De Long v. Spring Lake & Sea Girt Co. , 65 N.J.L. 1 ( 1900 )

The opinion of the court was delivered hy

Depue, Chief Justice.

This was an action of covenant. 'The Spring Lake and Sea Girt Company, on the 23d of August, 1892, by an indenture under seal, conveyed in fee to Frank E. De Long, Charles F. De Long and Thomas D. Richardson, for the consideration of $12,000, a lot of land known and designated as block No. 41 on a plan of lots of Spring Lake, Fled in the office of the clerk of the county of Monmouth on the 16th day of May, 1878, with' a description by metes and bounds. Of the consideration, $4,000 was paid in money, .and the residue of $8,000 was paid by certificates issued to ihe stockholders of the company by way of dividends—the plaintiffs- being stockholders and receiving such certificates. Each certificate is, by its terms, made receivable as payment .of $1,000 from the bearer for purchase-money due on any lot bought of the company.'

The deed contained a covenant that the party of the first part was seized in its own right of an absolute and indefeasible estate of inheritance in fee-simple, and had good right, full power and sufficient authority in law to grant, bargain, sell and convey the same, and a covenant also for peaceable possession. Then follows a covenant that the premises were free from all former mortgages, judgments and ■ executions, and of and from all other encumbrances whatever, and also a covenant of warranty. The breach assigned is that the lot conveyed, together with other lands of the company, had been dedicated to public use by the Spring Lake Land Company, under which the defendant took title, as a park and yray of access to the waters of Spring lake. The plaintiffs’ case is founded on a contention that at the time the deed was made to them the premises had previous^ been dedicated to a public use.

The Spring Lake Beach Improvement Company was incorporated as a land company in 1875. Paraph. L., p. 100. That company owned a tract of about four hundred acres, and in 1875 they caused to be laid out a plan of lots on this tract of land. Within the borders of the tract owned by the company was Spring lake, a body of water that gave special value to the entire tract. The map was made, by Frederick Anspach, the surveyor and engineer of the company, and was by him revised and corrected in the year 18.76, and filed in the office of the clerk of the county of Monmouth May 16th, 1878. The premises in question were known as block No. 37 on the original map of 1875, and as block No. 41 on the íevised map of 1876. It contains from three to five acres of lan.d.

The defendant company was organized under the act of the legislature, entitled “An act concerning corporations,” by a certificate of organization dated November 29th, 1889, under the name of the Spring Lake and Sea Girt Company. By a deed dated December 19th, 1889, the Beach Improvement company conveyed to the Spring Lake and Sea Girt Company the tract of land owned by the former company. The case shows that the map of 1876 was filed in the county clerk’s office. It also appears that the company, in making conveyance of property to purchasers, referred to the map, and, after the description of the premises conveyed, described the same by lot number and as being a lot on plan of lots made by Frederick Anspach and duly filed in the clerk’s office of the county of Monmouth.

The evidence is plenary that the map, with conveyances made by reference thereto, was a dedication of the streets delineated upon it. This lot, No. 41, borders on Spring lake, and lies between Passaic avenue and the lake. There is no indication on the face of the map that this lot was dedicated to a public use, except that the map indicates that the lot is covered with trees. The proof is that this parcel was unenclosed and that there were seats on it, and that it was used by children as a pleasure-ground; but the evidence is not sufficient, of itself, to show a dedication arising from user. There is evidence that would justify such a conclusion in the fact that from the time the Spring Lake Improvement Company acquired title to its lands down to the time the conveyance was made to the Spring Lake' and Sea Girt Company, a period of sixteen years, the officers and agents of the first-named company, for the purpose of securing purchasers of their lots, represented to all who intended becoming purchasers that the land was to be kept open for the use of the public and the lotowners. Mr. Anspach,who made the map and was in the employ of the company as engineer and agent for the sale of lots from 1874 to 1884, testified that in making sales of lots it was represented to the purchaser that the land between both of the borders of the lake and the lines of the avenues was to be left open for public use; that these representations were made by directors and officers and at board meetings. Mr. Willetts, who was an agent of the company for the sale of lots about 1876, testified that he was authorized to represent that the lotowners had the use of the lake, and that the portions environing the lake, between the roads and the lake, were for public use, and that he made such representations to the persons to whom he made sales; that he stated to the board of directors that he had made these representations when selling lots, and that they never made any question about it; they made the same representations; that people rowed upon the lake, sailed upon it and fished in it. Devine, who was superintendent of the company from 1878 to 1889, testified that he had authority from the officers •of the company to make statements concerning the tract of land around the lake when he was making sales; that he was instructed to inform anybody who wanted the privilege of putting boats on the lake that they could do it; it was free to the public at all times, and that the margin of land was for park purposes, and that he made- these representations. It is unnecessary to refer to other testimony on this subject; it is sufficient to say that it was amply sufficient to justify ■the finding of the jury that this plot of ground was dedicated to public use; and that question was properly submitted to-the jury in the charge of the court.

The learned judge charged the jury that if these lands-were dedicated, the dedication was irrevocable, and that where the lands conveyed are “subject to public easement or' servitude which cannot be removed, thq covenantee is entitled to the difference between the value of the premises if the title was good and its value as diminished by such public easement or servitude, not to exceed the consideration actually paid.” The consideration expressed in the deed is $12,000, Of this-$4,000 was paid in cash, and land scrip issued by the company by way of dividends was turned in at its face value of $8,000. The judge charged the jury that if, at the date of the deed, the scrip was worth less than its par value, that fact should be considered in assessing damages in favor of the plaintiff. He then instructed the jury to find what this scrip was worth, and, “adding its value to the $4,000, you have a starting point for the price, and then you say how much that should be diminished by this easement.”

. He also instructed the jury that the plaintiffs were entitled to interest at six per cent, from the date of the deed, August 23d, 1892, to November 7th, 1899. The jury found a verdict for the plaintiffs for $17,188. The interest allowed was for a longer term than six years.

In the declaration the plaintiffs count only on the covenant against encumbrances. The general doctrine of the law is that an easement upon the premises conveyed is a breach of the covenant against encumbrances; but lands dedicated to the public use cannot strictly be regarded as an easement. When the dedication is complete, the local authorities cannot discharge the dedication; the legislature alone has power to relieve the dedicated lands and discharge the public servitude. Hoboken Land Improvement Co. v. Hoboken, 7 Vroom 540. Under the evidence in this case the land company did not have title and had no right to convey. Strictly speaking, the plaintiffs should have counted upon the covenant of. seizin and for power and authority to make sale. But the measure of damages for the breach of a covenant against encumbrances, where it is of such a character as to amount to a failure of title, is the same as the measure of damages for the breach’ of a covenant of seizin, namelyj the consideration money and interest. Huyck v. Andrews, 113 N. Y. 81; 2 Suth. Dam. 326; Prescott v. Trueman, 4 Mass. 627 ; Stewart v. Drake, 4 Halst. 139. For present purposes we propose to consider this case as if the plaintiffs had counted also on the covenant of seizin.

It is insisted, on behalf of the defendant, that there was error in the charge of the judge in allowing interest for more than six years, the contention being that the measure of damages must be the same as the legal rule in case of the breach of a covenant of warranty, namely, the consideration money, with interest not exceeding six years antecedent to the eviction.

A covenant of seizin is an assurance to the purchaser that the grantor has the very estate in quantity and quality which he purports to convey, Rawle Cov. Tit. 77. It is a covenant that is satisfied only by the transfer of an indefeasible title, especially where, as in this case, the covenant is for an indefeasible estate of inheritance in fee-simple, and it is broken as soon as made if the title be from any cause defeasible. Id. 81; 8 Am. & Eng. Encycl. L. 90, 183; 2 Suth. Dam. 255. For a total breach of the covenant of seizin or good right to convey, where nothing passes by the conveyance, the measure of damages is the amount of consideration paid and interest. Sedgw. Dam. [175] 195; Smith v. Strong, 14 Pick. 128; Chapel v. Bull, 17 Mass. 213, 221; 8 Am. & Eng. Encycl. L. 184. The reason on which the consideration and interest furnishes the general rule for admeasuring damages in an action for the breach of the covenant of seizin, where, at the time of the execution of the deed, the grantor does not own the land, is well stated by Chief Justice Parker, in a Massachusetts case, in these words: “The rule for assessing the damages arising from this breach is very clear. No land passing by the defendant’s deed to the plaintiff, he has lost no land by the breach of this covenant. He has lost only the ■consideration he paid for it. This he is entitled to recover back, with interest to tliis time.” Bickford v. Page, 2 Mass. 455, 461. Where the plaintiff has never got into possession of the land, and in consequence of the want of title never can, the consideration money and interest is clearly the proper measure of damages. The action on the covenant then comes in place of an action for money had and received on failure of consideration. Mayne Dam. 143. There are conditions under which the plaintiff suing on such a covenant recovers less than the consideration money—where the grantee obtains some advantage from the lands conveyed; as, for instance, where he has had possession, or the eviction is from a part of the premises conveyed. In the former case, the use of the lands conveyed is regarded as an equivalent, pro tanio, for the interest on the purchase-money; in the latter case, the true measure of damages is the value of the part to which title has failed in proportion to the price of the whole, the computation being on the basis of the consideration money. Morris v. Phelps, 5 Johns. 49; Guthrie v. Pugsley, 12 Id. 126. Hymes v. Esty, 133 N. Y. 342, 347, is a case decided upon the same principle. There it was held that in the dedicated lands the plaintiff had acquired title to the fee, and the fee value of the strip was to be deducted from the consideration money. The jhdge delivering the opinion of the court said: “The cases prescribing the rule of damages where there has been an entire failure of title to-the premises, or some definite portion of them, or a total deprivation of the right of possession and enjoyment, have no application. If the eviction has been from all the lands conveyed, the recovery has been limited to the purchase-price paid and interest from the time of the' dispossession; if from a definite part capable of physical ascertainment and boundary, then to such part of the original price .as bears the same ratio to the whole consideration that the value of the land to which the title has failed bears to the value of the whole premises.”

With respect to the period of time for which interest shall be allowed, the decisions of the courts of our sister states are ■not harmonious. The Supreme Court of New York, as early .as 1805, adopted the rule that interest on the consideration money should be allowed to the vendee for so long a time as' he may be required to pay mesne profits to the owner of the paramount title'. The theory upon which this rule was adopted was that originally the vendee, if evicted, recovered only what was deemed an equivalent to the purchase-money, without interest, for he received other lands equal in value to the lands sold at the time of the sale. Chief Justice Kent, delivering the opinion of the court, said that the rule would be the same at this day had not the action for mesne profits been introduced, which takes away the intermediate profits of the land, and that, therefore, interest ought to commence at the point of time with the obligation to pay mesne profits. Staats v. Executors of Ten Eyck, 3 Cai. 111, 114. The rule adopted in this case has become the settled law in the State of New York. Caulkins v. Harris, 9 Johns. 324; Bennet v. Jenkins, 13 Id. 50; Baldwin, v. Munn, 2 Wend. 399, 405; Kelly v. Dutch Church of Schenectady, 2 Hill 105; 2 Kent 476; Sedgw. Dam. 182; Rawle Cov. Tit. 300. This rule of allowing interest only for six years has not been followed in Massachusetts. In Whiting v. Dewey, 15 Pick. 428, 435, Mr. Justice Wilde, delivering the opinion of the court, said: “In New York the rule is, in such a case, not to compute interest for more than six years back; but no such limitation has ever been sanctioned in this commonwealth.” Sumner v. Williams, 8 Mass. 162, 221; Smith v. Strong, 14 Pick. 128. The cases on this subject in the courts of our sister states are cited in Sedgw. Dam. 176, &c., and in 8 Am. & Eng. Encycl. L. (N. S.) 192, tit. “Covenants.”

In the present case the deed from the company conveyed no title to the dedicated lands. The plaintiffs got no title to the premises, and never can get title, unless the legislature should intervene and discharge the public use. They never had possession of the property or derived any benefit from the conveyance, and the land company has had the consideration money in its possession. Under these circumstances it would seem reasonable and consistent with the principle upon which the recovery of the consideration is allowed that the plaintiff should be allowed to recover the consideration paid, with interesfc from the time of payment; but this court, as far back as 1839, adopted as a rule in an action for the breach of a covenant of warranty of title on eviction to allow for damages the amount of the consideration money, with interest thereon not exceeding six years antecedent to the eviction, together with costs, and no more. This decision was made upon the citation and following of the New York eases. Morris v. Rowan, 2 Harr. 304. This rule for admeasuring damages is of so long standing in this state that it ought not to he disturbed at this time. We think it is applicable to this case.

The trial court laid down the correct rule for ascertaining the amount and value of the consideration paid, hut we think that the interest thereon should have been computed according to the rule laid down in Morris v. Rowan, supra.

There should be a new trial, unless the plaintiff will remit from the amount of his verdict the interest beyond six years.