Opinion
Argued December 9, 1886
Decided January 18, 1887
T.G. Barry for appellant. Ralph E. Prime for respondent.
The question presented on this appeal is not an open one. Granting for the sake of the argument, what is by no means certain, that the title conveyed to McEvoy by the corporate deed was imperfect and invalid, it does not follow that while as grantee he remains in the undisturbed possession and enjoyment of the premises he can retain that possession and at the same time withhold the purchase-price and so keep the fruit of his contract while repudiating its obligation. By the terms of the deed which he accepted the mortgage debt was in substance the purchase-money which he agreed to pay directly to the mortgagee for the relief and discharge of the mortgagor. The force of the covenant left him practically in the same situation as if he had given back a purchase-money mortgage with a bond or covenant to pay the debt directly to his grantors, and while retaining his possession and undisturbed therein, was resisting, if not the foreclosure, at least a judgment upon his covenant. That cannot be done. ( Parkinson v. Sherman, 74 N.Y. 88.) That case covers broadly all that is involved in this. There an action was brought to foreclose a mortgage which the grantee of the mortgagor had assumed and agreed to pay, and judgment was sought for a deficiency against such grantee. The answer averred that the title made to the grantee was utterly invalid, and at the date of the deed was in a third person who remained the owner. The court held that, inasmuch as the grantee was presumably in possession and alleged no eviction, and made no offer of surrender as a basis for equitable relief, the failure of title furnished no defense either to the mortgage or the covenant to assume and pay it. The case is decisive against the defense here interposed. The defendant, McEvoy, was shown affirmatively to have been put in possession and to have afterward conveyed to McCloskey. There is no allegation of an eviction or pretense that the possession has been disturbed. The corporate grantor has disbanded, leaving a future assertion of title in it extremely improbable, but if that should occur and prove successful, which is hardly to be anticipated, I think equity would not be powerless if McEvoy should pay the deficiency, by a revival of the mortgage to that extent, or some process of subrogation, to furnish proper and adequate relief. But in view of the foreclosure and the passing of the title under the mortgage, the validity of which nobody disputes, any action by the disbanded corporation is improbable and almost absurd. If the grantee should be called upon by the corporation to account for the rents and profits received I have no doubt that a recovery could be limited to those received in excess of the deficiency paid. But, be that as it may, there is no doubt of the rule which excludes the defense attempted. In Dunning v. Leavitt ( 85 N.Y. 30) there was an eviction, and so a total failure of consideration for the covenant of assumption. In Crowe v. Lewin ( 95 N.Y. 423) there was a mistake of fact which invalidated the entire contract and carried down with it the assumption agreement. The cases finally cited, of which Albany City Savings Inst. v. Burdick ( 87 N.Y. 40), is a type, concern only the question whether any contract of assumption was ever in fact made. The effort of the appellant to escape the operation of the rule invoked, by treating the contract of assumption as independent of the consideration of the grant and outside of the contract of sale, and so within the principle of U.A. Baptist Church v. Baptist Church in O Street ( 46 N.Y. 131, 139) cannot be sustained. By the terms of the accepted deed the assumption of the mortgage was itself the substantial consideration of the grant.
The judgment should be affirmed with costs.
All concur.
Judgment affirmed.