Bolles v. Beach

| N.J. | Apr 15, 1850

Carpenter, J.,

delivered the opinion of the court.

Beach brought suit against Bolles for the recovery of damages consequent upon the breach of a special agreement. The case set up by the plaintiff below is shortly this: In 1835, .Beach conveyed to Bolles certain lots of land, in the city of Newark, for the consideration of §14,274. The deed acknowledged the receipt of the purchase money, and contained the usual form of acquittance; it also contained full covenants of title and against encumbrances. At the time, however, of the execution and delivery of this deed, a part of the premises conveyed was subject to a morigage of §1000, given by Beach and wife to the executors of one John Douglass, deceased. It is alleged that the deed was given by Beach, and accepted by Bolles, subject to the lien and encumbrance of the mortgage, and upon an express and verbal stipulation between the parties that Bolles, the defendant, in consideration of the delivery of that deed, would assume the payment of the Douglass bond and mortgage, and would indemnify the plaintiff against them. Bolles did not discharge the bond and mortgage, and Beach, having been compelled to pay §818.78 of the sum so alleged to have been assumed by the defendant, sued for that amount and the interest.

Much has been said as to the sufficiency of the evidence offered by the plaintiff to sustain his ease upon this point. It is sufficient to say, that if the verdict was not supported by the evidence, the remedy was in another mode. We are upon a writ of error, and our duty is simply to review the ruling of the judge, as subjected to our revision by the bills of exception taken in the progress of the trial. It will be assumed that the facts stated are true, and no inquiry will be attempted as to the weight of the evidence or as to the propriety of the verdict. Indeed, how can wo judge as to the weight of the evidence, when we do not know that all the evidence before the jury has been embodied iu the bills of exception ?

The first error assigned is the admission of the deed of sheriff Burnet, without the judgment or decree and execution upon which that deed was founded, so as to show the authority of the sheriff to make the deed. But the deed was not offered to prove title or to show any fact which was dependent on the authority of the sheriff for its effect or validity. It was simply offered to show the amount of money raised by the sheriff, a mere collateral fact, for which purpose the deed was sufficient.

The next question is one of more difficulty. It is insisted, on the part of the defendant below, that the plaintiff was estopped by his deed, and the covenants which it contains, from proving that a part of the premises charged was encumbered by mortgage, or that the defendant undertook and promised 'to pay off and discharge that mortgage, as part of the consideration expressed in the deed.

In England the doctrine of estoppel, that a man shall not be permitted to deny facts which he has admitted by the solemnity of a deed, has been applied to the consideration clause in a deed of conveyance when the question of payment has arisen between the parties to the conveyance. When that clause contained an acknowledgment in the usual formal terms, the grant- or has been held to be estopped from showing that no money in fact passed. Rowntree v. Jacob, 2 Taunt. 141; Baker v. Dewey, 1 B. & C. 704. It does not appear that it was there ever held otherwise. Rex v. Scammonden, 3 T. R. 474, a ease so often cited in support of a contrary course of decision elsewhere, did not involve the doctrine of estoppel, not being between parties or privies to the deed. It was a mere-settlement case, in which the question depended upon the fact of the purchase of any estate in the parish, and the payment of £30 therefor; and parol evidence was offered, not to contradict the deed but to ascertain this independent collateral fact. But a different rule has been generally adopted in this country, and the course of decision, for the most part, has been in favor of free inquiry in regard to the fact of payment in actions for purchase money, «fee. Many of the eases on the subject are collected in Cowen’s Notes.to Phillips’ JEh. 217, '218,- 1441, &e., (ed. 1843). It is there said, that when the intention in regard to the estate is not disputed, nor the operation of the conveyance, as such, sought to be changed, this clause is regarded as formal merely, like the date, and open for explanation by parol. Thus, when the deed acknowledges the payment of the consideration, it cannot be denied by the grantor for the purpose of destroying the effect and operation of the deed, though it may be denied for the purpose of recovering the consideration money. Grant v. Townsend, 2 Hill 557. 'This doctrine is now in this country supported by such a weight of authority as not readily to be disturbed.

But this case goes somewhat farther, and has its peculiar difficulties. The counsel of the defendant below have not contested the doctrine, that the payment of the purchase money is open to inquiry, notwithstanding the consideration clause ; but they deny that the plaintiff can prove the existence of an encumbrance on the premises, as pari of his case, when he expressly covenants by his deed that the premises were free of encumbrances.

In Eugland the injustice which sometimes results from the strict doctrine of estoppel, applied to a clause merely formal, has been so strongly felt, that courts have obviously been ready to use any distinction or ambiguity to escape it, and reach the justice of the case. Lampon v. Corke, 5 B. & Ald. 606, is an instance. In Baker v. Dewey, already cited, the court held that the grantor was estopped from denying that the purchase money had been paid, but intimated that a part, which had been retained by the grantee to bo worked out in his business as a plumber and glazier, might have been recovered in another mode. Baker conveyed land to Dewey in consideration of a given price, but it was stipulated that the latter should retain £60 out of the purchase money, to be paid in work. While it was held that Baker was precluded from saying that any part of the money remained due as purchase money, yet it was said that the consideration might have been paid, and a part returned, on condition that the grantee would do certain work for the grantor. The court placed the transaction upon the ground of an independent or quasi subsequent agreement. The plaintiff failed because there was no count in the declaration to meet such a case. In Schillenger v. McCan, 6 Greenl. Rep. 364, the Supreme Court of Maine adopted the same view, and applied it to another state of facts. S. owned two lots in the same town, one being lot No. 60, otherwise known as the Hall farm, and lot No. 66. Being indebted to W., he mortgaged to him lot No. 66, without any other description, supposing it to be the Hall farm. Afterwards S. sold the Hall farm to M., taking, as part of the consideration, his obligation “ to cancel the mortgage, given by S. to W., of the Hall farm,” which obligation he assigned to W., the mortgagee. In a suit brought on this undertaking by W., in the name of S., he declared, first for money had and received ; and in two other counts on the promise to cancel a mortgage, first as on the Hall farm, called by mistake lot No. 66; and secondly, as on lot No. 66, called by mistake the Hall farm. The plaintiff proved that about $400, being part of the consideration for the conveyance, was left in the hands of the defendant to pay the mortgage on the Hall farm, who signed an agreement to that effect. Thus the whole transaction in relation to the conveyance of the title, and the payment of part, and the security of the residue of the consideration, was closed at the same time. The construction given to the transaction was, that the agreement to cancel or pay off the mortgage was received as part payment o'f the consideration, so much being left in the hands of the grantee for that purpose. That as the grantee might have proved in his defence, that the agreement had been so received, had he been sued for the unpaid part of the consideration, so on the other hand the grantor might prove, as he did, the foregoing facts, for the purpose of showing his claim to the $400, as a sum left in the defendant’s hands for a purpose which had failed. This sum was left to payoff a mortgage which did not in fact exist, and, the purpose having failed, was so much in the hands of the grantee, who was the defendant, and recoverable under the count for money had and received to the use of the plaintiff.

These cases have been referred to for the principle, by which, in order to reach the justice of the case, the effect of the consideration clause, as held in those courts, was avoided. The collateral and independent character attributed to the agreement, by which a part of the consideration wras left in the hands of the grantee to be specially applied, may be here similarly adopted, in order to escape the supposed effect of the covenant against encumbrances. In the time of Lord Mansfield it was ruled, that if a man covenant under seal that another shall enjoy certain premises, he shall not maintain ejectment against that person during the term specified in his covenant, the covenant by estoppel operating as a lease. Right v. Proctor, 4 Bur. 2208. It would probably be so held at the present day. However, therefore, the covenant in the present case might estop the grantor in an action between the parties to the deed, brought on the deed or defended by title or justification under the deed, yet can it have that effect in an action not founded on the deed, but upon an agreement merely collateral? In Carpenter v. Butler, 8 M. & W. 209, it was held that though as between the parties to an instrument under seal, in an action upon it, it is not competent for the party bound to deny a matter of recital; yet it was held that such party is not estopped in an-action by the other party not founded on the deed, but wholly collateral to it. Among the cases referred to, to exemplify the doctrine of estoppel, was that of Lainson v. Tremere, 1 Ad. & Ell. 792. In that case the action was upon a bond to secure the payment of rent under a lease, in which it was recited, that the lease was at a rent of £170 ; and the defendant was estopped from pleading that it was £110 only, and that such amount had been paid. The court said, in citing the case, that if in another suit, though between the same parties, the question should arise collaterally as to the amount of the rent, it could not be held that the recital in the bond was conclusive evidence as to the fact. We incline to think, therefore, that in this action the plaintiff is not estopped by his covenants against encumbrances, the question presented being collateral to the deed merely.

But, independent of this technical answer to the objection, if the consideration clause, under the course of adjudication in this country, is made an exception to the general doctrine of estoppel, why should not the exception be extended to the question of payment in this instance, coming, as it does, within the same reason ? The evidence, as to the agreement to pay off the mortgage, did not go to affect the operation of the deed, but simply to show the character and extent of the payment of the consideration; and the same reasons which persuade to the free admission of extrinsic inquiry in the one case, equally apply to the other. We are not willing to reverse on account of the admission of the evidence in this instance.

Another ground of error, predicated upon the exceptions taken at the triál, is, that Beach was not legally damnified, not having discharged the original liability by a payment in money, but merely by giving a new security. It is said that the giving the new security to the holder of the Douglass mortgage did not support the allegation of payment.

Assuming, in this form, that the contract charged was proved, the defendant was. obviously damnified to the whole extent of the failure by the defendant to appropriate to the discharge of the Douglass mortgage, the consideration money left in his hands for that purpose. As the giving the new security, received as payment, extinguished the Douglass bond and mortgage, perhaps it is not clear that this case comes within the range of cases cited, or that the plaintiff might not recover under the first count. But, however this may be, we do not perceive any difficulty. The second count expressly sets out the giving the new security, as the damnification consequent upon the default of the defendant, and the evidence certainly supported that count.

The only other error assigned, necessary to be noticed, is the alleged variance, as to the mortgage, between the declaration and the evidence. We do not, however, understand the language of the declaration to be as supposed by the counsel of the defendant below. It is not an exception for which we should be inclined to reverse, unless the error were very apparent.

It has been before said thát we do not feel called upon to examine those objections which are based upon the supposed defect of evidence. It may be proper to say that, notwithstanding the intervention of'a committee of speculators between Bolles and Beach, yet that the purchase money was to be paid to the latter for his own benefit; he was therefore the party in interest, and entitled to sue, though it is true, when paid, it became also so much paid on account of that committee.

We think (though I hesitated on one or two points) that the judgment ought to be affirmed.

The Ciiaxcellor. The mortgage was on the whole tract. There can be no implied promise that N. Bolles, the purchaser of a part only of the mortgaged premises, should pay the whole mortgage.

There was no contract or agreement between N. Bolles and Beach. To show this, it is only necessary to read the declaration, and ask the question, what did N. Bolles agree to pay Beach for the lots which he, N. Bollos, bought at the vendue made by the company ? Was there any contract between N. Bolles and Beach, as to the price of those lots? None. That contract was between N. Bolles and the company.

Now a condition of the sale of lots by the company was, that the lots should be free from encumbrance. A person to whom a lot was struck off at that sale, on finding that there was a mortgage on the property, was at liberty to refuse to comply with his bid. N. Bolles, therefore, was in condition to make his own arrangement with the company. He might refuse to assume a personal liability for the amount of the bond secured by the mortgage. And would the company, having, by what means does not appear, obtained from him bids amounting to upwards of $14,000 for the lots struck off to him, have ventured to express to him au unwillingness to consider the said lots sufficient security for $1000, and to say to him that he must assume a personal liability for the $1000? It is sufficient to say that he was at liberty to refuse to take the lots on such terms. Aud the reason why he might be unwilling to do so appears in the case. The lots he bought were afterwards actually sold on the mortgage, and did not bring enough to pay it; and the question involved in this suit is, whether he is personally liable to Beach for the balance, or whether Beach’s only remedy is not against the persons with whom he contracted. Why should the dealing between N. Bolles and the company be entirely overlooked, and an action be sustained by Beach against N. Bolles, between whom not a word ever passed in relation to the purchase of lots by Bolles ?

If any body ever undertook with Beach to pay the mortgage, it was the company, not N. Bolles. It seems to me that Beach should be left to go against the company, on their express agreement; and if the company have a case against N. Bolles, let them show it in proof in an action against him. They should not be permitted to act through Beach, and to come in themselves as witnesses.

There is a fatal variance between the proofs and the declaration. The declaration is, that Beach gave a mortgage on certain lots described in the mortgage; and that afterwards N. Bolles, in consideration that Beach would execute to him a deed for certain lots described in the deed, embracing the lots so mortgaged as aforesaid, subject to the lien of the mortgage, N. Bolles undertook to pay the mortgage. The proof is, that only a part of the land mortgaged was conveyed to Bolles. The declaration is, that in consideration of the conveyance of all the mortgaged land, Bolles agreed to pay the mortgage. The proof is, that but .part of the mortgaged land was conveyed to him. Why, under this declaration, should he pay the whole mortgage, when but part of the mortgaged land was conveyed to him?

But the proofs suggest 'this further question. Why should Beach, whose only contract was with the company, and which contract was, that the company, in consideration of his conveying to them the whole property mortgaged, should pay the mortgage, be permitted to go against N. Bolles for the payment of the whole mortgage, because he bought a part of the mortgaged premises from the company ?

There are other difficulties in the way of an action by Beach against Bolles. Beach, in the deed from him to Bolles for the lots bought by Bolles of the company, covenanted that the lots were free from encumbrances. I am not clear that he can be permitted to avoid this covenant by parol proof that Bolles agreed to pay an encumbrance.

Again, Beach has not paid the money due on the mortgage. He has only'given another bond and mortgage for it; and there is no proof that the first mortgage is cancelled. I think it at least very doubtful whether assumpsit for money paid can be maintained.

I think the judgment is erroneous, and that it should be reversed.

For affirmance — Justices Carpenter, Randolph, and Ogden, and Judges Porter, Schenck, and McCarter — 6

For reversal — The Chancellor, Justice Nevitxs, and Judges Speer and Wall — 4.

Judgment affirmed

Cited in Wilson v. King, 8 C. E. Gr. 152; Huyler’s Ex’rs v. Atwood, 11 C. E. Gr. 505; Harrison v. Guerin, 12 C. E. Gr. 223 ; Ketchum v. Brooks, Id. 349; Crowell v. Hospital of St. Barnabas, Id. 655.