Glassman v. Condon
27 Utah 463
| Utah | 1904
McCARTY, J.,

after stating the facts, delivered the opinion of the court.

1 Appellant contends that by the terms of the contract respondent was hound to furnish her with a good title, free from all incumbrances, with the exception of $250 of the $1,000 mortgage mentioned in the contract, and, having failed to do so, he is precluded from recovering in this action. On the other hand, respondent insists that, as appellant knew of the existence of the mortgage at the time the contract was signed, she is presumed to have contracted for and intended to purchase the property subject to the entire mortgage. It is an elementary principle of law that every purchaser of real property has a right to demand' a title /free from incumbrances and defects. And the great weight of authority holds that the legal effect of contracts to furnish a good title or a warranty deed, under a contract of purchase, is that the vendor, before he can compel payment of the purchase price, or any part thereof, must make and tender a title free from incumbrances and unclouded; in other words, he must produce and tender a marketable title, unless the contract by its terms, or the circumstances leading up to and surrounding the transaction, show the parties intended that the sale and transfer of the property should be made subject to the defects, if any, in the title. Mr. Warvelle, in his work on Vendors, sec. 46, vol. 1, states the rule to be that: ‘ ‘ Unless there has been some stipulation as to the character of the title to the estate to be conveyed, a marketable title is always presumed, and *467unless tbis fact can be satisfactorily established by the Vendor the vendee will not be compelled to complete the; purchase or pay for the land. ’ ’ And again he says on. page 373: “A purchaser in every sale,- unless he specially stipulates to the contrary, has a right to expect that he will acquire a valid and unassailable title, and the law presumes that he purchases with that object in. view. ’ ’ In the case of Swayne v. Lyon, 67 Pa. 436, Mr.. Justice Sharswood, speaking for the court, said: “It has been well and wisely settled that under a contract for the sale of real estate the vendee has the right not merely to have conveyed to him a good, but an indubitable, title. Only such a title is deemed marketable; for otherwise the purchaser may be buying a lawsuit, which will be a very serious loss to him both of time and money, even if he ultimately succeeds. Hence it has been often held that a tille is not marketable where it exposes the party holding it to litigation.” This same general doctrine is upheld and declared in th$ following decisions: Burwell v. Jackson, 9 N. Y. 535; Smith v. Schiele (Cal.), 28 Pac. 859; Kimball v. Bell (Kan.), 28 Pac. 1016; Durham v. Hadley (Kan.), 27 Pac. 105; Moody v. Railway Company (Wash.), 32 Pac. 751; Swan v. Drury, 22 Pick. (Mass.) 485; Sanford v. Wheelan (Or.), 7 Pac. 324; Hinckley v. Smith, 51 N. Y. 21; Vought v. Williams, 120 N. Y. 253, 24 N. E. 195, 8 L. R. A. 591, 17 Am. St. Rep. 634; Moore v. Williams, 115 N. Y. 586, 22 N. E. 233, 5 L. R. A. 654, 12 Am. St. Rep. 844; Shreck v. Pierec et al., 3 Iowa 350; Lyon v. Day, 15 Iowa 469; Wilhelm v. Fimple, 31 Iowa 136, 7 Am. Rep. 117; Reese v. Hoeckel, 58 Cal. 281; Preble v. Abrahams, 88 Cal. 245, 26 Pac. 99, 22 Am. St. Rep. 301; Dobbs v. Norcross, 24 N. J. Eq. 329.

2 It is claimed by respondent in this case that it was not his intention to pay off the mortgage, and his counsel in his brief say that ‘ ‘ it seems most remarkable that defendant should expect Mr. G-lassman to give her an unincumbered title to this land on October 1, 1902.” And yet this is just what G-lassman, by the *468terms of Ms contract, agreed to do, with the exception of the $250 of the mortgage which defendant assumed to pay. The sixth paragraph of the contract is as follows: “The party of the first part (Glassman) agrees • to make to the party of the second part a warranty deed upon the payment of two hundred and seventy-five ($275.00) dollars October 1st, 1902, subject to a mortgage of two hundred and fifty ($250.00) dollars, which the party of the second part assumes and agrees to pay.”. It will thus be seen that by the express terms of the contract the respondent was bound to furnish and appellant entitled to receive a warranty deed to the property mentioned, subject to a mortgage of $250 only, and not a mortgage of $1,000, as contended by respondent. Section 1981, Rev. St. 1898, provides that a warranty deed “shall have the effect of a conveyance in fee simple to the grantee . . . with covenants from the grantor . . . that the premises are free from all incumbrances. . . .” It is urged in behalf of respondent that as the mortgage would not fall due until after the installment of the purchase price sued for in this action became due, he could not furnish an unin-cumbered title to the property, and that, as this was known to the appellant at the time she signed the contract, it must be presumed that she contracted with reference to the risk of having eventually to' pay the entire mortgage of $1,000 to protect the property she was contracting to purchase. The record "in this case warrants no such presumption. Rather the presumption is that respondent having limited appellant’s liability to pay $250 only of the mortgage lien of $1,000, ■contracted with a view of being able to pay off at or before the time specified for the delivery of the deed so much of the mortgage as remained due after deducting the $250 assumed by appellant, or that he had arranged with the mortgagee to release that portion of the mortgaged property evidenced by the contract on payment of the $250 by appellant. However, these speculations are unimportant. The respondent contracted to fur*469nish. a good title, and the fact that he was unable to do so is his misfortune, and not the fault of the appellant.

Respondent cites and relies upon the case of Leonard v. Woodruff, 23 Utah 494, 65 Pac. 199, in support of his position in this case. By an examination of that case it will he seen that it was understood and agreed between the parties to the transaction out of which that litigation arose that in the exchange of property the defendant, Woodruff, was to receive certain property from Leonard subject to a “squatter’s” right or claim made to a portion of the property by- one Stewart. The court held that, Woodruff having contracted with reference to the squatter’s right, and having agreed to accept the property subject to such right, he was hound thereby. On appeal the judgment of the trial court was affirmed. In this case, however, the record does not show that appellant agreed or that it was understood that she was to accept the deed subject to the entire mortgage lien then existing against the property, hut, on the contrary, the contract specifically provides that the deed shall be subject to $250 only of this mortgage.

The judgment is reversed, with directions to the trial court to dismiss the case; the costs to he taxed against respondent.

BASKIN, C. J., concurs. BARTCH, J., concurs in the judgment of reversal.