Lovejoy v. Potter

Morse, J. The complainant’s bill is for the specfic performance of a written contract, under seal (but without witnesses), made between the complainant and the Central Car & Manufacturing Company, a corporation, for the sale of certain [99] real estate to the complainant as vendee, the land having been conveyed subject to the contract, and the contract, when about half paid, assigned to the defendant by a deed containing full covenants. The defendant, having tendered a deed containing a covenant against his own acts, for delivery on the payment of the remainder of the purchase .price, the complainant refused to receive it, and comes into court to compel the defendant to execute a deed with full covenants. The defendant demurred, and the court below dismissed the bill. The agreement, or contract for a deed, provided : “ And | the said party of the first part, on receiving such payment' at the time and in the manner above mentioned, shall, at its own proper cost and expense, execute and deliver to the said party of the second part, or to his assigns, a good and sufficient conveyance in fee simple of said described lands, free and clear from and of all liens and incumbrances, except such as may have accrued thereon, subsequent to the date hereof, by or through the acts or negligence of said party of the second part, his heirs or assigns.” The bill shows .that, upon the execution of the contract, the complainant paid some money upon it, and went into possession of the lands, which possession he has ever since held. The Central Car & Manufacturing Company, by its properly executed and delivered deed, conveyed this land to the defendant, subject to complainant’s contract, which deed contained all the covenants called for by the contract. After the deed and assignment aforesaid, the complainant paid to defendant all the money due upon the contract, except about $50. On the twentieth day of January, 1885, he tendered to said defendant the balance upon the contract, and demanded a deed according to the terms of the agreement. Defendant prepared and executed a deed of the premises, but the same was not a deed with general covenants of warranty, or a warranty deed of usual form, but a deed, being a release or quitclaim, with covenants only against the acts of said defendant. This deed the complainant refused to accept., [100] He then,'on the thirtieth of the same month, prepared a deed of the premises, containing the usual covenants of warranty, to be signed by defendant and his wife, and presented the same to said Potter for execution, at the same time tendering him one dollar for expenses, and offered him sixty-one dollars, being the amount claimed to be due by the defendant upon the contract. Potter refused to accept the money or execute the deed, declaring that he would make no other than the quitclaim aforesaid. The controversy, therefore, is whether complainant is entitled to the deed he demands of defendant. There is no averment in the bill expressly stating that complainant has ever consented to the release of the Car Company from its obligation under the contract, and the substitution of defendant in its stead ; but the bill shows that complainant, after the assignment of the contract to the defendant, paid him a large amount upon the contract, which defendant accepted, establishing a virtual substitution and a privity between the parties to this suit. It has been held in this State that, where a vendor, in a contract like the one under consideration,, had conveyed the land to a third person, in possession of the premises under a contract with the vendee in disregard of the rights of the vendee, the vendee had a right to a specific performance of the vendor’s contract by such third person holding the title:' Bird v. Hall, 30 Mich. 374 The original vendor was made ' a party in that case, because there were no contract relations ¡ between the vendee and the vendor’s assignee; and so, also,' in Daily v. Litchfield, 10 Mich. 29. But in this case, it was not necessary to make the Car Company a party, as the complainant had fully accepted the defendant in its stead. In equity, the corporation in this case was a trustee of the title of these premises, holding the same for the complainant,'to be conveyed to him upon the performance upon his part, of the contract. The defendant purchased the premises of the corporation, subject to its contract, and with notice of the complainant’s rights. He must therefore be deemed as standing in the shoes of the vendor, and is as much a trustee [101] for the vendee, the complainant, as was the corporation before its assignment of the contract: Murray v. Ballou, 1 Johns. Ch. 566; Saunders v. Dehew, 2 Vern. 271; Laverty v. Moore, 33 N. Y. 658; Smoot v. Rea, 19 Md. 398. The complainant is therefore entitled to a specific performance from the defendant. Taking the conveyance with a full knowledge of complainant’s equities, and succeeding to the interest of the vendor in the premises, and having been tendered the full amount of the balance due upon the contract, he must transfer the title to complainant, and transfer it in substantial compliance with the terms of the contract. The complainant has a right to demand and obtain as good a title in every respect as he would have been entitled to receive, had the vendor not parted with it: Keegan v. Williams, 22 Iowa, 378; Smoot v. Rea, 19 Md. 398; 2 Story Eq. Jur., 6th ed., § 784; Downing v. Risley, 15 N. J. Eq. 93. It seems to us that the demurrer should have been overruled. The complainant was entitled, under his contract, to a deed containing the usual covenants. The covenant against incumbrances and for seizin not running with the land, a quitclaim deed from defendant would not give him the title his contract guaranteed him : Rawle, Cov. 318, 320; Davenport v. Davenport, 52 Mich. 587; Matteson v. Vaughn, 38 Mich. 373. The defendant has received from the vendor, the Car Company, a warranty deed with full covenants, and the complainant asks from him only the same covenants. There is no good reason why he should not make such a deed. The case set out in complainant’s bill is equitable, and the defendant should comply with his demand or make answer, if he has any defense upon the merits. We cannot agree with the counsel for the defendant that his client became, by the deed and assignment of the Car Company, the trustee of the corporation, in the sense of being a mere agent whose only duty was to pass over to the complainant the deed of the Car Company to him with his own quitclaim, but he became a trustee, in the sense of succeeding to the rights and also the obligations of his vendor and assignor — standing in its place — and bound, by the [102] Car Company’s contract, which became his own, to give to the complainant as good a conveyance in every sense as the corporation must have done, had he not taken its place. If equity can allow the defendant to substitute his quitclaim deed for the warranty that complainant demands, the record title of these premises, which is the guide of purchasers, will not show the complete and perfect chain of warranties which dispenses with extrinsic evidence, to the buyer, that the title is good. There can be no hurt to the defendant in executing the deed required by complainant, unless there is something wrong in the title; and, if there is, the contract to which he has become a party cannot be fulfilled without such a deed. The decree of the court below is reversed, and the demurrer of defendant overruled, with costs of both courts to complainant. Defendant will be allowed 20 days in which to answer. The other Justices concurred.