Brown v. Staples

The opinion of the Court was drawn up by Shepley J. — The original action was commenced upon two conveyances in mortgage of the premises described. A conditional judgment was rendered for the amount due upon both the mortgages. By the agreed statement it appears, that John Welles, on July 7, 1825, conveyed the premises to Elliot Staples, who at the same time reconveyed the same to Welles in mortgage, to secure the payment of his notes given for the purchase money. On June 2, 1837, Elliot Staples conveyed the same to Peter Staples, who on May 6, 1841, conveyed the same by a deed containing a covenant of warranty to Winthrop Allen, who, on June 25, 1841, reconveyed the same in mortgage, with a covenant of warranty, to secure the sum of $360, and who also made a bond, by which he obliged him [502] self to Staples to pay and take up the notes given by Elliot Staples to John Welles and secured by the first mortgage. These conveyances were all recorded in due season. Winthrop Allen died without having paid or discharged either the mortgage made to the demandant, or that made by Elliot Staples to Welles. His estate was insolvent. The demandant proved his claim arising out of the bond, but nothing was paid, upon it. The administratrix on the estate of Winthrop Allen, having obtained license, sold and conveyed in her official capacity, whatever interest her intestate had- in the premises, on June 12, 1843, to Nathan H. Allen, who by a deed of release, made on July 7, 1843, conveyed all the right acquired by that conveyance to the tenant. When Nathan H. Allen purchased of the administratrix, he knew, that there were two existing mortgages upon the premises, and had been informed of the existence of the bond; and he states, that he has no doubt, that he informed the tenant of all the particulars connected with that transaction. Another witness states, that the tenant told him, that he knew of that bond when he bought:' The counsel for the tenant contends, that the covenant of warranty, made by the demandant to Winthrop Allen, ran with the land, and that the tenant by the subsequent conveyances made without such a covenant, acquired a title to the equity of redemption and to the benefit of that covenant; and that the demandant is thereby estopped to claim payment of the first mortgage, which had been assigned to him. The covenant of warranty, if not released or otherwise annulled, does ordinarily run with the land to the last purchaser, even by a deed of release. Clark v. Swift, 3 Metc. 390; Beddoe v. Wadsworth, 21 Wend. 120; Young v. Triplett, 5 Litt. 248. In answer to this position it is said, that the estoppel thus insisted upon is neutralized or avoided by the covenant of warranty contained in the mortgage deed from Winthrop Allen to the demandant. But the covenants in those two deeds are not considered to be thus mutually acted upon, each by the other, and their operation .thereby destroyed. Hardy v. Nel [503] son, 27 Maine R. 525; Hubbard v. Norton, 10 Conn. R. 422; Haynes v. Stevens, 11 N. H. R. 28. It therefore becomes necessary to inquire, whether the facts existing at the time, and intervening between the conveyance made to Winthrop Allen and the conveyance of the equity to the tenant, were such as to prevent the tenant from acquiring any right to enforce against him the covenant made by the demandant. A purchaser of land may not always be entitled to the benefit of such a convenant made to his grantee, for such grantee while he continued to be the owner of land, may have released or annulled it. This he could rightfully do. Middlemore v. Goodale, Cro. Car. 503. But if the covenant be not discharged or annulled, and pass with the land to the grantee of the covenantee, it cannot be discharged by him, unless he has been called upon and has paid damages to his grantee for breach of his own covenants. Thompson v. Shattuck, 2 Metc. 615 ; Chase v. Weston, 12 N. H. Rep. 413. The assignee of such a covenant, acquiring it with the land, will not be affected by any equities existing by parol between the covenantor and covenantee, even when their existence is known to him, before he becomes the purchaser of the land. Eveleth v. Crouch, 15 Mass. R. 307; Suydam v. Jones, 10 Wend. 181. Such a covenant can be discharged or annulled only 'by an instrument of as high a nature as the deed containing it. Kaye v. Waghorne, 1 Taunt. 428. In this case Winthrop Allen could maintain no action upon the covenants of the deed made to him by the demandant for a breach occasioned by his being deprived of the land by virtue of the mortgage made by Elliot Staples to John Welles, for he had by an obligation of as high a nature obliged himself to discharge that mortgage; and had thereby annulled the operation for such purpose of those covenants. It has been decided, that a covenant of warranty would not include an incumbrance which the grantee had engaged to discharge. Watts v. Welman, 2 N. H. Rep. 458. The tenant purchased the interest in the land after the covenant of warranty had been for such purpose annulled between the covenantor and [504] covenantee while the covenantee was the owner of the equity, and did so with a knowledge of the factshe would not thereby acquire more1 extensive rights, than the covenantee had. A right to the benefit of that covenant would be secured to him only by the action of the law. And the law would not transfer to him the right to enforce a covenant, which no longer had a vital or operative existence against the covenantor. The tenant cannot, therefore, present that covenant of the demand-ant as an estoppel to prevent his recovery upon the mortgage assigned to him, because he could maintain no action upon it to recover back from the demandant the amount, which he had been compelled to pay to procure a discharge of it. There are other facts presented in this case, which will prevent the tenant from deriving any beneficial interest in that covenant for such a purpose. The estate of Winthrop Allen, the covenantee, was settled as an insolvent estate, under the statute c. 109. In such cases all claims existing between the intestate and other persons arising out of or dependent upon obligations, covenants and contracts, which are mutually affected by or connected, each with the other, must be exhibited and finally settled before the commissioners of insolvency, at least so far, as it respects such mutual action of each upon the .other. The covenant of warranty in the deed to the insolvent intestate, was affected by the bond made by the intestate to him. He was obliged to present and prove that bond, if he would obtain any benefit from it; and the covenant, whose vitality depended upon it, was necessarily to be considered and the rights to arise out of it adjusted and discharged by the discharge of the bond, so far as its force depended upon the bond. Petition dismissed with costs.