Wilcox v. Musche

Graves, J. On the 6th of June, 1873, Wilcox was owner of lot 18 [of Walker’s subdivision of park lots 49, 50, 51 and 52] in. Detroit, extending from Woodward avenue to Cass avenue, a distance of some five hundred feet, and on that day he borrowed $6500 for three years, and as security gave his personal bond and also a mortgage on the whole of this lot. May 2d, 1875, he sold defendant in error a small part of the lot, being fifty feet front on Cass avenue and about one hundred and eighty feet deep, and equal in value to about one-eighth of the value of the entire lot. He gave a deed in which his wife joined, of the piece sold, and inserted the following covenants: “And the said parties of the first part, for themselves, their heirs, executors and administrators, do covenant, grant, bargain and agree to and with the said party of the second part, his heirs and assigns, that at the time of the ensealing and delivery of these presents they are well seized of the above granted premises in fee simple. That they are free from all incumbrances whatever except a mortgage of $6500 on this and the remainder of said lot 18, which they agree to pay and remove when due, and that they will, and their heirs, executors and administrators, for them shall warrant and defend the same against all lawful claims whatsoever.” The premises have been enjoyed by the defendant in error without any disturbance and he has never paid or been called on to pay anything in consequence of the mortgage. But as the mortgage was not paid when it [104] became due, the defendant in error instituted this suit on the covenant relating to it in the deed. There was neither an averment of special damage nor any offer to prove such damage. It appeared that the plaintiff in error remained owner of the rest of the lot and that although the consideration was described as being $2000, it was actually less. The court instructed the jury to find for defendant in error the full amount called for by the mortgage together with the interest thereon, and they accordingly returned a verdict for $7095. The main contention is upon this allowance of damage: the plaintiff in error insisting that only nominal damages were authorized, and the defendant in error defending the allowance made. The real question is one of interpretation to ascertain the true intention of the parties, and a proper solution requires that attention should be given to the whole instrument and also to the surrounding circumstances. The mere letter of the deed is not positively controlling. Broom’s Max., 611; Wharton, 167. We may fairly suppose the parties were seeking reasonable and just ends, and that neither contemplated any harsh or oppressive result or any result not agreeable to prudence or natural equity. The defendant in error was buying only a small portion of the mortgaged premises, and there was no ground for apprehending that the mortgage debt or any part of it might ever be for him to pay. In case the debt should not be obtained on the bond and recourse should be had to the mortgage the residue of the land, worth many times the amount of the debt, would be subject .to be first sold. The title of the purchaser was guarded by covenant of warranty, and the general covenant protected against other incumbrances. The debt was owing by plaintiff in error to a stranger and not to defendant in error or to any third person in his interest or for his relief, and his sole interest in its being paid was the fact of its being a subsisting [105] incumbrance, and payment to bim of the amount would not diminish the liability of plaintiff in error a single dollar on the mortgage. It could only enrich the defendant in error without the least corresponding benefit to the plaintiff in error, and we have only to suppose the residue of the lot to have been sold in several parcels in the same way to perceive to what extravagance the sense put upon the transaction would lead. The debt owing by plaintiff in error to his mortgagee would be still unpaid after having paid to his grantees several times the amount of it and more than the whole consideration received and more than the, entire actual value of the lot. We think the parties did not intend to make failure of plaintiff in error to pay his mortgage debt to the' owner of it on the day and hour of its becoming due, the final and conclusive ground of a forfeiture to defendant in error of an equal amount and more than three times the consideration or value of his purchase. The design was protection and indemnity, not penal consequence or any liquidation of damage. By the specific covenant, which is the undertaking on which the defendant in error relies, the engagement is to pay a third person the mortgage debt, and not defendant in error, and the latter can only claim what in justice and equity he ought to have on account of failure to pay at the specific time, that debt to such third person, and according to the present record he was not entitled to more than nominal damages. Counsel for defendant in error made a strong argument upon authorities to bring the covenant within a class of cases holding that when an agreement stipulates for the payment on a named day by one of the parties to it of a fixed sum to the other, or for his benefit, the prima facie measure of damages is the exact sum stipulated, with interest when interest is recoverable. As we construe the covenant differently, an examination of [106] the authorities cited by the counsel does not appear to be necessary. The judgment should be reversed with costs and a new trial ordered. The'other Justices concurred.