Walker v. Wilson

By the Court, Cole, J. This was an action to foreclose a mortgage. Tbe notes and mortgage were given to secure tbe purchase money of certain premises, consisting of some thirteen acres of land, with a mill and certain privileges, on Black Earth Creek. Tbe appellants alleged in their answer, that tbe respondent fraudulently represented, at tbe time of tbe purchase, that there was a good and valuable water power upon tbe land, and that be bad tbe right to raise and maintain a dam on tbe land sufficient to raise tbe water in tbe creek, at tbe dam, to tbe height of seven feet above its ordinary height at that point, while in fact be bad no such right; and that tbe covenants of bis deed are broken; claiming damages for such breach by way of counter-claim: Tbe deed granted and conveyed the piece of land, describing it, “together with tbe mill and all the' privileges and appurtenances thereunto belonging, or in any way appertaining, and with the right to raise a dam sufficient to raise tbe water seven feet high,” with tbe usual habendum clause. Tbe respondent covenants “that be is well seized in fee of tbe aforesaid premises, and has good right to sell and convey tbe same; that tbe same are free of all incumbrances whatsoever, and that tbe aforesaid premises in tbe quiet and peaceable possession of tbe parties of tbe second part, their heirs and assigns, against all and every person lawfully claiming or to claim tbe whole or any part thereof, be will forever warrant and defend.” On tbe trial, tbe appellants, in order to main [525] tain and prove tbeir defense set up in tbe answer, offered in evidence tbe deed of tbe respondent to them, (of tbe date as tbe mortgage of tbe same property,) which contained tbe covenant relied on; and offered to show, in connection therewith, that there was not upon said premises tbe right to raise tbe water of Black Earth Creek seven feet high by a dam, as stated in tbe deed, for tbe purpose of showing a breach of the covenant of seizin in the deed as a counterclaim to tbe action. Tbe circuit court held, that a breach of tbe covenants of tbe deed could not be set up as a defense to tbe action on tbe notes and mortgage, and refused to allow tbe deed to be given in evidence as tbe basis of tbe counter-claim. The correctness of this ruling is tbe principal question before us. Under tbe old practice it seems to have been well settled, that a purchaser of land who was in tbe undisturbed possession thereof, would not be relieved in equity against bis contract to pay the purchase money, on the mere ground of a defect in tbe title, when there bad been no fraud practised upon him. That doctrine is quite thoroughly discussed and fully established in tbe following cases: Bumpus vs. Platner, 1 J. C. R., 212; Abbott vs. Allen, 2 id., 519; Edwards vs. Bo dine, 26 Wend., 109; Woodruff vs. Bunce, 9 Paige, 443; Miller vs. Avery, 2 Barb. Ch. R., 583; Platt vs. Gilchrist, 3 Sandf. R., 118. In such a case, it is said that while tbe grantee remains in possession, enjoying tbe fruits of bis purchase, no real damage has been sustained by him; and that it would be inequitable to give him compensation for mere remote or possible future loss, when tbe defective title might, by adverse possession, ripen into a complete and perfect title. And if be should be evicted, there was no hardship in remitting him to tbe covenants in bis deed and to bis action at law upon them, where be bad a full and complete remedy. But still where there bad been an eviction, equity sometimes interfered and restrained tbe collection of unpaid purchase money, particularly where there were covenants of title in tbe deed. And tbe above cases show that even when an action of ejectment has been commenced to recover tbe possession of mort [526] gaged premises, by a third party claiming under a paramount an injunction has been granted to stay proceedings on a ’bond and mortgage for tbe purchase money. See also Johnson vs. Gere, 2 J. C. R, 546; Leggett vs. McCarty, 3 Edwards’ Chan. R., 126. Here the injury complained of is, that the respondent was not seized in fee of the premises, and could not grant and convey them with the right to raise the water to the height specified in the deed. It is obvious that this was a breach of the covenant of seizin, for which the appellants might immediately have brought an action; and it is insisted that whatever damages they have sustained in consequence of this breach of the covenant, constitutes .a proper counterclaim under the code. It will be seen that the appellants do not claim in their answer, that there has been a total breach of the covenant of seizin as applied to the entire premises conveyed, but only a partial failure of title so far as the right to raise and maintain a dam at the given height is concerned. This right, it is alleged, the respondent did not possess, and therefore could not and did not convey by the deed. What may be the damages to the mill and the premises in consequence of this partial failure of the title, it is impossible now to tell. But it is evident that the damages might have been serious, as such a right might be highly valuable and important. It certainly would be a subject of distinct and positive proof, and we can perceive no valid objection to permitting the damages to be proven in this action for the purchase money, and to their constituting a valid defense pro tanto. What good objection can exist to this practice ? It avoids a multiplicity of suits. The damages for the breach of the covenant can be ascertained and definitely determined. That there is a clear breach of the covenant of seizin there can be no doubt. How much are the appellants injured by it, is the question. They proposed showing the extent of their injury, and offered the deed as the foundation of their defense. But thé court held the evidence incompetent, and that it did not constitute a counterclaim. Was the court right in this view of the matter ? We think not. [527] Tbe statute permits a defendant to set up in bis answer any new matter constituting a counter-claim or defense. 2, sec. 10, ebap. 125. Tbe counter-claim, it says, must be one existing in favor of a defendant and against a plaintiff, between wbom a several judgment might be bad in tbe action, and must arise out of one of tbe following causes of action : 1. A cause of action arising, out of tbe contract or transaction set forth in tbe complaint as the foundation of the plaintiff’s claim, or connected with tbe subject of tbe action : 2. In an action arising on a contract, any other cause of action arising also on contract and existing at tbe commencement of tbe action. Sec. II.-- Tbe claim set up in tbe answer in this case, exists in favor of tbe appellants and against tbe respondent, and arises upon a contract and out of tbe transaction set forth in tbe complaint. Tbe covenant was broken at tbe time tbe suit was brought, and tbe appellants bad a good cause of action upon their deed. They did not see fit to bring their suit, but now desire to detain tbe purchase, money to the: extent to which they would be entitled to recover damages for a failure of title to part of tbe premises. See Knapp vs. Lee, 3 Pick., 459; Rice vs. Goddard, 14 id., 293. We cannot see why this does not constitute a “ counter-claim,” within tbe meaning of tbe code. Tbe spirit of that enactment is to prevent circuity of action and multiplicity of suits. No matter whether tbe counter-claim be for a breach of a covenant of seizin, or for unliquidated damages upon any other contract; so long as it comes within tbe requirements of tbe Code, it may be set up as a defense in tbe answer. Flanders vs. McVickar, 7 Wis., 372. We bad at first doubt, as to whether tbe covenant of seiz-in was intended to apply to and embrace tbe right to maintain tbe dam of sufficient height to raise tbe water seven feet. Its language is that tbe grantor “ is well seized in fee of tbe aforesaid premises,” &c, We think tbe covenant of seizin was intended to be as broad as tbe granting part of tbe deed, and to apply to all tbe estate conveyed. A right to maintain a dam of that height might be essential to tbe beneficial use and enjoyment of tbe mill. Tbe parties might [528] wen foe supposed to bave contracted with a view to that bead „ fr n . . water. It may be necessary and requisite to propel tbe machinery. We therefore feel bound to say, that upon tbe face of tbe deed tbe intention is apparent to make tbe covenant of seizin as comprehensive as tbe granting part thereof. See Pickering vs. Stapler, 5 S. & Rawle, 107; Whitney vs. Olney, 3 Mason C. C., 280; Stackpole vs. Curtis, 2 Red. (Me.), 383; Farrar vs. Stackpole, 6 Greenl., 154; Pratt vs. Sanger, 4 Gray, 84. Tbe conclusion at which we bave arrived is, that tbe evidence offered on tbe trial to sustain tbe answer was competent, and was erroneously ruled out by tbe court. Tbe judgment must therefore be reversed, and a new trial ordered.