Pelser v. Gingold
| Decision Date | 11 February 1943 |
| Docket Number | No. 33323.,33323. |
| Parties | PELSER et al. v. GINGOLD et al. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Ramsey County; Albin Pearson, Judge.
Action by Ray H. Pelser and others against Jacob A. Gingold and others to enforce alleged liability of defendants as grantees of plaintiffs and as assignees of vendors' interest in executory contract for deed for balance due for improvements on realty which plaintiffs had assumed and agreed to pay. From an order sustaining defendants' demurrers to complaint, plaintiffs appeal.
Order affirmed.
Walter L. Chapin and George G. Chapin, both of St. Paul, for appellants.
Arnold A. Karlins, of Minneapolis, for respondents.
Appeal from an order sustaining defendants' demurrers to the complaint.
Albert and Vernetta Lindberg, husband and wife, were the owners of certain real estate on which there was a dwelling house. They placed a mortgage on the property, installed an oil burner, and put on roofing and siding shingles. The oil burner and the roofing and siding were payable in monthly installments. The Lindbergs conveyed the premises to plaintiffs, who agreed to assume and to pay the balance on the mortgage and the unpaid balances for the oil burner and the roofing and siding. Plaintiffs sold the property under executory contract of sale to George R. and Sally M. Herbst for $2,500. Apparently the vendees took possession under the contract. As part of the purchase price the vendees agreed to assume and to pay the unpaid balance on the mortgage amounting to $1,127.53, and the unpaid balances, payable in monthly installments, of $184.29 for the oil burner and $248.16 for the roofing and siding. The contract provided that the agreements to pay constituted covenants running with the land and binding the heirs, executors, administrators, and assigns of the parties.
Plaintiffs and the Herbsts mortgaged the property to the German Roman Catholic Aid Society for $1,500, the proceeds of which were used to pay and satisfy the prior mortgage and to provide plaintiffs with $345 with which to pay for certain improvements made by them.
Thereafter plaintiffs conveyed the property to defendants as joint tenants, subject to the $1,500 mortgage and to the rights of the Herbsts as vendees under the contract for deed. At the same time plaintiffs, as vendors, assigned the contract for deed to defendants. Defendants were fully informed concerning the liabilities of the Herbsts under the contract for deed and under the mortgage. Part of the consideration for the deed and for the assignment of the contract for deed were, so the complaint alleges, "the payments to be made by said Herbst and wife for the oil burner and for the roofing and siding above described, which were required by said contract, and for which plaintiffs were liable as part of the purchase price by which they acquired the said real property, and which liability for payment continued and still continues and which became a liability of the defendants herein by virtue of the assignment to them of the contract." Defendants did not expressly agree, either in writing or orally, to assume and to pay the unpaid balances, either as part of the consideration or otherwise.
After defendants acquired ownership of the property and the vendors' interest in the contract for deed, they "absolved" the Herbsts "as between them" from all obligations to make the payments for the oil burner and the roofing and siding required of them under the contract for deed. Prior to the execution and delivery of the deed and of the assignment of the contract to defendants by plaintiffs, the Herbsts had made two monthly payments on the balances for the oil burner and the roofing and siding. After the Herbsts were absolved by defendants from the obligation to make the payments, neither the Herbsts nor defendants made any further payments.
Thereafter the Herbsts "abandoned said land," and defendants, claiming to be the sole owners thereof, sold the same under contract for deed to John and Barbara Marx, husband and wife, who entered into possession of the same.
Plaintiffs allege that by reason of the foregoing facts defendants have "without right enriched themselves in the enhanced value of their interests in said land to the extent of the sums required to be paid for said oil burner and shingling and siding" and have deprived plaintiffs of a like sum required to reimburse their grantors, the Lindbergs, for which plaintiffs are liable under the clause in their deed by which they assumed and agreed to pay the balances due for the same.
Plaintiffs in effect claim that defendants are liable for the unpaid balances for the oil burner and the roofing and siding amounting to $399.31 upon the grounds: (1) Defendants became liable for payment thereof by taking both the deed and the assignment of plaintiffs' interest as vendors under the contract for deed; (2) by absolving the Herbsts from the obligation of making the payments defendants deprived plaintiffs of the right under the assumption clause in their deed to the Herbsts to have them make the payments; and (3) because the sums unpaid on these balances were part of the consideration for the deed and the assignment, defendants unjustly enriched themselves in that amount by nonpayment thereof. No point has been raised that, since plaintiffs have no present interest in the land and the contract because of the conveyance and assignment, they have no right to sue, in view, no doubt, of our decision in Gustafson v. Koehler, 177 Minn. 115, 224 N.W. 699, holding that a grantor may sue on a covenant to assume under the circumstances of this case, but that in the event of recovery he holds the proceeds thereof for the benefit of the owner of the debt assumed by the grantee.
1. In support of the proposition that defendants became personally liable for the unpaid balances for the oil burner and the roofing and siding, plaintiffs argue that, since under the provisions in their deed from the Lindbergs they agreed to assume and to pay such balances, they became personally liable; and, by the same token, since the Herbsts by the assumption clause in the contract for deed likewise became personally liable therefor, defendants also became personally liable for such payments, because they took "an assignment of the vendors' interest in the contract as well as a deed of the legal title of the land" from plaintiffs.
For lack of a provision in the deed and in the assignment of the contract that defendants agreed to assume and to pay the balances, they did not become personally liable to pay the same. A grantee is personally liable for payment of a mortgage on the land transferred only where he agrees to assume and to pay it, but not where he takes subject to it. Allen v. Hoopes, 189 Minn. 391, 249 N.W. 570; Clifford v. Minor, 76 Minn. 12, 78 N.W. 861; Manning v. Cullen, 50 Minn. 568, 52 N.W. 573; Merritt v. Byers, 46 Minn. 74, 48 N.W. 417; Brown v. Stillman, 43 Minn. 126, 45 N.W. 2; Redhead v. Skidmore Land Credit Co., 194 Wis. 123, 215 N.W. 937; 4 Dunnell, Dig. & Supp. § 6289. The same rule applies where the grantee takes subject to debts of the grantor.
2. The personal liability of plaintiffs under the assumption clause in the deed from their grantors and that of the Herbsts under a similar provision in their contract for deed with plaintiffs were not transferred to defendants by the deed and the assignment from plaintiffs. Absent, as here, an assumption of liability for the same, a grantee does not become personally liable for the obligations of his grantor to a third person, even where the same is a lien or a charge upon the land conveyed, unless the obligation arises under a covenant running with the land. Here, the balances were merely personal debts, which were not a lien or charge upon the land. A covenant is said to run with the land when it touches or concerns the land granted or demised. Generally speaking, a covenant touches or concerns the land if it is such as to benefit the grantor or the lessor, or the grantee or lessee, at the case may be. As the term implies, the covenant must concern the occupation or enjoyment of the land granted or demised and the liability to perform it, and the right to take advantage of it must pass to the assignee. Conversely, if the covenant does not touch or concern the occupation or enjoyment of the land, it is the collateral and personal obligation of the grantor or lessor and does not run with the land. Examples of covenants running with the land, which directly relate to its use or enjoyment, are found in cases involving covenants to maintain water in a lake at a certain stage, Shaber v. St. Paul Water Co., 30 Minn. 179, 14 N.W. 874, and covenants relating to party walls, National Life Ins. Co. v. Lee, 75 Minn. 157, 77 N.W. 794. An example of a collateral or personal covenant, which relates not to the use or enjoyment of the land itself, but creates a liability on the part of the grantor, is found in Kettle River R. Co. v. Eastern Ry. Co., 41 Minn. 461, 43 N.W. 469, 6 L.R.A. 111, where the grantee covenanted for the exclusive transportation by a particular railway of the products of a stone quarry on the land granted.
A covenant by a grantee of land to pay a certain sum to a stranger does not run with the land. Clement v. Willett, 105 Minn. 267, 117 N.W. 491, 17 L.R.A.,N.S., 1094, 127 Am.St.Rep. 562, 15 Ann.Cas. 1053, and annotations; Dolph v. White, 12 N.Y. 296; Wells v. Benton, 108 Ind. 585, 8 N.E. 444, 9 N.E. 601; Spencer's Case, 3 Coke, 16a, 77 Eng.Reprint, 72. The authorities follow the rule as formulated in Spencer's Case, decided in 1583, which we adopted in our cases cited supra. There the court said:
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