Fagan v. Cadmus

46 N.J.L. 441 | N.J. | 1884

The opinion of the court was delivered by

Reed, J.

This action is for breach of the covenant against encumbrances contained in a deed from Richard Cadmus and wife to Patrick Fagan, the plaintiff. The alleged breach is said to exist from the fact that at the time of the execution of the covenant the land conveyed was subjected to a liability to. pay an assessment for benefits, in a proceeding taken to open a street in Bayonne. At that point of time an ordinance had been passed by the council of that city ordering the opening of Avenue C, and a final assessment map and report had been filed, approved and affirmed. This assessment was a lien upon the land at the time of the execution of the deed, and its presence caused, eo instante, a breach of the covenant against encumbrances contained in that instrument. But it appears from that statement of facts that this assessment was vacated upon certiorari to the Supreme Court, and that a new assessment was made after the execution of the deed, which assessment still stands. The point contended for by the defendant is that the lien of the old assessment, being removed by its vacation, that the lien of the new assessment attached to the land at the time of its confirmation, which was subsequent to the execution of the covenant and therefore is not a breach thereof.

I have already stated that the presence of the unvacated assessment was a technical breach of the covenant at the time of its execution, but this, although it be true, does not solve the ■questions involved in the present cause, because the legal questions certified are—first, whether there was a breach ; and second, if so, what is the measure of damages to which the plaintiff is entitled? If the plaintiff’s case rested alone upon the breach resulting from the existence of the assessment since vacated, his damages would be nominal only. He, however, claims that he is entitled to substantial damages, namely, the amount of the last assessment. To succeed in this contention he must place his right upon broader ground than that the first assessment constituted the breach. And I think he is entitled to do so.

It appears from the fact that a new assessment was made by commissioners appointed by the court which set aside the previous assessment, that the irregularity which rendered that assess ment illegal existed in the manner of placing the assessment, and not in the manner in which the improvement had been made. By the act of the court in appointing commissioners, the continuing liability to an assessment legally made was judicially recoguized. Now, although the final assessment was made after the execution of the covenant, yet the liability of the land conveyed to pay the amount which should be after-wards fixed by the commissioners was a pre-existing burden.

At the time of the conveyance all the stages in the proceedings preliminary to the assessment had been passed. The ordinance ordering the street to be opened had not only been passed and approved, but the work, for the benefits arising from which this assessment is made, had been done. When ■the plaintiff took his deed, therefore, the property which he bought was subjected to a burden resulting from an improvement to these lands while they were still the property of his grantor. This was an encumbrance, the extent of which subsequently appeared by the final assessment.

This question has received the consideration of the Supreme Court of Massachusetts in the case of Blacker v. Hudson, 117 Mass. 181. In that case it was held that a covenant against encumbrances was broken by the existence of a liability to an assessment for widening a street, although the assessment therefor was made subsequently to the execution of the deed. In the subsequent case of Carr v. Dooly, 119 Mass. 294, the same principle was adopted in regard to a liability for an assessment for building a sewer. There is nothing in the statutes under which the improvements mentioned in those oases were made which distinguishes them from the one now under consideration.

It may be observed of the cases in Massachusetts that t'hey fix the point of time when the liability arises at the date of the order to make the improvement. Here it is necessary only to hold that the liability exists from the time of the execution of the work which constitutes the improvement.

It is not intended to criticise or adopt the Massachusetts rule, which has the merit of certainty as to the time when the lien becomes fixed, but it is apparent that the correctness of the doctrine that the encumbrance precedes the assessment strikes the judgment more forcibly after the work has been done and the benefit has actually accrued for which the assessment has been made. To this extent only is it essential to go to hold that this plaintiff is not only entitled to recover, but to recover substantial damages. This result is in accordance with the views of the Chancellor in the case of White v. Stretch, 7 C. E. Green 76, a case similar to this.

The remaining question is, What is the measure of plaintiff’s right to recover damages? The measure of damages in action for a breach of the covenant against encumbrances differs in three classes of cases. First, where the encumbrance is a debt which has been paid by the covenantee; second, where it might have been, but has not been, So paid; and third, where the encumbrance is such that it cannot be discharged, as a servitude or unmatured mortgage. In the first class of cases the covenantee recovers what he has paid; in the second class he recovers nominal damages only, and in the third class he recovers an amount estimated as a compensation for the depreciated value of the land resulting from the existence of the encumbrance. Sedg. on Damages 179.

The present case is within the first class. The final assessment of $467.86, as has been already observed, was the ascertainment of the magnitude of the burden which already rested upon the land when the covenant was made. By the agreement of counsel it is to be taken as a fact that this assessment was paid by the plaintiff on June 19th, 1883. He therefore occupies the position of one who, having a covenant in his favor, pays a debt which was an encumbrance at the making of the deed. He is entitled to what he paid, with interest from the time of payment.