New York & Cleveland Gas Coal Co. v. Graham , 226 Pa. 348 ( 1910 )

Opinion by

Mr. Justice Stewart,

William H. Graham, the defendant, and Lizzie, his wife, by deed dated December 27, 1895, conveyed to the plaintiff company a tract of land in Allegheny county containing about eighty acres, for the consideration of $6,173.75, the plaintiff, in addition, to assume the payment of an existing mortgage on the premises for $1,643.75. The entire purchase money has been paid excepting $1,900 which remains in the mortgage given defendant as part of the purchase price, and which does not become due until two years after the death of William Robb and Mary, his wife, or the survivor of them. By its terms, the deed from Graham and wife to the plaintiff company is a present conveyance of the entire estate in the land described, without reservation or exception. It contains not only a clause of general warranty, but several special warranties, one for quiet enjoyment and «another for indemnity against- disturbance or interruption of any kind. There is nothing equivocal or ambiguous- in any of the terms of the deed; nor is any fraud, accident or mistake alleged in connection therewith. Under this deed the plaintiff began to mine coal on the premises conveyed. Mary Robb, surviving her husband, and claiming a life estate in the premises under a conveyance from William H. Graham, earlier in date than the deed to the plaintiff, brought an action in trespass against the plaintiff, to recover triple damages for the coal mined, and recovered a judgment for $5,250. The defense set up was liberum tenementum. On appeal to this court, the case being reported in 216 Pa. 418, the title of Mary Robb to the coal in the tract, as life tenant, with the right to exhaust, was held good, and the judgment was affirmed by an equally divided court. The plaintiff asks in view of this recovery against it, that the defendant be required to cancel and surrender the mortgage which he holds against it for the unpaid balance of the purchase money. The company’s right to this release is denied on several grounds; first, because when plaintiff accepted the deed for the property, it had knowledge of the existing earlier deed to Mary Robb, and fully understood that the covenants in its deed were not intended to protect or indemnify against the earlier deed; and, second, that even though the covenants be held to extend to the Mary Robb deed, there has been no breach of any of the covenants which would entitle plaintiff to recover against defendant anything more than nominal damages. With respect to the first: the mere fact that a grantee had knowledge of an existing defect in the title at the time he accepted, does not of itself impair his covenants. Such fact is a circumstance to be considered when it becomes a question whether it was understood and intended that the covenants were to extend to that particular defect, and the truth with respect to this may always be shown. When the covenants are general, with nothing expressly excepted, the burden is on the grantor who seeks to escape from a liability fairly covered by the general terms of the covenant, to show that his grantee accepted the title notwithstanding the defect, and, cum onere. That is what the defendant here undertook to do; and the first question in the case is, did he offer evidence sufficient to establish the fact? Besides the circumstances adverted to, — the character of the outstanding title, and plaintiff’s knowledge of the deed under which it was derived, — there was but a single piece of evidence introduced in support of his claim. William and Mary Robb had been the owners of this tract of land and had conveyed to Graham by deed dated February 16, 1884. On the same day Graham and wife executed a written agreement with Robb and wife, granting to them the privilege and right to remain on the property described in the deed during their natural lives or the natural life of the survivor. In 1897 Robb and wife filed a bill in equity against Graham, with notice to this plaintiff, praying that the deed to Graham should be construed and held to be a mortgage. The answer filed by the plaintiff to the bill contains the following admission, “ and the said defendant purchased said property subject to whatever rights said plaintiff might have under said agreement.” The agreement here referred to was the agreement between the Grahams and the Robbs. The admission goes so directly to the point, and is so precise and definite in its terms, that if it stood alone and not otherwise explained than by its own language it would certainly go far toward establishing plaintiff’s contention. As explained, however, by the president of the company who made it, and the general situation as disclosed by the evidence, it loses entirely the significance it otherwise would have. The fifth finding of the learned chancellor is as follows: “The plaintiff company and its counsel, with Graham, at the time of the purchase, with said agreement before them, construed the same to grant a mere right of occupancy to the Robbs; but in view of its existence and the notice received, the special covenants in said deed were inserted therein for the purpose of protecting the plaintiff in the event that the Robbs, or either of them, should have a greater right in said property than the mere right or occupancy of the surface during their lives; the plaintiff purchasing said tract of land for the coal thereunder.” The evidence which supports this finding was offered and received not to control the effect of the covenant, or to define the extent of the grant to the Robbs, but as interpreting the written admission of the plaintiff in the answer filed to the Robb bill above referred to, and relied on by the defendant. For this purpose it was entirely proper. In the light of this finding, in which we concur, it becomes evident that plaintiff’s admission introduced by the defendant, meant no more than that the property had been purchased subject to such rights of the Robbs as- plaintiff ’ was. advised were expressed in the agreement between them and Graham; that is, occupancy of the surface for life. It was not intended as an admission of any right in the Robbs to the coal. With this out of the case, defendant offered nothing to support the contention that plaintiff bought subject to the incumbrance. The learned chancellor was entirely correct in concluding that the covenants in the deed extended to this particular defect of title. Was there any breach? The general covenant of warranty was broken as soon as made. The existence of a better title with an actual possession under it in another, is of itself a breach of this covenant. “The rule therefore, as best supported by reason and authority, would seem to be this — where at the time of the conveyance, the grantee finds the premises in possession of one claiming under a paramount title, the covenant for quiet enjoyment or of warranty will be held to be broken, without any other act on the part of either the grantee or the claimant; for the latter can do no more towards the assertion of his title, and, as to the former the law will compel no one to commit a trespass in order to establish a lawful right in another action:” Rawle on Covenants for Title, p. 269. So, too, there was a breach of the special covenant which insured to the plaintiff that it “should at all times peaceably and quietly have, hold and enjoy all and singular the said premises without the hindrance, denial or interruption of any person or persons lawfully claiming or to claim any right,” etc. “A covenant'for quiet enjoyment,” says Gibson, C. J., in Stewart v. West, 14 Pa. 336, “which resembles the modern covenant of warranty, differs from it in this, that the former is broken by the very commencement of an action on the better title.” The plaintiff then being in position to avail itself of its covenants, and having been compelled, because of the outstanding paramount title, to pay in damages double the amount of the mortgage given for the unpaid purchase money, of course there could be no recovery on the mortgage. Why then shall the mortgage, which will not be due until two years after the death of-Mary Robb, remain during all this time a cloud upon the plaintiff title? If it be said that as between Graham and the plaintiff it was simply a mistake of law in supposing that the agreement between the former and Robbs granted only a surface right, and that against such mistakes equity does not relieve, a sufficient reply is found in Beauchamp v. Winn, L. R. 6 H. L. 223, — a widely recognized authority governing in cases of this kind, — ■ where Lord Chelmsford says: “With regard to the objection that the mistake was one of law, and that the rule ignorantia juris neminem excusat applies, I would observe, upon the peculiarity of this case, that the ignorance imputed to the party was of a matter of law arising upon the doubtful construction of a grant; this is very different from ignorance of a well-known rule of law.” He further observes in the same case, that “although when a certain construction has been put by a court of law upon a deed, it must be taken that the legal construction was clear, yet the ignorance, before the decision, of what was the true construction, cannot, in my opinion, be pressed to the extent of depriving a person of relief on the ground that he was bound himself to have known beforehand how the grants would be construed.” The relief plaintiff seeks is the removal of a cloud upon its title. Against the menace of this mortgage it cannot immediately protect itself, or maintain its right to defeat the mortgage, by any course of proceeding at law. Under such circumstances equity will afford relief. Wc need only cite Dull’s App., 113 Pa. 510, in support.

In what we have said the questions raised by the assignments of error have all received consideration, and they are overruled.

The appeal is dismissed at the costs of appellant, and the decree is affirmed.