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Reading v. Gray

37 N.Y. Super. Ct. 79 5 Jones & S. 79 Court N.Y. Super. Ct. Decision date 1874-02-28 English

Delivered by *88 By the Court. —Monell, Ch. J.

Contents

Majority

p. 79
MARY EMMA READING, Plaintiff and Respondent, v. CHRISTOPHER GRAY, Defendant and Appellant.

Headnote

I. Mistake oe Law.
'Money voluntarily paid under, cannot be recovered back, n. Contract.
1. Construction of by parties.—Estoppel.
A. Where the parties (there being no fraud or concealment, or mistake or ignorance of facts) themselves put a construction on, the terms of the contract, such construction must control in the nature of an estoppel. But the parties can review their decision- and arrive at a different construction, and if that different conclusion be acted on, it will in its turn become conclusive-unless the parties review it.
2. Construction by the court.—Intent of parties, a. Such intent must be considered.
3. Interpretation of particular words.
a. The word “ from” may be read “at.”
IH. Incumbrances.—Covenant Against, in Deed.
1. When satisfied,.
a. By retention out of the purchase money of a sufficient sum to pay the incumbrance, satisfies the covenant as long as- the retention continues.
2. When revived.
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a. It is revived by a return of the money, although such return be voluntary.
3. When money retained for an incumbrance can be recovered by parties, a. After the grantor has paid off and satisfied the incumbrance.
4. Damages for b'each of.
a. Until actual payment of the incumbrance by the grantor he can recover only nominal damages. .
1. The case of Rector of Trinity Church ». Higgins, 48 M T. 533 distinguished.
IV. Maxims.
1. Ignorantia . . . facti excusat. Ignorantia juris non-excusat, applied.
V. New Trial.—Nominal Damages.
1. A new trial will not be granted to enable a party to recover nominal damages.
VI. Application of these Principles.
1. In a contract for the sale of real estate, dated June 3, 1873, the vendor agreed to convey, “free from all incumbrances from the date of this contract.” The contract called for a delivery of the deed on August 33: On August 5, a judgment was recovered against the husband of the vendor, and on July 33, an assessment on the property was duly confirmed. The deed containing an unqualified covenant against incumbrances was delivered August 37. On its delivery, the vendee was, with the vendor’s consent, allowed to retain a certain sum as an indemnity against the judgment and assessment. Shortly after the delivery of the deed, the parties met to determine which of them should, under the agreement, pay the assessment, when the vendee (knowing all the facts bearing on the question), said the assessment was to have been paid by him, that his understanding, and what he meant to express was, that “from the date of the contract, anything that came on the property was for him to pay.” And he thereupon drew his check for the amount of the assessment and delivered it. The vendor, having paid off and satisfied the judgment, brought an action to recover from the vendee the amount retained by him therefor. Defendant, after denials sufficient . to put the plaintiff to proof of her cause of action, averred that the assessment remained unpaid, that he had paid back of the money originally retained by him, so much that sufficient did not remain to satisfy the assessment, and Claimed to recover of plaintiff the difference between the assessment and interest thereon, and the amount remaining in his hands.
Held, 1. The payment back being expressly on account of
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the assessment, plaintiff was entitled to sustain the action for the money retained as an indemnity against the judgment.
2. That the affirmative facts alleged by the defendant, if they formed any defense, only constituted a defense by way of counter-claim.
3. That those matters constituted no defense, by way of counter-claim or otherwise, except a counter-claim for nominal damages.
4. That the judgment for plaintiff, entered on verdict for the full amount claimed by her, should be affirmed.
Before Monell, Oh. J., and Freedman, J.
Decided February 28, 1874.
Appeal from a judgment and an order denying a motion for a new trial.
The parties made a written agreement, the plaintiff to sell and convey to the defendant certain premises in this city. The agreement contained the following:
“And the said parties of the first part, on receiving such payment, at the time and in the manner above-mentioned, shall, at their own proper costs and expense, execute, acknowledge and deliver to the said party of the second part, or to his assigns, a proper deed for the conveying and assuring to him or them, the fee simple of the said premises, free from all incumbrances from the date of this contract.”
At the time of the delivery of the deed, the defendant was allowed to retain of the purchase money, the sum of three hundred and fifty dollars,-as an indemnity against the lien upon the premises of a certain unsatisfied judgment. The judgment was afterwards satisfied of record, and this action was to recover the deposit.
The defendant alleged that the deed, delivered by the plaintiff to him, contained an unqualified covenant against incumbrances. That at the delivery of the
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deed, the premises were incumbered by an assessment, amounting to three hundred and sixty-one dollars and fifty-four cents. That the defendant, with the consent of the plaintiff, retained out of the purchase money, the smqiFof seven hundred and twenty-three dollars and fifty-four cents, as an indemnity against the aforesaid judgment, and the said assessment. That soon thereafter, and while said assessment was unpaid, the plaintiff induced the defendant to return to her the sum of three hundred and seventy-three dollars and fifty-four cents, part of the indemnity money; that the plaintiff has not paid the assessment, and it remains a lien on the premises.
The defendant further alleged, as a counter claim, the breach of the covenant in the deed, against incumbrances, by reason of the unpaid assessment.
It appeared that after the delivery of the deed, the parties met to determine which of them, under the agreement, should pay the assessment. A witness for the plaintiff testified, that at such interview the defendant was asked whether this assessment, which was levied on July 2; 1872, and which had been allowed to him, was to have been paid by him or by the plaintiff; he at once said that it was to have been paid by him ; that he was an honest man and wanted to do what was right; he "then and there sat down and drew his check for the amount of the assessment which had been allowed to him three hundred and seventy-three dollars and fifty-four cents ; the plaintiff’s share of the assessment was three hundred and sixty-one dollars and fifty-four cents; the other twelve dollars was on the other lot; the judgment was satisfied of record on February 10.
There was some contradiction of this by the defendant ; but he stated in his testimony, that he had said at the interview alluded to, “that from the date of the contract, anything that came upon the property, be
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longed to Mm to pay.” The counsel of the-defendant,• who was present at the same interview, testified that he said to the defendant to -this effect: “Mr. Gray, a question has arisen in regard to which of you parties should pay the expense of this assessment, and I have thought it best to send to you and let you state" yourself what was your intention in making this contract in regard to who should pay this assessment; ” he answered immediately, “ that Ms understanding, and what he meant to express, was that he should pay all the assessment from the time of the date of the contract ; upon which a check was drawn and he signed it, and it was delivered to you, and you all went away with the exception of Mr. Gray, who remained a few moments afterwards.”
The assessment had been confirmed on July 22, 1872, which was between the dates of the contract and deed.
The was some dispute in the evidence, as to the purpose for which the three hundred and fifty dollars was retained by the defendant.
The case was submitted to the jury, under the charge of the court. They were instructed, first, to determine concerning the three hundred and fifty dollars retained by the defendant; and if they found that it was retained as an indemnity against the judgment, with a promise to return it when the judgment was satisfied, the plaintiff, having satisfied the judgment, was entitled to recover the amount.
They were further instructed in respect to the counter-claim, that “if the defendant was induced improperly or fraudulently, or by any mistake or wrong or deception practiced upon him in any way or shape to return this money, it being rightfully bis, he is not to be prejudiced by any fraudulent act, .deception or wrong. But if, for the purpose of acting in good, faith, and carrying out what the parties themselves believed
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to be the real interpretation of the contract, and to avoid difficulty, he believed it his duty as an honest man to pay this money, he is bound by that act, and is not entitled to get the money back, because the law is a healer and pacifier of difficulties, and when parties meet, and in good faith make their own interpretation, and pass money in respect to it, and carry it out, the law gives effect to it. The constant daily transactions of life show the construction of similar contracts and obligations, and if they could be disturbed afterwards, great wrong might arise, and litigation to a considerable extent. ’
“ Hence, if in good faith, this money was, without any fraud or deception practiced upon the defendant, returned by him to the plaintiff, then' the defendant is barred by that, and you must find for the plaintiff.
“But if you can find that there was any bad faith or fraud, or deception, or wrong practiced upon the defendant, then your vérdict will be for the defendant, and under his counter-claim, it will be your duty to give him a verdict for the sum of forty-six dollars and forty cents. If on the other hand you find that it was a transaction in good faith, putting an interpretation ■ upon it such as was agreed to by the parties, and that this three hundred and fifty dollars was deposited a& indemnity against the judgment in the marine court,, then your verdict will be for the plaintiff in the sum of three hundred and fifty dollars, with interest amounting to three hundred and sixty-eight dollars and thirty-eight cents.”
Defendant’s counsel asked- the court to charge that in case the jury believed that this was a misinterpreta- , tion, or a mistake by any of the parties in construing the "contract, they have a right to take it into consideration ; that if the defendant mistook his rights, and misinterpreted the contract, he could recover.
p. 85
The court declined to charge further than he had charged, and the defendant accepted.
The defendant appealed from the judgment and order.
A motion for a new trial was denied.
J. if. Budd, attorney, and B. A. Mott, of counsel for appellant, urged
was the duty of the plaintiff to pay the assessment, and it having been fully shown by the testimony on both sides, that the money which she claims to have paid in full satisfaction of such liability was demanded by and paid back to her by defendant, the justice should have directed the jury, as requested, to find a verdict for the amount of such assessment, less the three hundred and fifty dollars retained by defendant. The language of the contract is plain ; it required no interpretation ; the word “ from ” is synonymous with “ from and after,” and when read in conneption with the delivery of the deed, means “down to” or “at the time of” the delivery of the deed (Keene v. Towsley, 45 Barb. 150 ). That such was the understanding of all the parties is proved.
II. The withdrawal of the money did not relieve the plaintiff from her liability, as above stated. The return of the money by defendant was without any consideration, and it cannot be inferred that he intended to waive the express terms of his contract, and the covenants in his deed. In fact, the testimony clearly repels any such inference (Canal Bank v. Bank of Albany, 1 Hill, 287 ; Bank of Commerce v. Union Bank, 3 N. Y. 230 ; Mayor v. Erben, 38 Id. 305 ; Kingston Bank v. Eltinge, 40 Id. 391; Chapman v. City of Brooklyn, Id. 372.) The money was returned by defendant through mistake, and the plaintiff could not be injured by repayment of the amount to defendant. All the cases show that when such repayment has been denied by the court, the party would be injured.
p. 86
or prejudiced in some manner; but in. this case the plaintiff, by the covenants in her deed, is liable to pay this assessment as an incumbrance, and parol evidence would not be permitted to explain away that liability. The return of the money being a mistake of fact, an action by defendant to recover it back would lie (Rheel v. Hicks, 25 N. Y. 289 ; Mayor, &c. v. Erben, 40 Id. 372 ; Kingston Bank v. Eltinge, Id. 391 .) The contract has been interpreted by each of the parties in succession. 1. On August 27, when all the parties and their counsel left the money with the defendant to pay the assessment, &c. 2. On August , when part of the -money was returned. 3. The plaintiffs admit that “there is an ambiguity in the language of the contract “that it was bungling and rather obscure.” 4. The defendant being the last to interpret the contract, ought not to be precluded from having the law interpret the contract, concerning which so many lawyers and parties had differed. 5. Especially when he says he never intended to waive any of his rights by complying with plaintiff’s request to return the money. The rule of law is well established that’ to prevent-money being paid back to the payer, it must appear to be paid with full knowledge that it ought not to be paid (Waite v. Leggett, 8 Cow. 195 ; Kingston Bank v. Eltinge, suptf).
III. Whether the return of the money was by reason of a mistake of fact or of law on the part of the defendant, the agreement and deed by reason of the covenants fix the liability of the plaintiff to pay the assessment,. and until the same is actually so paid by tl^e plaintiff, this liability cannot be discharged, and the deposit money left in possession of the defendant should be retained by him. This action is brought to recover a portion of the money deposited, and the plaintiff has shown that she voluntarily left it with the defendant as security against two liens, but one only of which has been removed.
p. 87
IY. As a .separate proposition distinct from the parol testimony in the case, the court erred in not granting the motion, as the assessment on the property was an incumbrance or charge before the date of the agreement, although not confirmed until after its date. The plaintiff, therefore, should have paid it in compliance with the very terms of the agreement (Rundell v. Lakey, 40 N. Y. 513 ; Keene v. Towsey, 45 Barb. 150 ; Post v. Leet, 8 Paige, 336 ; 4 Mass. 627 ). The assessment was for a sewer, a permanent improvement to the land—rendering it more valuable. The law presumes the defendant knew of such improvement—in fact he did, and by reason of it, was induced to give more for the land than he otherwise would have given • —and also that the owner added the value thereof to his price. . The liability for an assessment is fixed when, the work is done—and the delays in the confirmation of the assessment pertain to the city5 s right to enforce the collection of the assessment (Cases last cited).
Y. The judgment appealed from should Ice reversed.
J. L. Slosson, attorney, and of counsel for respondent, urged:—I.
The counter-claim is based upon the breach of the covenant against incumbrances in plaintiff’s deed, the breach alleged being the very assessment to pay which the money was paid and received at the time of the delivery of the deed. As to that assessment, that covenant was absolutely satisfied and discharged by that payment.
II. The defendant having repaid the money voluntarily and without any fraud or deception practiced upon him—as to which there is neither evidence nor even pretense, is estopped by his deliberate act. His positive admission, followed by his immediate repayment of the. money in accordance therewith, concludes him.
III. The judgment should be affirmed.

The right of the plaintiff to recover the three hundred and fifty dollars, retained by the defendant, cannot be successfully questioned. Apart from the finding of the jury, which, upon conflicting evidence, must be regarded as conclusive, the facts present a clear case of liability on the part of the defendant. It cannot be doubted that he retained the money, as an indemnity for the judgment, with an implied, if not an express promise to return it, upon the judgment being satisfied of record. The plaintiff soon afterwards caused the judgment to be so satisfied, and there is no valid pretense for the defendant’s withholding the amount, unless he has a good cause of action growing out of the facts constituting his counter-claim.

The retention of the money to pay the assessments, was upon the assumption of both parties, that under the contract the burden should fall upon the plaintiff. At that time—the time of the delivery of the deed—such was the construction of the contract by the parties. They believed, as a matter of law, that the words in the contract, “free from all incumbrances from the date of this contract,” imposed upon the vendor the obligation to remove all incumbrances, as- well after the date of the contract as before.

Accordingly the deed, with an unqualified covenant against incumbrances, being about to be delivered, it was mutually agreed, that the vendee should retain out of the purchase money, a sufficient sum to meet the assessment.

There is no doubt the parties, mutually and alike, understood the facts. They each knew the precise terms of the contract, and that the assessment had been confirmed by the proper authority, intermediate the execution of the contract and the delivery of the deed ; and they are presumed to have known, as matter of law, that the assessment did not become an in

p. 89
cumbrance upon the property, until its actual confirmation by the proper authority."

Under these circumstances, the parties undertook to determine for themselves, their legal rights and obligations ; and they arrived at the conclusion, that under the terms of the contract, the vendor was bound to pay the incumbrance.

The effect of the retention of the money by the defendant, was to satisfy the covenant in the deed. The contract, by the execution and delivery of the deed, had become merged in the latter ; and as the covenant against incumbrances in the latter was unqualified, it left a present liability of the' grantor (plaintiff) upon that covenant. But retaining of the plaintiff’s money, a sufficient sum to pay and discharge the incumbrance, was so far a satisfaction of it, "as to deprive the vendee of all right of action, for any breach of the covenant in the deed, by reason of the existence of the incumbrance.

Such being the effect of the retention of the money by the defendant, it became absolutely his to do with as he pleased. He could discharge the incumbrance ; but if he omitted to do so, he could have no recourse to the plaintiff’s covenant.

Nor was the plaintiff, after such payment to the defendant, under any obligation to discharge the incumbrance. He had paid it, in effect, by the arrangement with the defendant, and thereby satisfied his covenant.

Subsequently the parties met, under a claim made by the plaintiff, that there had been an error in the construction of the contract, and, in effect, reviewed their former conclusion; and then, as found by the verdict, agreed upon an interpretation of the agreement, which cast the burden of the incumbrance upon the defendant.

The was no mistake concerning the facts, necessary

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to be known by either party. They1 each knew, as before, the precise terms of the agreement, and the time the incumbrance had become a lien upon the premises; and then they determined, as matter of law, that the burden should fall upon the vendee.

Thereupon the defendant voluntarily returned the amount to the plaintiff.

The recovery of this sum by the defendant, upon the counter-claim set up in his answer, if it can be recovered at all, is not upon any ground of a breach of the covenant against incumbrances, which ground I will presently examine, but upon the ground of its having been paid thrugh an excusable mistake.

The maxim of the law is “ Ignorantia . . . facti excusat,—Ignorantia juris non excusat.' ’

There is no pretense that the' payment was. made in ignorance of any fact, it was essential the' parties, or either of them, should know, to predicate their judgment. But with knowledge of all that was necessary of the existing facts, the parties, without deception or fraud, and in entire good faith, saw fit to construe and interpret for themselves, the contract they had made, and to decide from its terms, and their own knowledge of their intentions, which of them should remove the incumbrance.

There may have been a mistake of law. Under the somewhat uncertain and. ambiguous phraseology of the contract, it may not. have been clear, what precisely was intended; and a literal reading would, perhaps, require, that the vendor should pay all incumbrances, which might become liens after the date of the contract. Or, construed by the probable intention of the parties, it might mean to bind the vendor against such incumbrances only, as had become liens at or prior to the date of the contract.

In this doubt of the true meaning of the words employed, the parties themselves had recourse to their

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own knowledge of their intention, and by such knowledge, put their construction upon the words. And acting upon such construction, the money was paid.

There was no. mistake in fact, and there is no remedy for a mistake of law.

But I do not think there was any mistake of law. Construing the agreement by the intention of the parties, it is evident that it was meant,, that the vendor should be responsible only for such incumbrances as were liens at the date of the contract; and that the vendee should take title subject to such as might accrue afterwards. That would be a reasonable construction, and such as would conform the contract, to the usual understanding between parties, on the sale of real estate, where time is required by the purchaser, for the examination of title.

The effect, as has been seen,- of the retention by the defendant of the amount of the assessment, was to satisfy the covenant in the deed, at least for such time as he retained the money. But, I think,-when he re- . turned it to the plaintiff, although it was a voluntary payment, it revived the covenant in the deed, so that, if the defendant had paid the assessment, he might have resorted to the covenant for redress; with what result, however, would depend upon the determination of several questions, not necessary to be examined here; among them, whether, .upon a construction of the contract, the plaintiff was to pay the assessment; and whether the contract was merged in the deed.

But there is an insuperable difficulty in the defendant’ s recovering at all, or at least more than nominal damages, for a breach of the covenant. He has not paid the assessment.

It is, I believe, well settled, that until actual payment, the covenantee can have* only .nominal damages

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(Delavergne v. Norris, 7 Johns. 358 ; Hall v. Dean, 13 Id. 105; Standard v. Eldridge, 16 Id. 254; Giles v. Dugro, 1 Duer., 331 , 335; Grant v. Tallman, 20 N. Y. 191 ).

The only departure, or perhaps I should say apparent departure, from the rule above stated, is the case of Rector, &c. of Trinity Ch. •». Higgins (48 JY. Y. .532), where it was héld, that a lessor might recover an assessment laid upon the demised premises, which the lessee had covenanted to pay, notwithstanding the lessor had paid nothing. But that decision was on the ground that the covenant was affirmative and not collateral; and a distinction is drawn between a promise and an indemnity.

That case, however, does not disturb the unbroken current of decision, fixing the measure of damages for a breach of the covenant against incumbrances.

Inasmuch, therefore, as at most, the defendant could be allowed only nominal damages, it would not be ground for granting a new trial ..(Rundell v. Butler, 10 Wend. 110 ).

So far as there was any dispute in the evidence, the defendant had the benefit of having it settled by the jury. The jury were allowed to find, had they seen fit to do so, that some fraud, deception or unfairness was practiced upon the defendant; and had they so found, they were instructed by the court, that the defendant should have their verdict. This was quite as favorable to the defendant, as, upon the evidence, he had the right to expect. And having had the question of fact found against him, be must abide by the result.

The objections to some evidence in respect to the contract and deed, without producing these instrument, if they were sound, were afterwards removed by their production and reading in evidence, by the defendant.

But the objections were properly overruled. The

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production of the papers was not necessary, and the oral testimon„y was admissible without them.

The judgment and ..order must be affirmed, with costs.

Freedman, J., concurred.

Cases cited