Lehman v. Paxton ( 1898 )

Opinion by

Porter, J.,

The defendant entered into a sealed written agreement with the plaintiff to convey a fee simple title to a certain tract of land for a price named, “ clear of all incumbrances.” Pursuant thereto, a deed was executed and delivered between the parties. Subsequently the grantee was compelled to pay a lien filed for unpaid purchase money, due the commonwealth. This suit raises the question whether the grantee can recover from the grantor, the amount so paid.

The court below directed a verdict for the plaintiff, on the ground that tbe stipulation contained in the agreement of sale to convey “ clear of all incumbrances ” was not merged in the deed subsequently executed, and that therefore the plaintiff was entitled to recover.

It has been held that the acceptance of a deed in pursuance of a contract of sale is presumably in satisfaction of all previous covenants. The rule is not, however, without exceptions. In Selden v. Williams, 9 Watts, 9, it is said “the deed is in many cases to be considered not as a merger of the contract, but as a part performance of it. The contract remains binding as to the further stipulations contained in it, conferring valuable rights on the plaintiffs and forming part of the consideration on which they contracted to pay the purchase money, and accept the deed.” See also Brown v. Moorhead, 8 S. & R. 569; Anderson v. Long, 10 S. & R. 55: Neil v. Thompson, 4 Watts, 405.

In the present case, the agreement of sale was left in the possession of the attorney for the vendee. The language used in Cox v. Henry, 32 Pa. 18, is pertinent. “ Where there is a covenant of warranty entered into at the time of the contract for the sale of land, and a similar covenant is embodied in the deed afterwards accepted, the first covenant is merged in the last, so far as regards the measure of damages. But a special covenant to indemnify the vendee against all costs, charges, and damages, on account of any action that might be brought against him by any claimant of tbe land, retained by the vendee, after receiving the conveyance, in which there is no similar covenant, is not merged in or extinguished by such deed.”

This distinction is borne out by the later cases. In Stockton v. Gould, 149 Pa. 68, it was held that a written contract for the exchange of real estate by which each party assumed the mortgage on the property to be conveyed to him was not merged in deeds subsequently executed containing no expressed assumption of the mortgages. See also, McGowan v. Bailey, 146 Pa. 572.

In Close v. Zell, 141 Pa. 390, Mr. Justice Green sustains a parol stipulation by a vendor to refund purchase money on failure of title, and holds that it was not merged in the deed. The opinion is exhaustive, and contains this language : “ It thus appears from the cases now cited that,: whether the agreement for indemnity was made before or at the time of the sale, or after-wards, tbe right to recover indemnity in an action on the special agreement is sustained, and that whether the agreement was by writing or in spoken words is a matter of indifference. Such an agreement is not merged in the deed if made before or at the time of the deed, and is not destroyed by a covenant of general warranty in the deed if made thereafter.” This determines the case in favor of the appellee.

The appellant here is in this position. If the clause of general warranty in the deed is broad' enough to support the present action, then the agreement to convey clear of all incumbrances is superseded by the provisions of the deed. If the clause of general warranty does not comprehend the agreement to convey clear of all incumbrances, then such agreement is not merged in the deed. The execution of the deed superseded the contract to convey to the extent that the deed included the provisions of the contract. The provisions which are not included, still remain of force by virtue of the original contract. The use of the word “ merge ” in this connection is perhaps not accurate. The agreement does not merge in the deed, but is superseded by the deed. The agreement to convey clear of all incumbrances is not embodied in terms in the deed in this case. It is therefore an obligation subsisting and enforceable.

The assignments of error are .dismissed, and the judgment of the court below is sustained.