Majority
p. 100*Morris vs. Wadsworth.
Headnote
Where a party, having an equitable estate in the moiety of a lot, for a valuable consideration, released his interest to the owner of the other moiety who held the legal estate in the whole premises by deed from A. B., and covenanted, in case it should thereafter appear that A. B., at the time of his conveyance, had not title to the lot, and a recompense for the same could not be obtained from A. B. in a reasonable time after his title thereto should be found defective, that he would pay to the other party the value of the one half of the lot; it was held, in an action against the covenantor to recover such value, (in which action the plaintiff in his declaration alleged that it had been discovered that A. B., at the time of his conveyance, had no title to the lot, and at the time of such discovery was wholly insolvent and unable to make any recompense for the lot, and so continued until his death, so that the plaintiff was unable, by due course of law or otherwise, to obtain such recompense,) that it was not necessary for the plaintiff to aver in his declaration that recourse to legal proceedings had been had against A. B. or his representatives for the recovery of the value of the moiety of the lot, and that a plea that no suit at law or in equity had been instituted against A. B. or his representatives for the recovery of such value, was no bar to a recovery, and therefore bad on demurrer.In the case of a guaranty, a suit at law against the principal debtor is not necessary to sustain an action against the guarantor, unless such suit is required by the very terms of the contract, or necessarily implied from the terms used.
Ordinarily, in a case like the present, a demand of payment from the person who in the first instance was to be looked to, ought to be shown; but where, as in this case, such person from the time that his liability occurred until his death was wholly insolvent, such demand need not be made.
A replication containing no new matter, and barely denying the facts alleged in a plea, concluding with an averment, is bad; but such defect can be taken advantage of only by a special demurrer.
Action of covenant. The plaintiff, in his first count, declares that on the 17th August, 1800, the defendant executed a deed poll, whereby, after reciting
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that in the division of sundry lots of land in the county of Ontario, whereof the plaintiff and defendant were tenants in common, it was agreed that the plaintiff should retain a certain lot of land known as lot No. 47, &c. which was conveyed by Oliver Phelps to the plaintiff in fee, by deed bearing date 1st January, 1800, the one half of which was in equity the property of the defendant, in lieu of which half of the lot the defendant had received other *lands, the defendant, in consideration of the premises, released and forever quit-claimed to the plaintiff all his right, title and interest in or to the undivided half of the said lot No. 47, and covenanted and agreed, that in case it should thereafter appear that Phelps at the time of his conveyance had not title to the lot, and a recompense for the same could not be obtained from Phelps in a reasonable time after his title thereto should be found to be defective, the defendant would pay to the plaintiff the value of one half of the lot. The plaintiff then avers that Phelps, at the time of the conveyance to the plaintiff, had no title to the lot, either at law or in equity, and that such defect of title was discovered by the plaintiff and the defendant on the 1st July, 1806 ; by reason whereof the title of the plaintiff to the lot was defective. He further avers, that on the day last aforesaid, Phelps was wholly insolvent and unable to make any recompense for the lot, and so continued until 1st February, 1809, when he died wholly unable to pay his debts, so that the plaintiff was unable to obtain by due course of law or otherwise, and hath not obtained from Phelps any recompense for the lot, whereby the defendant became liable to pay to the plaintiff the value of the one half of the lot; and although the defendant had notice that the plaintiff had not obtained, and could not obtain such recompense from Phelps, yet he did not pay, &c. and so, Stc. The declaration contains a second count precisely like the first, except, that in addition to stating that Phelps had no title to the lot, it is averred that the title was in one W. Whiting, and that the discovery of the defect of title is alleged to have been made on the 1st July, 1807. The defendant put in a number of pleas ; in his ninth plea to the first count, and tenth plea to the second count, he alleges that since the discovery of the defect of title in Phelps, no suit at law or in equity has been instituted by the plaintiff against Phelps, or the heirs or personal representatives of Phelps, to recover a recompense for the failure of title. To these two pleas, the plaintiff demurs, and the defendant joins in demurrer. In his eleventh plea to the first count.and twelfth plea to the second count, the defendant alleges, that at the time when it was ascertained that the title of the plaintiff to the lot was defective, Phelps *was possessed of a large amount of real personal property belonging to him, sufficient to have enabled the plaintiff with due diligence to recover and collect a full recompense for the lot, and so continued possessed, See. until 1st February, 1809, when he died, leaving the same; but the plaintiff, during the life time of Phelps, neglected, and since his death has continued to neglect to take any measures to recover a recompense for the lot. To the two last pleas the plaintiff replies, reiterating the averments in the declaration, that at the time when, See. Phelps was insolvent, and so continued, Sec. whereby he was enabled to obtain any recompense for the lot from Phelps during his life time, or from his heirs or representatives since his death, concluding with a verification and prayer of judgment. To these replications the defendant demurs, and the plaintiff joins in demurrer.
B. F. Butlee, for the plaintiff.
All the pleas out of which the demurrers in this case have grown, present substantially the question whether, before suit brought against the defendant, the plaintiff should have sought his remedy by a course of legal proceedings against Oliver Phelps, or his representatives since his death ? On the part of the plaintiff, it is submitted that this was not ne
p. 104
cessary; that the utter insolvency of Phelps is a sufficient excuse for the omission to seek from him or his representatives the recompense to which the plaintiff was entitled. 8 East, 242. 15 Johns. R. 425. 19 id. 69. 1 Cowen, 98. 4 id. 173. 1 Wendell, 457. 8 id. 199. A suit at law or in equity, against Phelps or his legal representatives, was not the only mode of testing the insolvency of Phelps ; it might be shown in any other way in which the fact could be satisfactorily established. The covenant does not require in terms that the plaintiff shall institute a suit at law or in equity against Phelps, nor is the engagement of the defendant dependant upon the’ condition that a suit be instituted.
J. C. Spencer, for the defendant.
Whether satisfaction might or might not have been obtained from Phelps or his representatives, could be ascertained only by a course of legal proceedings. The covenant of the defendant was in the *nature of a guaranty, if not in itself a guaranty. In
case the title proved defective, and a recompense for the lot could not be obtained from Phelps, the defendant covenanted that he would pay, &c. How is this case distinguishable from an ordinary guaranty, where the guarantor engages to pay, if payment cannot be obtained from another ? In Thomas v. Woods, 4 Cowen, 188, Mr. Justice Sutherland says that this court has held, that where a party undertakes to pay the debt of a third person if it cannot he collected from him, it is necessary to issue not only á f. fa., but a ca. sa., against the original debtor, before recourse can be had to the surety; and that it was no answer to say that the original debtor was insolvent, and that there was, no reason to suppose that a ca. sa. would have produced the money. In Taylor v. Bullen, 6 Cowen, 624, the same doctrine is held; and the principle advanced in Moakley v. Riggs, 19 Johns. R. 69, is cited with approbation, that “it may well be doubted whether an engagement by one to perform an act on the previous performance of another act by the other, can be enforced without showing the previous act done, or that its performance was dispensed with or prevented by him who was to perform the subsequent act.” The covenant, it is admitted, does not in terms require a suit to be commenced; but it should receive a construction rendering a suit necessary. It is only in case a recompense cannot be obtained from Phelps on a failure of title, that the defendant is to pay; and how can that fact be ascertained but by suit ? and if the contract requires a suit, it cannot be dispensed with by the plaintiff; and there having been no compliance with this requirement, the plaintiff cannot recover. In Cumpston v. M’Nair, 1 Wendell, 457, where the holder of a promissory note guaranteed its collection, the court say the very terms imply that measures to collect it from the principals were first to be used, and the defendant’s contract or guaranty was that those measures should be successful, and if not, that he would pay the note and costs : it is precisely equivalent to a guaranty that the note was collectable by due course of law ; for it can be collected, that is payment of it enforced, only by due course of law. Do not the words of the covenant here equally imply that measures to obtain the retí compense from *the principal are first to be resorted to? At all events, a demand upon the principal for payment should have been shown. 1 Wendell, 137. The replications are bad in not concluding to the country; there being an affirmative on the one side and a negative on the other, the plaintiff should not have concluded with a verification. 1 Saund. 103, n. 1.
Butler, in reply.
The objection to the replications cannot be urged, as they were not demurred to specially for the cause assigned. 1 Saund. 108, b.
By the Court,
It is clear that as between these parties, in
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equity and justice, the obligation to pay to the plaintiff the value of a moiety of lot No. 47, on failure of the title, lay originally upon the defendant. The case is to be viewed in the same aspect as if the defective title had been derived from the defendant himself. Had the loss happened while the parties remained tenants in common, half of it would have fallen upon the defendant, and the object of the covenant in the release was to bind him to sustain such loss, and keep harmless the plaintiff after he had taken to himself the whole title in the partition. The defendant received from the plaintiff the full value for his moiety of the lot, and it was just and proper to take from him an engagement to stand behind the title. We cannot, therefore, view the defendant in the light of a guarantor of the debt or duty of another, but as providing in the covenant for the discharge of his own duty; and this being so, we are of opinion that the plaintiff was not bound to prosecute Oliver Phelps as a condition precedent to the claim or recovery upon the covenant for the value of the land. If we could view him in that character, as sureties are favorites in the law and entitled to a strict and favorable construction of their contracts as such, and are not to be made responsible without a full and perfect compliance with the terms and conditions upon which their liability depends, we might possibly be disposed to give such an interpretation to the covenant that the defendant would pay the value of the one half of the lot, if a recompense for the same could not be obtained from Phelps in a reasonable time after *his title thereto should be found to be defective, as would require the plaintiff to show by legal proceedings his failure to obtain such recompense. But as at present advised, I should not be willing even to say thus much, for I apprehend it would be giving a more comprehensive construction to the terms of the guaranty, calling it such, than is supported by any of the adjudged cases on the subject.
In all the cases that have been cited by counsel, or which I have seen, the very terms used necessarily implied that the liability of the guarantor depended upon the failure to obtain recompense or payment, after proceedings at law against the principal. Moakley v. Riggs, 19 Johns. R. 69. Thomas v. Woods, 4 Cowen, 173. Taylor v. Bullen, 6 id. 624. Cumpston v. M’Nair, 1 Wendell, 457. Where this is not the condition of the liability by the terms of the covenant, or by legal inference, a suit at law is not necessary, Bank of New-York v. Livingston, 2 Johns. Cas. 409 . Compston v. M’Nair, 1 Wendell, 457. Mech. Fire Ins. Co. v. Ogden, 1 id. 37. According to the doctrine of the case last cited, it would be material to set forth in the declaration an averment of a demand upon Phelps before suit brought against the defendant ; but the averment of Phelps’ insolvency and total inability to pay, covering the whole time from the discovery of the defective title until his death, supersedes such averment. If this fact can be maintained, and we are to assume it for the purpose of this decision, a demand would have been nugatory and idle. On the ground, then, that the demand in this case is in equity and justice the debt of the defendant, and the terms of the covenant not necessarily imposing, as a condition to his liability, a suit against Phelps on the covenant in his deed, we are of opinion that the ninth plea to the first count and tenth plea to the second count demurred to by the plaintiff are bad, and that the plaintiff is entitled to judgment. It follows, also, that the substance of the replications to the eleventh plea to the first count and to the twelfth plea to the second count are good; and the only question left is as to the correctness of the conclusions of those replications. We are of opinion they are bad and ought to have concluded to the country, as no new or different issue
p. 107
could be raised, *had rejoinders been put in, from that presented by. the matter set up in the pleas ; the insolvency and inability of Phelps to make recompense to the plaintiff would be the issue in either case. 1 Saund. 103, n. 1. This defect, however, can only be taken advantage of by special demurrer, 1 Saund. 103, n. 1, b, and the demurrers in this case to the replication are general.
The plaintiff is therefore entitled to judgment upon his demurrers to the de-4 fondant’s pleas, and also upon the demurrers of the defendant to the replications put in by the plaintiff, with leave to the defendant to amend, on payment of costs.