Opinion
02-11-1907
METTLAR v. CONOVER et al.
Freeman Woodbridge, for complainant. Theodore B. Booraem and Willard P. Voorhees, for demurrants.
Bill by George W. Mettlar against David A. Conover and others. Heard on demurrer to bill. Demurrer overruled.
Freeman Woodbridge, for complainant. Theodore B. Booraem and Willard P. Voorhees, for demurrants.
EMERY, V. C. This bill to foreclose, which is demurred to, discloses the following facts:
Complainant on April 28, 1806, purchased from defendant David A. Conover two tracts of land in Middlesex county, described in the bill, for $933, and the land was conveyed to complainant by Conover by deed of full covenants and warranty. David A. Conover's title to one-half interest in the lands was derived by deed from Cornelius N. Conover and others, dated December 11, 1895, and at the time of the conveyance by David A. Conover to complainant there was a judgment obtained in the Supreme Court on December 12, 1893, against Cornelius Conover and William Allen, in favor of the Mapes, etc., Guano Company, for $1,130.11, which judgment appeared of record as a lien against the lands conveyed to complainant wholly unsatisfied. David A. Conover, the vendor, to induce complainant to take the deed, and for further protection against the judgment, and pay the consideration, executed and delivered with the deed a bond to complainant, in the penal sum of $1,500, with the following recitals and condition: "Whereas the said David A. Conover has by warranty deed, bearing even date herewith, conveyed to said George W. Mettlar certain lands in said county therein described and whereas the equal undivided one half part of said lands may be subject to the lien of a certain judgment entered in the Supreme Court of New Jersey on the 12th day of December, 1893, against Cornelius Conover and William Allen in favor of The Mapes Formula and Peruvian Guano Company for the sum of one thousand one hundred and thirty ($1130 11/100) dollars and eleven cents, damages and costs. Now the condition of this obligation is such that if the said David A. Conover shall protect the said lands and the whole thereof from levy and sale under said judgment and shall also within three years duly cause all lien arising out of said judgment to be removed from said lands and said lands to be freed and discharged from all such lien, and shall save harmless the said George W. Mettlar, his heirs and assigns of and from all damage, loss, cost and expense by reason of said judgment, then this obligation to be void; otherwise to be and remain in full force and virtue." This bond was secured by the mortgage now sought to be foreclosed, given by David A. Conover to complainant on twoother tracts of lands, situate in Middlesex county; the proviso and condition of the mortgage being "that if the said David A. Conover, or his heirs * * * should well and truly pay, or cause to be paid, unto the said George W. Mettlar, or to his certain attorney * * * the sum of $1500, according to the conditions of the said bond, according to the true intent and meaning thereof," the mortgage should be void. The vendor, it is alleged, did not within three years of the date of the bond cause the lien arising from the judgment to be removed from the lands conveyed, and did not cause the lands to be freed and discharged from such lien within that time. And it is further alleged that on August 10, 1901, one Edwin Allen, who had, by an order of this court made on July 2, 1901, been subrogated to the lien of the judgment, filed his bill in this court to satisfy the judgment (to the extent to which he was subrogated) by a sale of the lands conveyed to complainant, and complainant was made a party defendant to this suit of Edwin Allen. At the time of the commencement of this suit David A. Conover was out of the state of New Jersey, his whereabouts then unknown to complainant, and he was then, and still is, without financial responsibility, and unable to protect complainant under the covenants of warranty. The complainant, under advice of counsel, filed an answer and defended the suit, and on July 13, 1903, the bill was dismissed, with costs as against complainant, and as against the lands conveyed to him by David A. Conover. The expense to complainant of defending this suit to enforce the judgment against his lands, for counsel fees, expenses, and costs, was $233.40, and it is claimed that the repayment of these expenses is secured by the bond and mortgage in question.
The defendants Mrs. McLaughlin and Mrs. Parker, who are, respectively, grantees of the two lots covered by the mortgage, by conveyances subsequently made, demur to the bill—Mrs. McLaughlin for the reason that by the bill itself it appears that the condition has been fully performed; and the defendant Mrs. Parker for a number of reasons, which cover specifically the same general point, and, in addition, for two reasons relating to the defective manner of setting out the bill and parties to the Edwin Allen suit. Edwin Allen's lands having been dismissed on final hearing, the expenses incurred in complainant's defense in that suit could not have been recovered in an action on the general covenants in the deed. These covenants against incumbrances in the usual general form are construed as applying only to lawful claims and demands, and not to tortious or wrongful claims. Rawle, Cov. (4th Ed.) p. 1391. The condition in the bond, however, was not in terms to secure damages arising from the breach of covenant against lawful claims, but was a contract for the performance of certain acts relating to a particular and specified judgment, as to which it was recited in the bond, that the equal undivided one-half part of the lands may be subject to the lien of the judgment. These acts thus contracted for were two: (1) To protect the lands and the whole thereof from levy and sale under the judgment; (2) within three years to cause all lien arising out of the judgment to be removed from the lands and the lands to be discharged from the lien. There was, in addition, another contract relating to the specified judgment, being the express contract of indemnity "to save complainant harmless from all damage, loss, cost and expense by reason of the judgment."
In order to protect the lands conveyed from levy and sale, the vendor was required, under this contract, to protect, if necessary, by defending any suit or proceeding taken to enforce levy and sale. "To protect," in this contract, is equivalent to, or at least includes, "defend against attack," which is one meaning of protection. The contract was not that the lands should not be sold under the judgment, but that the vendor would protect them against sale. This required him to defend any suit to enforce the judgment by sale of the lands, unless he can make it appear that such defense was not reasonably necessary for the protection of the lands, and, inasmuch as the bill alleges that the bill to enforce the judgment was dismissed, as against complainant and his lands, because of equities set up by complainant in that suit, it must, on the allegations of the bill, be taken for granted that the defense made by complainant was reasonably necessary for the protection of the lands from sale under the judgment. As this contract for protection of the lands did not require notice of any suit to be given, or demand of protection to be made, the suggestion that such notice or demand was necessary, in order to show a breach of the contract, is not well founded. Whether the entire amount claimed is recoverable for breach of this contract to protect the land is a question not yet to be decided; for, if anything is recoverable, the bill must be held for inquiry' as to the damages and the demurrer overruled.
The second act to be done by David Conover in relation to the judgment was "within three years to cause all lien arising out of the judgment to be removed from the lands, and the lands to be freed and discharged from all such lien." For the proper construction of this clause, and to ascertain the meaning of the expressions "lien arising out of the judgment" and "freed and discharged from all such lien," the contract must be read and construed in connection with the words in the recital referring to the lien. These are that "the lands may be subject to the lien of the judgment entered in the Supreme Court." So read and construed, the contract, I think, referred to and required the discharge or removal from therecords of the then apparent lien on the land, which was the "lien arising out of the judgment," with reference to which the parties contracted. Conover's failure to effect such removal of this apparent lien within the three years, and before the commencement of the Edwin Allen suit, was a breach of this contract, and by reason of the breach complainant was made a party to this suit and obliged to defend it. The damages resulting from this breach are secured by the bond and mortgage. What these damages are must be ascertained later, but the bill cannot be dismissed if anything is recoverable.
Under the indemnity clause, also, agreeing to "save harmless from all damage, loss, cost and expense by reason of the judgment," I think the bill shows a right to recover under the mortgage. As to the construction of contracts of indemnity and covenants for title, a distinction seems to be well settled, arising from the form of the indemnity or covenant, and whether it be general against all incumbrances, and against the acts of all persons, or whether it be special and to save harmless against a particular lien or against the acts of a person or persons specified. Where the covenant or indemnity is general, the acts relied on as a breach of the covenant must be lawful acts, because the covenantor or obligor cannot be supposed to covenant against all the wrongful acts of any person, and therefore the law restrains the covenant within its reasonable import, and confines it to acts lawfully committed by such person or persons. But, where the covenant or indemnity is against the acts of a specified person or persons, the contract covers unlawful, as well as lawful, acts of the specified person; the reason being that the covenantor is presumed to know the persons against whose acts he is content to covenant, and may therefore reasonably be expected to stipulate against any disturbance from him whether from lawful title or otherwise. Nash v. Palmer, 5 Maule & S. 374; Rawle, Cov. (4th Ed.) p. 139; 10 A. & E. Ency. 412. The plain and natural meaning of the words of his covenant includes all acts, and the reason for restricting them to lawful acts only does not exist. In Nash v. Palmer the condition of a bond (which recited a purchase of lands by the plaintiffs from W.) was to save them and the lands harmless from all manners of mortgages, judgments, extents, executions, and other incumbrances had and obtained, or thereafter to be obtained by T. or any other person, and it was held to bind the obligor against the wrongful entry of T., because it was against the acts of a particular person. The soundness of this distinction in the form of the covenants or contracts of indemnity has never been questioned.
Applying the principle of these authorities, the condition in the present case to save complainant harmless from all loss or expense by reason of this particular judgment indemnifies against costs or expense incurred by complainant by reason of the unsuccessful prosecution of the judgment, as well as by reason of a prosecution which is successful. In either case the costs and expense are incurred "by reason of the judgment" within this clause of the contract, which covers costs arising from the existence of the judgment as an apparent lien, as well as costs arising from its being thereafter held to be an actual lien.
The formal objections to the bill made on behalf of Mrs. Parker are (1) that the name of the cause in which Edwin Allen obtained the order of July 2, 1901, is not stated; and (2) that it does not appear by the bill who were the parties to the bill filed on August 10, 1901, or that David Conover ever had notice thereof. Such notice, not being required in his contract, was not necessary, nor were the other allegations specified in these objections necessary in order to show a breach of the condition.
The demurrer will be overruled.