Opinion
September 30, 1955.
LAYTON, J., sitting.
C.W. Berl, Jr. (of Berl, Potter and Anderson) for Plaintiffs.
W. Thomas Knowles for Defendant.
Motion to dismiss Complaint. Denied.
Plaintiffs filed a complaint against defendant for breach of a construction contract claiming damages in the sum of $3,000 for defendant's failure to build in accordance with plans and specifications. The Contract of Sale is substantially as follows:
"Contract "Wilmington, Del. March 19, 1954
"Sold this day to John Re, Jr. Mildred R. Re, his wife or his assigns, the property known as Lot No. 3, Marsh Road, Mayfield, New Castle County, Delaware Sale price includes choice of wallpaper (within $150.00 allowance) Choice of bathroom fixtures and tile, choice of powder room fixtures and tile, choice of kitchen linoleum, lot to be graded, seeded and shrubbed, electric range and garbage disposal, choice of asphalt tile in recreation room, choice of paint on wood paneling in recreation room, and choice of paint on recreation room walls. House to be built according to plans and specifications, on the following terms and conditions of sale:
"Purchase Price Sixteen Thousand Six Hundred Fifty ($16,650.00) and no/100 Dollars
"One Hundred ($100.00) and no/100 Dollars cash as forfeit money is hereby deposited with Conly, Mills Rossiter, Inc., Agent, by the Purchaser, to bind the bargain, said money to be considered a part of the purchase price.
"Balance of down payment to be made at time of settlement.
"Seller agrees that all shades, blinds, screens, storm sash, awnings, and linoleum belonging to Seller and now on the premises shall remain and be included in the purchase price.
"Taxes, Water Rent and Rent of Property to be prorated. Title to be good, marketable, fee simple title, clear of all incumbrances except as otherwise stated herein, but subject to all existing restrictions and easements. In case the title is found to be imperfect the forfeit money paid will be refunded. Loss or damage to the said premises by fire, windstorm or other casualty prior to delivery of Deed shall be borne by the Seller.
"Deed shall be delivered to the Purchaser, and final settlement completed, on or before April 1, 1954."
The Complaint charges that defendant failed to waterproof the walls and foundations, constructed the driveway improperly and graded the property so as to preclude adequate drainage.
Defendant has filed its motion to dismiss upon the proposition that plaintiffs, having once accepted a Deed to the premises in question, cannot now bring suit upon the Contract of Sale because the latter Contract has become merged into the Deed and is void.
Superior Court for New Castle County, No. 416, Civil Action, 1955.
The authorities are uniform in holding that where a Deed is executed and delivered pursuant to a Contract of Sale of realty, the latter merges with the former and becomes void. This rule is clearly expressed in Dieckman v. Walser, 114 N.J. Eq. 382, 168 A. 582, 583, as follows:
"It is the general rule that the acceptance of a deed for land is to be deemed prima facie full execution of an executory agreement to convey, and thenceforth the agreement becomes void, and the rights of the parties are to be determined by the deed, not by the agreement. Until consummated, an executory contract is subject to modification. In all cases, the deed, when accepted, is presumed to express the ultimate intent of the parties with regard to so much of the contract as it purports to execute. The executed contract supersedes all prior negotiations and agreements, where the last contract covers the whole subject embraced in the prior one. * * *"
There is, however, an equally well recognized exception to the rule in cases where the Contract of Sale contemplates the performance of acts in addition to the conveyance. In this connection, the same court went on to say:
"* * * But where the stipulation is to do a series of acts at successive periods, or distinct and separable acts to be performed simultaneously, the executory contract becomes extinct only as to such of its parts as are covered by the conveyance. Long v. Hartwell, 34 N.J.L. 116. Covenants collateral to the deed are exceptions to this rule. And in Bull v. Willard, 9 Barb., N.Y., 641, it is said: `That the covenant, in order to be denied collateral and independent, so as not to be destroyed by the execution of the deed, must not look to, or be connected with the title, possession, quantity or emblements of the land which is the subject of the contract.'"
To the same effect see Stevens v. Milestone, Md., 57 A.2d 292; Raab v. Beatty, 96 Pa. Super. 574; Allen v. Currier Lumber Co., 337 Mich. 696, 61 N.W.2d 138.
Defendant concedes the law to be as laid down by the above cited authorities but argues that the Contract in the case at I do not agree. Clearly, the agreement calls for the performance of two separate acts, the conveyance of land improved by a dwelling and the building of a house in accordance with certain plans and specifications. This Contract falls within the exception to the rule. There is no merger.
Motion to dismiss denied.