Case Name: BERRY against M'MULLEN
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1827-12-26
Citations: 17 Serg. & Rawle 84
Docket Number: 
Parties: BERRY against M‘MULLEN.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 17
Pages: 84–88

Head Matter:
[Philadelphia,
December 26, 1827.]
BERRY against M‘MULLEN.
IN ERROR.
One who owns the equitable interest in land, who is in the constructive possession and-may receive the income of it, is liable in covenant as assignee for a ground rent charged thereon, although the legal title is in another, and no trust appears by deed.
Writ of error to the Court of Common Pleas of the county of Philadelphia.
■ Covenant, by the plaintiff, Peter L. Berry, against the defendant, Joseph M‘Mullen, to recover the sum of thirty dollars, being a half year’s ground rent, due the 18th of April, 1821, issuing out of a lot-of ground situate at the corner of Chesnut and Juniper Streets, in the city of Philadelphia. The evidence on both sides consisted of different conveyances of the lot and the ground rents issuing out of it, iogether with admissions by'the parties, of certain facts.
On the 18th day of April, 1812, the lot on Chesnut and Juniper Streets, being then owned by Edward Burd and Edward Ship-pen Burd, was conveyed to Robert Mercer ánd Joseph M'Mullen, their heirs and assigns, by Messrs. Burd, reserving a ground rent, payable to them, of one hundred and twenty dollars per annum, payable half yearly on the 18th day of the months of April and October, in each and evéry year, which Mercer and M'Mullen, by express covenant, contracted to pay. On the 22nd of April, 1817, Joseph M‘Mullen and wife, released all the moiety of McMullen in the land, to Robert Mercer, his co-grantee, subject to the payment of the rents and the performance of the covenants in the deed from the Messrs. Burd to them. By this operation, Robert Mercer became the sole proprietor of the lot. On the 22nd day of December, 1818, Robert Mercer and wife, conveyed the lot to Berry, the plaintiff, in consideration of one dollar paid, and of the performance of the covenants of the indenture, among which was an express covenant by Berry, to pay the paramount ground rent to the Messrs.- Burds, and ah additional' ground rent of sixty dollars per annum to the said Robert Mercer, his heirs and assigns for ever. On the 25th day of August, 1819, Robert Mercer, being in failing and insolvent circumstances, assigned,'among other things, his interest in th¿ ground .rent, reserved from the lot by his deed to Berry, off the 25th of December, 1818, to Joseph M‘Mullen and Michael Nesbi’t, in trust foi; his creditors. On the 20th of November, 1820, Joseph McMullen, the defendant, and Michael Nesbit, assignees of Robert Mercer, for the 'consideration of ten dollars,, conveyed the ground rent of sixty dollars per annum, to Jane Berry, a daughter of the plaintiff. Miss Berry, subsequently, and be fore the bringing of this suit, died intestate, and without issue; and by the intestate laws of this commonwealth,-this ground rent, so owned by her, accrued to her father, Peter L. Berry, the plaintiff. Sometime in 1820, the precise time no.t being stated, the lot itself was levied upon at the suit óf a creditor of Mr. Berry, and sold by the sheriff by virtue of a writ of venditioni exponas, at public sale, for forty-five dollars. At the sale Mr. M‘Mullen, the defendant, bid for the property, and, on its being struck off to him, signed the usual conditions of sale, the name of no other person being then mentioned by him as interested in the purchase.
A few days afterwards he came to the sheriff’s office with Mr. George Mercer, and requested the sheriff to make the deed to him, Mr.' George Mercer'. The latter gentleman paid the purchase money, and on the 1st of November, 1820, received a deed for the lot from the sheriff, subject to the two ground rents of one hundred and twenty dollars and sixty dollars per annum. From receipts produced upon notice, by the defendant, it appeared that he had, during the years 1823 and 1824, paid the paramount or larger ground rent of one hundred and twenty dollars, to Mrs. M'Pherson, who had derived title to it through the Burds. Upon the lot there was a partial erection of a building, which was in a dilapidated condition, having been abandoned for some time.
The plaintiff contended,
1. That in point of fact; M'Mullen was the real purchaser of the lot at the sheriff’s sale — that •George Mercer was a mere trustee for him — that he was the cestuy que trust, the person beneficially interested in the purchase. , ,
2. That these facts being established, it is competent for Mr. Berry, the plaintiff to maintain this action of covenant against M‘Mullen for.the privity of estate; the plaintiff being the owner of the ground rent, and the. defendant the owner of the soil.
Charge of the Court. — The question of fact, whether George Mercer was a mere trustee for the defendant,'is a matter for- your,' peculiar and exclusive cognisance, and the court are not'disposed to entrench upon your duties by pressing any positive opinion upon you they may-have formed, as to how far the evidence supports this position of the plaintiff. The able advocate of the plaintiff supposes that the facts of the defendant having bid at the sale, and signed the conditions, and paid the paramount ground rent to Mrs. M‘Pherson, the proprietor, are conclusive as to his being the real owner Of the land, and of Mr. George Mercer being, in his language, “a man of straw.” This, however, does not appear so very clear to the court. - These acts are of a very equivocal character. In practice, it .is very ..common for one man either to bid for another, or to substitute another person as purchaser by subsequent arrangements. The fact, as the payment of the paramount ground rent by Mr. M‘ Mullen, is more so. He was one of the original grantees of the lot, to whom the Burds conveyed it, and was bound by his express covenant, to,pay the rent to the Burds, or their assigns, in whosesoever hands the land might be. These facts, however, are not without weight, and, if they, in any respect, go to establish that Mercer was a mere trustree of McMullen, and you arfe the only judges of this part of the case, then the other question made by the plaintiff’s counsel arises, and upon which the court are called upon to express an opinion by both of the parties. ’
Without saying whether a cestuy que trust, a person for whose use real estate was held nominally by a trustee who was in possession of it, and in the permanency and enjoyment of its issues and profits, and where the trust appeared by deed, or' other unequivocal evidence would or would not be liable for rent in such a case as this,, and, in this form of action, the court are of opinion, that in the case before them, the plaintiff cannot recover on this ground. It is true, as the plaintiff ’s counsel has contended, that in Pennsylvania the courts of common law, from the necessity of the case, exercise equitable powers, and that recoveries upon equitable principles are had in other courts, which could not be attempted with any hope of success in the country from which we draw our sys-. tern of jurisprudence. But the learned counsel hasnot shown a case in which the extraordinary powers of a court of equity have been employed to enforce such a recovery as this, depending as it does upon strict legal principle, operating in most instances, and in this particularly so, with .great severity. It is clear law that the assignee of such an estate, who is not bound by personal covenants, but liable from privity of estate, on Covenants running wifh the land, may assign it to a beggar, a bankrupt, or even a feme covert, and such assignment is valid, and will discharge him from the subsequent rent. In one of the decided cases, Strange, 1220, ,2 Mk. 546, where an assignee, to get rid of the term, assigned it to a female, a prisoner in, the Fleet Prison,' for five shillings, which money it appeared he had given or loaned her for the very purpose; the transaction was held not to be fraudulent, and the assignment valid, and the court professed to go upon equitable principles. If a man who has made an injudicious bargain, can assign it- to a beggar to get rid of it, it is difficult to perceive why the more cautious man who anticipates evil' by -providing such person for the assignee in the first place, must be made to smart’for his prudence. It is admitted that if Mr. MlMulleñ had”taken the deed on the 1st of November-, 1821, and on the second, transferred it to George Mercer, that the plaintiff’s remedy would only be against the latter. The equity, then, talked of, would seem to depend upon a form of conveyance. The jury will, however, understand these remarks with reference to the case before them, inwhich-there is'no testimony that Mr. M‘Mullen ever took possession of,the lot on or after the 1st, of November, 1820, or that’ he ever received one farthing of its rents, issues, and profits, or in, any way enjoyed it.' of them. There is a fallacy in the argument of the counsel for the plaintiff, when he urges that Mc Mullen, if you find in his favour, will hold the land discharged of rent, supposing as he does, that he is the beneficial owner. This is not the case. The land is still liable. • If improvements are erected upon it, as from its very eligible situation, it is most likely there will be soon, Mr. Berry’s remedy by distress still remains, and he still can sell the land, by a suit, judgment and .execution against the assignee of the soil. Upon the whole, gentlemen, the court are clearly of opinion that there is no principle of law or equity which under the circumstances of this particular case, will enable the plaintiff to maintain this action of covenant, and that your verdict should be for the defendant.
Rawle, jr., for the plaintiff in error,
cited 2 Mad. 97. A resulting trust is equivalent to a declared trust. 1 Mad. 361. Cesiuy que trust has the same power over the equitable estate that the legal owner has over the legal estate. 1 Tid, 605. Willes, 400. 8 Serg. & Rawle, 440.
Lowber, contra.
Covenant does not lie. No precedent is shown. There is no such thing as covenant founded on privity of estate. There must be privity of contract. The defendant must be a party to the deed, which he may become by accepting an assignment of the lease and entering into possession. 1 Salk. 81. 2 Stra. 1221. 2 Atk. 346. 1 Dall. 305. This is strictly a matter, at law.
Broom, in reply

Opinion:
Rogers, J.
The facts of this cause have been well stated by the president of Court of the Common Plea's. It will be sufficient to refer to some established principles which govern this case, and, in my judgment, it is divested of its chief difficnlty.
Covenant lies on privity of contract, and also on a privity of estate. An assignment does not relieve the covenantor from his personal liability, for he is responsible from privity of contract, but it discharges the assignee who assigns, for. he is liable from privity of estate, and is charged merely because he enjoys the income, if any? and has the possession. The assignee, when the covenant runs with the land, takes it cum oriere, and the covenants affect the owner of the title. • Where there is no adverse possession, the law adjudges the possession in him who has the right, and hence if is that the owner of wild and uncultivated land is deemed a possessor, so as to support trespass quare clausum fregit. 3 Serg. & Rawle, 513. It is equally well settled, that the title of the cesiuy que trust is recognised in the common law courts, and that in Pennsylvania he can support ejectment in his own name. From these principles which it is unnecessary to prove by authority, it results that there was but a single question of fact involved, what was the nature of the transactions between M'Mullen and Mercer. Was it a bona fide sale of the interest of Maúllen to Mercer, a substitution of Mercer as the purchaser from the sheriff, or was Mercer a mere trustee for MMullenl If Mercer be the owner of the legal and equitable interest, the authorities relied on, Strangé, 1220, 2 JltJe. 546, (and which we do not intend to dispute,) apply with their utmost force. If, however, it was a mere mode of conveyance, Mercer having the legal and McMullen the beneficial interest, the possession of the property, the receipts of the benefits will render him liable to this suit, There exists the privity of estate, which alone is necéssary to sustain covenant. Not to apply these rules to this transaction, would place the ground landlord, where there was nothing, as here, on the premises to distrain,, in some measure, in the power of the owner of the fee, without exposing him at the same time to any inconvenience or risk. It would be for him to convey to an insolvent trustee, under the sanction of whose name he would retain possession, have the equitable title, and enjoy the profits of the property. It is not necessary that he should actually receive profits, or be in the actual possession of the land. It is sufficient that he is the owner of the equitable interest, and in the constructive possession; that he may improve the property if he chooses, and receive the income; or, may await, at his pleasure, and as he conceives to be his interest, a rise in its value. The laws regards substance, not form; and looks to a real transfer of property, not to a mere formal conveyance in which the legal title is in one, and the equitable title in another. It will be observed, that we do not intend to express any opinion on the facts. They were properly left by the court, in the first instance, to the jury, but afterwards withdrawn from them; in which I conceive there was manifest error.
Judgment reversed, and a venire facias de novo awarded.