Hyperlawhypertext legal database Tallmadge v. Wallis 25 Wend. 106

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Tallmadge v. Wallis

25 Wend. 106 Court N.Y. Sup. Ct. English

Contents

Majority

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*Tallmadge vs. Wallis.

Headnote

A plea of want of seizin 'in a vendor who has conveyed real estate with covenant of seizin, is no bar to an action of debt on bond given for the purchase money. It seems that to bar a recovery on the ground of a total failure of consideration, the defendant must allege that he obtained no estate or interest whatever under the conveyance; and in such case, in the absence of an allegation in the pleadings to the contrary, it will be presumed that he obtained even possession of the premises. The onus of showing a total failure of consideration lies upon the defendant.
It seems also, that in a plea of want of seisin the defendant must specify the defect of title, and show in whom is the tide.
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Where the purchaser has acquired any estate or interest whatever in the premises, or obtained any benefit by the conveyance, he cannot plead want of seisin in the vendor in bar of an action for the recovery of the purchase money: but must, with his plea, give notice of the facts he relies upon to reduce the amount of recovery as for a partial failure of consideration.
Where there has been an eviction, and the purchaser is liable to the true owner, for mesne profits to an amount equal to the sum demanded of him by his vendor, he may plead^such facts in bar of an action for the purchase money as showing a total failure of consideration; but whether a total or partial failure of consideration by reason of defect of title can be shown where the conveyance was with warranty and there has not been an eviction, quere.
Where a contract for the sale of real estate has been consummated by the execution of a deed without fraud or deceit, on the part of the vendor, the purchaser cannot by his own act repudiate the contract; he must apply to chancery, and even that court will not in general interfere, if there be covenants in the deed to which the parly may resort for his remedy.
The statute relative to evidence in certain cases, 2 R. S. 406, § 77, 78, places the defence to actions upon sealed instruments in respect to want of consideration total or partial, upon the same footing with defences to actions upon instruments not sealed, except so far as relates to theybm of pleading; in respect to which, the statute requires that the defence to an action on a sealed instrument to be available, must be pleaded, or notice given of it.[1]
Error from the supreme court. Wallis sued Tallmadge in the superior court of the city of Hew-York in an action of debt on bond, bearing date 26th December, 1885, in the penal sum of §16,185, conditioned for the payment of $8,092,50. The defendant pleaded: 1, non est factum ; and 2, after craving oyer of the bond, and setting it forth that on the day of the date of the bond, the plaintiff, in consideration of the sum of §12,900, executed a deed, conveying to him in fee, thirteen lots of land in the city of Hew-York, subject to a certain ^mortgage for [ *108 ] §4,807.50, which he (the defendant) assumed to pay off and cancel on record as part of the consideration expressed in the deed ; that the plaintiff covenanted that at the time of the sealing and delivery of the indenture, he was lawfully seized in his own right of a good, and indefeasible estate of inheritance in fee simple, of and in the premises, (except as to the mortgage) and that he had good right, &c., to grant, Ssc., in manner and form aforesaid. The defendant then averred that at the time, &c., the plaintiff was not lawfully seized in his own right of a good, absolute and indefeasible estate of inheritance in fee simple (except as to the mortgage) of and in the premises, and that he had not at the time, &c., good right, &c., to grant, &c. He further averred that the bond and deed were executed at the same time, and that the deed was the entire and only consideration for the bond; and inasmuch as the plaintiff was not lawfully seized of the premises or of any part thereof, he (the defendant) said that the consideration of the bond had wholly failed: concluding with a verification and prayer of judgment. To this second plea, the plaintiff demurred, and the defendant joined in demurrer. The cause was tried upon the issue of fact, and a verdict found for the plaintiff—contingent damages being assessed upon the issue of law. The court in which the suit was commenced sustained the demurrer
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and rendered judgment for the plaintiff, and the supreme court on writ of error affirmed the same, and in deciding the case, adverting to the opinion delivered in Whitney v. Lewis and others, 21 Wendell, 131. The defendant then removed the record into this court.
C. O’ Connor, for the plaintiff in error, presented and argued the following points:
I. A plea of the total failure of title to lands conveyed, with warranty, is a perfect bar to an action of debt upon a bond given for the purchase money.
1. When the entire consideration of a covenant to pay money, was some act which the covenantee agreed, in the same instrument, to per- [ *109 ] form prior to, or simultaneously with *the payment, the covenantee in a suit upon the covenant, was obliged, before the R. S. to aver, and prove performance of such act, or readiness to perform it. Campbell v. Jones, 6 T. R. 570-73. Boone v. Eyre, 1 H. Blackstone 273 in note. 1 Williams’ Saunders, p. 320, note 4.
2. This rule, although generally affirmed in cases presenting only a question of pleading, nevertheless establishes the principle that where matter of fact, even though resting merely in pais, grounded upon, and arising out of the same contract would show a total failure of the consideration of the covenant to pay, such matter will, where some technical impediment does not prevent it, discharge the covenant at law, as it ought in equity.
3. The limitation of this principle of general justice, by the common law, in actions of covenant, to the case mentioned in division 2, was founded upon reasons purely technical, was subversive of equity, and not in harmony with the rules of law, in actions on simple contract, as recognized in this state.
The plaintiff was not obliged to aver and prove performance of a prior act, constituting only part of the consideraton, because such a rule would deprive him of payment for what he had performed; and yet the defendant was precluded from setting up such partial failure, in reduction of the plaintiff’s demand, on the technical ground that unliquidated damages could not be set off. Davidson v. Gwynne, 12 East. 388. 7 Johns. R. 249.
Some English judges applied this principle to actions on simple contract, but the courts of this state never did so. Le Blanc, J. 7th East, 484, note 1.
The defence of a total failure of the consideration of a covenant to pay money, when not admissible, through the instrumentality of the rule above adverted to, as the failure of a condition precedent, was, in actions of cove, nant excluded on the technical ground that the plea setting it up, must, necessarily, bo pronounced bad, because the seal was in law conclusive proof of a
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consideration, and the plea, although it admitted the breach alleged, showed no excuse. 1 Chitty’s Pleadings, 483.
*The use of the general issue in assumpsit and debt on simple [ *110 ] contract, and the broad rule of justice adopted in respect to evidence under it, i. e. that anything which showed that the plaintiff had, when he brought his suit, no right to recover, was admissible, alone prevented the application of this legal, but inequitable and inconvenient rule, to those actions. 1 Chitty’s Pleadings, 472, 3d Am. Ed. note 14, lb. 476, note (g.)
By 2 R. S. 406, § 77, sealed instruments are placed, as it respects consideration, on the same basis as simple contracts. Case v. Boughton, 11 Wendell, 106. Johnson v. Miln, 14 Wendell, 199. See 18 Wendell, 610. 15 Wendell, 359.
In actions on simple contract, a total failure of the consideration is, as a plea or as evidence, a perfect bar at common law. Per Chancellor, Reab v. McAllister, 8 Wend. 115 ,16,17, and cases cited. Cook v. Moseley, 13 Wend. 279 . Ib. 607. Judd v. Denison, 10 Wend. 513 . See 14 Wend. 259 .
A failure of title to the thing sold, where there is an‘express or implied warranty, is a bar, within this rule, to an action for the price, whether brought on the contract of sale or on a separate security, although fraud be not alleged. Frisbee v. Hoffnagle, 11 Johns, R. 50, and cases there cited.
5. Even at common law, where the consideration of a covenant to pay money, is a grant of land, accompanied by an express or implied covenant of warranty, it has long been settled law, forming, perhaps, an exception to the rule, that if nothing passed by the deed, the covenant to pay the consideration money, could not be enforced. Frontin v. Small, 2 Ld. Raym. 1418. Bogart v. De Bussy, 6 Johns. R. 96.
6. It is an elementary principle of jurisprudence, founded in the purest justice and sanctioned by innumerable decisions, that, when the consideration of a promise to pay money, has failed, the promise shall not be enforced.
II. The plea in this case shows an entire failure of consideration, and entitled the plaintiff in error to judgment in the court below.
*1. The covenants of seisin, &c. did not form the consideration [ *111 ] of the bond ; they are mere auxiliaries to that which formed the consideration, i. e. the grant.
2. If the covenants of seisin, &c. did form the consideration of the bond, the plea showed a total failure of them, which would entitle the plaintiff in error, in case judgment was given for the defendant in error to recover back in a cross action precisely the same sum which was recovered in this suit; and therefore, according to these general principles of law, long recognized in all other actions on contract, and now, by R. S. rendered applicable to actions on sealed instruments, in order to effectuate justice between the par
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ties, and to avoid vexatious litigation and circuity of action, it ought to be held good. McNeish v. Stewart, 7 Cow. 474 . Luddington v. Pulver, 6 Wend. 406 , deed and bond one instrument. Parker v. Parmelee, 20 John. 133 , referring to 11 Johns. 525 . Montague on set off, page 1. See also 6 Paige, 227.
III. The plea cannot be adjudged bad, on general demurrer, because it does not negative a remote, conceivable possibility, i. e. that the defendant in error, when he sold in fee, had, although not seized in fee, some lesser interest. Such defect, if it be one could only be reached by a special demurrer. Waggoner v. Colvin, 11 Wendell, 27. 1 Chitty's Pleadings, 236, 7, 8, 9. Gould’s Pleadings, page 82, § 53, p. 83, §, 56, page 167, § 193. Hotham v. E. I. Company, 1 T. R. 638. Griswold v. National Ins. Co. 3 Cow. 96 —117. Sir R. Bovy’s case, 1 Ventris, 217. Rex v. Pemberton, 2 Burr, 1036. Hughes v. Robotham, Cro. Eliz. 302. Challoner v. Davis, 1 Ld. Raym. 400. Stephen on Pleading, 350.
J. L. Wendell and S. Stevens,
for the defendant in error admitted that under the provisions of the Revised Statutes, 2 R. S. 406, § 77, the defendant might rebut the presumption of consideration arising from the fact that the instrument upon which he was sued was sealed, by proving a total failure of consideration ; but to enable him to do so, § 78 of the [ *112 ] same statute requires him to plead, or give notice of the ^matter, he relies upon. This the defendant here has not done. He has pleaded that the plaintiff was not seized ; but nothing beyond. Want of seisin does not show a total failure of consideration; for aught alleged the plaintiff may have had a term for 999 years, or an equitable estate, or an adverse possession within a few days of ripening into a perfect bar at the time of the conveyance, and become so in fact, at the commencement of the suit. For a defect of title in part, a purchaser in an action for breach of the covenant of seisin is entitled to recover only pro rata. 5 Johns. R. 49. 12 Id. 126 . 12 Wendell, 83. The defendants should have alleged that he had obtained nothing under the deed; that he had been prevented from taking possession, or been evicted by title paramount, and set forth the name of the true owner. Having omitted to do so, the legal intendment is that he could not, with truth, make such allegations. These averments the defendant must be held to make, or the consequence will be, that in every suit brought for the recovery ef the purchase money of land sold, a plaintiff who has given covenants of seisin, may be compelled to prove not only the execution of the bond, but his title to the land sold, the consideration of the bond. In those of our sister states where the failure, or want of consideration may be set up in bar of a recovery on a sealed instrument, a purchaser of land is not permitted to allege a failure of consideration in' whole, or in
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part, whilst he is in the undisturbed possession of the land. 7 Martin’s Louis. R. 223. 15 Id. 111 . 19 Id. 235 . 1 Bailey’s So. Car. R. 217. 250, 259. By the civil law a purchaser in possession cannot rescind the contract, 2 Kent’s Comm. 472, n. a., and the same rule prevails at the common law, in respect to personal property, in case of defect of title. Where a party wishes to rescind a contract on that ground, and recover back money paid, he must return the property; and where he desires to get rid of paying any thing, he must do the same. 2 Kent’s Comm. 480. So, even in equity, an injunction to stay a suit for the recovery of the purchase money will not be granted, on the allegation of defect of title, whilst the purchaser remains in possession. 2 Johns. Ch. R. 519. According to this view of the rights of vendor and ^purchaser, justice will be done [ 413 ] to both parties. If the purchaser finds that he has not obtained what he contracted for, he either applies to chancery, to rescind the contract, on the ground that the principal inducement to the purchase has failed, and that court will do what is equitable, under the circumstances of the case, 2 Kent’s Comm. 474; or he pleads the facts, showing a total failure of consideration, in bar of the action, or gives notice of a partial failure, in reduction of the amount claimed by the vendor.

After advisement, the following opinion was delivered :

The bond upon which this suit was brought was given to secure the purchase money of lands conveyed by Wallis, the plaintiff in the court below, to Tallmadge the defendant, in fee simple, subject to a mortgage specified in the conveyance. Wallis, in his deed, covenanted that he was seised in his own right of an absolute and indefeasible estate of inheritance in the whole of the premises conveyed, except as to the mortgage, and had good right to convey the same. The grantee pleaded these facts in bar to the suit on the bond ; averring in his plea, that at the time of giving the deed, Wallis was not seized in his own right of an absolute and indefeasible estate of inheritance in the premises, or any part thereof, subject to the mortgage, and had not good right to convey, &c. But the plea does not show that the purchaser had been evicted; nor does it aver that the grantor had no estate or interest in the premises which passed to the grantee by the conveyance ; -nor does it specify the defect in the title, or the person having an interest in, or claim upon the premises, that can in any way impair the title to the estate which the deed purports 'to convey. The courts below having decided that this plea did' not constitute a full defence to the suit upon the bond, the case is brought up to this court for the purpose of obtaining a reversal of their decisions.

The effect of the seventy-seventh and seventy-eighth sections of the title of the Revised Statutes relative to evidence, 2 R. S. 406, undoubtedly is to put the defence to actions *upon bonds, and other [ 414 ] sealed instruments, so far as relates to a partial or a total want of

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consideration, on the same footing as if the suit was brought upon a promissory note or other instrument not under seal, and which purported to have been founded upon a good or valuable consideration, except so far as relates to the form of pleading or of setting up such defence. The last of these sections requires the defendant, in the suit upon the sealed instrument, to plead this defence, or to give notice thereof with a plea of the general issue, or some other plea denying the contract upon which the action is brought. If there is a total want of consideration, the defendant may either plead that defence in bar of the action, or give it in evidence under a notice upon a plea denying the execution of the instrument declared on. A partial failure of consideration, however, cannot be pleaded in bar under these statutory provisions, for the presumption of a sufficient consideration can only be re. butted in the same manner, and to the same extent as if the instrument declared on was not sealed. In an action upon a promissory note, or other unsealed instrument, a partial failure of consideration would not be a full defence ; but could only be given in evidence in reduction of the amount to be recovered. Burton v. Stewart, 3 Wend. Rep. 236 ; Reab v. McAllister, 8 Id. 109. In the present case the consideration of this bond had not wholly failed if the defendant acquired any estate or interest whatever in the premises, or in any part thereof, or any benefit by virtue of the conveyance. The defendant, therefore, instead of pleading in bar of the action, should have pleaded the general issue of non est factum, and given notice with such plea of the partial failure of title, for the purpose of reducing the amount to be recovered upon the bond.

The defendant does not pretend in this plea that the plaintiff was guilty of any fraud or deceit in representing the title to the property different from what he supposed it really was. It is not a case, therefore, in which the purchaser can repudiate the title by any act of his own, and return the property to the vendor because he has not gotten the whole fee [ *115 ] simple which he' contracted to purchase. Upon *an executory contract to purchase real estate, a court of equity will not decree a specific performance unless the vendor can give to the purchaser such a title, substantially, as the latter contracted for; but where the contract has been consummated by the execution of a deed, the purchaser cannot rescind the contract, except by the aid of the court of chancery. And as a general rule, even that court will not interfere in such a case; but will leave the purchaser to his remedy, if he has any, upon the covenants of warranty1' contained in his deed. Simpson v. Hawkins, 1 Dana’s Rep. 305 ; 2 Kent’s Comm. 473 ; Bates v. Delavan, 5 Paige’s Rep. 300.

The question whether a total failure of title, upon a conveyance with warranty, is a good defence to a suit upon the notes given for the purchase money* is one upon which judges have entertained different opinions. Where

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there is a covenant of warranty merely, which covenant is not broken until there has been an eviction, or something equivalent to an eviction, there appears to be great difficulty in permitting the purchaser to show a total or a partial failure of title, either in bar of the suit or to reduce the amount of the recovery. It is a well known fact that land is frequently conveyed with general warranty, which is warranty against eviction only, when both parties to the sale perfectly understand that the title is doubtlul, or that there is some outstanding contingent interest, which may, perhaps, at a future period be the means of evicting the purchaser ; and to protect the purchaser and enable him to recover against the vendor in case of eviction, the covenant of warranty Is inserted in the deed. And yet in many-cases of this kind, the purchaser continues to hold and enjoy the land until all question as to the title is removed, by lapse of time or otherwise. How, in such cases, if the purchaser were permitted to set up an outstanding title in the original patentees or their heirs, or in some one who had received a title directly or indirectly from them, it might be very difficult, if not impossible, for the vendor to trace a perfect claim of title from the original patentee to himself, although he was in fact the legal owner of the premises at the time of the sale. Permitting the purchaser to set up such a defence before eviction, would, as a general rule, be making *a new contract for the [ *116 ] parties, which they never intended to make for themselves.

But where there has been an actual eviction of the purchaser within six years after the conveyance, and by a title or claim which entitles the party recovering the property to mesne profits as against such vendee from the time of his purchase, so that the amount .of damages which he would be entitled to recover upon the covenant of warranty thus broken, would be to the full extent of the purchase money of the premises, with the interest thereon, there is a virtual failure of the whole consideration of the note or bond given for the purchase money. In such a case, I can see no good reason why the defendant, to avoid circuity of action, should not be permitted to plead such total failure of consideration as an absolute bar to the suit, in the same manner as if the note or bond had been given upon the sale of a horse warranted sound, which turned out to be unsound, and entirely valueless. In either case it may be said that the whole consideration had not failed, as the warranty itself formed a part of the consideration for the note or bond given upon the purchase. But the effect of setting up such a defence, would operate as an estoppel to the purchaser, if he should attempt to bring an action for a breach of warranty after he had been once satisfied for his damages, in this manner; or if the jury found a verdict which, in terms, or by necessary implication, negatived the existence of the fact set up in his plea.

The only valid objection to the decision in the case of Frisbee v. Hoffnagle, 11 Johns. R. 54, if the case is correctly reported, is, that there was

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not a total failure of consideration, as the purchaser had not actually evicted, and the mesne profits which he would be liable to pay to the party who had obtained the title, under the sheriff’s deed, could not extend back beyond the time of the sale and conveyance by the sheriff. The court probably proceeded upon the ground that there was a moral certainty that the defendant must be turned out of possession under the sheriff’s deed; and as the case was submitted without argument, they may have overlooked the fact that the mesne profits of the premises could only be recovered from [ *117 ] the time of the sheriff’s sale, which, *as stated in the report, was subsequent to the defendant’s purchase, though' the judgment was docketed before. 'If the case is correctly reported, the court probably erred in the application of a correct principle to the facts then before them.

The case of Whitney v. Lewis, 21 Wendell, 131, I think was correctly decided upon the two last grounds stated in the opinion of Justice Bronson, to wit: that there had been no eviction, nor anything which was tantamount thereto ; nor did the plea show an absolute failure of title. 1 think both are necessary to sustain a plea in bar of the recovery of the whole purchase money upon a covenant of warranty for quiet enjoyment only.

The judgment of the supreme court of Maine, in the case of Lloyd v. Jewell. 1 Greenl. Rep. 352, was probably correct, as the title in that case had faild but in part, and the extent of the failure of consideration was less than the amount due upon the two others notes, to which the plaintiff had a right to apply the damages occasioned by the failure, according to the special provision ip the deed itself. I cannot, however, concur in the other conclusions at which the court arrived in that case, if the principle adopted by this court in Reab v. McAlister is to be sustained. The conveyance in the Maine case contained covenants of seizin as well as of warranty. The consideration, therefore, failed as to the part of the bond which was in question there, the moment the deed was given, as the land was then in the adverse possession of the real owner, and the grantor had no title or interest whatever in that part of the premises. Chief Justice Mellen supposed in that case, that it was the settled law of Massachusetts that a total failure of title, under such circumstances, was no defence to an action upon a note given for the purchase money. It appears, however, from the case of Knapp v. Lee, 3 Pick. Rep. 452 , that he was under a mistake in supposing that the courts in Massachusetts had ever so decided in any reported case.

In the case now under consideration, the vendor having covenanted that he wás seized of the premises absolutely in fee, if the plea had shown that at the time of the conveyance, he had no estate or interest what- [ *118 ] ever in the premises, or in *any part thereof, it would have gone to the whole consideration, and in my opinion would have been a valid bar to the suit upon the bond; and the court, in the absence of any al

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legation in the pleadings to that effect, would not presume that the purchaser ever was in possession of land in which he had acquired no right whatever under the conveyance. But the plea is clearly defective in not showing an absolute failure of the title, as the bond was presumptive evidence of a good consideration for the whole amount of the purchase money for which it was given. The onus, therefore, of showing that the consideration has wholly failed, lies upon the defendant. He might probably have reduced the amount of the recovery by proving, under a notice, a partial failure of title; but having neglected to do so, he must be left to his remedy by a cross suit upon the covenants in his deed.

I think the judgment of the superior court of the city of Hew-York was not erroneous, and that the judgment of the supreme court upon the writ of error should be affirmed.

On the question being put, Shall this judgment he reversed I the members of the court divided as follows:

In the affirmative: Senators Hawkins, Hopkins, Humphery, Hunt, Livingston, Tallmadge, Wager, Works—8.

In the negative: The President of the Senate, the Chancellor, and Senators Hull, Lee, Root, (and five other Senators, whose names the reporter is not able to give)—10.

Whereupon the judgment of the supreme court was Affirmed.

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