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Canaday v. Stiger

35 N.Y. Super. Ct. 423 3 Jones & S. 423 Court N.Y. Super. Ct. Decision date 1873-04-05 English

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LLOYD CANADAY, Plaintiff and Appellant, v. JOHN S. STIGER, Defendant and Respondent.

Headnote

I. Real Estate.—Contract for Sale of Lots and Houses, one of the Houses being unfinished.—Covenants.
1. When and under what contract the vendee cannot, after ddivet'y of deed,, recover from the vender the expense of finishing the house.
1. Where the words of the contract are “ to convey seven houses and lots on the south side of Eightieth Street, commencing at the fifth house west of Lexington Avenue, and including the said fifth, sixth, seventh, eighth, ninth, and eleventh houses adjoining, and also the second or third house east of the Fourth Avenue, which said houses and lots are subject to a mortgage or mortgages amounting to $105,000,” no such recovery can be had.
1. Such words contain no express stipulation, and none can be implied from them, that if any of the houses are in an unfinished condition, they should be completed by *he vendor.
2. Nor do they imply any warrant or guaranty that the lots, at the time of the conveyance, should have on them “ finished houses.”
a. The word “ homes," in the contract, does not authorize a finding of fact, that it was the intent of the parties, that one of the houses being unfinished at the time, should be finished without expense to the vendor.
2. Wa/rranty implied.—Upon a contract of sale of real estate, there is no implied warranty except so far as relates to title.
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3. Merger.—All agreements relating to the purchase and sale of land are merged in the deed UNLESS the contract clearly manifests a different intention.
a. This includes the implied covenant of title.
II. Maxim.—Caveat Emptob.
1. This maxim has an equal application to such parts of real contracts as relate to the condition of premises sold, the buildings, improvements, and general appurtenances, as it has to chattels.
Before Morell, Freedman, and Curtis, JJ.
Decided April 5, 1873.
Appeal from a judgment.
The action was to recover a deficiency arising upon an over-estimate of certain encumbrances upon real estate, contracted to be sold by the plaintiff to the defendant, amounting to about $2,000.
The defendant alleged that the following was a part of the contract:
“And the said party of the second part hereby agrees to purchase said premises, and to pay for the same as. follows: by conveying to said party of the first part, seven houses and lots situate on the southerly side of Eightieth Street, in the city of New York, commencing at the fifth house west of Lexington Avenue, and including the said fifth, sixth, seventh, eighth, ninth, and eleventh houses, adjoining, and also the second or thud house east of the Fourth Avenue, which said houses and lots are subject to a mortgage or mortgages amounting to one hundred and five thousand dollars, which the said party of the first part hereby agrees to assume and pay,—five thousand dollars in' cash on the delivery of the deeds of said property; four thousand dollars by delivery to said party of the first part his note, payable six months from date, with interest.”
And then averred that one of the houses was in an unfinished condition, and would cost the sum of $1,600 to finish it; and he claimed, that to that extent there
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had "been a failure of consideration on the part of the plaintiff.
The action was tried "by a referee, who found as facts (amongst others not necessary to "be stated), that the conveyances for the lots and houses had "been interchanged "between the parties to the contract, the defendant having received and accepted the deed for the seven houses and lots of lands.
The referee then further found:
That at the time of conveying the seven houses to the defendant, there was only the sum of $101,000 of mortgages thereon, the plaintiff having previously paid down the encumbrances on one of said houses, $1,943, ■ to which sum of $1,943 the defendant then and there became justly indebted to the plaintiff with interest thereon, from October 19th, 1871, amounting at this date to the sum of $2,072.72.
That at the time of the conveyance of the seven houses one of them was in an unfinished condition, and the defendant finished the said house about the 1st of January, 1872, at an expense of $1,400, which sum with interest thereon, from January 1st, 1872, at this date amounts to $1,474.04.
That after deducting from the two amounts due the plaintiff, as aforesaid, the said taxes and the $1,400 expended in finishing said house as aforesaid, it leaves a balance due the plaintiff of $331.78 at this date.
Upon the settlement of the case, the referee, it seems, found the additional facts :
That at the time of making the agreement, in the complaint mentioned, seven houses were finished and one of them was in an unfinished condition.
That the plaintiff bargained with the defendant upon the supposition and with the intent that the said unfinished house was to be finished without expense to the defendant, and that he was to have a completed house.
And as conclusion of law, the referee found and de
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tided that by the written, contract the plaintiff sold said seven houses as finished houses, and was legally chargeable with the expenses of finishing- said houses.
And that upon the facts found there was a balance due the plaintiff, from the defendant, of $331.78 only, for which sum he directed judgment.
Judgment was entered, in conformity with the report, and the plaintiff appealed.
Sheldon & Brown, attorneys, and De Witt C. Brown, of counsel for appellant,
urged :
I. Without fraud, mutual mistake, or warranty, it is respectfully submitted that there was no ground for charging the plaintiff with the expense of completing the said house.
The legal presumption is, that contracts of this kind are made upon and in view of the premises (French v. Carhart, 1 Coms. 107; Hansha v. Reid, 6 Hand, 418).
II. The rights of the parties became fixed by the contract, and the conveyance by the plaintiff on the 23d of October followed the terms, and was in pursuance of the contract of the 14th, and any conversations had between the parties intermediate the contract and deed, were of no consequence.; and, even if plaintiff had expressly promised during this time to finish the said house, it would not have bound him.
If the defendant supposed himself entitled to any such agreement, he should have inserted a covenant to that effect in the deed, which the defendant prepared for the plaintiff’s execution. The deed was returned from Albany to the defendant, and by him forwarded to Aymar, who drew it for record, and by him it was recorded.
Some ten days after the execution of the contract, and after all the conversations by the plaintiff in reference to the completion of the house, the defendant accepted and placed upon record the deed of the seven houses.
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It is well settled that no matter how far the deed in its covenants, or want or covenants, departs from the contract, the latter is superseded by the deed.
If there had been in the contract an express stipulation to finish the house, and the defendant had subsequently accepted voluntarily a deed, without such covenant, the obligation of the plaintiff to finish the house would have been at an end, unless there had been something to evince clearly a different intention ( 4 Hill, 346 ; 2 Kent's Com. 473; 5 Paige, 299; 5 John Ch. 79; 9 Paige, 443; 3 Sandford, 437; 3 Bosw. 29 ; 26 Wend. 169 ).
III. Since the Revised Statutes ( 1 B. 8 . 738, § 140), no covenant can be implied, either in the contract of October 14, which was under seal, or in .the deed of the Eightieth Street houses (Sandford v. Truax, 40 N. Y. 140 ).
Therefore, as the contract and deed contained no express covenant to finish the house, the plaintiff was under no legal obligation to finish it.
IV. The referee was correct in saying, that where there is an ambiguity in a contract, it is permissible to put ourselves, so far as we can, in the situation of the parties, and endeavor to ascertain their intentions by the light of the surrounding circumstances.
The rule thus stated by the learned referee is correct; but it has no application to this case. There was no ambiguity.
The plaintiff, by the contract of October 14, 1871, agreed to pay for the Jersey property, “ by conveying to said party of the first part, seven houses and lots, situated, etc.,” describing the seven houses; and subsequently, and about the 23d of the same month, executed and delivered to the defendant the deed mentioned, of the seven houses, which the defendant accepted and recorded, without claim that it did not agree with the con
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tract; and subsequently, and before this suit, sold most of the seven houses.
■ “When, from the language of the contract, there is no uncertainty as to the true meaning of its terms, it is not competent to give evidence to show, that a different meaning was intended ” (Curtis v. Howell, 39 N. Y. 211 ).
“ And the subsequent admissions and conduct of the defendant, are not admissible in evidence, with the view to the construction of such a contract” (Horton v. Woodruff, 2 Coms. 153).
In Wescott v. Thompson, 18 N. Y. 367 , the court' say: “I lay out of view the finding of the referee, as a fact, that the parties understood it as above interpreted. The understanding of parties to a contract is to be learned from the terms of the contract, if plain and unambiguous; and the question of what was their understanding, is always a question of law.”
Parol evidence is never allowed to create an ambiguity where none existed before (Auburn City Bank v. Leonard, 40 Barb. 119 ).
L. M. Northrop, attorney, and Henry E. Knox, of counsel, for respondent,
urged :
I. The first conclusion of the referee, 1 ‘ That by said written contract the plaintiff sold said seven houses as finished houses, and was “legally chargeable with the expense of finishing said “house,” is correct. The phrase “seven houses and lots ’ ’ means necessarily seven completed houses. Until the buildings are completed they are not houses.
H. The finding of fact ‘1 That the plaintiff bargained “ with the defendant upon the supposition and with the “intent that the said unfinished house was to be finished without expense to the defendant, and that the “defendant was to have a complete house,” is abundantly sustained by the evidence.
III. This finding of fact of the referee, being abundantly sustained by the evidence, the court will not disturb it on appeal (Foote v. Roberts, 7 Robertson, 17).
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IY. If there was any doubt as to what the parties meant by using the phrase “ seven houses and lots,” with reference to the houses being finished or unfinished, the court may properly resort to extrinsic evidence for the purpose of setting at rest the doubt (Blossom v. Griffin, 13 N. Y. 569 ).

The contract for the sale and conveyance of the seven houses and lots of land, is silent in respect to the condition of the buildings to be conveyed as part of the premises. There is no stipulation expressed, and none can be implied, that if they or any of them were in an unfinished state, they should be completed by the vendor.

The referee has found no fact from which could be deduced any obligation on the part of the plaintiff to allow to the defendant the expenditure required to complete the buildings; but from the mere fact that one of them was in an unfinished condition, he concludes as matter of law, that the plaintiff sold the houses as finished houses, and was legally chargeable with the-cost of completing them.

It is impossible to sustain the conclusion of the referee, either upon any fact found by him, or upon any evidence in the case of any contract expressed or implied, showing any obligation on plaintiff’s part to complete the houses.

But, even if it was a part of the contract that the plaintiff should finish the buildings, there would still be a serious difficulty in sustaining the judgment.

The premises had been conveyed, and in the absence of any mistake or fraud, it is to be presumed that all the covenants in the contract were merged in the deed.

But the defendant put his claim, not upon the ground that it was agreed that the houses were to be completed, but that the contract being for the sale and conveyance

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of seven houses, there was an implied warranty or guarantee that they should "be, at the time of the conveyance, “finished houses.” And the referee has adopted this theory of the defence, which led to his finding of the additional fact, that it was the intent of the parties that the one unfinished house should "be finished without expense to the defendant.

This additional finding is not supported by any evidence that it was a part of the written contract that the house should be complete. Indeed, as I understand the defence, and the views adopted by the referee, it is conceded that the contract does not impose any such obligation. If it did, then the principle of merger, already alluded to, would apply. So much, therefore, of the additional finding as states or implies that the parties bargained upon the supposition and with the •intent that the unfinished house should be finished without expense to the defendant, can be supported only upon the claim of implied warranty in the contract.

The questions involved, therefore, are : first, Is there any such implied warranty ? and second, If it existed, was it merged in the conveyance of the lots %

Upon the sale of chattels, there is an implied warranty of title and quality. The latter (quality), unless in view of the purchaser, extends to a warranty that the bulk is equal to the description given or sample shown. And the rule has been applied to choses in action, and the designation of the chose held to imply that it.was as designated, and to be a warranty (Furniss v. Ferguson, 15 N. Y. R. 437; Delaware Bank v. Jarvis, 20 Id. 226).

This doctrine of implied warranty has also been applied in this State to contracts for the sale of lands, so far, at least, as relates to the title (Burwell v. Jackson, 9 N. Y. R. 535). But I am not aware that it has ever been carried to the extent that a warranty may be

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implied in any other respect. The theory of the law concerning the transmission of the title to real property is opposed to the implication of covenants. Contracts of sale must "be in writing ( 2 R. 8 . 135, § 3), and are supposed to contain the whole agreement of the parties. So no covenant whatever can "be implied in a conveyance of real property (1 R. B. 738, § 140). But upon the principle that a vendee ought not to "be obliged to take a defective title, courts have deemed it proper to protect him by implying that the vendor had agreed to give a good title.

Mr. Justice Seeder, in Burwell v. Jackson {supra), says the rule rests upon a solid foundation of reason and justice. “It is fair to presume that a vendor knows the nature and extent of his own rights, but that the vendee has not the same means of knowledge.”

The reason does not, however, exist in respect to other parts of the contract, and there cannot be any further obligation implied. If the vendor is capable of giving a good title, and otherwise complies with the terms of Ms contract, the title cannot be refused on the ground that some duty which can only be implied from the contract, has not been discharged.

From the time of entering into a contract for the sale of land, the purchaser is deemed the owner, and has a descendible estate, and his heirs may insist on the completion of the purchase (Cogswell v. Cogswell, 2 Edw. 231 ), and from. such time the premises are at his risk; and though the buildings should be destroyed by fire, the loss would be upon him, and it would furnish no reason for his refusing to perform (Mott v. Coddington 1 Robt. 267).

There is a further reason why covenants, other than such as relate to the title, cannot be implied. In respect to buildings, improvements, and generally appurtenances, the rule of caveat emptor must be deemed to apply. That rule is not exclusive in its application to

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chattels, "but has an equal application to such parts of real contracts as relate to the condition of the premises sold ; and such application is distinctly recognized in’ Burwell v. Jackson, supra, although made inapplicable to the matter of title. Parties to a sale and purchase of land are presumed to be upon the land when the contract is made (Harshaw v. Ried, 45 N. Y. R. 415), and to contract with reference to the condition the premises are in at that time. And if the vendor makes no false representation, the vendee must examine for himself, or else provide in express terms in his contract for his protection.

But a more serious objection to the defence arises from the execution and delivery of the deed.

Whatever may have been the agreements, express or implied, of the parties, they all entered into and were merged in the conveyance of the title. And this includes the implied covenant of title.

It is held in a large number of cases, that unless the contract clearly manifests a different intention, the acceptance of a deed is evidence of the execution of the whole contract; and the rights and remedies under it are determined by the deed. The contract thenceforth becomes null and void (Davis v. Barker, 3 John R. 506; Grangiac v. Arden, 10 Id. 293; Tallman v. Green, 3 Sandf. 437 ).

And even collateral covenants intended to be saved from merger must be such as do not relate to the title (Bull v. Willard, 9 Barb. 641 ; Carr v. Roach, 2 Duer, 20 ). If they relate to the title, and whether they are expressed or can be implied, the principle of merger applies to them; and the reason is furnished in Barwell v. Jackson, uii sup., where it is said, “ the reason why the implied warrantee on the part of the vendor ceases upon the consummation of the contract of sale by the execution of a deed, is not that the vendor, is presumed to have, investigated the title, and discovered the defects,

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if any there be, but that it is reasonable to require the vendee in taking a deed, which is a more solemn and deliberate act than entering into a preliminary agreement for the purchase, to protect himself by an express warranty.” Or, as might have been added, by refusing to take the deed until the title had been made good.

If, therefore there was such an implied warranty as is claimed by the defendant in this case, he should have rejected the deed, until the plaintiff had fully performed ; or protected himself by a new and independent contract.

For both the reasons therefore, first, that there was no implied warranty; and second, that the agreement was merged in the deed, it was erroneous in my opinion to allow to the defendant the sum expended by Mm in completing the unfinished house.

In accordance with these views, the plaintiff was entitled to recover the amount found to be due to him, without a deduction therefrom of the amount found to have been paid by the defendant for finishing the buildings, which with interest is stated at $1,474.04.

As all the facts are before us, and the amount which the plaintiff should recover, can readily be ascertained by computation, there is no necessity for a new trial.

The plaintiff should have judgment for the additional sum of $1,400, with interest thereon from Jan. 1, 1872, and the judgment should be amended accordingly, together with the costs of the appeal.

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