American Academy of Music v. Smith

The opinion of the court was delivered, by Thompson, J. The case of Walker v. Physick, 5 Barr 193, conclusively rules this case. The state of the facts in that'ease and in this are entirely similar; and it was there settled that where a ground-rent deed contains a grant of ground to another, “ under and subject to the rent as the same shall accrue,” the grantee’s 'duty to indemnify the grantor endures no longer than his tenancy of the freehold; and his covenant, implied from these words, would consequently be no more than commensurate with that duty. In this case the grant to the Academy of the lots in question, by the covenantor, wás “ under and subject”“to the rent reserved ; and being sued for the arrears of rent the company sets up the defence that before the rent fell due they had parted with the title and possession to one Neff, and that the duty no longer rested upon them either on account of privity of contract or estate, to indemnify the covenantor against the payment of the rent. This presented purely a legal defence, which the learned judge overruled, and directed a verdict for the plaintiff for the unpaid rent. This, measured by Walker v. Physick, was an error. I have carefully examined the authorities referred to by the defendant in error, and not one of them in the least disturbs or casts doubt upon that case. It was a most carefully considered case, upon a reviewof all the authorities, English and American, both by Mr. Justice Kennedy at Nisi Prius, and in banc, as evidenced by the opinion of Gibson, C. J. We cannot set aside that decision, especially as we see no reason for even doubting the correctness of the principles therein enunciated, as applicable to the eases of ground-rents. In all the cases, from Campbell v. Shrum, 3 Watts 60, down to the last ease cited of Heist v. Baker, 13 Wright 13, the words “ under and subject” were held either to import an express covenant, as in Campbell v. Shrum, or to imply a promise to pay, either from privity of estate, or because the encumbrance had become part of the purchase-money, and as such, enforceable against a purchaser by his vendor. In view of an unshaken decision establishing a clear distinction between these cases and a case like the present, we do not feel it to be our duty more minutely to analyze the cases. We think the distinction an obvious and necessary one, and because it was not observed, this judgment must be reversed. Had the case been submitted to the jury on the question of fact, whether the Academy had divested itself of the property by a boná. fide sale, before the rent fell due, there could have been no doubt whatever of the result. It was clearly proved that it was done for no other purpose than to avoid the payment of the [133] accruing ground-rent. If so, the conveyance was void as against the covenantor and his representatives, by the statute of 18 Eliz. It was calculated to delay, hinder and defraud creditors. To bring a case within Walker v. Physic, of course the assignment of the lessee must be bonfi fide, and not to a man of straw, with a view to avoid the effect of the words “ under and subject” upon the real owner. All such arrangements’must prove abortive. Judgment reversed, and a venire de novo awarded.