Eby v. Elder

Opinion, Mr. Justice Stebbett : In this action of scire facias sur purchase money mortgage, brought to recover the balance, $1,000 and interest due thereon, the defence was failure of consideration resulting from an easement or right of way over the mortgaged premises, previously granted by the mortgagees, but unknown to the mortgagors, as they allege, at the time the lot was conveyed to them in May, 1871. The consideration of the conveyance was $21,000, one third in hand, and the residue, $14,000, evidenced by twenty-eight bonds of $500 each, secured by the mortgage in suit. Seven of the bonds were made payable to each of the four vendors individually, as his share of the deferred purchase money. Shortly after their purchase the mortgagors closed the road, and, in the suit brought against them by claimants of the easement, the right of the latter to the use thereof was established and has since been enjoyed without question. In the meantime the mortgage debt was reduced to $6,000, represented by three $500 bonds to each of the four mortgagees. Further payments having been refused, suit was brought on one of the bonds in the name of the payee, Jacob R. Eby, against Wm. K. Cowden, one of the obligors, who by conveyance from his three co-tenants had become sole owner of the mortgaged premises. The pleadings were so amended before verdict that the sole defence was failure of consideration, resulting from the easement above mentioned. The result was a verdict for defendant and judgment thereon. Matters then remained in statu quo until January, 1882, when Cowden, then sole owner of the lot, proposed to the several bondholders to settle their dispute as to failure [355] of consideration, etc., by paying the face of the eleven outstanding bonds, without interest. This proposition was accepted by three of the bondholders, and thus nine of the bonds were paid; but the holder of the two remaining bonds, both payable to Jacob R. Eby, declined to accept the proposition of compromise. In the meantime Mr. Eby died, and these bonds, which had been assigned by him, were re-assigned to his administrator, and this suit was brought to recover the $1,000 (two bonds of $500 each), residue'-'of purchase money and interest. On the trial, the defence and evidence in support thereof were substantially the same as in the suit on the $500 bond above mentioned, and the result was also the same, viz.: a general verdict in favor of defendants, mortgagors, and judgment thereon. In resisting the defence set up by the mortgagors, plaintiffs introduced evidence tending to prove that at the time of the sale, and prior thereto, the roadway across the lot was visibly open and in actual use, and requested the court to charge that Cowden and his co-purchasers took the property subject to the easement, and were not entitled to any deduction from the purchase money. This point was substantially affirmed, the learned judge saying: “ If the jury find from the evidence that at the time of the purchase the land was openly and plainly subject to this easement; that the physical condition of the ground was openly and plainly affected thereby, then, since' there is no express agreement or covenant relating thereto, the continuance of the easement would not be a breach of the covenant against incumbrances, and plaintiffs would be entitled to recover $1,000 and interest thereon.” In the general charge he also said: “ There is testimony that in 1871 this road was plainly marked upon the ground as a road in actual use. That would, of course, put anybody desiring to purchase the property upon notice that there was such a road there; that probably there was that incumbrance there, and then, if the deed was made without any reference to the road, without any express agreement against it, or any promise to be responsible for the damage it might cause, there would be no remedy; that is, no remedy under the implied contract arising from the words, 4 grant, bargain, and sell.’ In other words, if you find from all . the evidence that the road was plainly marked upon the ground, [356] showing it to be a burden on this property, an easement upon the ground, the plaintiff is entitled to recover. If, however, you find it was not so, then you come to the other question in the case,” viz.: the question of damages or compensation for failure of consideration, etc. The attention of the jury had previously been called to the declarations of Mr. Eby, “ admitting that before the deed was executed, Mr. Cowden and his associates had been assured that there was no road,” and other evidence bearing on the question. That controlling question of fact raised by the evidence, and submitted to the jury, was decided adversely to plaintiffs. They also undertook to prove that at the time the deed was executed, an allowance was made for the easement, and “ that $1,000 or $1,500 was thrown off ” for the injury which it did to the property. That question was submitted to the jury, and, as requested by plaintiffs, they were instructed that if such was found to be the fact, defendants were not entitled to any deduction for the easement in question; but that, as well as all other material questions of fact raised by the pleadings and evidence, was found in favor of defendants; and the jury proceeded to determine the extent of the depreciation or failure of consideration resulting from the existence of the easement. Plaintiffs’ point, recited in the first specification of error, was rightly refused for the reasons stated by the learned judge in his answer thereto. The second and third specifications, relating to the right of defendants to show failure of consideration as an equitable defence to the balance due on the mortgage, notwithstanding they had previously availed themselves of same defence to defeat recovery on another of the $500 bonds, may be considered together. In support of their right to do so, defendants rely on the principle announced in Good v. Good, 9 W. 567, and 3 W. & S. 475, viz., that, under the plea of failure of consideration, as distinguished from the plea of set-off, the defence is equitable and inherent in all the securities founded on the same consideration and, therefore, applicable to successive actions on any of them, till the defendant is compensated to the extent of his loss. As explained in the case last cited, this does not mean that each security shall bear only a pro rata or ratable proportion of the [357] general abatement, but, as suit is brought on any security, founded on the same consideration, the plea of failure of consideration, if successful, dispenses with a certificate of the balance when the amount of the loss is greater than the claim, and the verdict is then, generally, for the defendant. The remainder of the loss or damage proven is applicable as a defence, under the same plea, to a subsequent suit on any of the same securities until the entire damage is exhausted, and defendant compensated. That principle, recognized in Rice v. Olin, 79 Pa, 391, and other cases, is just and equitable, and, under the facts found by the jury, it was properly applied in this case. In the former suit on one of the $500 bonds, defendants obtained partial compensation to the extent of that claim, and, as has been settled by the verdict in this case, they were entitled to additional compensation for same failure of consideration to the extent, at least, of the balance due on the mortgage. The verdict and judgment in former suit were tantamount to payment of the $500, and interest on account; and by their verdict the jury has impliedly found that in addition thereto, defendants’ damage by reason of the failure of consideration was at least equal to the amount claimed by plaintiffs in this suit. The authorities cited and relied on by plaintiffs are inapplicable to the special facts of this case as established by the verdict. The question was one of fact solely for the jury, and was submitted to them under proper instructions. If, in arriving at the conclusion they did, those instructions were disregarded, the remedy was in the court below, not here. That court appears to have thought that substantial justice was done and, therefore, refused a new trial. The fourth and fifth specifications relate to the road in question, which plaintiffs contended was an open, notorious, and visible easement upon the lot. That, under the evidence, was a question of fact for the jury. The subject has already been sufficiently noticed. There is nothing in either the sixth or seventh specifications that require special notice. In view of what has been said the points covered by them respectively were rightly refused. The eighth specification of error is not sustained. We are not at all satisfied there was any error in the qualification com [358] plained of. An examination of the evidence inclines us to the conclusion that the court was right in calling the attention of the jury to Mr. Eby’s declarations, as was done in the general charge, and also in the qualified refusal of defendant’s seventh point. We find nothing in the record that calls for a reversal of the judgment. Judgment affirmed.