Keyes & Marshall Bros. Realty Co. v. Trustees of the Canton Christian College

146 A.D. 796, 131 N.Y.S. 527, 1911 N.Y. App. Div. LEXIS 3371

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 3, 1911
• Status: Published

Opinion

Clarke, J.:

Plaintiff is a Missouri corporation. Defendant is a domestic corporation. The complaint sets up an action for damages on breach of covenant of warranty, contained in a deed conveying lands situate in St. Louis, Mo., executed and delivered by defendant at the city of New York to plaintiff’s predecessor in title. Plaintiff, a remote grantee through several mesne conveyances, sues defendant as original covenantor. The breach alleged is a judgment of eviction from a portion of the lands conveyed in a suit brought in the Circuit Court of the city of St. Louis, Mo., by the holder of an older and better title, of which suit defendant had notice.

The defendant demurred upon the ground that it appears on the face of the complaint that the court has no jurisdiction of the subject of the action because it appears on the face of the complaint that the action is for damages for alleged breach of warranty in a deed of real property lying wholly within another State, to wit, the State of Missouri, and also that the complaint does not state facts sufficient to constitute a cause of' action. The Special Term overruled the demurrer upon the ground that the complaint stated facts sufficient to constitute a cause of action and from the interlocutory judgment entered thereon defendant appeals.

It is well established that a covenant of warranty runs with the land and that eviction, actual or constructive, by elder title constitutes a breach. A cause of action accrues upon the breach to a remote grantee against the original covenantor. The question presented is whether such cause of action is transitory . or local. This depends upon the question whether the cause of action is based upon privity of contract or privity of estate. . ,

In Clarke v. Priest (21 App. Div. 174) Willard Bartlett, J., said: “ A. covenant is said to run with the land when such covenant, given by a prior owner, inures to the benefit of the subsequent owners in the chain of title. Until breach, all' covenants for title run with the land. Under the common-law doctrine of covenants, according to the weight of American authority * * * the covenant of warranty and the covenant for quiet enjoyment refer to the future, and, hence, run with the land. * * * Of the covenants of warranty and quiet enjoyment there is no breach until eviction, and hence no cause of action can arise until that time. There is, therefore, no conflict of interest between successive holders of the title. An earlier grantee of the land who has parted with his title cannot recover against his covenantor until himself compelled to respond on his own covenants to his grantee. (Withy v. Mumford, 5 Cow. 137; Rawle on Covenants of Title, § 215.)”

In Mygatt v. Coe (147 N. Y. 456) O’Brien, J., said: “It' must be regarded as the law of this case that privity of estate is essential to carry covenants of warranty and quiet enjoyment to subsequent grantees in order to support a right of action by them against the original covenantor, when there is an eviction by paramount title. It was so held by a majority of the Second Division when the. case was there, and we felt constrained, when the case was here, to follow that doctrine. (142 N. Y. 82.)”

. In the same case (142 N. Y. 78) Finch, J., said, referring to the first appeal (124 N. Y. 212): “The majority of the court held that privity of estate is essential to carry covenants of warranty to subsequent grantees so as to support a right of action by them against the original covenantor whenever evicted by a title paramount' to his; that a covenant of warranty made by one having neither title nor possession, and so no estate in the land, will not run with it into the hands of subsequent grantees, but will stop where the privity of contract ends, and so at the first or original covenantee.”

Follett, Ch. J., in the same case (124 N. Y. 212), said:

“ ‘There are three manner of privities, viz., (1) Privity in case of estate only. (2) Privity in respect to contract only. (3) Privity in respect to estate and contract together.’ (2 Sugd. Vend. *714; 4 Cruise’s Dig. *376; Greenleaf’s ed. 458.) Thterm privity in estate denotes mutual or successive relationship to the same rights of property. (Stacy v. Thrasher, 6 How. [U. S.] 44, 59; Green. Ev. §§ 189, 523; Big. Est. [6th ed.] 347.) ‘ There is a certain privity between the grantor and grantee of the land. It is not the privity arising upon tenure, for there is no fiction of fealty annexed. It is, however, the same sort of privity which enables the grantee of a purchaser to maintain an action upon the covenants of title given to his vendor ; and it is moreover a privity of the same nature with that which obtains between the grantor and grantee of terms for life and for years.’ (Van Rensselaer v. Hays, 19 N. Y. 68, 91.) * * * Under the facts found there was no privity of estate, actual or assumed, between the defendant (the covenantor) and Haney Fisher (the covenantee), only privity by contract. The defendant having no estate, title or interest in or possession of the land conveyed, there could be no privity in estate between him and Haney Fisher, and not having covenanted or represented that he had an estate, he cannot be estopped from showing that he had none. The only privity which existed between the defendant and Haney Fisher was by contract, which is insufficient to carry the benefit to subsequent owners of the property to which the covenants relate. * * * Kent states the rule in this language: ‘ The distinction between the covenants that are in gross and covenants that run with the land (and which are covenants real, annexed to or connected with the estate, are beneficial to the owner of'it, and to him only) would seem to rest principally on this ground that, to make a covenant run with the land, there must be a subsisting privity of estate between the covenanting parties. ’ (4 Kent’s Com. 472.) ” .

Geiszler v. De Graaf (166 N. Y. 339), cited by respondent, simply decided that the court would hold that the covenant against incumbrances ran with the land. It thus appearing clearly that the cause of action alleged arises from privity of estate, is .such action transitory or local ?

White v. Sanborn (6 N. H. 220), decided in 1833, was an action of covenant broken. The court upheld a demurrer to the declaration which was by a subsequent grantee through mesne conveyances of a grantor of certain lands in Vermont, the deed containing a warranty, and there having been a judgment of eviction in Vermont against the plaintiff by a holder of an.older title. Richardson, Ch. J., said: “In general, actions founded upon contracts are transitory although made and even stipulated to be performed out of the State for debitum et contractus sunt nullius loci. But when the action is founded upon privity of estate it is local and lies only in the place where the land is. 1 Chitty’s Pl. 274; Comyn’s Digest ‘Action’ N, 4; 2 Salkeld, 651, Way v. Yally; 1 Salkeld, 80, Barker v. Damer; 1 Shower, 187; S. C.; 6 Mod. Rep. 194, Way v. Yally; 6 Mass. Rep. 331, Lienow v. Ellis; 5 Cowen, 18*; 1 Wilson, 165, Thrale v. Cornwall. It is very clear that this action is not founded upon any privity of contract between- the parties but upon privity of estate. * * * And it is settled that not.only real actions are local, but that all actions founded on any privity of estate in land are also local. Whether it might not have been better if the law had been otherwise settled in this respect, it is not for us to say. We sit here to determine not what the law should be, but what it is,” and sustained the demurrer.

Clark v. Scudder (6 Gray, 122), decided in 1856, was an action of contract in the Supreme Judicial Court of Massachusetts, in the nature of covenant broken upon a covenant contained in a deed of land, situate in Illinois, for peaceable enjoyment - and warranty. Plaintiff claimed through several, mesne conveyances. Upon the trial the chief justice, Lemuel Shaw, ruled that as this was an action on covenant running with the land, brought by an assignee of the covenantee, the land being situate out of the Commonwealth, the court had no jurisdiction, and a nonsuit was entered, subject to the opinion of the full court. This was given by Metcalf, J., as follows: “ This ' casé cannot be distinguished from that of Lienow v. Ellis, 6 Mass. 331, where it was decided that an action of covenant concerning land, brought by the assignee of the covenantee against the covenantor, was local and could be maintained only in the county where the land was situate. The same point was decided in the same way in White v. Sanborn, 6 N. H. 220, and Birney v. Haim, 2 Littell, 262. There is no privity of contract between the plaintiff arid the defendants, but merely a privity of estate; and. when an action is founded on privity of estate only it is local, as is shown not only by the above cited cases but by numerous other books. 1 Tidd’s Pract. (1st Amer. ed.) 373; 1 Selw. N. P. (11th ed.) 517; 1 Saund. Pl. & Ev. (2d ed.) 865; Mayor, &c., of Berwick upon Tweed v. Shanks, 3 Bing. 460. The plaintiff contends, however, that as both he and the defendants are inhabitants of this State he is without remedy, unless he can maintain an action here, and that for this reason the court should sustain this action. Lord Mansfield once yielded to this consideration (Cowp. 180), at nisi prius, but he was overruled, Doulson v. Matthews, 4 T. R. 503. See, also, Shelling v. Farmer, 1 Stra. 646; Chit. Pl. (6th Amer. ed.) 302; Story Confl. § 554. Nonsuitrto stand.”

Doulson v. Matthews (4 Durn. & East. [4 T. R.] 503), decided in 1792, was an action in the King’s Bench of trespass for entering the plaintiff’s dwelling house in Canada and expelling him. Lord Kenyon on the tidal was clearly of opinion that the .cause of action stated was local, and . plaintiff was nonsuited. Erskine moved to set aside the nonsuit, observing that this was not an action to recover the land, but merely a personal action to recover a satisfaction in damages, which was transitory, and might be tried here. Buller, J., said: “It is now too late for us to enquire whether it "were wise or politic to make a distinction' between transitory and local actions. It is sufficient for the courts that the law has settled the distinction, and that an action guare clausum fregit is local. We may try actions here - which are in their nature transitory, though arising out of a transaction abroad, but not such as are in their nature local.” • -

That case was followed by Chief Justice Marshall in Livingston v. Jefferson (1 Brock. 203), and ,by Chancellor Walworth in Watts v. Kinney (6 Hill, 82), who said, referring to the Livingston case: “And one of the ablest judges [who] has adorned the bench of this or any other country, after a full and elaborate argument of the question before him, has pronounced the decision in Doulson v. Matthews to be in accordance with the settled principles of the common law. ”

Mayor, Bailiff & Burgesses of the Borough of Berwick upon Tweed v. Shanks (3 Bing. 460) was, an action in the Common Pleas upon a covenant by the lessors against the assignee of a term in- certain premises, alleged in the declaration to be situate within the liberties of Berwick-upon-Tweed. The venue was laid in Northumberland. There was a general demurrer and joinder. Best, Ch. J., said: “The action is undoubtedly local because it arises, on privity of estate and not on privity of contract. Our judgment, therefore, must be for the defendant.”

In Port v. Jackson (17 Johns. 239), which was an action on a covenant for the payment of rent, the court said: “What I have said,*and the. cases that have been referred to show, that the assignment by the defendant to Graham, and the acceptance, by the lessor of Graham as his tenant, do not discharge the defendant from this covenant, and that his liability does not arise out of the privity of estate, but the privity of contract; and this is an answer to the objection that has been made, that this action is local, the covenant having been made in England, and that no suit, therefore, can be maintained upon it in the courts of this State. The suit is brought on the express covenant, which remains in full force after the land is. gone, and is founded on a privity collateral to the land. * "x" * Like every other personal agreement it is transitory in its nature, and may be tried here, though arising.out of a tran-s-' action abroad. (Doulson v. Matthews et al., 4 Term Rep. 503.) ”

In the case at bar, the action being by a remote grantee against the original covenantor upon a covenant of warranty, is maintainable only because that warranty runs with the land and the plaintiff’s right depends upon privity of estate; but that estate is situate in Missouri and the breach, to wit, the eviction by title paramount, is evidenced by the judgment obtained in the courts of the State of Missouri, and while the action is for damages, it accrues by reason of a transaction which could only occur in the State where the land is located. It is thus a local and not a transitory action and, being so, the courts of this State, upon the foregoing authorities, have no jurisdiction of the subject-matter of the action.

The interlocutory judgment appealed from should be reversed, with costs and disbursements to the appellant, and the demurrer sustained, with costs, with leave to serve an amended complaint within twenty days on payment of costs in this court and in the court below.

Ingraham, P. J., Laughlin,' Scott and Dowling, JJ., concurred.

Judgment reversed, with costs, and demurrer, sustained, with costs, with leave to plaintiff to serve amended complaint on payment of such costs.

[Rep.