25 monthly, in advance. The lease provided that it should cease and determine at any time after its date, upon conveyance by appellant to appellee of the premises leased in accordance with the contract of sale of even date, it being understood and agreed that said conveyance should be made at any time during the period covered by the lease or an extension thereof, when appellant was able to carry out the said contract of sale by giving to appellee a certificate of title, merchantable abstract or copy, or merchantable guaranty policy, in accordance with the contract of sale. The lease further provided that in case the contract of sale was consummated and conveyance made, all rentals paid prior to the date of the conveyance should apply on the purchase price, and in case the contract was not consummated the lease should remain in effect for the full period covered thereby.

On December 27, 1912, appellant filed a bill in the superior court of Cook county to compel the specific performance of the nontract. The bill set out the contract between appellant and appellee of date of August 1, 1911, and a copy of the lease of same date was attached to and made a part of the bill. The bill alleged that appellant had been in possession of said lot xo since November, 1904, had paid all taxes on the same and had' constructed certain buildings thereon; that he held the lot under a quit-claim deed from Jacob Glos and wife made and recorded in December, 1904, and a quit-claim deed from the village of Maywood made in February, 1905, recorded in July, 1907, and that Glos and the village had tax déeds to the lot from the county *591clerk of Cook county; that prior to December 20, 1912, appellant acquired the fee simple title to the premises by conveyance from the owner of the record title; that on December 20, 1912, appellant tendered to appellee a title guaranty policy executed by the Chicago Title and Trust Company, guaranteeing appellee against defects in appellant’s title' to the property to the amount of $2500, also a general warranty deed executed and acknowledged by appellant and his wife, and served at the same time a written notice upon appellee demanding payment of $2110.53; that appellee had made monthly payments of rent under the lease amounting to $375, which, together with the $25 earnest money paid at the date of the contract, amounted to $400 as a credit of appellee, leaving $2100 due on the contract, to which were added $3.04 general taxes for the year 1911 and $7.49 special assessment which fell due subsequent to the year 1910 and which were paid by appellant, making a tot-al of $2110.53, the amount claimed by appellant as due and owing under the terms of the contract on December 20, 1912, when the warranty deed and guaranty policy were tendered appellee; that appellee refused to make such payment or accept the deed or guaranty policy, but did not at that time raise any question as to the form or sufficiency of either the deed or guaranty policy, and that neither of said instruments was ever examined by appellee or his attorney until after the filing of the bill in this case, to which were attached copies of said instruments as exhibits. The answer of appellee denied all the material allegations of the bill. The cause was heard before the chancellor, and it is not denied that the proo"f fully sustained the bill. A decree was entered May 29, 1913, dismissing the bill for want of equity. To review said decree the record is brought to this court by appeal.

The grounds upon which the specific performance of the contract is resisted are, that the contract is lacking in mutuality; that appellant did not bind himself to procure a *592merchantable title but only agreed to convey it when he did procure such title, and that as appellant was not the owner of the record title to the land at the time the contract was made, he could not, by afterwards acquiring title, enforce the performance of the agreement of appellee to buy.

The contract and lease must be considered together in construing and determining the rights of the parties. So considering and construing them, it appears that appellant desired to sell, and appellee desired to purchase, the property. Appellant was in possession of it, and had been for several years, under conveyances from the holders of tax titles but did not have the record title, which was known to the appellee, who was unwilling to accept and pay for the property until appellant could make him a good title. A lease was therefore agreed upon between the parties,, by which appellee leased the premises for three years from August i, 1911, at a certain rent reserved, and with the right to renew the lease for another three years. The contract of sale is an unconditional agreement of appellant to sell, and of appellee to buy, the property. Appellant bound himself to convey a good and merchantable title by warranty deed and to furnish appellee a certificate of title issued by the registrar of titles of Cook county, or a merchantable abstract of title or merchantable copy, .or merchantable title guaranty policy, within the time fixed by the lease. By the lease appellant was given the period covered by it to make the conveyance, and when made the lease was to cease and determine and all sums paid as rent were to be applied on the purchase price. The contract was essentially one of a party obligating himself, within a ctertain time, to sell property he did not own at the time he made the contract, but the fact that at the time it was made appellant was not in a position to perform it is not conclusive that it was not capable of enforcement when he did, within the time fixed, become able to perform. In Mason v. Caldwell, 5 Gilm. 196, it was held a court of equity may enforce the specific *593performance of a contract for the sale of land notwithstanding the vendor had no title to the land at the time the contract was made, if he can make good title at the time of the decree. This rule was quoted and adhered to in Gibson v. Brown, 214 Ill. 330. In that case the vendors did not own part of the land they agreed to convey, at the time they made the contract. They acquired the title to- it before the expiration of the time within which they agreed to convey it, and the court held they were entitled to enforce the contract against the purchaser. The question was again before this court in Cohen v. Segal, 253 Ill. 34. The court cited Mason v. Caldwell, supra, Gibsom v. Brown, supra, and Maryland Construction Co. v. Kuper, 90 Md. 540, (the latter a leading case on the subject,) and adhered to the law as announced in those cases. In the Maryland case it was said that when the vendor has acted in good faith, relief will be granted him if he is ready to furnish-a clear title at the time of the decree, provided the delay has not prejudiced the purchaser. Here there was no change in the property nor in the circumstances of the parties which would make it any more inequitable to enforce performance of the contract at the time the performance was sought than at the time the contract was made. Appellant, well within the time agreed upon between him and appellee, was able, and offered, to perform the agreement by making the conveyance. The remedy by specific performance is not strictly a matter of right but is wi„thin sound judicial discretion. Courts may not, however, arbitrarily refuse to grant such relief under circumstances where the facts and the rules of equity justify it.

In our opinion the appellant was entitled to the relief prayed, and the decree of the superior court is reversed and the cause remanded, with directions to grant the prayer of the bill.

Reversed and remanded, zvith directions.