Parker v. Beasley

• Decision Date: 10 January 1936
• Docket Number: No. 4065.,4065.
• Parties: PARKERv.BEASLEY et al.
• Court: New Mexico Supreme Court

40 N.M. 68

54 P.2d 687

PARKER

v.BEASLEY et al.

No. 4065.

Supreme Court of New Mexico.

Jan. 10, 1936.

Appeal from District Court, Dona Ana County; Numa C. Frenger, Judge.

Action by James H. Parker against Sarah Virginia Beasley and others, in which the defendants filed a counterclaim. From an unsatisfactory judgment, plaintiff appeals.

Judgment in accordance with opinion.

In vendor's action against heirs of purchaser to foreclose purchase-money mortgage, purchaser's widow, if she owned only half of claim against vendor for breach of covenant against encumbrances and deceased's personal representative owned other half, could not set off her half against vendor's claim where representative was not party to suit.

Edward C. Wade, Jr., of El Paso, Tex., for appellant.

R. C. Garland, of Las Cruces, for appellees.

BRICE, Justice.

Upon motion for a rehearing, it is thought best to withdraw the original opinion. It is accordingly withdrawn and the following substituted:

This action is on a promissory note signed by appellee Sarah Virginia Beasley and her deceased husband (the other appellees are their children) and to foreclose a mortgage upon real estate securing it. The land in suit was sold by James H. Parker to G. R. Beasley and conveyed by a deed warranting against encumbrances, and the note was given as part of the purchase price. At the time the deed was executed, there were back taxes and water charges including interest against the land of $447.67, which Beasley paid during his lifetime. It is charged that appellees are the sole and only heirs at law of Beasley and that they had assumed and agreed to pay the note sued on and were the owners of the land and real estate involved in the suit. The appellees answered admitting these facts, but pleaded as set-off the money paid to satisfy the encumbrances just mentioned, alleging that they had succeeded to and had inherited all rights and obligations due Beasley by virtue of the warranty deed mentioned. To the answer the appellant filed a demurrer on the 26th day of January, 1934, charging that the answer did not contain facts sufficient to constitute a defense to appellant's cause of action. That the counterclaim showed on its face it was not one that could be asserted against appellant by appellees in that it was not available to the heirs of Beasley.

Before this demurrer was acted on and on the 18th day of June, 1934, an application was filed by appellee Sarah Virginia Beasley to amend her answer by alleging that Beasley by his last will and testament devised and bequeathed to her all his right, title, and interest in and to his entire estate, consisting of real, personal, and mixed property, and that such will had been admitted to probate and that the estate was legally and properly administered and the administratrix discharged and that the said appellee took all of the estate of every kind and nature whatsoever, excepting $1 each to the appellees, who were her children.

The court heard the demurrer on July 10, 1934, without acting on the motion to amend, and held that the debt due by Parker, pleaded as a set-off, was community property, and that appellees could offset the widow's half of it against the debt sued on; that the other half could not be set off because the covenant against encumbrances was not a covenant running with the land and therefore was one that could only be enforced by the personal representatives of Beasley. An order overruling the demurrer was entered in which it was stated: “To which such findings and ruling the plaintiff reserves an exception upon his demurrer and refuses to plead over. Whereupon the court orders that plaintiff is entitled to judgment and decree as prayed for in his complaint less one-half the amount claimed as offset,” etc.

Thereafter, on the 6th day of August, and before judgment was formally entered in the case, the appellees called up their motion to amend, filed prior to the entry of the order overruling appellant's demurrer, which motion the court overruled, giving in the order the following reasons: “That said motion is without merit; that said motion was filed and presented subsequent to the overruling of plaintiff's demurrer herein.”

Thereafter, judgment was entered on the same day, finding there was due the appellant on his note $633.72, and there was due appellees on their counterclaim $447.67, one-half of which, to wit, $223.83, was subject to set-off, leaving a balance of $409.89, for which appellant was given judgment. From this judgment appellant has appealed, and appellees have presented their case here under section 2 of rule XV.

The appellant contends that inasmuch as the set-off claimed was a breach of a personal covenant accruing before the death of Beasley that it passed directly to the legal representatives and therefore was not a subject of set-off by the heirs. The appellees claim the court erred in not permitting the amendment of their answer; but in any event the allegations of ownership of the land, that they owed the debt and owned the claim sought to be set off, was sufficient plea of title to withstand a general demurrer, and it not being denied, they were entitled to set off the entire sum paid on encumbrances against the purchase-money note.

(1) Appellant contends that the covenant against encumbrances in appellant's deed to Beasley was strictly personal, enforceable only by him while living and only by his personal representative after his death; neither assignable nor distributable to his heirs, and therefore died with the administration of the estate if not collected by the personal representative.

This court has held that covenants against encumbrances do not run with the land and are therefore personal. Knight v. Cox et al., 31 N. M. 325, 245 P. 250, 45 A.L.R. 510; Beecher v. Tinnin, 26 N.M. 59, 189 P. 44. This follows authorities generally in the absence of a statute making choses in action assignable; the lack of assignability under the common law was the basis for holding that such covenants were personal and therefore did not run with the land. But in states where choses in action are made assignable by statute (their assignability is recognized in New Mexico, section 105-418, N.M.Comp.St.Ann.1929), some courts have held that a warranty against encumbrances runs with the land (Geiszler v. De Graaf, 166 N.Y. 339, 59 N.E. 993, 82 Am.St.Rep. 659), but this court has consistently taken the other view. They were not assignable at common law, the probable reason (a number are advanced) is they were held to be strictly personal obligations and could be enforced only by a party thereto; also it was said that one could not assign that which he did not have in possession. The rule gave way to some extent and particularly as to those within the law merchant as early as the 14th Century. Farrell v. Passaic Water Co., 82 N.J.Eq. 97, 88 A. 627; 2 R.C.L. 595; 5 C.J. Title “Assignments,” § 7. Covenants of title were introduced toward the close of the 17th Century, replacing the feudal warranty. Rawles, Covenants for Title, c. 1. Then equity entered the field and by recognizing “equitable assignments” upheld the transfer and protected the assignee, notwithstanding the legal title remained in the assignor. Field v. Mayor of New York, 6 N.Y. 179, 57 Am.Dec. 435; 5 C.J., Title “Assignments,” § 8; 2 R.C. L. 598. Law courts soon followed by permitting the assignee to sue in the name of the assignor; still holding that the legal title could not pass to the assignor because they were not assignable at common law. Farrell v. Passaic Water Co., supra; 2 R.C.L. 638; 5 C.J. 961.

[1] The rule at law, though long barren, has continued until this day where not changed by statute authorizing an assignee to sue in his own name. 2 R. C.L. 638; 5 C.J., Title “Assignments,” § 173; or else as in New Mexico and other code states by providing that all suits must be brought in the name of the real party in interest, which has the same effect. Pomeroy's Code Remedies § 63 et seq.; 5 C.J. 993. The general rule now is that choses in action are assignable, the few exceptions are those for personal wrongs and contracts of a personal nature involving confidence, skill, and others of like nature. 2 R.C.L. 595, 596; 5 C.J., Title “Assignments,” § 9.

If the right of action which arises in favor of the covenantee on the breach of a covenant against encumbrances is not assignable, then it cannot be an ordinary chose in action, as such are assignable in this state. Is there a distinction between such causes of action and that on an ordinary chose in action that will at this time justify such a difference in their legal status; and if so what is the distinction?

[2][3] The courts are united in holding that upon breach of any covenant it ends and a right of action arises as on an ordinary chose in action (Peters v. Bowman, 98 U.S. 56, 25 L.Ed. 91; 12 R.C. L., Title “Covenants,” § 36; 15 C.J., Title “Covenants,” § 188, “Statutory Changes”; Rawle on Covenants for Title (5th Ed.) § 226), and as a covenant against encumbrances is broken when made, if at all (Beecher v. Tinnin, 26 N.M. 59, 189 P. 44), an action immediately arises to recover as on an ordinary chose in action. The usual test of their assignability is whether they die with the promisee or descend to his personal representatives. 5 C.J. 850.

Counsel states that the effect of our opinions in Knight v. Cox et al., 31 N. M. 325, 245 P. 250, 45 A.L.R. 510, Beecher v. Tinnin, 26 N.M. 59, 189 P. 44, 46, and Merchants' National Bank v. Otero, 24 N.M. 598, 175 P. 781, 782, is to hold that such personal covenants are not assignable. We held in those cases that covenants against encumbrances were personal covenants, broken when made, if broken at all, and therefore did not run with the land and were not assigned merely by virtue of the deed. The question of their assignability other than by the deed was not before the court. It is true they are not...