Whittemore v. Farrington

.Learned, P. J.:

With scarcely any variation the facts are the same as they were on the former trial. (14 S. C. N. Y., 392.) It was there held on appeal that in the absence of fraud or misrepresentation, neither of which existed in this case, the purchaser of land who has neglected to take covenants in his deed has no relief at law or in equity. (See the cases there cited.) Indeed, this view seems to be accepted in the court below, as it was held that it was the plaintiff’s duty to examine and insist upon such covenants as would protect him, and that the acceptance of the deed was in full satisfaction and performance of the parol agreement. (Burwell v. Jackson, 9 N. Y., 535.)

But the court held that there was a mutual mistake as to the existence of the mortgage, and therefore the plaintiff should bo relieved in equity from the legal effect of such acceptance. There wTas, however, no mistake as to the nature and character of the deed. The plaintiff saw wliat it was and called the defendant’s attention to it, and then of his own free will accepted it. That acceptance was a consent on his part to take the property without any warranty.

The court below, however, held that, because the plaintiff was ignorant of the existence of this mortgage, therefore the acceptance *352of the quit-claim deed was under a mistake and should be relieved against. This cannot be so. If it were, the grantee in a quit-claim deed might always look to the grantor foy damages, in case the 'premises should prove to be incumbered by a mortgage, of which the grantee had no actual knowledge. This rule would have the effect of turning quit-claim deeds into deeds with full covenants. It would be contrary to the contract of the parties; to settled rules of equity, and of law (2 Kent Com., 473), and to the statute (1 R. S., m. p. 738, § 160).

Nor does it help the matter that, the court adds, the plaintiff believing, and having good reason to believe from the acts of the defendant, that the deed conveyed a good title, and that there was no incumbrance thereon.

The defendant never stated, expressly or by implication, that there was no incumbrance. The plaintiff’s own account of the con versation negatives any such statement. Nor did the defendant evei say any thing as to the effect of the deed until some months after it had been delivered and accepted. The defendant did argue, as the plaintiff says, that a sheriff’s deed was the best kind of a deed; but such a deed the plaintiff did not agree to take and did not take. There is no evidence whatever, up to the time of the acceptance of the quit-claim deed, showing any representations by the defendant as to the nature or effect of a quit-claim deed, or as to the actual condition of the property in respect to incumbrance. The case is entirely wanting of all fraud or misrepresentation.

Further, the defendant never agreed to give a warranty deed, and the court ought not to make a new contract for him. Whatever contract there was, arose out of the conversation of the parties. Assuming even that this contract would have justified the plaintiff in refusing to accept an incumbered title, it gave him no right to a warranty deed.

We have already seen that there was no mutual mistake as to the contents of the quit-claim deed. But the court below held that the ignorance, as to the existence of the mortgage, entitled the plaintiff to relief. In the recent case of Grymes v. Sanders (93 U. S. Rep., 55) the court say, that mistake to be available in equity must not have arisen from negligence where the means of knowledge were easily accessible. The party complaining must have exercised *353at least the degree of diligence which may fairly be expected from a reasonable person. The parties, in dealing with the property, stood upon a footing of equality; they judged and acted respectively for themselves. The contract was deliberately entered into on both sides.” The court refused relief.

That language applies to the present case. The means of knowledge were equally within reach of both. Examination at the clerk’s office would have informed the plaintiff of the existence of the mortgage. Where the fact is equally unknown to both parties, or where each has equal and adequate means of information, if the parties have acted with entire good faith, a court of equity will not interpose.” The like rule will apply to all cases of sale of real estate or personal estate made in good faith, where material circumstances affecting the value are equally unknown to both parties.” (1 Story’s Eq., § 150.)

But, granting that the contract for the exchange of these two pieces of property was made under mutual mistake, as to the existence of this mortgage, and that this was such a mistake as would authorize the plaintiff to maintain an action to rescind that contract, the difficulty is that the plaintiff does not ask for that remedy. He desires, not to rescind the contract, but to have the court make a new contract. After he had discovered the alleged mistake he spent money on the property. (Cobb v. Hatfield, 46 N. Y., 533.) The defendant might well say: I am willing to rescind the contract altogether, since there was a mistake, but I never agreed to pay a sum of money towards making the exchange.

If we take the simple facts of the case, the defendant verbally agreed to sell a piece of land to the plaintiff for so much; the plaintiff paid the price; the defendant executed a quit-claim deed; the plaintiff sent back the deed saying that the defendant said he would give a warranty deed; the defendant returned the quit-claim deed and the plaintiff kept it and had it recorded. Three months after he discovered a prior and a recorded mortgage on the premises, of which neither party knew; after the discovery he kept the property and spent money on it.

I think he must bear the loss, and that the judgment should be reversed and a new trial granted, costs to abide the event.