Zandri v. Tendler
| Decision Date | 01 July 1937 |
| Citation | 123 Conn. 117,193 A. 598 |
| Court | Connecticut Supreme Court |
| Parties | ZANDRI v. TENDLER et al. |
Appeal from Superior Court, New Haven County; Arthur F. Ells and Carl Foster, Judges.
Action to foreclose a mortgage by Virginia Zandri against Herman Tendler and others, brought to Superior Court. From a judgment for defendants after plaintiff's demurrer to special defense was overruled and issues were tried to the court, plaintiff appeals.
No error.
Samuel M. Gordon of New Haven, for appellant.
A. S Bordon, of Hartford, for appellee Home Owners' Loan Corporation.
Nathan A. Resnik, of New Haven, A. A. Ribicoff, of Hartford, and F G. Monahan, of New Haven, for appellees Tendlers.
Argued before MALTBIE, C.J., and HINMAN, BANKS, AVERY, and BROWN JJ.
The controversy in this action concerns the right of the plaintiff to foreclose a mortgage upon certain land in New Haven. The mortgage had been originally executed by the defendant Herman Tendler to the plaintiff and another, but the latter subsequently assigned his interest in it to the plaintiff. The mortgage in terms gave, granted, bargained, sold, and confirmed to the mortgagees the land, describing it by metes and bounds, and then, before the habendum clause, it recited that the property was subject to the right of an adjoining owner to have the eaves of a garage drip upon it, to certain restrictions of record and to a first mortgage to the Parker-Smith Company, trustee. It contained the usual covenants; that against incumbrances was limited by the words " except as aforesaid," but that of warranty was unrestricted.
Subsequent to the giving of this mortgage, the Second National Bank of New Haven, as trustee, became the owner of the Parker-Smith mortgage. It brought an action of foreclosure against several parties including the plaintiff and Tendler. A decree of foreclosure was granted, but none of the defendants redeemed. The bank did not pursue a claim for a deficiency judgment. It went into possession and on December 21, 1931, filed a certificate of foreclosure. Thereafter until May 25, 1934, it was in possession and control of the property, managing it and collecting the rents without objection from any one. Tendler with his family occupied an apartment in the building, paying rent to the bank. Some time prior to January 27, 1934, the bank suggested to him and his wife that they endeavor to secure the aid of the Home Owners' Loan Corporation to recover the property. Tendler did not desire a reconveyance, but his wife, the defendant Celia Tendler, did, and through an attorney she entered into negotiations with the corporation to bring that about. It was a rule of the corporation that it would only aid those who were or had been owners of the property involved and that all mortgages made to it by married persons must be executed by both husband and wife. Tendler, in order to assist his wife, signed an application to the corporation for aid and agreed to execute all necessary documents. It was agreed between the bank, the corporation, Tendler, and his wife that the bank would quitclaim the property to Tendler; he and his wife would execute a mortgage to the corporation; it would thereupon pay in cash certain overdue taxes and the expenses of the transaction and would issue bonds which would be accepted by the bank in payment for the property; and that Tendler would immediately transfer the property to his wife.
On May 25, 1934, the agreement was consummated, the various steps being taken as nearly simultaneously as might be, and the documents were recorded at substantially the same time, the whole constituting one transaction. Subsequently the plaintiff in this action sued Tendler and his wife on the note secured by the mortgage the plaintiff is now seeking to foreclose, claiming that the conveyance to Mrs. Tendler was fraudulent, but the court, while giving judgment against Tendler on the note, held that the conveyance to his wife was not fraudulent and rendered judgment for her. The plaintiff has not been able to satisfy her debt from Tendler and so brought this action to foreclose the mortgage securing it. The question at issue is whether although the plaintiff was foreclosed in the action upon the first mortgage she can now enforce her second mortgage against Tendler, his wife, who is the present owner of the equity, and the Home Owners' Loan Corporation as a subsequent mortgagee, by reason of the fact that the bank after foreclosure reconveyed the property to him.
The question presented has never been determined in this state and varying decisions have been reached in other jurisdictions in more or less similar situations. In most of these decisions the determining consideration has been the effect of the covenant of warranty in the mortgage claimed to have been reinstated by the acquisition of the property by the original mortgagee. The warranty known to the English common law bound the grantor, in case of a breach, to recompense in kind; Stewart v. West, 2 Harris (14 Pa.) 336, 338; Rawle, Covenants (4th Ed.) p. 209; although it has been stated that damages might also be recovered in certain cases, Paxson v. Lefferts, 3 Rawle (Pa.) 59, 68. The common-law warranty has been generally replaced in this country by the covenant of warranty. Under this covenant a breach occurs only where the grantee has been actually or constructively evicted; Perkins v. August, 109 Conn. 452, 458, 146 A. 831; but there is an eviction where a prior mortgage has been foreclosed and judgment obtained, under which the mortgagee takes possession, King v. Kilbride, 58 Conn. 109, 116, 19 A. 519; and see Ensign v. Colt, 75 Conn. 111, 122, 52 A. 829, 946. Where the conveyance is of an unconditional fee and there is a breach of the covenant, the measure of damages in this jurisdiction is the value of the property. Sterling v. Peet, 14 Conn. 245, 254; Beecher v. Baldwin, 55 Conn. 419, 428, 12 A. 401, 3 Am.St.Rep. 57. Where the covenant is contained in a mortgage deed, obviously the measure of damages would not necessarily be the value of the mortgaged property; " the plaintiff is entitled to indemnity, and no more; and to compel the defendants to pay the full value of the estate would be unjust, if it exceeded the amount of the incumbrance." Donahoe v. Emery, 50 Mass. (9 Metc.) 63, 69; Winslow v. McCall, 32 Barb. (N.Y.) 241, 249. For our present purposes, it is not necessary to consider the particular measure of damages in such a case, but only to point out that, at least where the amount of loss to the mortgagee is less than the value of the property, he could not recover the latter. Under both the common-law warranty, with its requirement of recompense in kind, and the present covenant of warranty, under which upon a breach damages are limited to the loss actually suffered, the protection afforded reaches no further than the interest conveyed in the deed under which the grantee claims.
Where a grantor without title made a conveyance and subsequently acquired title, that title might under the commonlaw warranty become vested in the grantee because, being entitled to recompense in kind for the breach of the warranty, he had an equity to require the transfer of it to him. Sugden, in Jones v. Karney, 1 Drury & Warren (Irish Ch.) 159. The same result is accomplished under the covenant of warranty. " The principle deducible from these authorities seems to be, that, whatever may be the form or nature of the conveyance used to pass real property, if the grantor sets forth on the face of the instrument, by way of recital or averment, that he is seized or possessed of a particular estate in the premises, and which estate the deed purports to convey; or, what is the same thing, if the seizin or possession of a particular estate is affirmed in the deed, either in express terms or by necessary implication, the grantor and all persons in privity with him shall be estopped from ever afterwards denying that he was so seized and possessed at the time he made the conveyance." Van Rensselaer v. Kearney, 52 U.S. (11 How.) 297, 325, 13 L.Ed. 703; Comstock v. Smith, 30 Mass. (13 Pick.) 116, 119, 23 Am.Dec. 670; Rawle, Covenants (4th Ed.) p. 418; and see Wheeler v. Young, 76 Conn. 44, 48, 55 A. 670. The covenant is intended to give full effect and operation to the very estates and interests conveyed by the deed. Davis v. Tollemache (Eng.) 2 Jur. (N.S.) 1181.
The doctrine is " intended to carry out the real intention of the parties that a certain particular estate was to be conveyed and received, and where that intention appears, the law will not suffer the grantor to defeat it." Rawle op. cit., p. 445. Thus where the terms of the covenant are general but only a limited title is conveyed, the covenant is to be limited to the interest actually conveyed. Sweet v. Brown, 53 Mass. (12 Metc.) 175, 177, 45 Am.Dec. 243: Merritt v. Harris, 102 Mass. 326, 328: Van Rensselaer v. Kearney, supra, 11 How. 297, at page 327, 13 L.Ed. 703. If the title purporting to be conveyed is an equity of redemption, the warranty and estoppel arising out of it will extend no further than to protect the grantee from loss of that title. Hoxie v. Finney, 82 Mass. (16 Gray) 332; Bates v. Foster, 59 Me. 157, 8 Am.Rep. 406. Where the mortgage describes the land by metes and bounds and then recites that it is subject to a...
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