Case ID: ohio-st_19/html/0384-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George W. Manahan v. Isaac Smith.
    B. and S., on sufficient consideration, made the following agreement and guaranty to and with M.:
    “ I hereby agree to cancel all incumbrances (if any) in six months from this date, on a certain piece of land containing one hundred and sixty acres, this day sold to George W. Manaban, situate in the county of Steuben, State of Indiana, James township, except taxes.”
    (Signed) “B.W. Breckenridge.’”
    “ I hereby guarantee that the above undertaking will be complied with.” (Signed) “ Isaac Smith."
    This agreement was subsequent to the sale and conveyance of the premises to M. An attachment had been previously levied, on the premises so sold, by creditors of B., and was at the time of the sale a subsisting lien thereon. B. denied the validity of his creditors’ claims, and took upon himself the defence of the pending suit in attachment in Indiana. Bailing in his defence, he permitted the land to be sold by order of court, for the satisfaction of the judgment 'in attachment, without notice to M., who resided in Ohio, and did not hear of the sale till several months thereafter.
    In an action by M. against S. on his guaranty, — Meld: That the measure of damages which the plaintiff was entitled to recover, under the circumstances, was the value of the land at the time title thereto was lost hy the plaintiff, and interest thereon till judgment.
    Error to the district court of Huron county.
    The record in this case shows the following state of facts: In September, 1856, the plaintiff in error exchanged a house and lot in Monroeville, Huron county, Ohio, with one F. W. Breckenridge, for 160 acres of land owned by the latter in Steuben county, Indiana. The parties mutually executed to each other deeds of conveyance for the premises respectively exchanged by them, with the usual covenants of warranty, and against incumbrances. On the same day, and very shortly after the execution of the deeds, the plaintiff was informed that an attachment had been previously levied at the suit of creditors of Breckenridge, and was then a subsisting lien upon the Indiana land. The plaintiff thereupon sought Breckenridge, told him what he had learned, and offering to reconvey the land to Breckenridge, demanded a rescission of the contract of exchange, and a reconveyance of the Monroeville property. Breckenridge denied the existence of the supposed lien or incumbrance, and refused to rescind or reconvey, • but offered to give him, by way of security in the premises, the guaranty of Isaac Smith, defendant in error. This offer was accepted, and thereupon Breckenridge and Smith executed and delivered to the plaintiff the following agreement and guaranty:
    “ I hereby agree to cancel all incumbrances (if any), in six months from this date, on a certain piece of land containing 160 acres, this day sold to G-eorge W. Manahan, situate in the county of Steuben, State of Indiana, James township, except taxes.” (Signed) “ F. W. Breckenridge.”
    “ I hereby guarantee that the above undertaking will be complied with.” (Signed) “ Isaac Smith.”
    Suit was brought by the plaintiff, in the court of common pleas, against both Breckenridge and Smith, upon this agreement and guaranty, alleging an entire failure on the part of. Breckenridge to comply with-its terms, whereby the plaintiff wholly lost title to the Indiana lands, for which he sought to recover damages. In this action he recovered, in February, 1861, a joint judgment against both defendants for the sum of $1,952.42. The defendants had answered separately, and Smith alone filed the proper undertaking for a second trial of his part of the case. Upon the final trial by a jury, of the issues joined between the present parties, the jury found for the plaintiff, but under the instructions of the court, given upon the trial, they assessed his damages at $612.32 only.
    From a bill of'exceptions taken on the trial, it appears that the plaintiff, upon the trial, offered evidence tending to prove the facts hereinbefore stated, and tending to prove that an attachment had been regularly levied upon the Indiana land, by creditors of Breckenridge, shortly before the conveyance thereof to the plaintiff; and that judgment was ■subsequently rendered against Breckenridge, in the attachment suit, and that the lands were, by order of the Indiana court, sold and conveyed to the purchaser for the satisfaction of the judgment; that Breckenridge, with the knowledge and consent of Smith, took upon himself the defence of the suit dn attachment against the Indiana land; that whilst the proceedings in attachment were pending, he was informed by 'Smith that he had seen th.e attaching creditors, Murphy & Co., and that they had requested him to pay off their judgment ; that he wished he had done so, but Breckenridge had •forbidden his doing it; that he, the plaintiff, did not hear of the sale of the Indiana land until some months after it was ■•sold under the attachment; and that at the time the exchange was made, in the fall of 1856, the Indiana land was worth $1600. The plaintiff also offered to prove that the Rouse and lot in Monroeville, at the time of the exchange, were worth $1600. But the defendant objected to evidence of this character, and his objection was sustained by1 the •court.
    The court refused to instruct the jury upon several matters .-as prayed for by plaintiff; but did instruct them, among other things, that if the agreement and guaranty sued upon was given under the circumstances which have been stated, then “ it is obligatory upon the parties, and if, at the time the paper was given, the Indiana land had been attached, as claimed by plaintiff, such an attachment constituted an incumbrance which Breebenridge and Smith were bound to remove. If they did not remove it, according to the terms of this contract, the plaintiff is entitled to recover. If you, therefore, find, under the directions that I have given you, that the plaintiff is entitled to recover, you will find from the pleadings and evidence the amount of the lien upqn the Indiana land at the time of the exchange, and interest from the date of the judgment, and that will be your verdict.”
    The court also charged, “ that the testimony in respect to the value of the Indiana land was competent only to show that the value of the said land was equal to, or greater than, the amount of the lien at the time of the exchange.”
    To this charge the plaintiff excepted, and a verdict having been returned in accordance therewith, the plaintiff moved to set the same aside, and for a new trial, on the ground, among others, of error in the charge of the court. This motion was overruled, and judgment entered on the verdict; and this judgment was subsequently affirmed upon eiuor, by the district court. The plaixxtiff now seeks to reverse this judgment of affirmance, on the ground, among others, that' the court of common pleas ex-red in its charge to the jury, in regard to the measure of damages px-oper to be assessed, upon a recovery by the plaintiff.
    
      S. T. Worcester for plaintiff in error:
    1. Immediately after the exchange of deeds, and before the rights of any third pai’ty could have intervened, Manahan was informed that the attachment lien had been fastened upon the land he had bought, and the sequel proved this information to be cox’rect. The discovery of this fact gave him the right to x’escind, if he chose to do so, and to require a reconveyance. The right of rescission is not limited ta fraud or concealment amounting to fraud. Bixt mutual 
      
      mistakes of the parties as to matters essential to the contract, or affecting the property, without the taint of fraud, is as valid and as frequent ground for rescission as absolute fraud, or purposed concealment. 1 Hilliard's Vendors, 315, and cases cited; 2 id. 147, sec. 13; 2 Parsons, 191, 192; Kelley v. Remington, 7 Ohio, pt. 2, 103; Reed v. Burns, 13 Ohio St. 57; Lewis v. White, 16 Ohio St. 444; Fry, Spec. Performance, 308.
    Having the right to rescind, Manahan parted with that right, and received in place of it, of Breckenridge and Smith, their agreement of indemnity.
    2. The rule of damages, applicable to the facts, I claim to be the value of the consideration paid for the land to which the title failed, and that consideration was the house and lot in Monroeville. Lloyd v. Quimby, 5 Ohio St. 265; Rawle on Covenants, pp. 141-146, 153; Sedgwick on Damages, pp. 180, 182-184, 185; 2 Parsons, pp. 502, 503; 10 Ohio, 331; 17 Ohio, 66, 71; Cady v. Allen, 22 Barb. 308; Wade v. Comstock, 11 Ohio St. 71-82; Winslow v. McCall, 32 Barb. 241.
    The contract of indemnity was intended by the parties to be, and in fact was, a substitute for the covenants in the deed. It was not an agreement to pay to the plaintiff, or to Murphy & Co., a certain sum of money, but to “ cancel all incumbrances, if any,” on the Indiana land. Manahan was under no obligations to advance to Murphy & Go., the amount of their judgment. He had already paid Breckenridge and Smith to do that.
    
      Homer Goodwin for defendant in error:
    1. Manahan, after the delivery of the deeds, had no right to rescind the contract. Hus protection against the contingency of the very thing happening which it is claimed did happen, was provided for in the deed he received. It was an executed contract. There was no fraud, no concealment, and there is no pretence of any. Both parties acted in good fa/ith / the transaction was closed. Could the plaintiff back out of such a contract ? Breckenridge was not in default; he had done nothing wrong up to this time. There was no consideration moving from Manahan. Breckenridge was under no obligation to give him this security. Manahan waived no right to a rescission, for he had no such right. See Hill & wife v. Butler, 6 Ohio St. 217; 3 Phillips' Ev. 361, note 950; Miller v. Watson, 7 Cowen, 195.
    2. The measure of damages upon the contract, if there is any right to recover at all, was the amount of the lien upon the Indiana land at the time of the exchange, and interest.
    The rule is, that for the mere breach of an executory contract for the payment of money, the measure of damages is the money agreed to be paid, and the interest thereon; and to this rule, where the action is founded only upon such a contract, there are no exceptions.
    Such is the character of the present contract, as against Smith. This was not a covenant against incumbrances. It was no covenant that this land was free from incumbrances, and good to anybody else who should own the land. Foot v. Burnet, 10 Ohio, 333; Bricker v. Bricker, 11 Ohio St. 246. In the case at bar, the obligation is a mere personal obligation to pay. It did not run with the land. It has nothing to do with the leund. Smith was in no way connected with the land, either as grantor or grantee. “ I hereby agree to cancel all incumbrances (if any) in six months,” etc. This means that Breckenridge will pay it off. A contract to pay, and no more. If he did not do it in six months, the plaintiff was not bound to wait longer. He could then remove it himself, or he could sue the contract, collect the money, and then pay it. See Auburn City Bank v. Leonard, 40 Barb. 119; Wilson v. Stilwell, 9 Ohio St. 470. A contract to pay is not a contract to indemnify. In this case the amount to Toe paid is the amount of the Murphy judgment. It is not a contract to indemnify against all the remote consequences of not paying that judgment. The rule of damages from a failure to pay money is the amount of money to be paid and interest.
    If Breckenridge delayed until the land was sold, Manahan . need not have delayed. He could have paid off the judgment- and saved his land, and then recovered the amount from the defendants. See Sedgwick on Damages, p. 189; Sethbridge v. Mytton, 6 Barn. & Ad. 772; Schooley v. Stoops, 4 Ind. 130; Tate v. Bove, 9 Ind. 13; Johnson v. Britton, 23 Ind. 105.
    But even if this were an ordinary covenant against incumbrances, the measure of damageswould.be the amount of the incumbrance. Foot v. Burnet, 10 Ohio, 317; Greene v. Tallman, 20 N. Y. 191, 195; Nyce's Ex'rs v. Oberts, 17 Ohio, 71; Delavergne v. Norris, 7 Johns. 358; Hull v. Dean, 13 Johns. 105; Winslow v. McCall, 32 Barb. 248, 249.
   Scott, J.

We cannot agree with counsel for defendant in error, that the contract sued upon in this case was void for want of consideration. Whether, under the circumstances of this case, the- plaintiff had or had not a right to rescind the contract of exchange, when he discovered the existence of an incumbrance, unknown at the time of exchange, he was in good faith claiming such right, and undoubtedly had a right to bring suit immediately against his grantor upon the covenants in his deed of conveyance. His forbearance to assert or attempt to exercise such right for six months, and his giving Breckenridge that length of time to remove incumbrances, was clearly a sufficient consideration to support the contract upon which suit was brought.

Passing, then, to the main question in the case, as to the proper measure of damages in the action, we think it unnecessary to inquire what the rule as to damages would have been, had the action been brought upon the covenants of warranty, or of title, in the deed of conveyance executed to the plaintiff by Breckenridge.

The action was not brought upon any covenants made by the grantor concurrently with the grant, in respect to the title of the land granted and conveyed; and which would have run with the land to thé assignees of the grantee; but it was brought upon a contract purely personal, executory in its character, and entered into after thé title had been conveyed to the plaintiff, by the terms of which the defendant Smith, for sufficient consideration, guaranteed that Breckenridge would, within six months, cancel (that is, extinguish, or procure the discharge of) all liens upon certain premises which had been previously conveyed t© the plaintiff. This is not a covenant as to the state of the title, but an agreement to do certain acts, for the plaintiff’s benefit, within a specified time. For the breach of such an executory contract, we know of no reason why the plaintiff should not be allowed to recover such damages as are the necessary, natural, and proximate result of the breach complained of. Such is certainly the general rule, as to the measure of damages; and it would seem to rest upon principles of obvious justice. Under the state of facts which the evidence in the case tended to show, the plaintiff was guilty of no laches in respect to the lien or incumbrance through which he lost title to the Indiana land. He was not bound to take the risk of paying it off. Breckenridge denied the existence of any valid lien or incumbrance; the land lay in another State, remote from the plaintiff, and Breckenridge refusing to allow his creditor’s claim to be paid, undertook to defend against it. Failing in his defence, he permitted the land to be sold, without giving notice to the plaintiff, and without giving him any opportunity for discharging the incumbrance. This was a direct breach of the contract, of which the defendant had guaranteed the performance. As a necessary and direct consequence, the plaintiff lost the Indiana land; and its value when title to it was thus lost, with interest thereon from that time, was, as we think, the measure of damages to which he was entitled. It follows that the court of common pleas erred in the instructions given upon that subject to the jury, and in overruling the motion for a new trial.

As to the other errors assigned, we find none which we think would have required a reversal of the judgment.

Judgment of the district court and of the common pleas reversed, and canse remanded to the common pleas for a new trial.

Beinkebhoff, C.J., and Welch, White, and Day, JJ., concurred.