[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 169 The law is too well settled to be doubted or shaken, that a lease like the one under consideration contains an implied covenant for quiet enjoyment. This covenant having been broken in this case, the plaintiff was entitled to recover, and the only serious question is as to the measure of damages.
The measure of damages, in an action against the vendor for breach of a contract for the sale of personal property, is the difference between the contract and the market price. But the same rule has not been applied against the vendor or lessor of real estate. Ordinarily, in an action against the vendor of real estate for breach of covenant of warranty, the vendee can recover only the consideration paid, and interest for not exceeding six years; and when the contract of sale is executory, no deed having been given, in cases where no part of the purchase money has been paid, the vendee can recover only nominal damages; and in cases where purchase money has been paid, he can recover the purchase money, interest and nominal damages. In an action by the lessee against the lessor for breach of covenant for quiet enjoyment, the lessee can ordinarily recover only such rent as he has advanced, and such mesne profits as he is liable to pay over; and in cases where the lessor is sued for a breach of a contract to give a lease or to give possession, ordinarily the lessee can recover only nominal damages and some incidental expenses, but nothing for the value of his lease. These rules, however *Page 172 much they may be criticised, must be regarded as settled in this State. But at an early day, in England and in this country, certain cases were declared to be exceptions to these rules, or more properly speaking, not to be within them; as, if the vendor is guilty of fraud; or can convey but will not, either from perverseness or to secure a better bargain; or if he has covenanted to convey, when he knew he had no authority to contract to convey; or where it is in his power to remedy a defect in his title, and he refuses or neglects to do so; or when he refuses to incur expenses which would enable him to fulfill his contract; in all these cases, the vendor or lessor is liable to the vendee or lessee for the loss of the bargain, under rules analogous to those applied in the sale of personal property. (Bush v. Cole, 28 N.Y., 261; Trull v. Granger, 4 Selden, 115; Driggs v. Dwight, 17 Wend., 71; Brinckerhoff v.Phelps, 24 Barb., 100; Tracy v. The Albany ExchangeCompany, 3 Seld., 472; Chatterton v. Fox, 5 Duer, 64; Dean v. Roesler, 1 Hilt., 420; Grant v. Tallman, 20 N.Y., 191;Conger v. Weaver, 20 N.Y., 140; Lock v. Furze, 1 Law Reports Com. Pleas, 441; Engle v. Fitch, 3 Law Reports Queen's Bench, 314.)
In the last case cited, COCKBURN, Ch. J., says: "The purchaser (of personal property) will be entitled to the difference between the contract and the market price. There is nothing in the nature of real property which, either on technical or general grounds, should take a contract for the sale of real estate out of this general rule, with one single exception, namely, that owing to the state of the law as to real property, the undoubted owner of an estate often finds, unexpectedly, difficulty in making out a title, which he cannot overcome; if, an obligation to make out title being implied in every such contract, the opposite party rejects the title and repudiates the contract, it seems not altogether unreasonable that he shall be entitled to no more than the return of the deposit, if any, and the expense of investigating the title. In this exceptional case, he is put, not in the condition in which he would have been if the contract had been performed, but in *Page 173 the condition in which he would have been if the contract had not been made. He is where he was before, without the estate and the benefits it would have brought him, if a title could have been made to it. But the limit of the exception is to be found in the reason on which it is based. The reason ceasing, the rule should cease." In the same case the learned judge says that the rule "should have no application when the failure either to make out a title or to give possession arises, not from the inability of the vendor, but from his unwillingness either to remedy a defect in the title or to obtain possession on the score of expenses."
In this case, the defendant resided in Buffalo, where the real estate was located, and he owned the real estate at the time he made the lease; and, in the absence of any proof to the contrary, he must be presumed to have known of the mortgages upon the real estate at the time he made the lease. He is, therefore, within the rule of law above alluded to, liable to the damages awarded against him, because he gave the lease knowing of the defect in his title. Then, too, he should be held liable to these damages because, being the owner of the equity of redemption, and there being, so far as appears, no obstacle in the way, he did not pay up the mortgages and thus perfect his title and protect the lease which he had given. Again, instead of purchasing the real estate at the mortgage sale jointly with Dorsheimer, why did he not, being the owner of the equity of redemption, bid off the real estate alone, and thus protect the lease which he had given, knowing of these incumbrances upon his title? So far as appears, it was not impracticable nor even difficult for him to do so. When he gave this lease, if he acted in good faith, he must have intended, in some way, to have taken care of these mortgages; and, because he did not do so, having the ability, so far as appears, to do so, he should be held liable to the damages recovered. He not only failed to do his duty to the plaintiff in any of the respects here indicated, but went actively to work to remove him from the premises, and succeeded in doing so. He can claim no benefit *Page 174 from the fact that he did not do it alone, but that he did it in conjunction with Dorsheimer. It is not certain that Dorsheimer would have purchased without him, or that he would have moved to dispossess the plaintiff without his co-operation, and against his wishes. He aided in dispossessing him, not of half the premises only, but of the whole; and hence he must, in this action, be responsible as if he had done it alone. Upon the whole, therefore, I am clearly of the opinion that the judgment should be affirmed.