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Grant v. Johnson

5 N.Y. 247 Court N.Y. English

Delivered by Gardiner, J.

Contents

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Grant v. Johnson.

Headnote

Dependent and independent Covenants.
Whether covenants he dependent or independent, is determined by the order of time in which their performance is required. A covenant is not, necessarily, independent, which goes only to a part of the consideration; nor is it conclusive, that the consideration is divisible in its nature, or that a part has been received by the defendant; nor will the fact, that one or any number of the covenants, in an agreement, are independent, render the others so; the intention of the parties is the controlling element.
Grant v. Johnson, 5 Barb. 161 ; s. c. 6 Ibid. 337, reversed.
* Appeal from the general term of the Supreme Court, in the third district, where a motion for a new trial, after a verdict in favor of the plaintiff, had been denied; a demurrer to the plaintiff’s replication to the defendant’s third plea, overruled; and judgment perfected for the plaintiff, upon the record. Reported below, 6 Barb. 337 ; and, on a demurrer to the declaration, in 5 Ibid. 161.) '
This was an action of covenant, to recover the second instalment of purchase-money of land sold by the plaintiff to the defendant, by a contract, under seal, bearing date the 24th August 1845.
By this agreement, Grant, the plaintiff, contracted to sell to Johnson, the defendant, a piece of land, lying in the town of Neversink, known as part of the Reed farm,
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and therein particularly described, for the consideration of $950, to be paid as follows, $200, the 1st day of April, then next; $200, on the 1st April 1847; and the residue in two annual payments, of equal amount, to be paid on the 1st of April of the two succeeding years, with interest from the 1st April 1846. The vendor also thereby agreed to give the purchaser the quiet and peaceable possession of the premises on the 1st November, then next, with the exception of certain privileges granted to third persons; and to give him a good and sufficient deed for the same, on the 1st May 1846, “ if the above conditions are complied with.”
This suit was brought to recover the instalment of $200, which fell due on the 1st April 1847. The plaintiff, in his declaration, averred, that he gave the defendant possession of the premises, on the 1st November 1845, and was ready to convey, according to the true intent and meaning of the article of agreement, on the 1st May 1846; but there was no averment of a tender of a deed, or of a readiness or willingness to execute one. The defendant demurred to the declaration; but the court overruled the demurrer, with leave to amend, holding that the covenants were independent. ( 5 Barb. 161 .) The defendant then pleaded over, and there was a demurrer to his third plea, and also to the replications to the first and second pleas, which raised the same question of law that had been decided on the former demurrer ; the Court again gave judgment for the plaintiff, with leave to amend. ( 6 Barb. 337 .) Issues of fact were then raised, the defendant’s demurrer remaining upon the record; and, upon the trial, the defendant moved for a nonsuit, on the ground that the ^'plaintiff was bound to show the delivery or tender of a deed, before he could recover the second instalment. The court denied the motion; and the defendant’s counsel excepted. He then offered to prove that no deed had been tendered to him, up to the 15th July 1846; but the
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court rejected the evidence, as not constituting a legal defence; to which another exception was taken.
The jury, under the direction of the judge, found a verdict for the plaintiff, for the amount of the second instalment, and interest; and a motion for a new trial, made upon a bill of exceptions, having been denied, and judgment perfected for the plaintiff, upon the whole record, the defendant took this appeal.
Hill, for the appellant.
Beardsley, for the respondent.

The question in this case is, whether the plaintiff can sustain an action for the second instalment of the purchase-money secured by the agreement, without averring and proving the delivery, or an offer to deliver, a deed of the premises.

*The parties have declared that certain payments were to be made, and certain acts performed by them, respectively, at the times specified in the agreement. They must be held to have intended the performance of these acts, when, and, of course, in the order of time indicated in their covenants. The plaintiff was to give the defendant possession, on the first of November 1845. The performance of this requirement preceded anything to be done by the defendant, and it might, consequently, have been enforced, without any offer upon the part of the defendant; but if no possession had been given, the plaintiff could not have recovered the $200 to be paid by the vendee on the first of April 1846.

The possession, however, was given, and the first $200 paid, and on the first of May 1846, the vendee was entitled to his deed, as the thing next to be done, in the order prescribed by the parties in their agreement. It

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was not executed, nor a willingness to execute it, either averred or proved. The payment of the $200 for which the suit is brought, was fixed upon a day subsequent to that agreed upon for the delivery of the deed. The case is, therefore, brought directly within the letter and spirit of the second rule suggested by Sergeant Williams in his note to Pordage v. Cole (1 Saund. 320 b), that, “ when a day is appointed for the payment of money, &c., and the day is to happen after the thing which is the consideration is to be performed, no action for the money can be sustained, without averring performance.”[1]

The plaintiff relies upon the third rule of Sergeant Williams in his note to the case above cited, that, “ where a covenant goes only to a part of the consideration on both sides, and a breach of such covenant may be paid for in damages, it is an independent covenant, and an action may be maintained, without averring performance.” The rule is not free from obscurity. It was given by Lord Mansfield, originally, in Boone v. Eyre (1 H. Bl. 273, note a). The defendants in that SU^’ a^er having received a conveyance of *the equity of redemption of a plantation, and the negroes upon it, when sued for a part of the consideration, set up a breach of a collateral covenant on the part of the plaintiff, relating to the title and possession of the negroes, in bar of the action. The warranty extended both to the estate and negroes. (4 Mees. & Welsb. 311.) The covenant of the plaintiff, it will be perceived, embraced the whole and every part of the subject conveyed. If the title failed to a single negro, or the defendant was evicted from an acre of the land, the covenant was intended to afford redress, and enable a jury to apportion the damages, according to the agreement of the parties. A “ breach of the plaintiff's covenant might be paid for in damages,” because a failure of title ■ as to any part of the consideration could be

1 Goodwin v. Lynn, 4 Wash. C. C. 714 .

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compensated, according to the standard fixed by the parties. In other words, the consideration for the defendant’s promise was divisible, and the • damages arising from a breach of the covenant of warranty were apportioned to each parcel of that consideration, by the agreement itself. This, it is supposed, is what is meant by the expression above quoted, that the breach may be paid for in damages. (5 Mees. & Welsb. 701.) Accordingly, it is stated in the note to Pordage v. Cole (supra), that, “when the consideration for the payment of the money is entire and indivisible, so that the money payable is neither apportioned by the contract, nor capable of being apportioned by a jury, an action is not maintainable.”

The doctrine is thus stated in Chanter v. Leese (4 Mees. & Welsb. 311). “The party contracting to pay his money, is under no obligation to pay for a less consideration than that for which he has stipulated. If, indeed, he does accept a partial performance, and to a certain extent enjoys the benefit of that for which he has stipulated, it may become a question, whether he may not be liable upon an implied contract to pay for what he has had. And when the consideration is in its nature capable of being divided, and the payment apportioned by the terms of the contract, there *may be still a right to recover the portion due on the original contract.” This decision was affirmed in the exchequer chamber (5 Mees. & Welsby 701), in 1839, and may be considered as the established doctrine in England, at that day.

The rule of Lord Mansfield, according to its original application, and as expounded in the decision above mentioned, is reasonable; it brings us back to the contract, to learn the intention of the parties.[2] Courts are

2 Covenants are to Re construed as dependent or independent, according to the intention of the parties, and the good sense of the case ; technical words must give way to such intent. McCrelish v. Churchman, 4 Rawle *242 26 ; Bredin. v. Agnew, 3 W. & S. 300 ; Wright v. Smyth, 4 Ibid. 527. And see Lippincott v. Low, 68 Penn. St. 314 .

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not required to speculate upon the inequality of loss to the parties, nor to look beyond • the agreement, to its performance, in order to ascertain its character, as suggested by some judges and commentators. (1 Saund. 320 a.) These inquiries are proper, where the question arises, whether the plaintiff has any remedy for what he has done, or parted with, or whether the defendant is not estopped by his acts, subsequent to the agreement, from insisting upon a condition precedent in his favor. Much of the confusion in the books, it is believed, arises from confounding the doctrine of waiver by matters ex post facto, with a rule of construction applicable to the agreement as it came from the hands of the parties.. (Havelock v. Geddes, 10 East 555.) A defendant may waive the performance by the plaintiff, in case of a covenant clearly dependent, and thus render himself liable in some form of action (Mitchell v. Darthez, 2 Bing. N. C. 555; Lacas v. Godwin, 3 Id. 737), but it is only when the consideration is divisible, and the payments are apportioned by the agreement to the different parts of the consideration, that the covenant becomes independent, and a recovery can be had upon the original contract, without averring performance, or an excuse for non-performance.

A covenant, therefore, which goes only to a part of the consideration, is not, necessarily, independent; nor is it conclusive upon this point, that the consideration is divisible in its own nature, or that a part of it has been received by the defendant; nor will the circumstance, that one or any number of covenants in an agreement are independent, render others so. In Chanter v. Leese, (Mees. & Welsby. 311), the *agreement was, that the defendants should have the exclusive use and sale of six different patents, and they were to

p. 243
pay 400i., in half-yearly payments, for one of which payments the action was brought; the defence was, a failure of title as to one of the patents. The grant of the exclusive right was an independent covenant, which the defendants could have enforced, without any averment; the consideration for the undertaking of the defendants was divisible in its own nature. The undertaking upon which the action was brought, went only to a part of the consideration to be paid; and the court remarked, that although it had appeared affirmatively that the other five patents had been enjoyed by the defendants, the plaintiff could not have recovered on the contract. Terry v. Duntze (2 H. Bl. 389), which was followed in our supreme court, in Sears v. Fowler ( 2 Johns. 272 ), in Havens v. Bush (Id. 387), and in Wilcox v. Ten Eyck (5 Id. 77), to the contrary, is not law in this state, or in England. The two cases in 2 Johns., were expressly overruled in Cunningham v. Morrell ( 10 Johns. 203 ), and the court, in Wilcox v. Ten Eyck, observe, that the case could not be distinguished from Sears v. Fowler.

The decision in Bennett v. Pixley ( 7 Johns. 249 ), is placed by the court on the same ground with that of Sears v. Fowler, and Terry v. Duntze, and the reasoning of the court in that case is overruled by Cunningham v. Morrell, and by Dey v. Dox ( 9 Wend. 129 ). The case, I think, should be classed with Campbell v. Jones (6 T. R. 570), and Tompkins v. Elliott ( 5 Wend. 496 ), all of which fall within the principle of the first rule in Saunders, “ that if a day be appointed for the payment of money, or part of it, or the doing of any other act, and the day is to happen, or may happen, before the thing which is the consideration of the money, or other act, an action may be brought for the money, or for not doing such other act, before performance,” &c. (1 Saund. 320 a.) The decisions in Term, and in Wendell, were placed distinctly upon that ground (6 T. R. 572; 5 Wend. 499 ), and what fell from Lord Kenyon and Judge Savage,

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key°n(^ a *uiere recognition of the. rule laid down by Lord Mansfield, was no way necessary to the determination of those cases. The judgments were unquestionably correct, for other reasons assigned by those judges.

The question then returns, was the consideration in this case divisible, and were the payments apportioned by the agreement to the different parts of the consideration, within the principles above stated ? According to the contract, the $950 to be paid by the defendant, as therein stipulated, was the entire consideration, for a complete title to the premises. The possession was incident to the title, the whole of which the defendant was to receive, as the consideration for his payments. He received one element of a complete title, to wit, the possession, on the first of November 1845; he then paid, on the first of the following April, all that he was to advance by the terms of the agreement, until the fee should be added to the possession, by a conveyance from the plaintiff, and the title of the defendant be then perfected. The plaintiff refuses or neglects to convey, and yet, by this action, claims the purchase-money of the defendant.

If we assume, that the consideration of the defendant’s undertaking was divisible, yet, by the terms of the agreement, he was to receive both the possession and a deed of the premises, before he could be called upon for the payment of the instalment in controversy. These things were “ to be done to him,” according to the rule of Lord Holt, adopted in 10 Johns. 206 ; he was not to trust to the personal responsibility of the plaintiff. ( 9 Wend. 134 .) The plaintiff had covenanted that the thing stipulated should be performed, before the defendant could be required to pay; nor, by the contract, were the payments to be made by the defendant apportioned to any particular part of the consideration. He was not to pay anything for the possession, as distinguished from the fee of the land, but a gross sum for both, by separate

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instalments. If he had refused to accept a deed, all that the plaintiff could have recovered would have been the balance of the purchase-money *with interest. f # On the contrary, had the plaintiff refused to convey, the recovery on the part of the defendant would have been confined to the difference between the contract-price and the actual value of the land with interest. In a word, the covenant sought to be enforced against the defendant in this action, went to the whole consideration on the other side, and depended on it. The judgment of the supreme court should be reversed.

The question is, whether the covenants to pay the second and subsequent instalments are dependent.

So many decisions have been made on the vexed question of what are, and what are not, dependent covenants, and so many of them are irreconcilable, that they rather perplex than aid the judgment, in determining a given case. One rule is universal, and that is, that the intent of the parties is to control. On reading the covenant in this case, it is clear to my mind, that giving the deed was to precede the payment of the second and subsequent instalments; the parties have said so, in so many words. The deed was to be given on the first of May 1846; and the second and subsequent instalments paid'on the first day of April, in the following years. If each had fulfilled his contract, the appellant would have had his deed, when the second instalment was payable. The clause, “ if the above conditions are complied with,” can only apply to such conditions as were to be performed by the appellant, before the deed, by the terms of the contract, was to be given. The possession is a mere incident which follows the title, and cannot be retained independently of it.

Judgment reversed.[3]

3 In covenants for the sale of land, the covenants of the vendor and vendee «re construed to be dependent, unless a contrary intent plainly appear. Bari- *246 of Columbia v Hagne r Pet. 455. And see Washington v. Ogden, 1 Black 450 .

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