Colby v. Osgood

29 Barb. 339, 1859 N.Y. App. Div. LEXIS 123

• Court: New York Supreme Court
• Decided: May 2, 1859
• Status: Published

Opinion

By the Court, Boosevelt, J.

-In 1853—after the code went into operation—Osgood, the defendant, in consideration of $30,000, conveyed a certain house and lot,.with the furniture, in 17th street, to one Smith, with full covenants of seisin, warranty, right to convey free from incumbrances, and for further assurance. The covenants, as usual, were made in terms, not only with Smith, but with “ his heirs and assigns.” In the following year, to wit, in May, 1854, Smith, the grantee, for the same consideration and with the same covenants, conveyed the premises to Colby, the plaintiff in this suit. Osgood, it appears, before his sale to Smith, had mortgaged thé lot to one Snyder, for' $10,000, who, in December, 1854, commenced a foreclosure against Colby, and compelled him to pay the $10,000, besides a large amount in addition, for interest and costs, which Colby now seeks to compel Osgood to refund. Colby, it is conceded, has a remedy against Smith, and Smith against Osgood, for reimbursement. The question is, can Colby, passing by Smith, sue Osgood, Smith’s grantor ; or must he sue Smith, and let Smith sue Osgood ?

The referee held that Osgood's covenant was broken the moment it was made; and that it was competent, under the code, to assign a broken covenant; but that in this case no such assignment had been made. In these views the referee, we think, partially erred. ,

First. The answer itself alleges that, simultaneously with the execution of the first deed, a sealed agreement was entered into, which recognized the mortgage, and qualified the effect of its existence as an immediate incumbrance, by allowing it to remain, by consent, unpaid till the 1st of November, 1854. There was therefore no breach in that respect of the covenants, or either of them, until after Smith's conveyance to Colby.

Second. The complaint sets forth the whole deed of the defendant, verbatim, including the covenant for further assurance. It therefore lays the foundation of a claim for a release of the mortgage, or payment of its equivalent in damages. A release of a mortgage is a “further assurance;” and the right to further assurance, when stipulated for, passes to the successive grantees. In other words, it is a covenant that “runs with the land," and as a consequence is assigned by a conveyance of the land. It may be that in this view of the causé of action, a demand should first have been made. No objection, however, was taken, in the answer, or on the argument, for the want of such demand. The defense was placed on the single position that the plaintiff had no right to make any demand, whether before suit or by suit; that the cause of action had never been assigned to him, but belonged, still, to the original covenantee; that the conveyance to him, by the covenantee of the lands, did not pass the right of action on the covenants, which, it was assumed, had been previously broken. The covenant for further assurance appears to have been overlooked. That clearly had not been broken before the conveyance. In its nature it was prospective; and although, in its legal effect, it might, in the present case, give to the party injured the same amount of damages as the covenant against incumbrances, it still was not the same covenant. (4 Kent, 473.) It ran with the land, even if the other covenant did not; and it carried the other covenant with it.

[New York General Term, May 2, 1859.

Roosevelt, Pratt and Clerics, Justices.]

On both grounds, the dismissal of the complaint was erroneous, and the judgment should be reversed, and a new trial ordered; costs to abide the event.

Ordered accordingly.