Brinton v. Johnson

• Decision Date: 27 July 1922
• Citation: 35 Idaho 656,208 P. 1028
• Parties: CALEB BRINTON, Respondent, v. AUGUSTE JOHNSON, J. A. JOHNSON (Her Husband), O. C. CARSSOW, A. E. CARSSOW, MARY E. CARSSOW (His Wife), PAUL W. JOHNSON and LAURA B. JOHNSON (His Wife), Appellants
• Court: Idaho Supreme Court

208 P. 1028

35 Idaho 656

CALEB BRINTON, Respondent, v. AUGUSTE JOHNSON, J. A. JOHNSON (Her Husband), O. C. CARSSOW, A. E. CARSSOW, MARY E. CARSSOW (His Wife), PAUL W. JOHNSON and LAURA B. JOHNSON (His Wife), Appellants

Supreme Court of Idaho

July 27, 1922

COVENANTS IMPLIED FROM THE USE OF THE WORD "GRANT" IN A DEED OF CONVEYANCE-TAX LIENS AS ENCUMBRANCES-IMPLIED COVENANTS AGAINST ENCUMBRANCES RUN WITH THE LAND-PURCHASE-MONEY MORTGAGE-RIGHT OF MORTGAGEE TO HAVE AMOUNT OF ENCUMBRANCES CREDITED UPON THE MORTGAGE.

1. The implied covenant against encumbrances from the use of the word "grant" in a deed of conveyance includes the lien of a tax levy which attached while the grantor was the owner of the premises.

2. Under C. S., sec. 5384, the implied covenant against encumbrances from the use of the word "grant," in a deed of conveyance, runs with the land in favor of a remote grantee.

3. In an action at law, founded upon a covenant against encumbrances in a deed, to recover the amount of taxes paid by a grantee, or a remote grantee, the covenant is considered one of indemnity. Only nominal damages can be recovered until actual payment has been made, and thereafter only the amount of such payment can be recovered.

4. Where a grantor who has covenanted against encumbrances seeks to foreclose a purchase-money mortgage, he is required to credit upon the mortgage the amount of any outstanding encumbrances for which he is liable.

5. Where a purchase-money mortgage provides for semi-annual payment of interest, and that the mortgagee at his option may consider the entire amount due upon failure to pay any instalment of interest, the grantor and mortgagee, having covenanted that the premises are free from encumbrances, he must, where a tax lien on the premises exceeds the amount of the instalment of interest due, credit the amount of the encumbrance upon the purchase price, and will not be permitted to take advantage of his own failure to remove the encumbrances so as to accelerate the maturity of the mortgage and add the additional burden of costs and attorney fees upon the mortgagor.

APPEAL from the District Court of the Tenth Judicial District, for Nez Perce County. Hon. Wallace N. Scales, Judge.

Action to foreclose mortgage. Demurrer to answer sustained. Reversed.

Judgment reversed, with costs to appellants. Petition for rehearing denied.

Eugene A. Cox and Noel B. Martin, for Appellants.

The tax lien had all the effect of a personal judgment against the owner, Brinton, and was a lien, not only on the property conveyed, but on all his other property. (Rice v Rock, 26 Idaho 552, 144 P. 786.)

Our statute provides plainly and concisely that the implied covenant against encumbrances runs "to the grantee, his heirs and assigns." (Sec. 5384, C. S.; Polak v Mattson, 22 Idaho 727, 128 P. 89.) A substantially identical statute has been repeatedly construed by the courts of Texas and it has been uniformly held that under this statute the covenant against encumbrances runs with the land. (Taylor v. Lane, 18 Tex. Civ. 545, 45 S.W. 317; Bullitt v. Coryell, 38 Tex. Civ. 42, 85 S.W. 482; Rotan v. Hays, 33 Tex. Civ. 471, 77 S.W. 654.)

The trend of judicial decision is toward the rule that covenants against encumbrances run with the land wherever causes of action are assignable. (Security Bank of Minnesota v Holmes, 65 Minn. 531, 60 Am. St. 495, 68 N.W. 113; Id. 68 Minn. 538, 71 N.W. 699; Tucker v. McArthur, 103 Ga. 409, 30 S.E. 283; Geiszler v. De Graaf, 166 N.Y. 339, 82 Am. St. 659, 59 N.E. 993; Arnold v. Joines, 50 Okla. 4, 150 P. 130; General Underwriting Co. v. Stilwell, 139 A.D. 189, 123 N.Y.S. 653; Tanzer v. Bankers' Land & Mortgage Corp., 159 A.D. 351, 144 N.Y.S. 613; Gadow v. Hunholz, 160 Wis. 293, Ann Cas. 1917D, 91, 151 N.W. 810; Knadler v. Sharp, 36 Iowa 232; Harwood v. Lee, 85 Iowa 622, 624, 52 N.W. 521; Richard v. Bent, 59 Ill. 38, 14 Am. Rep. 1; Sprague v. Baker, 17 Mass. 586; Beasley v. Phillips, 20 Ind.App. 182, 50 N.E. 488; Maitlen v. Maitlen, 44 Ind.App. 559, 89 N.E. 966.)

In this state choses in action are assignable (sec. 5364, C. S.), and therefore every reason for the ancient commonlaw rule has been swept aside.

Damage from breach of covenant against encumbrances is a proper offset against encumbrances. (Union Nat. Bank v. Pinner, 25 N.J. Eq. 495; Van Riper v. Williams, 2 N.J. Eq. 407; Dayton v. Dusenbury, 25 N.J. Eq. 110; White v. Stretch, 22 N.J. Eq. 76.)

A mortgagee in default cannot accelerate maturity of mortgage debt. (Ingram v. Golden Tunnel Min. Co., 25 Wash. 318, 65 P. 549; Fairchild-Gilmore-Wilton Co. v. Southern Refining Co., 158 Cal. 264, 110 P. 951; White v. Stretch, supra; Schuchmann v. Knoebel, 27 Ill. 175; Stiger v. Bacon, 29 N.J. Eq. 442; Stephens v. Weldon, 151 Pa. 520, 25 A. 28; Broderick v. Smith, 26 Barb. (N. Y.) 539; Walker v. Sedgwick, 8 Cal. 398.)

Equity will not permit acceleration of maturity where a good faith controversy exists. (Schurger v. Moorman, 20 Idaho 97.)

A vendee is not required to pay off the encumbrance before he can interpose a breach of the covenant against encumbrances as a defense on a suit to foreclose a purchase price mortgage. (Warren v. Stoddart, 6 Idaho 692, 59 P. 540.)

Benjamin F. Tweedy, for Respondent.

Respondent was under no personal obligation to discharge the tax lien; the liability for the taxes is exclusively an in rem liability. (Clizer v. Krauss, 57 Wash. 26, 106 P. 145; Allen v. Peterson, 38 Wash. 599, 80 P. 849; Sound Inv. Co. v. Bellingham Bay Land Co., 53 Wash. 470, 102 P. 234; Territory v. Copper Queen etc. Min. Co., 13 Ariz. 198, 108 P. 960; United States v. Chamberlain, 156 F. 881, 13 Ann. Cas. 720, 84 C. C. A. 461; Perry v. Washburn, 20 Cal. 318; Board of Commrs. v. First Nat. Bank, 48 Kan. 561, 30 P. 22; McPike v. Heaton, 131 Cal. 109, 82 Am. St. 335, 63 P. 179; City of Detroit v. Jepp, 52 Mich. 458, 18 N.W. 217; Judy v. National State Bank, 133 Iowa 252, 110 N.W. 605; Louisville Water Co. v. Commonwealth, 89 Ky. 244, 12 S.W. 300, 6 L. R. A. 69; Packard v. Tisdale, 50 Me. 376; Boston v. Turner, 201 Mass. 190, 87 N.E. 634; State v. Piazza, 66 Miss. 426, 6 So. 316; City of Carondelet v. Picot, 38 Mo. 125; Hibberd v. Clark, 56 N.H. 155, 22 Am. Rep. 442; City of Camden v. Allen, 26 N.J.L. 398; Gatling v. Commissioners of Carteret County, 92 N.C. 536, 53 Am. Rep. 432; Miller v. Hale, 26 Pa. 432; Shaw v. Peckett, 26 Vt. 482; State v. Chicago etc. R. Co., 128 Wis. 449, 108 N.W. 594; Hinchman v. Morris, 29 W.Va. 673, 2 S.E. 863; Lane County v. Oregon, 74 U.S. 71, 19 L.Ed. 101.)

Respondent being under no personal obligation to discharge the tax lien, the fact that he owned the land at the time the law of Idaho made the tax lien attach in favor of the taxing municipalities becomes immaterial and of absolutely no force and effect against him. (Polak v. Mattson, 22 Idaho 727, 128 P. 89.)

These previous encumbrances are not within the covenant against encumbrance "done, made, or suffered" by the grantor, for the reason that he has not created or caused them to exist. (Crist v. Fife, 41 Cal.App. 509, 183 P. 197.)

A covenant in a deed against encumbrances is one of indemnity, and a cause of action thereon does not accrue until payment of the encumbrance by the grantee, and only to the amount paid. (Wright v. Boggess, 24 Cal.App. 533, 141 P. 1082; 39 Cyc. 1932.)

A setoff and a counterclaim must be accrued at or before the commencement of the action, or otherwise it cannot be used as a setoff or counterclaim. (McGuire v. Edsall, 14 Mont. 359, 36 P. 453; L. Scatena & Co. v. Van Loben Sels, 19 Cal.App. 423, 126 P. 187; Reilly v. Lee, 155 N.Y. 691, 50 N.E. 1121; Id., 85 Hun, 315, 32 N.Y.S. 976; Sprout v. Crowley, 30 Wis. 187; Ellis v. Cothran, 117 Ill. 458, 3 N.E. 411; McClendon v. Heisinger, 42 Cal.App. 780, 184 P. 52.)

The mere existence of an encumbrance, which has not been paid, where deed has been delivered and accepted, conveying the land as in the instant case, is no defense to the grantor's action for the purchase money. (Clark v. Snelling, 1 Ind. 382; Dahl v. Stakke, 12 N.D. 325, 96 N.W. 353; Buell v. Tate, 7 Blackf. (Ind.) 55; Brown v. Montgomery (Tex.), 31 S.W. 1079; Lattin v. Vail, 17 Wend. (N. Y.) 188.)

Cross-demands do not ipso facto extinguish themselves, but they remain as causes of action. (Langford v. Langford, 136 Cal. 507, 69 P. 235.)

The word "assigns" cannot cause every covenant in a deed to run with the land; the personal covenants remain personal and the real covenants remain real. (Carpenter v. San Francisco Sav. Union, 128 Cal. 516, 61 P. 92.)

In the California statute as in ours the word "assigns" is found, and yet the California court held that a covenant against taxes does not run with the land, but is personal, and that a remote grantee cannot maintain an action on the covenant. (McPike v. Heaton, 131 Cal. 109, 62 Am. St. 335, 63 P. 179.) It is generally held that a covenant against encumbrances does not run with the land. (Smith v. Richards, 155 Mass. 79, 28 N.E. 1132; Guerin v. Smith, 62 Mich. 369, 28 N.W. 906; Davenport v. Davenport, 52 Mich. 587, 18 N.W. 371; Graber v. Duncan, 79 Ind. 565; Allen v. Little, 36 Me. 170; Dale v. Shively, 8 Kan. 276; Buren v. Hubbell, 54 Mo.App. 617; Sears v. Broady, 66 Neb. 207, 92 N.W. 214; Moore v. Merrill, 17 N.H. 75, 43 Am. Dec. 593; Carter v. Denman's Exrs., 23 N.J.L. 260; Pillsbury v. Mitchell, 5 Wis. 17; Marbury v. Thornton, 82 Va. 702, 1 S.E. 909; Fuller v. Jillett, 2 F. 30, 9 Biss. 296; Mitchell v. Warner, 5 Conn. 497.)

If the covenant is broken as soon as the deed is executed and delivered, it is a personal covenant, and being a personal covenant does not run with the land. (Beecher v Tinnin, 26 N.M. 59, 189 P. 44; Knight v. Southern P. Co., 52 Utah 42, 172 P....