Mayhew v. Hardesty

Mason, J., delivered the opinion of this court. The principal questions raised upon this appeal are: — first, whether the appellee, Hardesty, as mortgagee of the term, notwithstanding he never took possession of the premises, is liable under the real covenants of the assignor? secondly, if he was, did not the sale and bond of conveyance to Mason, accompanied with possession, so far amount to a legal transfer of all his interest, as to make Mason, and not himself, liable under the covenants? and thirdly, if not liable as mortgagee out of possession, or if there has not been a complete transfer of all interest to Mason, so as to make him liable, will not the possession of Mason, under the peculiar circumstances of the case, be regarded as that of Hardesty, so as to make him mortgagee constructively in possession? In settling the first two questions, we need not look to the English authorities nor to those of our sister States, as we think the decisions of our own Court of Appeals have settled both. The third question, therefore, becomes unimportant. By a close inspection of the case of Hintze vs. Thomas, 7 Md. Rep., 346, it j?ill be found that the principle is clearly recognised, that/ivhere a party takes an assignment of a lease, as in the present case, the whole legal estate passes, and he [495] thereby becomes liable on the real covenants, whether he became possessed, or occupied the premises, in fact, or not,,.,-' This is also now the law in England, notwithstanding the earlier decision of Eaton vs. Jacques, Doug., 455, to the contrary. Williams vs. Bosanquet, 1 Brod. & Bing., 230, 5 Eng. Com. Law: Rep., 72. The same rule prevails at least in some of our sister States. Pingrey vs. Watkins, 15 Verm. Rep., 679. But it is contended by the appellee’s counsel, as his second ground of defence, that even if he had been liable, by mere force of the mortgage, to him, and without possession, such liability was divested by the sale and bond of conveyance of his interest to Mason, and the possession of the latter thereunder. This is not a correct legal assumption. Unless Hardesty transferred to Mason his entire interest or term, the latter would not thereby be an assignee, but a mere sub-lessee, and as such not liable under the covenants., .-The case of Peter vs. Schley, 3 Har. & Johns., 211, determines, that such an entire interest as is ascribed to Mason, that is, an interest for more than seven years, cannot, under our registry laws, be transferred or assigned in any other way than that prescribed by those Jaws, and that no acts, in pais, short of a deed duly executed and recorded, are competent for that purpose, (act of 1766, eli. 14.) Mason, therefore, cannot be regarded as the legal, assignee of Hardesty’s entire interest, and is not on that account liable to the appellant. We are also of the opinion, that the term “factories'1 ’ embraces the fixed machinery necessary to operate the factories, and the reason is, that without such necessary machinery, the buildings would not in fact be factories. A building is no more a factory without machinery, than machinery wouLd be a factory without a building. A covenant, therefore, to keep in ■ sured a factory, necessarily embraces the obligation to keep (he machinery necessary for the operation oí the factory also insured: among such necessary fixed machinery would be included the water-wheel, shafting and gearing. in the main, wo think the theories of the appellant’s first [496] three prayers are correct, but we do not deem it necessary to affirm all the legal propositions advanced by each of those prayers. The last three prayers, which rest upon the notion that Mason’s possession should be treated as the possession of Hardesty, need not be passed upon in the view we have already taken of the case. We reverse the judgment, in order that the Court of Common Pleas, upon another trial, may instruct the juiy in accordance with the principles herein announced. Judgment reversed and procedendo awarded.