Lloyd v. Jewell

1 Me. 352

Opinion

Mellen C. J.

delivered the opinion of the Court at the succeeding term in Cumberland, as follows.

In the argument of this cause several questions were presented for consideration, which may be resolved into the three following.

1. In an action on a promissory note, payable at a given day, brought by the promissee or his representatives against the maker or his representatives, given for the price of real estate conveyed by the promissee to the promissorby deed containing the usual covenants of seisin and warranty, is it competent for the defendant to shew by way of defence a total or partial failure of title, or want of title in the grantor, at the time of his making the conveyance ?

2, If not, then is it competent for the defendant in this case to do it, in consequence of the special language of the plaintiff’s covenants in his deed as to the limitation of his liability in damages, and the mode of paying them ?

3. If so, is it competent for him to avail himself of any advantage from the special language of the covenants in an action on the particular note sued in this case ; two other notes, given at the same time, and for part of the consideration of the land sold, still remaining due, and not yet demanded ?

As to the first point, we would observe that for a long series of years the practice in Massachusetts has proceeded upon the principle that the covenants in the deed of conveyance, or, if no deed had been given, but only a bond or covenant to give a deed, then such bond or covenant constituted a good and valuable consideration for the note, and of course a want or failure of title would be no legal defence to an action on such note; and we had considered such to be the true principle of law in relation to this question ; but the cases decided in Kew-York cited from Johnson by the counsel for the defendants, in which such a de-fence was considered substantial, have induced us to look carefully into those cases, and to examine the point with more attention, respecting, as we do, the high character and learning of the Court which pronounced those decisions.

It is a principle of law, universally acknowledged, that assump-sit will not lie where the debt is due by specially, for in such case the specialty ought to be declared upon. Bul. N. P. 128. It is equally clear that if a debt due by simple contract be after-wards secured by specialty, the original cause of action is merged. Hence it is plain in the case before us, that whatever claim the defendants have upon the plaintiff is secured by the covenants in his deed ; and if they can avail themselves, in this action of assumpsit, of the failure of title by way of defence, it is more than they could do in character of plaintiffs demanding damages. These propositions require no authorities to support them. It is also plain that the defence proposed cannot be made by way of set-off against the plaintiff’s demand ; because our statute upon this subject is not so broad as the English statute, and does not in any case authorize a defendant to set off a debt secured by a specialty or a promise in writing.

Where there are several covenants, promises, or agreements, which are independent of each other, one party may bring an action against the other, without averring performance on his. part, and it is no cause for the defendant to allege in his plea a breach of the covenant on the part of the plaintiff. 1 Saund. 320. note 4. Yelv. 134. note 1. and. cases there cited. In those cases in the books in which the question was whether the promises or covenants were mutual and independent, or dependent, the contract or undertaking on both sides was of the same character and grade ;—not covenant on one side, and assumpsit on the other, as in the case at bar. Another well established rule of construction is that the intent of the parties, and not the mere arrangement of the words, ought to govern. 1 Saund. 320. note 4. Thus, if a day be appointed for payment of money, and the day is to happen, or may happen before the thing which is the consideration of the money is to be performed, an action may be brought for the money when payable, and before performance; for it appears the party relied on his remedy, and did not intend to make the performance a condition precedent. Same note 4. In the case supposed in the point under consideration, the note is payable on a certain day; and yet the covenant to warrant and defend might not be broken for many years after. Another objection against allowing, the de-fence proposed in an action on the note arises from the amount of damages which may become due in consequence of the failure of title to the lands conveyed. By our law, in case of eviction, the grantee or his assignee, as the case may be, is entitled to recover the value of the lands at the time of eviction. This may be twice the amount of the consideration secured by the note,—and it may be not half that amount. Hence also the propriety of considering each contract separately and independently of the other, so that each may have its proper operation and no more, and both parties be subjected to their respective legal liabilities, according to the principles laid down in Boon v. Eyre, 1 H. Bl. 273. n. 1. and Duke of St. Alban's v. Shore, ib. 270.

It has been urged that public policy requires that the proposed defence should be allowed, and several cases have been cited to support this argument. In the cases of Everett v. Gray and Taft v. Montague the defence grew out’of the unfaithfulness of the work for which the plaintiff’s were seeking compensation ; and so not like the present. In 3 D. & E. 438. the covenant of the plaintiff with the defendant amounted to nothing; it gave him no remedy against the plaintiff, and the permission to the defendant to use the patent frame, gave him no rights. It was not a new invention, and the whole was a fraud. The case of Bliss v. Negus was assumpsit on a promissory note, given for the assignment of all the plaintiff's tight under a certain patent, with a covenant to warrant the same to the defendant; and it was proved that the plaintiff had no right, and that nothing passed by the assignment; and there being nothing on which the covenant could operate, it wras a dead letter, and could not form a consideration for the note. The case of Sill v. Rood, 15 Johns. 230. only decides that in an action on a promissory note given for a chattel, the defendant may shew deceit in the sale, under the general issue. Frisbie v. Hoffnagle, 11 Johns. 50. was an action of trover for certain promissory notes given for lands purchased, the title to which had wholly failed; and the Court decided that the consideration for the notes had also failed, though the lands were conveyed with warranty. This case is admitted to be, in principle, directly in point for the defendants ; but on examination of the cases of Morgan v. Richardson, 1 Campb. N. P. 40 note. Tye v. Gwynne, 2 Campb. 346. and Barber v. Backus, Peake's Ca. 61. all which are cited at the end of Frisbie v. Hoffnagle, it will be found that they are totally different from that case in principle and do not in any degree support it. They related merely to an alleged failure of the whole or a part of the consideration of bills of exchange given for articles which were defective. The other case cited for the defendant wras Winter v. Livingston, 13 Johns. 54. That was assumpsit on three promissory notes signed by Livingston for the price of a tract of land. About a month after the date of the notes Winter covenanted with Livingston to convey the land in fee simple to him, on the express condition that the covenant should be void if several notes should not be paid at the times they should respectively become due. They were not paid. The Court, in delivering their opinion, say—“ By this covenant, however, it was provided that the agreement was to be void, unless “ Livingston paid his notes as they fell due. He did not pay “ them ; and of course the agreement was void, if Winter elect* “ ed so to consider it; and the case shows that he availed him- “ self of this forfeiture, for he went on and sold the land for his exclusive benefit; and Livingston has therefore received “ nothing for his notes, and Winter has a complete and perfect “ title to his lands.” It is clear that this case does not in any degree support the principle it was cited to establish. The only authority, then, opposed to the principle which has been so long recognized in Massachusetts is the case of Frisbie v. Hoffnagle, and that is an insulated case.

In the case of Fowler v. Shearer, 7 Mass. 14. the action was founded on a promissory note, and the defence was a want of consideration. The note was given in payment for land conveyed by a married woman alone, with covenants in the usual form. The only consideration pretended, was this deed by which nothing passed ; and Parsons C. J. said—“ the defendant “ cannot derive any advantage from any covenant in the deed. “ She is not answerable on any of her covenants; I do not “ therefore see any consideration sufficient to support this promise.” It is evident that if the covenants had been good and binding they would have been a good consideration for the note. The case of Smith v. Sinclair, 15 Mass. 171. recognizes and proceeds on the principle that the bond to convey the tract of land for which the note declared on was given, constituted a good consideration for the note, though there was a partial failure of title by a previous mortgage. And in addition to the authority of these decided cases it may not be improper to notice the argument ab inconvenienli urged by the counsel for the plaintiff. It is certainly unusual to try the title to real estate in actions of assumpsit; and in the present case, should the defence be allowed, and the sum now sued for not be recovered, but in evidence set off against the breach of one of the covenants in his deed ; the record would disclose no facts on which the plaintiff could found his action against his warrantor for reimbursement. These, to say the least, are great inconveniences ; which may all be avoided by a steady adherence to settled principles, in preference to consulting individual convenience, or merely preventing circuity of action.

With respect, therefore, to the general question which we have been considering, we all agree in deciding it in the negative,

As to the second question, whether the general principle is changed by the special language in the covenants on the part of the plaintiff, we are well satisfied that it is not. The clause relied on by the defendant was introduced for the benefit of the plaintiff, and the object was to limit his accountability, whatever might be the consequences as to the title, and reserve to himself the liberty of paying the damages which might be recovered against him, in the defendant’s own notes in whole or in part, provided they should not have been paid at the time of such recovery of damages. Viewing the special provision in this manner, it is clear that the defendant has no rights reserved to him by it; and upon no fair construction can it be considered as dispensing with the rules of evidence, or altering the principles of law in the decision of the merits of the cause.

It has now become unnecessary to decide the third question before proposed; though we are inclined to believe that if the defence offered could be made in any form against either of the notes, the plaintiff might elect to have the damages paid by giving up one of the other notes : so as to avail himself of the costs of this action, which was properly commenced. But on this point we give no opinion.

We are all agreed that the evidence on which the defence prevailed was improperly admitted, and accordingly the verdict must be set aside and a new trial granted.