Brennan v. Schellheimer — 36 N.Y. St. Rep. 867

Majority

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Emma E. Brennan, Resp’t, v. Frederick Schellheimer, App’lt.

(New York Common Pleas, General Term,

Filed March 2, 1891.)

Headnote

Vendor and purchaser—Eppect oe acceptance op deed upon covenants in contract.

Under a contract for the sale and purchase of land containing covenants by the vendor to be subsequently performed, or as to the condition of the premises, the acceptance of a deed by the vendee, with no words or acts of reservation, will be deemed a full satisfaction of all covenants of which the conveyance is necessarily performance. When, however, there are

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stipulations in the contract of which the conveyance itself is not a performance, the acceptance of a deed, even though the vendee have actual knowledge of the defects covenanted against, raises no presumption that the covenants have keen waived, and, in default of any proof to show an intention to make such waiver, the grantee may sue the grantor for damages for breach of such covenants.

Action for damages for breach of covenant concerning condition of building in an agreement to convey real property. Appeal from judgment of the ninth district court in favor of plaintiff.

Henry F. Idppold, for app’lt; Joseph Fettreich, for resp’t.

On September 28, 1889, by an agreement under their hands and seals, the plaintiff agreed to purchase, and the defendant agreed to sell and convey, the premises known as 117 East Ninety-first street in the city of New York. As part of his agreement, the defendant covenanted that the building was completed in compliance with the laws of this city and state and the rules and regulations of the board of health and fire department of the city of New York. Some time before the final performance of the agreement the plaintiff ascertained that the drainage and plumbing work in the premises were defective and in violation of the laws, rules and regulations referred to, but, notwithstanding, she accepted a conveyance of the premises without expressly reserving her right to proceed against defendant upon his covenant.

Thereafter plaintiff caused the cesspool and plumbing work to be put in proper condition and for the recovery of the expense incurred brought this action, in which judgment was rendered in her favor. Assuming that notwithstanding her acceptance of the deed the plaintiff could recover upon the covenant in the preliminary agreement, we do not feel authorized to direct a reversal inasmuch as the return of the court below discloses no error, and the evidence introduced for plaintiff is sufficient to sustain the trial justice’s disposition of the matter. On the trial, however, as well as upon fhe hearing of this appeal, the learned counsel for defendant cqntended that the action was not maintainable and should have been dismissed, the ground for his contention being that the preliminary agreement of sale became merged or extinguished upon the acceptance of the deed. As a proposition of law this is not entirely correct, the question of merger or extinguishment of the preliminary and executory agreement by acceptance of the deed being purely one of intention, and if it be apparent that the parties did not so intend the agreement will not be deemed merged or satisfied by the subsequently delivered tand accepted deed. If there be no evidence whatever of an express reservation or waiver of the provisions of the agreement, the intention to accept the deed in satisfaction and extinguishment thereof becomes a matter of interpretation of the acts of the parties and all former provisions of which the conveyance is the performance must be considered at an end. For as to such provisions the parties must be deemed to have so intended. But not so-concerning provisions of which a conveyance is not necessarily performance. These will be regarded as still subsisting. The rule is stated as follows: In all cases, then, where there are stipulations in a preliminary con

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tract for the sale of land of which the conveyance itself is not a performance, the true question must be whether the parties have intentionally surrendered those stipulations. The evidence of that intention may exist in or out of the deed. If plainly expressed in the very terms of the deed, the evidence will be decisive. If not so expressed the question is open to other evidence, and I think in absence of all proof there is no presumption that either party, in giving or accepting a conveyance, intends to give up the benefit of covenants of which the conveyance is not a performance or satisfaction.” Morris v. Whitcher, 20 N. Y., 41 . See also Willard on Real Estate and Conveyancing, (2nd ed.,) pages 305 and 306, and cases cited; Atwood v. Norton, 27 Barb., 638 .

This rule has been approved of by the court of appeals in the very recent case of Disbrow v. Harris, 122 N. Y., 362 ; 33 N. Y. State Rep., 558, which in its essential particulars closely resembles the case at bar. In the case cited it appeared that the plaintiff had covenanted that the buildings to be conveyed were in good condition. At the time of the delivery and acceptance of the deed the defendant complained that the contrary was the fact, and a part of the purchase money was permitted to remain in his hands as security for plaintiff’s promise to make certain improvements. When these improvements were completed the defendant sought to retain the sum remaining in his hands because of other alleged defects in the building. It was held that the fact that the defendant had secured himself for the defects specified at the time of accepting the deed would sustain an inference that he intended to waive objection to others, but the court say, that in the absence of anything indicating a contrary intention the right to seek redress for plaintiff’s breach of covenant respecting the condition of the building would have survived the conveyance. See, also, Bennett v. Abrams, 41 Barb, 619 .

We have examined Whittemore v. Farrington, 76 N. Y., 452 ; Harsha v. Reid, 45 id., 415, and Canaday v. Stiger, 55 id., 454, cited by counsel for appellant, but these cases could not be urged as sustaining his position. In neither of these cases was it attempted to recover upon a covenant in a preliminary and executorv contract of sale, and the question now presented to us for consideration did not there appear and was not attempted to be discussed, and the same may be said of most of the numerous cases upon the appellant’s brief.

The. judgment appealed from should be affirmed, but without costs, as per stipulation annexed to the return.

Allen and Pbyob, JJ., concur.