#### Garrett S. Mott, plaintiff and appellant, *vs.*Israel Coddington *et al.*defendants and respondents.

1. A cause of action for damages for injuries to real property By the negligence of the defendant, is necessarily local; and the courts of this state have not jurisdiction of such an action relating to real property without the state.

2. But a cause of action for Breach of a covenant to convey real property is • transitory; and if the courts of this state obtain jurisdiction of the parties, they can entertain jurisdiction of the action.

3. A stipulation either in a deed of real property, or in a separate instrument executed by the vendor and' purchaser, and not merged in the deed, that the vendor shall retain possession for a time, and then shall deliver possession to the purchaser, does not create the relation of landlord and tenant, between them during such period. The premises are meanwhile at the risk of the purchaser; and the vendor is not liable to him, upon such contract, for a loss By fire Before the delivery of possession.

4. Even were it otherwise, the purchaser’s acceptance of the deed, after the fire, with knowledge of the loss, would extinguish any claim to indemnity.

(Before Moncrief; Robertson and Monell, JJ.)

Heard October 19, 1863;

decided November 14, 1863.

This was an appeal from an order, denying a motion made by the plaintiff, upon the judge’s minutes, for a new trial upon the exceptions taken at the trial. '

The action was to recover damages from the defendants, who Were Israel Coddington and John Herbert, for the loss by fire of a mill and machinery, located at South Bound Brook, New Jersey.

In June, 1861, the plaintiff and defendants entered into an agreement, whereby the defendants agreed to convey to the *268plaintiff certain premises at South Bound Brook, upon which was situated the mill in question. In consideration of this conveyance, the plaintiff agreed to convey to the defendants certain premises in the city of Brooklyn. The deeds were to be exchanged at the office of Tracy, Wait *'&*Olmstead in the city of New York, “on or before the 22d day of July, 1861.” It was further agreed that the defendants should retain possession of the real estate at Bound Brook, to be conveyed by them as aforesaid, *until the*19í7¿ *day. of September,*1861, *when they should deliver possession thereof to the plaintiff.*The deed for the Bound Brook property was executed on the 26th of June, and for the Brooklyn property on the 16th of July; but the deeds were not exchanged until some time afterwards, being both left in the hands of Tracy, Wait *&*Olmstead until certain liens on the Brooklyn property could be removed.

While the deeds remained thus in escrow, and on the 13th of August, 1861, the defendants then being in possession, under the agreement between the parties, the mill, machinery, and out-buildings were destroyed by fire.' The deeds were exchanged oh the 16th of August, after the fire, at which time the plaintiff gave the defendants notice in writing that he should hold them responsible in damages for the loss of the mill, and requiring them to replace the same prior to the 19th of September ensuing.

The deed from the defendants to the plaintiff of the mill property contained this clause, “subject, nevertheless, to the possession of said premises by said Coddington and Herbert, until the 22d day of September, 1861, when they agree to deliver possession of the same to the said party of the second part, or his assigns.”

The plaintiff claimed in his complaint to recover, *first,*damages for a breach of the agreement between the parties, in not delivering possession of the mill, &c. on the 19th of September, 1861, and *second,*damages for the loss of the mill, &c. caused by the negligence of the defendants while in possession thereof under said agreement.

*269The action was tried, before Mr. Justice Moítceief and a jury, on the 11th of March, 1863.

At the close of the plaintiff's evidence the counsel for the defendants moved to dismiss the complaint on the following grounds:

1. That the court has no jurisdiction, this action being for injury to real estate in the state of Yew Jersey.

2. The plaintiff must show that he was seized of the property when the injury happened, and that the defendants were in possession as tenants at the time of the fire.

3. When the plaintiff áccepted the deed, after the affair occurred, his contract ceased to be the subject of an action, there being a covenant in the contract to keep the buildings there.

4. There was no proof of negligence being the proximate cause of the fire.

Whereupon the conrt dismissed the complaint, and the plaintiff excepted.

A motion for a new trial having been denied at special term, the plaintiff appealed from the order.

*A. R. Dyett,*for the plaintiff, appellant.

I. As to the first ground of nonsuit, this court has jurisdiction of this action. It is not an action local to Yew Jersey. This action is founded and based on the contract, which was made in this city, and was to be performed here. The fact that in one aspect of the cause of action one of its elements is negligence, does none the less make it an action on the contract, which was necessary as the basis of the action. (4 *Moo. & S.*249. 3 *Kernan,*587. 6 *Abb.*165, *and cases cited in the opinion. Strange,*614. 1 *Wallace, Jr.*275, *and cases at p.*282. *Story’s Conflict of Laws,*§§ 35, 555.)

Besides, the cause of action in the complaint, "in one aspect, is *entirely*based on the non-performance of the contract.

II. As to the second and third grounds of nonsuit, which will be considered together :

1. The action was brought on the *contract*and *not*on the *270*deed. Both are under seal.*The clause in the contract upon which the action is brought is an independent covenant, and by its terms is to remain in force *after the delivery of*the deeds. The delivery and acceptance of the deeds on both sides, did not, therefore, merge or affect the covenant referred to, nor was it so merged or affected by the clause in the deed, that the conveyance was made subject to the defendant’s right of possession.

2. The last clause in that deed was drawn and executed before the fire, and was necessary to limit the covenants in the deed, and was rather a confirmation of the contract than a merger of it. When this cause of action arose, the defendants were in possession *under the contract alone.*

3. Upon the execution and delivery of the agreement, the plaintiff became the equitable owner of the lands and mill, machinery, *&c.*and the defendants held them merely as trustees. (1st *Sugden on Vendors,*190.) When the plaintiff conveyed his lands to the defendants, this equitable title of his became, if possible, stronger and of greater force than before.

4. But whether the plaintiff waived the cause of action, involves a question of intent, and that *intent*was a question of fact for the- jury. The notice referred to, which was given

in writing at the time, showed beyond all question, there was *no intent*to waive the cause of action. But the notice just referred to, as matter of law, saved the cause of action from being waived by the plaintiff or merged in the deed. *(Moore*v. *Westervelt,*1 *Bosw. 366.)*

*5.*The plaintiff could not have sued *until after the 19th of September.*The defendants had a *right*to retain possession until that time, and an action would have been premature if brought before. *Non constat,*but the defendants would rebuild, and on the 19th September deliver us possession of the premises in good order and condition. They had a right to do so. The plaintiff could not refuse to accept the *deed*of the premises. He did *not*accept *possession,*because the defendants would not *then*deliver possession, which they were not *271bound to do until September following. All the plaintiff could do was to give the notice he did.

The deed of the Bound Brook property was acknowledged, and left to be delivered to the plaintiff, some weeks prior to the fire. If it did not then take effect, all the plaintiff did was to comply with the condition upon which it was to be delivered to him, in order to render the delivery absolute.

Such deed being delivered for the purpose of vesting title in the lands conveyed to the plaintiff, and sustaining his rights in and to the same and his present cause of action, even if it were in escrow, took effect from the time of such delivery to Tracy, Wait & Olmsted. (18 *John.*544. 13 *id.*285. 4 *id.*230. *Shep. Touch.*58, 59. *Odell*v. Wake, 3 *Campb.*394. 1 *John. Cases,*81. 1 *John. Ch.*288, 296, 304. 2 *Mass. Rep.*447. *Cruise’s Dig. tit.*32, *ch.*2, 86 *to*93. 9 *id.*397. 3 *Reports,*28, 29, 30.)

7. It clearly follows, therefore, that the acceptance of the deed by the plaintiff, after the fire, was no waiver of the cause of action upon which he seeks to recover, nor was that cause of action merged in the deed. (1 *Bosw.*366. 14 *Eng. L. and Eq.*320.)

III. As to the third ground of nonsuit, there was abundant evidence to go to the jury on the question of negligence, *vide supra.*

*Charles Tracy,*for the defendants, respondents.

I. The court has no jurisdiction of the action, if it be for an injury to real estate in New Jersey. (3 *Black. Com.*294. 1 *Burrill’s Prac.*123, *notes a. and b.*2 *R. S.*409, § 2. *Watts*v. *Kinney,*6 *Hill,*82. *Ring*v. *McCoun,*3 *Sandf.*524. *Code of Pro.*§§ 33, 123, 124.)

II. If this is an action upon contract, the plaintiff has clearly no right to recover. *(Masters*v. *Stratton,*7 *Hill,*101, 104. *Wilbur*v. *Brown,*3 *Denio,*356, 362.

1. The parties were mere vendor and vendee, by an executory contract. *(Gardiner*v. *Heart,*1 *Comst.*528.)

2. Even a landlord has no right of action against his tenant, *272for buildings burned by negligence of the tenant, unless there is an express contract of the tenant to sustain it. (3 *Black. Com.*229, *note*4. *Countess of Shrewsbury's case,*5 *Coke’s Rep.*13. *The Countess of Salop*v. *Crompton, Croke Eliz.*,777, 784. *S. C. Co. Litt.*§ 71. *Stat. Gloucester,*6 *E.*5, *C.*5.)

3. The vendee had an insurable interest, and if he did not take out a policy of insurance, he stood as his own insurer. (1 *Sugden on Vendors, 10th Eng. ed.*467-469, *ch. 6,*§ 2. *Paine*v. *Meller,*6 *Vesey,*349, 353. *Dart on Vendors,*117. *Gates*v. *Madison Co. Mutual Insurance Co.,*1 *Selden,*469.)

4. At the time of the fire the plaintiff had not perfected any right to the Bound Brook property. He had not cleared the title of the Brooklyn property from taxes, &c. until after the fire. He, therefore, had neither a legal nor a perfected equitable title to the mills.

5. Neither the contract for the exchange, nor the deed, contains any express agreement to insure the buildings, or to preserve or renew them.

6. The voluntary acceptance of the deed after the fire occurred, was a waiver of all the- claims to restore or renew the buildings, and the plaintiff is estopped from maintaining this action. *(Addison on Contracts,*172. *Co. Litt.*352 *a.)*

7. The contract was merged in the deed, and became extinct. *(Jackson*v. *Camp,*1 *Cowen,*605. *Haughtaling*v. *Lewis,*10 *John.*297. *Howes*v. *Barker,*3 *id.*506. *Witbeck*v. *Waine,*16 *N. Y. Rep.*532. *Morris*v. *Whitcher,*20 *id.*41.)

III. It was not proved that the fire was caused by negligence of the defendants. (1 *Parsons on Contracts,*603. *Edwards on Bailments,*312. *Stephens*v. *Vroman,*18 *Barb.*250, 257. 1 *Green. Ev.*§§ 200, 209. *Hayne*v. *Rogers,*9 *Barn. & Cress.*577, 587. *Crain*v. *Petrie,*6 *Hill,*522, 524. *Armstrong*v. *Percy,*5 *Wend.*535, 538. 1 *Saund. Pl. and Ev.*344. 2 *Green. Ev.*§ 256. *Butler*v. *Kent,*19 *John.*223, 228.)

By the Court, Monell, J.

The second cause of action stated in the plaintiff’s complaint, namely, the injury ocoa^ *273sioned by the *negligent*act of the defendants while in possession of the premises, this court, clearly, has not jurisdiction to try. This cause of action is for an injury to real property; is local in its nature, and must be tried in the state where, the real property is situated.

The distinction between local and transitory actions, as stated by Chief Justice Marshall, *(Livingstone*v. *Jefferson, 1 Brockenb. Rep.*203,) is, that actions are to be deemed transitory where the transactions upon which they were founded might have taken place any where ; but were local, when the cause of action was in its nature necessarily local. (*Watts*v. *Kinney,*6 *Hill,*82.) Injuries caused to real property by the negligent act of another, like permissive waste, is necessarily local.

If, however, the action for a *breach of the agreement*entered into between the parties, can be sustained, I can see no jurisdictional difficulty in the way. That cause of action is for a breach of a covenant contained in ■ a contract; and the action is necessarily *upon*the contract; and we having obtained jurisdiction over the parties, can entertain jurisdiction of the cause of action. Actions upon contract have always been regarded as transitory, and are equally so whether they relate to real or personal property. *(Sutphen*v. *Fowler,*9 *Paige,*280. *Massie*v. *Watts,*6 *Cranch,*148.) The claim is for damages for not performing a contract; the recovery, if any, must be personal, and can not affect the real property.

This brings me to the remaining question in the case, namely, has the plaintiff shown any cause of action ?

I have already disposed of the question of negligence, being of opinion that all evidence on that subject was inadmissible, this court not having jurisdiction of such a cause of action.

I do not think the relation existing between the parties intermediate the delivery of the deed and the 19th September, was that of landlord and tenant. The defendants owed no such duty to the plaintiff as is expressed or implied in cases of tenancy. Their right to retain possession was determined by *274the limitation in the contract ; hut it was a mere retention of possession, the estate proceeding from the defendants which was not affected or defeated by the subsequent delivery of the deed. *(Bogart v. Burkhalter,*2 *Denio,*125. *Miller*v. *Avery,*2 *Barb. Ch.*582.) This is more especially so, as the deed continues the right in express terms.

Although possession or the right of possession follows the delivery of the deed, it is competent for the grantor to reserve the possession to himself for a determinate or indefinite period, either in the deed or by a cotemporaneous instrument not merged in or extinguished by the deed. Such reservation does not constitute-a tenancy.

In *Provost*v. *Calder,*(2 *Wend.*517,) the grantor reserved to himself and his heirs the exclusive right to the use of a stream of water running through the land, and subsequently demised the privilege of erecting a dam, and using the water, to a lessee. The reservation was held to be valid. In this case it was said, a man may grant a messuage with the appurtenances, *reserving one of them.*So, too, he may grant a tract of land, *reserving all mines,*and he may grant a tract of land *reserving all mill sites,*and such a reservation is valid.

In *Dygert*v. *Matthews,*(11 *Wend.*36,) a reservation out of the grant of so much land as is necessary'for the use of a grist mill, was sustained.

In *Jackson*v. *Swart,*(20 *John.*85,) the grantors reserved to themselves the *use of the premises during their natural lives,*and the question arose whether the deed was void, as conveying a fee to commence *in futuro;*and it was held that the deed operated as a covenant to stand seised, if the estate of the grantee was to take effect after the death of the grantors. And the case, of *Jackson*v. *Dunsbagh,*(1 *John. Qas.*91,) is referred to, where it is expressly decided that a deed of bargain and sale, founded on a pecuniary consideration, to take effect *in- futuro,*was effectual.

In all these cases, where the reservation has been clear, and the intention of the parties undoubted, it has been sustained, *275and that, too, whether it was of a part only, or of the whole of the granted premises.

In this case the reservation is of the possession, which carries with it the use of all the granted premises, for a definite period. And, in my view, it is not material whether we look for the reservation in the contract between the parties, - or in the deed; the former, as we have seen, not being extinguished by, or merged in the latter, either is effectual and operative ; although the deed may be resorted to as furnishing evidence of the intention to make the reservation, if further evidence was needed.

If it is true, then, that the reservation of the possession of the whole of the granted premises was effectual, and the defendants had the right to continue to occupy them until the 19th of September, (or the 22d, as named in the deed) then it follows, there was no actual delivery of the premises, nor had the plaintiff any right of entry at the time of the happening of the fire. In short, the grantors had not at that time delivered, nor did they, until some time afterwards, *deliver possession of the premises to the grantee.*The contract remained executory, and the execution and delivery of the deed, though it conveyed the legal title, was only a partial performance of the contract, and did not carry with it the possession, nor the right to the possession, until the expiration of the period reserved to the. grantors to occupy and possess the premises.

Such possession was not under, nor in subordination to the rights of the grantee. It was created by the act and deed of the grantors, and originated at the time that the legal estate was passing from them. Such legal estate, however, did not vest in the grantee *in*presentí, and, as respects the possession, was suspended, or as I might better express it, *did not- take effect,*until the termination of the right which the grantors' had reserved to themselves.

I have thus endeavored to show that the relation of landlord and tenant did not exist between these parties; and I have spent more time in this effort than I should have done, *276had not the able argument of the counsel for the appellant raised a doubt in my mind on the subject. But I can not yield my judgment to his convictions, in the face of principles and authority which to me,are most satisfactory.

The act of the parties as evidenced by their written contract, was the selling and buying of the premises in question ; hence the relation between them was that of vendor and vendee. The plaintiff, as vendee, became the equitable owner of the estate, and according to well settled principles could he compelled to pay the consideration, even though the estate itself should be destroyed between the date of the agreement and the conveyance. *(Sugden on Vendors, 6th Am. ed.*468.) From the time the contract was sealed by the parties, the premises were at the risk of the vendee, who had an insurable interest, and could have protected himself from loss by fire. At any rate, as he was entitled to any benefit which might accrue to the estate in the interim between the contract and deed, he must take the risk and bear the burthen of loss.

But even if this were not so, the acceptance of the deed by the plaintiff, after the fire, *with knowledge of the loss,*would extinguish any right to indemnity he otherwise might have had. *(Paine*v. *Meller, 6 Vesey, Jr.*349.)

I think the plaintiff has failed to show any cause of action against the defendants, and that the justice decided correctly in dismissing the complaint.

The order appealed from should be affirmed, with costs.

Robertson, J.

The agreement for the exchange of land in this case permitted the defendants to retain possession of the real estate to be conveyed by them,, until a time subsequent to that when the destruction of the mill thereon complained of in this case occurred, when they were *to deliver possession of the same to the plaintiff.*The deed actually conveyed the premises *in presentí,*subject to a possession of them by the defendants, until three days after the time fixed in the agreement, when they agreed to deliver possession of the premises to the plaintiff. No rent was agreed to be paid *277for such occupation, nor was any thing else required to he done, from which it could be inferred that the relation of landlord and tenant existed between the parties. The question then is, whether such deed operated to convey the estate, to begin only from the date fixed in such clause, leaving the estate in the defendants, and no relation subsisting between the parties until then; or whether the defendants conveyed the whole estate in fee, taking back an estate for the period during which they were to retain possession.

An exception must be part of the thing granted, wherein it differs from a reservation, which is not part of it, but some new thing issuing out of it. *(Craig*v. *Wells,*11 *N. Y. Rep.*315.) Words óf reservation may create an exception however, *(Provost*v. *Calder,*2 *Wend.*517; *Borst*v. *Empie,*5 *N. Y. Rep.*33,) and sometimes an implied covenant or estoppel. *(Case*v. *Haight,*3 *Wend.*632.) On the other hand, words of *exception*may create a *reservation. (Dygert*v. *Matthews,*11 *Wend.*35.) An exception must be certain, and what would otherwise be an exception may be construed as a reservation, in order to prevent its being void for uncertainty, *(Thompson*v. *Gregory, 4 John.*81,) but it must be construed as the former, if it can be reduced to certainty. *(Jackson*v. *Vermilyea,*6 *Cowen,*677.) The reservation of an estate for life, in the grantors of an estate in fee, (husband and wife,) although void as such, was held to create a covenant to stand seised for the use of the sxirvivor, (the wife,) although a conveyance in fee, to take effect *in futuro,*might be void, *(Jackson*v. *Swart,*20 *John. 85,)*except under the statute of uses. (Jackson, *ex dem.*v. *Dunsbayh. 1 John. Cas.*91.)

It is not material whether there can be a technical reservation of an estate in the premises or not, provided the deed can be construed so as to prevent an estate from vesting until some future day. The Revised Statutes make it the duty of courts to carry into effect the intent of parties in an instrument affecting real estate, so far as it can be gathered from the whole of it. (1 *R. S.*748, § 2.) There can be no doubt *278that by the deed in question in this case, the defendants intended only to create an estate in the plaintiff to begin at the end of their possession. No relation, therefore, of landlord and tenant existed, and no right of action could accrue for waste.

The plaintiff had an insurable interest in the buildings burnt, but the defendants had not. *(McLaren*v. *Hartford Fire Ins. Co.,*5 *N. Y. Rep.*151.) They were not bound to restore them either under the agreement, *(Sugden on Vendors, 6th Am. ed.*468,) or the deed, which contains merely a covenant to deliver possession of the premises, but not in the same condition as they were at its date.

It is not necessary, therefore, for me to express any opinion as to the ability of the plaintiff to maintain an action in this state for, permissive waste on land in New Jersey.

I therefore concur in the judgment of affirmance. '