Smith v. Wahl

88 N.J.L. 623 | N.J. | 1916

The opinion of the court was delivered by

Swayze, J.

Wahl conveyed iand to Smith by deed with full covenants of warranty and excepted from the covenants a mortgage of $1,100. There was. outstanding a prior mortgage, which was not excepted from the covenants. A bill to foreclose this mortgage was filed November 7th, 1910. Pending this foreclosure, and on December 17th, 1910, Smith was adjudged a bankrupt and Sooy appointed trustee. On March 25th, 1911, Sooy filed a disclaimer for the real estate which had been conveyed by Wahl to Smith, and an order was made by the referee in bankruptcy rejecting that real estate and refusing to take possession of the same. Thereafter, on November 24th, 1912, a final decree was entered in the foreclosure and the property was sold thereunder. Smith then sued Wahl on the covenant of warranty.

Upon the disclaimer of the trustee and the order of the referee, the bankrupt could assert title to the land. American File Co. v. Garrett, 110 U. S. 288; Sparhawk v. Yerkes, 142 Id. 1; Sesswin v. Romadka, 145 Id. 29; Dushane v. Beall, 161 Id. 513; First National Bank v. Lasater, 196 Id. 115. And, as the warranty runs with the land, the right of action thereon would be in him.

But it is said that the defect in the title here was the encumbrance of a mortgage; that the covenant against encumbrances was broken as soon as made, and, like other choses in action, passed to the trustee in bankruptcy and was not disclaimed by him.

Since there had been no eviction and no payment by the trustee to the holder of the mortgage prior to the disclaimer of title, the trustee in an action on the covenant against encumbrances could have recovered only nominal damages. Stewart v. Drake, 9 N. J. L. 139, 141; Hasselbush v. Mohmking, 76 Id. 691, 695. The question, therefore, reduces itself to this: Will the mere existence of a right to recover nominal damages on a covenant against encumbrances prevent a recovery of substantial damages on the covenant of warranty where there is a subsequent eviction? We think the question must be answered in the negative. The proof required in actions on the two covenants is different. In one, proof of eviction is necessary to any recovery; in the other, the fact of eviction is important only with reference to the amount of damages. From this it results that the two actions accrued at different times. When the trustee disclaimed there had been no eviction and there could as yet be no action on the covenant of warranty. It has been held that the covenantee may sue at the same time upon a covenant for seisin and a covenant for quiet enjoyment and enter judgment upon either. Rawle Cov. Tit., § 166, citing Sterling v. Peet, 14 Conn. 245; Stark v. Olney, 3 Ore. 88. The ruling in Leggett v. Lippincott, 50 N. J. L. 462, is not inconsistent with this. In that ease there had been a recovery of consideration money, interest and costs in an action on the covenant that the covenantor was the true, lawful and right owner of the premises. After-wards the covenantee sought to recover additional damages in an action on the covenant of warranty, damages which had been caused by Ms retaining possession of premises which at his own suit had been solemnly adjudicated not to belong to Mm. Chief Justice Beasley necessarily held that he had already recovered all that he was entitled to for the breach of any or all of the covenants whose office was to secure to him a valid title to the property. We fail to see how a later accruing right of action by the owner of the land for breach of the covenant of warranty can be lost because someone else has a right of action on a covenant against encumbrances which appear to be contained in the same deed and to relate to the same land. The nonsuit was properly denied. Donnell v. Thompson, 10 Me. 170; Moore v. Johnston, 18 So. Rep. 825.

The question raised as to the- measure of damages is not properly before us. The appeal was taken November 5th, 1914. The exception seems to have been taken March 2d, 1915. We do not question the statement of counsel that the defect was noticed at the argument in the Supreme Court and that that court suggested that application be made to the trial judge to supply the defect if he could. That was not enough. Fairness to the Supreme Court required that the j udges should be apprised of the fact that the trial judge had signed the exception. This evidently was not done, since the memorandum of the court expressly states that no exception was taken that raised the question. We cannot review a question that has not been legally raised in the Supreme Court.

The judgment must be affirmed, with costs.

For affirmance—Swayze, Trenchaiud, Parker, Bergex, Kalisch, Black, Teruttxb, Heppenheimer, Williams, Taylor, JJ. 10.

For reversal—None.