
    James S. Sandford, et al., Executors and Executrix of Edward Sandford, deceased, Plaintiffs and Respondents v. Hester A. R., and James Travers, Defendants and Appellants.
    1. "In a suit to foreclose a mortgage given to secure the purchase money agreed to be paid for the mortgaged premises, where no covenant in the deed is broken and there has been nti fraud on the part of the grantors, it is no defense that a part of the premises at the time of the grant and mortgage, was encumbered by an unexpired lease thereof.
    2. Where there is a mutual mistake as to a material fact for which a court of equity would relieve, a party desiring relief on that ground must, on discovering the mistake, oiferto rescind.
    3. The purchaser in such a case, there being no fraud, cannot, if he retain the property, avoid paying the full contract price.
    4. Proof of a defense, not pleaded, cannot be received at the trial.
    5. A deed by executors, as such, with a covenant against their own acts, cannot he construed as containing an implied covenant that their testator was seized of an estate in fee simple; or a covenant on their part to put the purchaser in possession.
    6. No covenant can be implied in any conveyance of real estate, whether such conveyance contains special covenants or not.
    (Before Bosworth, Oh. J., and Woodruff and White, J'. J.)
    Heard November 15,
    decided December 29, 1860.
    This action was commenced by James S. Sandford and others, acting executors, &c.-, of Edward Sandford, deceased, to foreclose a mortgage executed to them as such executors, by the defendant Hester Ann R. Travers, December 13,1855,. to secure the price agreed to be paid by her tó them, for the mortgaged premises, according to the condition" of a bond executed by her and the defendant, James Travers. By an agreement of the same date as the mortgage, executed by said executors as parties of the first part, said H. A. R. Travers, of the second part, and James Travers, of the third part; the parties of the second and third part, as a further security for the payment of the purchase money, agreed to erect and complete, on or before the first"of October, 1856, twenty houses on said lots, according to specified plans, and one Samuel G-. Smith, entered into a bond to said executors, in the penal sum of $4,000, conditioned, that H. A. R. and James Travers, should perform last said agreement. The bond of the defendants was conditioned to pay $27,472, in five years from its date, with interest semi-annually, on the first of August and February in each year. The whole principal became payable, on a default to pay interest, and the same being in arrear for fifteen days. The mortgage was, in terms, a security for the payment of this bond, according to its condition, and for the performance of the contract to erect the twenty houses.
    The complaint alleges the non-payment of $961.50 interest, falling due August 1, 1856, and that it had been in arrear more than fifteen days, whereby the whole principal had become due.
    The answer of the defendants alleges that H. A. R. Travers purchased the premises from the plaintiffs with a view to the immediate improvement thereof; that the defendants thereupon executed said building contract, and procured Samuel G-. Smith to become security for its performance ; that shortly after the delivery of the deed, bond, mortgage, and other contracts, they discovered, and state the fact to be, that at the time of the execution of the deed to her, the premises were held adversely to said Edward Sandford, and to his executors, with claim of right and title so to do, by Thomas E. Dusenbury and others, unknown to the defendants, who then had and still have actual, possession; that these defendants requested the plaintiffs to put them in possession, which they have not done, whereby the defendants have been unable to obtain possession, or to perform their building contract. They allege that certain of the covenants in the deed to them from the plaintiffs, have been broken, and that by reason thereof, and by not being able to obtain possession of the premises and improve them, the said Hester has sustained $10,000 damages, which she demands by way of counterclaim.
    The action was referred to Henry Nicoll, Esq., as referee. On the trial, the bond and mortgage were given in evidence by the plaintiffs. The defendants gave in evidence, two deeds from Garrett S. and Jordan Mott, to Edward Sand-ford, dated January 5, 1854; also the will of said Sandford, dated July 3, 1853, containing a power in these words : “I do hereby authorize and empower my executors, or such of them as shall take upon themselves the execution of my said will, to sell all or any of the real estate of which I may die seized or possessed ;” also the deed from the plaintiffs to H. A. R. Travers; also a lease dated June 6, 1850, from the mayor, &c., of New York, demising the westerly part "of the mortgaged premises to James M. Stark, for four hundred years, and assignments of that lease to Charles E. Dusenbury.
    
      James Travers was then sworn as a witness for the defendants, and said, that he made the contract with the plaintiffs for his daughter; he did not search the title, “plaintiffs assuring him the premises had been two hundred years in the Striker family;” that after he had arranged to proceed with the buildings, he went to the premises and found Charles Dusenbury and others, in possession, claiming, under the corporation lease, “ that a foundation was partially digged and building materials on the ground;” that he informed one of the plaintiffs and asked him to give possession, who replied they were squatters, and when they finished painting he would turn them out; that he called several .times subsequently and stated he wanted possession ; when he last called, the papers to commence this suit were served on him; and that each house when finished, would have cost, with the lot, $6,100, and have sold readily for $8,500.
    The defendants then moved for a dismissal of the complaint, on the ground that the plaintiffs were bound to give possession, and had failed to do so. Under the counterclaim, they offered to prove that the plaintiffs who negotiated the sale, made repeated declarations that the title was good and free from encumbrances, and that defendants relied thereon and did not search the title; that they contracted with B. M. Fowler to erect the twenty houses, whereby each house with the lot, would have cost $6,'700, and that they would readily have sold for $8,500, mating a loss to defendant of $1,500 on each building. This evidence was excluded, and the defendants excepted.
    The referee found, as facts and conclusions of law, as follows, viz:
    “ That, on or about the fifth day of January, 1854, Garrett S. Mott and Jordan Mott, severally made and delivered to Edward Sandford, deceased, the testator of the said plaintiffs, indentures of deed of the premises in the complaint described, and that each of said indentures of deed contained a covenant of seizen, a covenant for quiet enjoyment, a covenant against encumbrances, and a covenant-'of, warranty.
    
      “ That the said Edward Sandford, deceased, in and by his last will and testament, authorized and empowered his executors, or such of them as should take upon themselves the execution of his will, to sell all or any of the real estate of which he might die seized or possessed.
    “ That on or about the 13th day of December, 1855, the plaintiffs, James S. Sandford, Halsey Sandford, and Garritt H. Striker, Junior, made and delivered to the defendant, Hester Ann R. Travels, an indenture of deed of the said premises, and that said last mentioned indenture of deed contained a covenant by and on the part of the said grantors as executors severally, and not jointly, for the quiet enjoyment of said premises by the defendant, Hester Ann R. Travers, without any let or hinderance from the said parties of the first part to the said indenture, their heirs or assigns or by or from any person lawfully claiming under them, or by or from their, said testator, the said Edward Sand-ford, deceased.
    
      “ That, simultaneously with the execution and delivery of the said last mentioned indenture of deed, the defendants, Hester Ann R. Travers and James Travers, made and delivered to the said James S. Sandford, Halsey Sandford, and Garritt H. Striker, Junior, the bond and mortgage in the complaint in this action mentioned, and that simultaneously therewith an agreement was made and delivered by and between the said James S. Sandford, Halsey Sandford, and Garritt H. Striker, Junior, as acting executors of the said Edward Sandford, deceased, of the first part, and the said Hester Ann R. Travers, of the second part, wherein, after reciting the aforesaid sale and conveyance, and that a portion of the security of the purchase money was to consist of buildings and improvements thereafter to be erected on the said premises, it was covenanted that the said Hester Ann R. Travers would, on or before the first of October, 1856, erect and completely finish, on said premises, twenty houses, according to certain plans and specifications in said articles of agreement particularly mentioned and referred to. And in and by said articles of agreement, the said parties of the first part thereto covenanted to release from the lein of their said mortgage, certain of the houses so to be erected, and the ground on which they should stand, when the building of all the houses should have been advanced to an extent in the said articles of agreement particularly mentioned.
    “ That, simultaneously with the execution and delivery of the said articles of agreement, one Samuel G. Smith, sealed and delivered to James S. Sandford, Halsey Sand-ford, and Garritt H. Striker, Junior, executors as aforesaid, his bond or obligation in the sum of $4,000, conditioned in case the said Hester Ann R. Travers and James Travers, should not perform and keep the covenants on their part in said articles, to pay to the said James S. Sandford, Halsey Sandford, and Garritt H. Stryker, Junior, the sum of two thousand dollars. That prior to the execution and delivery of the said indenture of deed from the said Garritt S. Mott and Jordan Mott to the said Edward Sandford, the westerly half of said premises described in said complaint, being known and distinguished on the assessment map for regulating the Ninth avenue, by the numbers 829, 830, 831, 832, 833, 867, 868, 869, 870, and 887, had been sold pursuant to the Statute in such case made and provided, for a term of four hundred years, to one James M. Stark, for the payment of the assessment unpaid upon the said premises for regulating the Ninth avenue, and such proceedings were thereupon had; that upon the 6th day of June, 1850, the mayor, aldermen, and commonalty of the city of New York, did execute to the said James M. Stark, his executors and assigns, an indenture of lease of the said premises for the term of four hundred years, and which said indenture of lease was afterwards, and on the 21st day of December, 1850, recorded in the office of the register of the city and county of New York.
    “ That, at the time of the execution and delivery of the last mentioned indenture of deed, indenture of mortgage, and articles of agreement, one Charles Dusenbury was the holder and assignee of the said indenture of lease.
    “ That default was made in .the payment of the sum of $961.82, being the interest which became due upon the sum of money mentioned in the condition of the bond before mentioned, so made by the said Hester Ann R. Travers and James Travers, on the first day of August, 1856. According to the tenor and effect of the said condition, and that the said interest remaining unpaid and in arrear for the space of fifteen days, the said plaintiffs elected that the principal sum mentioned in the condition of the said bond should be due and payable to them.
    “ Upon the foregoing facts, I do find, as conclusions of law, that the said plaintiffs are entitled to a judgment barring and foreclosing the defendants, and all persons claiming under them, or either of them, of all right and equity of redemption in the said premises, and for a sale of said premises, according to law, and for the payment of the amount due to them, with interest and their costs, out of the proceeds of said sale, and for a judgment against the defendants for any deficiency in such proceeds to pay and satisfy the above amounts, with interest and the costs as aforesaid.
    “ And I further report, that I have computed the amount due on the said bond and mortgage for principal and interest, at the date of this my report, and that the same is the sum of thirty-five thousand four hundred and eighty-four dollars and sixty cents, ($35,484.60.) All of which is respectfully submitted.
    “ Dated New York, March 31, 1860.”
    Judgment having been entered upon the report, the defendants appealed from it to the general term.
    
      John Anthon, for Appellants.
    1. The deed to the appellants having been made by the respondents in execution merely of a general power in testator’s will, (no estate being vested in them,) will be construed in equity as if it had recited in hosc verba, the title deed to testator, with all its covenants of seizin, warranty, &c., vesting in him a present estate in fee, the power in the will, authorizing the respondents to sell that precise estate, and the conveyance of that estate by proper words and covenants to the appellants; or as if a similar deed had been made by the testator himself, in his life time, in the strongest manner. (2 Sug. on Powers, 26 ; Griswold v. Bigelow, 6 Conn. 269 ; Middleton v. Cross, 2 Atk. 661 ; Jackson v. Veeder, 11 Johns. 169 ; Osgood v. Franklin, 2 Johns. Ch. 1 ; Doolittle v. Lewis, 7 Johns. Ch. 45 ; Jackson v. Davenport, 20 Johns. 541; estoppel, Pickard v. Sears, 6 Ad. & Ells. 469 ; Preston v. Maine, 25 Conn. 119.)
    2. The outstanding lease for four hundred years, and the possession of lessee under it, reduced the subject matter of the deed to testator, and power to executors, from a vested fee in possession, to a remainder in fee, to vest in possession at the expiration of four hundred years ; and this is all respondents could convey to appellants, who bargained for and took their conveyance for an immediate fee.
    
      3. The mortgage sought to be foreclosed in this case, was given by the appellants for the entire purchase money of such present vested fee. Appellants have never had possession; and a court of equity will never allow a foreclosure in such a case. (Platt v. Gilchrist, 3 Sandf. S. C. 118 ; Edwards v. Bodine, 26 Wend. 109 ; Legget v. McCarty, 3 Edw. 124 ; Wither v. Powers, 2 Sandf. C. Ch. 350, notes.)
    4. But the case presents this point in a still stronger point of view. The deed, bond, and mortgage, building contract, and surety bond for its performance, form one entire contract, requiring that respondents should give appellants immediate possession, and such duty was expressly imposed upon them by law, independent of their express promise and undertaking. The breach of contract was on the part of the respondents who had no right to foreclose the mortgage. (Stow v. Tift, 15 John. 463 ; Cornell v. Todd, 2 Denio, 130 ; Trull v. Granger, 4 Seld. 118.)
    5. The referee, on these grounds, ought to have dismissed the complaint-seeking a foreclosure.
    6. The whole case was thus, on both grounds taken, reduced to the question of the amount of damages under the counter-claim for breach of contract.
    The evidence of Travers as received, and that of Fowler offered and rejected, was proper evidence establishing a loss to the amount of $15,000. On this, he ought to have acted, and reported accordingly. (Masterton v. Mayor of Brooklyn, 7 Hill, 65 ; Caswell v. Wendell, 4 Mass. 108.)
    
      7. The deficiency on the sale which, from the defect of title, forming an item on the record of $30,000, would be also an item to be claimed by appellants on their counterclaim, should the foreclosure and sale be sustained.
    
      H. Bay, for Respondents.
   By the Court. Bosworth, Ch., J.

—The defenses set up in the answer are : 1. That H. A. R. Travers “ purchased said premises from said plaintiffs, with a view to the immediate improvement thereof;” and that the defendants made ’ the building contract, which they have been always willing and desirous to perform. That shortly after executing the mortgage, &c., they discovered, and so charge the fact to be, that at the time of executing the deed to H. A. R. Travers, the premises were held adversely to the testator and the plaintiffs, with claim of right and title so to do, by persons named, who then had and still have actual-possession thereof. That the plaintiffs promised to put defendants in possession, and have not done so.

2. That some of the covenants in plaintiffs’ deed were broken, eo instanti its execution and delivery, by reason of said adverse title and holding; and that said Hester, by reason of being unable to take ' possession and build, has suffered $10,000 damages, which she seeks to recover, as'a counter-claim.

It is to be observed, that the answer contains no allegation of any misrepresentation, concealment, or other deceit, practiced by the plaintiffs, to induce H. A. R. Travers to purchase, or either defendant to enter into any of the obligations to which they became parties.

Nor is there any averment of an offer by the defendants before suit brought to rescind the contracts; nor is such an offer, nor an offer to reconvey to the plaintiffs, made in the answer. And the defendants, instead of praying that the contracts may be canceled on a reconveyance to the plaintiffs being executed, demand damages by way of counter-claim, upon the theory of the contract being treated as operative and obligatory.

It is quite clear, that no breach of any covenant on the part of the plaintiffs contained in the- deed executed by them, has been proved. Assuming the corporation lease to be valid and in full force, the estate which the holder of that lease has, was not acquired from or through the plaintiffs, or their testator; nor has it arisen or been created by reason of any act or omission of either of them.

That lease was executed on the 6th of June, 1850, to give effect to a sale made on the 1st of June, 1848, to obtain payment of an assessment of $11.73, confirmed the 24th of April, 1847.

The testator acquired title by a deed executed to him by Garritt S. & Jordan Mott, June 5th, 1854. Hence, if the corporation lease be valid, the estate conveyed by it had been created, and existed over three years and a half before the testator acquired title.

No covenant can be implied in any conveyance of real estate, whether such conveyance contains special covenants or not. (3 R. S. 5th Edit. p. 29, § 160 ; and see Burwell v. Jackson, 5 Seld. 535 ; The Mayor, &c. v. Mabie, 3 Kern. 151, and 158.)

It does not contain an implied covenant of seizin; or against incumbrances, or of a present right of possession.

There is, therefore, no breach of any covenant, on the part of the plaintiffs, contained in the deed executed by them to H. A. R. Travers.

As to the defense first stated in the answer, it may be observed, first, that, assuming the corporation lease to be valid, it affects the title to only half of the lots conveyed, and there is no pretense that a good title to the .other half was not conveyed. Nor has the referee found that the lots covered by the corporation lease- were in the actual possession of any third person at the time the deed given by the plaintiffs was executed.

James Travers, the only witness to that point, testified, “ that after he had made arrangements to proceed with the buildings, he went to the premises, and found Charles Dusenbury and others in possession, claiming under the corporation lease to Stark; that a foundation was partially digged, and building materials were on the ground.” He does not state when this was, nor otherwise designate the time when they took possession. Therefore, not only has the referee not found the fact of there being an adverse possession at the time the plaintiffs conveyed to H. A. R. Travers, but, on the contrary, no evidence was given which would warrant such a finding.

The case, then, on the merits, stands thus: The plaintiffs, supposing, so far as the evidence warrants any conclusion as to what they supposed or believed, that their testator had title to the twenty lots, in good faith conveyed whatever estate he had in the twenty lots at the time of his decease; they practiced no fraud or deceit in mating the sale. H. A. R. Travers bought, ignorant, as were also the plaintiffs, of the existence of the corporation lease.

There was a mutual mistake as to a material matter, viz: as to the corporation lease creating an estate in half of the lots for the term of four hundred years.

When the defendants discovered this mistake they had their election, assuming the mistake to be one which would authorize a court of equity to rescind the contract, to offer to rescind and reconvey, on having their obligations canceled and surrendered, or to hold on to their bargain, .pay the contract price, and have such relief as the plaintiffs’ covenants might entitle them to demand.

This, certainly, is the most favorable rule in behalf of • the defendants ; that it is consistent with elementary law and adjudged cases, see 2 Kent’s Com. 471, 472 ; Belknap v. Sealey, (4 Kern. 143 and 158;) Tallmadge v. Wallis, (25 Wend. 107 and 114, 115 ;) Van Epps v. Harrison, (5 Hill, 63 ;) Mason v. Bovet, (1 Denio, 73, 74.)

They cannot retain their deed, and such estate as it conveys, and avoid paying the contract price, there being no fraud on the part of the plaintiffs, and none of their covenants being broken.

When this action was commenced, the case does not disclose. The complaint was verified the 21st of October, 1856, and the suit was brought by reason of a failure to pay interest falling due August 1, 1856.

Assuming" that there was no laches in not offering to rescind, so long.as the plaintiffs gave the defendants reason to expect they would be put in possession, yet it was their duty to take that' position when this action was brought, and claim that kind of relief, if they intended to take it at all, and to allege the facts and offer to do the acts which would entitle them to it.

Whether the defendants’ purchase would be a bad speculation if held to pay the contract price for a present fee in ten lots, and a remainder in the other ten, the evidence furnishes no means of determining.

If these views are correct, the first exception taken to the refusal to dismiss the complaint is untenable. It is not found as a fact, nor does the evidence tend to show that the defendants could not have taken possession of ten of the lots at any time, nor that they might not have taken possession of the whole at the time the deed to them was received and recorded.

The ground of the second exception to the refusal to dismiss the complaint does not entitle the defendants to such relief. For aught that appears, the premises were not actually occupied when the defendants received their deed, and no third person had then made any claim of title to any part of the lots, and in that condition of things there was no possession- to be given in addition to the execution and delivery of the deed.

The offer to prove that the plaintiffs represented the title to be good and free from encumbrances was properly excluded ; no such defense is stated in the defendants’ answer.

The offer to prove certain facts, by way of establishing a counter-claim, was properly overruled, because, First: There was- no proof of any breach of any covenant on the part of the plaintiffs; and, Second: On failure of title, in cases free from fraud, where the grant contains, a covenant of seizin, the measure of damages is the consideration money, if it has been paid, and interest thereon. (Peters v. McKeon, 4 Denio, 546 ; Noyes v. Anderson, 1 Duer, 342 ; Conger v. Weaver, 20 N. Y. R. 140.)

And it is a sufficient answer to all the grounds on which the court was asked to dismiss the complaint, that on no principle could the defendant, H. A. R. Travers, be permitted to retain the estate conveyed to her without paying to the plaintiffs any part of the contract price; and a judgment dismissing the complaint, after all the evidence had been given, would have effected that result.

The decision and the judgment entered thereon are, that the premises be sold; that out of the proceeds of thé sale, liens for taxes and assessments be discharged, and the plaintiffs’ costs paid ; and that the residue be applied in satisfaction of the amount due to the plaintiffs, and if ■ there be* a deficiency that the defendants pay it.

The plaintiffs offered on the argument to consent to a modification of the decree, whereby the defendants should ■ be discharged from all liability for any deficiency.

Such a decree, assuming the plaintiffs to have been the purchasers at the sale under the judgment .in this action, would, in effect, reinvest the title in the plaintiffs at their own expense, and exonerate the defendants from all liability as purchasers—and would be, in effect, a rescinding of the contract as to the sale, and purchase and conveyance of the land.

But the defendants have neither asked such relief, nor suggested that they would be content with it. On the argument of the appeal, as at the trial, they claimed no relief based on an offer, or an avowéd willingness to surrender and cancel the contracts and reconvey the land, but urge their defenses and supposed counter-claims, by virtue of their rights created by the deed, its covenants and the cotemporaneous contracts.

In this condition of things, unless they consent to a judgment releasing them from the deficiency, upon a cancellation ' of the building contracts by ‘the act of all the parties to them, the court has no right to modify the judgment as the plaintiffs consent that it may be, and as- thus modified, affirm it.

Judgment affirmed.  