Mueller v. Bankers' Trust Co. of Muskegon

• Decision Date: 01 March 1933
• Docket Number: No. 81.,81.
• Citation: 262 Mich. 53,247 N.W. 103
• Parties: MUELLER v. BANKERS' TRUST CO. OF MUSKEGON.
• Court: Michigan Supreme Court

262 Mich. 53

247 N.W. 103

MUELLER

v.BANKERS' TRUST CO. OF MUSKEGON.

No. 81.

Supreme Court of Michigan.

March 1, 1933.

Appeal from Circuit Court, Muskegon County; John Vanderwerp, Judge.

Action by Rose Mueller against the Bankers' Trust Company of Muskegon, trustee. From a judgment in favor of the plaintiff, the defendant appeals.

Cause remanded to the circuit court, with directions.

Argued before the Entire Bench.

Arthur W. Penny, of Muskegon, for appellant.

Cross, Foote & Sessions, of Muskegon, for appellee.

WIEST, Justice.

A plant of land was so located that a bridge across a creek or the establishment of a way to a public road was essential and defendant, vendor in a land contract, dated June 18, 1926, covenanted with Joseph McDonald, the purchaser of two lots at the price of $2,000, as follows: ‘It is understood and agreed that first party will either build a bridge across Green creek or will provide a right of way out to Memorial Drive.’ The land contract was the usual printed short form, and the mentioned covenant was inserted after the clause binding the heirs, executors, administrators, and assigns of the parties. A bridge was built in 1926, and in use in March, 1927, when the vendee assigned the contract to plaintiff herein. June 24, 1927, plaintiff paid the balance due on the contract and received a warranty deed. In the spring of 1928, one approach to the bridge was washed out by high water, and, in the spring of 1929, high water carried the bridge away. In April 1931, plaintiffs brought this action to recover damages arising out of defendant's failure to construct a suitable bridge, and upon trial before the court was awarded $625 as interest on her investment for five years, $297.22 loss of expenditure on shrubbery and trees, and $131.16 for taxes paid. Defendant appealed.

The land contract was assigned by the vendee contrary to its provisions, and defendant urges want of privity. When defendant accepted performance of the contract by the assignee and deeded to the assignee, it recognized the validity of the assignment and cannot now urge what it then waived. Did the covenant to build a bridge pass to plaintiff under the assignment of the contract? The answer depends upon whether the covenant ran with the land or was personal to the vendee. The bridge was located wholly apart from the lots, but the covenant related to an essential to enjoyment and use of the lots, and therefore entered materially into the agreed consideration to be paid. This benefit to the lots attached to the land, was not collateral to or independent thereof and ran with the land.

In Keogh v. Peck, 316 Ill. 318, 417 N. E. 266, 269, 38 A. L. R. 1151, the rule on this subject was stated as follows:

‘The test as to whether a covenant runs with the land, or is merely personal, is whether the covenant concerns the thing granted and the occupation or enjoyment of it or is a collateral and personal covenant not immediately concerning the thing granted. If a covenant concerns the land and the enjoyment of it, its benefit or obligation passes with the ownership; but to have that effect the covenant must respect the thing granted or demised and the act to be done or permitted must concern the land or the estate conveyed. In order that a covenant may run with the land, its performance or nonperformance must affect the nature, quality, or value of the property demised, independent of collateral circumstances, or must affect the mode of enjoyment.’

The fact that the covenant was inserted in the contract after, instead of before, the provision binding the heirs and assigns of the parties, is significant only of the fact that, in the printed form used, there was no other place to put it. There is no merit in the claim that such place of the covenant in the contract limited it to the vendee and not as well to an assign. When the executory contract merged in the deed, without equivalent covenant carried forward, was the land contract and all of its covenants at an end?

Defendant invokes the general rule, stated in Blake-McFall Co. v. Wilson, 98 Or. 626, 193 P. 902, 907, 14 A. L. R. 1275: ‘Stated broadly, the general rule is that a contract to convey land is merged in a deed executed in performance of such contract, and the deed operates as a satisfaction and discharge of the executory contract. 2 Devlin on Real Estate (3d Ed.) § 850a; 27 R. C. L. 529.’

This general rule is well established. Coleman v. Coleman, 239 Mich. 139, 214 N. W. 81;Crane v. Smith, 243 Mich. 447, 220 N. W. 750;Joseph v. Rottschafer, 248 Mich. 606...