Case ID: ny-super-ct_9/html/0020-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court. Campbell, Justice.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Carr v. Roach.
    (Before Campbell, Bosworth, and Emmet, J.J.)
    December 10, 1862;
    February 26, 1853.
    A covenant in a contract for the sale of lands that the premises “shall he free and clear from encumbrances,” if a conveyance is thereafter delivered to, and accepted by the purchaser, is merged in the deed.
    If an incumbrance is thereafter found to exist, which the purchaser is forced to satisfy, his sole remedy is against his grantor upon the covenant in the deed.
    These rules apply, even where the agreement to sell the lands is made by one person, and the deed is given by another, and when the agreement contains a provision that the consideration is not to be paid until “ it can be ascertained that the title to the premises is good, and unencumbered.”
    Such a provision makes it the duty of the purchaser to examine the title before he accepts the conveyance, and is evidence of the understanding of the parties that the delivery and acceptance of the deed covenanted to he given, would be a fulfilment and discharge of the agreement.
    Upon these grounds a verdict taken for the plaintiff, subject to the opinion of the court, set aside, and a verdict and judgment thereon entered for the defendants.
    
      The action was brought to recover damages for the breach of a covenant in an agreement between the parties for the sale and conveyance of a house and lot in the city of New York. It was tried before Mr. Justice Sandford and a jury, in May, 1851.
    The following are the material facts proved on the trial— The plaintiff and defendant, on the 10th of September, 1851, signed and sealed a memorandum of agreement whereby the defendant agreed to sell and the plaintiff to buy the premises known as Ho. 34 West 19 th street in the City of New York for the sum of $14,009- The property to be conveyed subject to a mortgage, and the balance to be paid by plaintiff “ as soon as it can be ascertained that the title to said premises is good and unencumbered except as above stated, and upon a production to him of a good and satisfactory warranty deed executed in due form of law.” The defendant on his part covenanted and agreed “ that the said premises shall be free and clear from all encumbrances save the said mortgage, and that he will procure and deliver to the said party of the second part a good and satisfactory warranty deed for such premises subject as aforesaid.”
    On the 15th day of Hovember, 1851, a deed of the premises was executed by one John Lovejoy to the plaintiff’s wife, and which deed was dated on the 4th of June, 1851, and contained no covenant except against grantor’s own acts, that he had not done or suffered anything to be done by which the premises were or could be encumbered. The legal title was in Lovejoy. The defendant acted as agent for the firm of Henry and Meyer, who were the equitable owners. The deed was delivered and accepted by Carr without objection.
    In July, 1851, after the date, but before the delivery of this deed, a tax was imposed upon the premises, which the plaintiff paid, and alleges he was compelled to pay.
    He claimed to be entitled to recover as damages the amount so paid with interest. When the testimony was closed, there being no disputed facts, the judge ordered a verdict to be entered for the plaintiff for $129.34, the damages claimed, subject to the opinion of the court upon a case to be argued at general term, with the usual liberty to turn the case into a special verdict or bill of exceptions.
    
      J. E. Burrill, for plaintiff.
    I. The agreement on which the action is founded, was not discharged by the execution of the deed. 1. The covenant made by the defendant, that the premises shall be free and clear from all encumbrances, is a personal independent covenant, and distinct from his covenant to procure a deed for the property. 2. The defendant was not the owner of the property, as the parties well knew, and his covenant was an additional security to the plaintiff. 3. The deed was not executed by the defendant, nor has he executed any instrument subsequent to the agreement. The defendant is not liable on the deed, but only on the agreement. 4. The deed was not executed to the plaintiff. He has no individual right of action from the deed. 5. The deed contains no covenant against encumbrances— which shows that the covenant of the defendant was not intended to be discharged. (Bogart v. Buckhalter, 1 Denio, 175.)
    II. The plaintiff was not a stranger, nor the payment by him voluntary, but it was in law compulsory. 1. Plaintiff, by the agreement, assumed the payment of the mortgage of $8,600, and the existence of prior encumbrances increased his responsibility and risk. 2. Taxes, though imposed subsequently to a mortgage, have a priority of lien, and the mortgagee on paying them, is entitled to recover them from the mortgagor, or the party representing him. 3. The plaintiff paid the consideration for the deed, and whether the deed was executed to his wife as a gift or as a purchase, it was done at the request of the plaintiff and under the assumption that it was unencumbered, and he had a right to have his intentions or his agreement carried out or fulfilled. 4. The plaintiff, as husband of the grantee, had sufficient interest in the property to pay off an encumbrance. He is entitled to judgment upon the verdict, with costs. .
    
      J. Graham, for defendant.
    
      I. The agreement for the sale of the property was a memorandum of what the parties were to do. It stipulated for a specific kind and time of execution. If not executed as required, it was then broken; but if the plaintiff chose to receive a different kind of performance as and in execution of it, the defendant’s covenant was discharged. To have entitled himself to sue the defendant upon his original covenant, he should have put him m the position of refusing a strict performance of it—i. e. in giving such a deed as was required.
    II. The agreement was merged in the execution of the deed* to the plaintiff’s wife. Such a departure from the original platform, not only as to the person of the grantee or vendee, bnt as to the form or kind of conveyance, operated its entire destruction. It was a complete waiver of it.
    III. Even if the agreement could be made the basis of the present action, it imposed a duty upon the plaintiff of ascertaining whether the property was clear and .unencumbered; and any oversight on his part was at his risk. The whole agreement is to be looked at, and its intention (which was plainly this) is to be carried out.
    The defendant agrees, “ as soon as it can be ascertained that the title, &c., is good and unencumbered, &c., and upon production to him (the plaintiff) of a good and satisfactory warranty deed,” &c. The plaintiff stipulates for the right to judge of the sufficiency of the title, aliunde the deed, and also of the sufficiency of the deed in form, and this before he is under an obligation to receive the property.
    It is plain the plaintiff intended to have something more than the covenant of the defendant, that the title should be good. Suppose the title to have been bad, and still a warranty deed to have been tendered, would the plaintiff have been bound to receive it, and pay the consideration ? How, then, can he hold the defendant liable on the original agreement, when, by taking a deed at all, he pronounces the title to be good and satisfactory ?—or satisfactory—that is enough.
    IV. If the plaintiff is correct in his position, he has got more than the agreement called for; for, according to him, the defendant is liable to him under the covenants in the agreement, and the grantor in the deed (Lovejoy) is liable to his wife on the covenant in that instrument.
    We say that by taking the deed irom Lovejoy, every covenant in a warranty deed not in his was waived, and that his personal responsibility was substituted in the place of the defendant’s.
    V. The plaintiff, in paying the alleged tax, did so in his own wrong. He was not the owner of the property, and his act was purely voluntary. He had no legal interest of any description to protect.
    For cases where a party has been allowed to recover money paid under coercion, see De Lavergne v. Morris, 7 Johns. 358. Hall v. Dean, 13 Johns. 105. Stanard v. Eldridge, 16 Johns. 254.
   By the Court. Campbell, Justice.

In Houghly v. Lewis, 10 John. 297, it was said by Mr. Justice Thompson, in delivering the opinion of the Court, that “ parties may no doubt enter into covenants collateral to the deed, or cases may be supposed when the deed would be deemed only a part execution of the contract, if the provisions in the two instruments clearly manifested such to have been the intention of the parties.” And the same learned judge had before said, in Harris v. Barker (3 John. R. 509), that “ the deed cannot be considered as an execution of the contract in part only. If an execution at all, it must be of the whole contract, and the articles of agreement are a nullityand this was the doctrine held by him in HoughI/j v. Lewis. Indeed the general principle is well settled that all negotiations between the parties prior to or contemporaneous with the execution of a deed are merged in it (Patterson and others v. Hull and others, 9 Cowen, 747). I am inclined to think that the true distinction was taken by Justice Welles, in Bull v. Willard, 9 Barbour, 641, that in all cases the execution and delivery of the deed operate as a merger of the contract on the part of the grantor except where the covenants in the contract are collateral and independent, and not such as look to the title, possession, quantity, or emblements of the land.

In this case, as in Bull v. Willard, there was a tax on the property—a lien on the premises to be conveyed. It does not appear that the defendant had any knowledge of it. He had agreed to procure and deliver a good and satisfactory warranty deed. He procured and delivered a deed containing a covenant against the grantor’s own acts, and it was accepted by the plaintiff. It appears to have been satisfactory to him, as no objection was made by him or his attorney who was present at the time of the delivery of the deed.

The counsel for the plaintiff relied upon the case of Bogart v. Buckhalter (1 Denio, 125). But that case simply determines that a conveyance by the vendor does not operate to relieve the vendee from his covenants contained in the agreement. The performance of a contract by one party to it is not in judgment of law a performance by the other. The general principle then deducible from all the cases in this State would seem to be this, that where there is a contract for the conveyance of land and a deed is subsequently executed and accepted by the vendee, it operates, so far as the vendor is concerned, as an execution and merger of the contract, except there may be covenants in the contract which are collateral, and not connected with the title, possession, or quantity of the land. But on the other hand, the acceptance of the conveyance does not discharge the vendee from his covenants in the contract. He may still be liable as in the case of Bogart v. Buckhalter, to erect a brick house on the lot which he had stipulated to do by the terms of his agreement to purchase. ' He might still be compelled to pay the purchase money, if it remained in whole or in part unpaid after the execution of the deed, and this according to the amount agreed upon in the contract. In the case before us there is no hardship in the application of the rule. The defendant, it seems, acted as agent. He was to procure and deliver a deed. The plaintiff was to pay as soon as it “ can be ascertained that the title to said premises is good and unencumbered.” The contract contemplated that the plaintiff should examine and ascertain whether the title was good, and whether the premises were unencumbered. The lien in question was a recent tax, and its existence could easily have been ascertained. It might be a great hardship under such circumstances to hold the defendant liable upon his contract when a deed has been given and accepted without objection, and when the agent may have settled and paid over the proceeds to his principal. It is unnecessary under this view to consider whether the plaintiff having himself no title to the premises, the same having been conveyed to his wife, can bring an action on the contract, he not having been compelled to pay the same.

We think that the. verdict for the plaintiff must be set aside, and a verdict and judgment thereon be entered for the defendant with costs.