Summary
In Sage v. Truslow (88 N.Y. 241) Styles was personally liable upon the mortgage which had been foreclosed, and the judgment for deficiency entered against Styles had been increased by the amount of the tax which Truslow had agreed to pay.
Summary of this case from Cohen v. StecklerOpinion
Argued February 8, 1882
Decided February 28, 1882
Theo. F. Jackson for appellants.
Wm. F. MacRae for respondent.
We concur with the learned court below in its conclusion that the agreement of Truslow, contained in his contract with Mrs. Styles, for the purchase of the land, to assume and pay arrears of taxes and assessments thereon to an amount not exceeding $2,000, was not merged in the deed subsequently executed and delivered by Mrs. Styles to him. His agreement to pay these taxes was part of the consideration for the conveyance. It was executory and to be performed after the delivery of the deed. It took the place of the payment of so much money to her which would have enabled her to pay the taxes and free the land from the lien and thus give a clear title to Truslow, her vendee, and it was in substance retained by him for that purpose. The covenant was important to Mrs. Styles, because she was personally liable upon the mortgage held by the plaintiff upon the same premises, and therefore interested in having them relieved of the lien of the taxes. Truslow's covenant to pay them being part of the consideration for the conveyance was not merged in the deed. There was no occasion to refer to it therein except so far as was necessary for the purpose of qualifying the covenant against incumbrances contained in the deed. ( Bogart v. Burkhalter, 1 Den. 125; Morris v. Whitcher, 20 N.Y. 41; Taintor v. Hemingway, 83 id. 610.)
The plaintiff's mortgage has been foreclosed, and a deficiency has arisen exceeding the amount due from Truslow on his covenant. Judgment for the deficiency has been rendered against Mrs. Styles in favor of the plaintiff, and this judgment has, by reason of the breach by Truslow of his covenant, been increased to an amount equal to the $2,000 which he agreed to pay and the interest thereon. The taxes remained a charge upon the mortgaged premises, and were, pursuant to law, allowed to the purchaser at the foreclosure sale, and the fund applicable to the payment of Mrs. Styles' debt to the plaintiff was thereby reduced to a corresponding amount. She has thus been damnified to that amount. Furthermore, Truslow's covenant was not a mere covenant to indemnify. It was an absolute undertaking to pay. He assumed this payment as part of the consideration for the conveyance by Mrs. Styles to him and as his own debt. She occupied the same position as if she had placed the fund in his hand on his undertaking to apply it. His failure to pay was a breach of his covenant. ( Rector, etc., v. Higgins, 48 N.Y. 533.)
Mrs. Styles has now assigned her claim for the breach of the covenant to the plaintiff, and we think his right to maintain this action is clear.
There was no issue in the case as to any claim of Truslow against the plaintiff on the covenants contained in the deed from him to Mrs. Styles, dated in 1874. It appears that this deed was executed in performance of a contract made in 1871, which had been extended, and there may have been a very good answer to any claim for taxes accruing since that time, had any such demand been set up by way of counter-claim, and moreover, by his deed from Mrs. Styles, Truslow took expressly subject to these taxes, and by his contract with her he covenanted absolutely to pay them as one of the terms of his purchase, and Mrs. Styles then bore the expense of clearing his title. It is difficult to see how he could, under these circumstances, have set up any claim therefor under the covenants in the deed from the plaintiff to Mrs. Styles.
The judgment should be affirmed.
All concur.
Judgment affirmed.