The defendant purchased plaintiff's real estate which was heavily incumbered, under an agreement that the major portion of the purchase price should not be paid until the plaintiff had discharged certain of the incumbrances, and that, for the plaintiff's protection, the warranties in the deed of conveyance should be suspended for three years. Before the expiration of this period, the defendant was obliged to pay off the second and third mortgages to prevent the loss of his title by foreclosure. Held that he was entitled to credit these amounts upon the purchase price; there being no merit to the plaintiff's claim that the defendant's sole remedy under the agreement was an action for breach of warranty at the end of three years. One of the incumbrances which the plaintiffs agreed to remove was an assignment of rents to P, who was to pay the interest on the second mortgage. P also held the third mortgage. When the defendant discharged the third mortgage — having previously paid the second — it was arranged between him and P that, as part payment, P should retain the rentals which he had collected under the assignment subsequent to the transfer of the title to the defendant. Held that the plaintiff had no cause to complain of the transaction, since there was nothing in the agreement between the plaintiff and the defendant to alter the general rule that rents belong to the purchaser of real estate. Claims are not entitled to consideration in this court unless made in the court below.
CURTIS, J.
The plaintiff Nunziata Valente sold a tract of land to the defendant for $45,000, upon which the plaintiff, by the assumption of a $25,000 mortgage and a cash payment of $2,100, had paid those amounts on the purchase price, thus leaving $17,900 unpaid. There existed at the time of the sale, an assignment of the rents from the property to one Angelo Porto, two mortgages, and these attachments on the property, all duly recorded. As to these incumbrances, the grantee was protected by the warranties in the deed. At the time of making the deed, the parties entered into a contract (Exhibit A). The construction placed upon Exhibit A by the court appears in the above statement of facts.
Among the terms of the contract, it was agreed that the plaintiff Nunziata should discharge these incumbrances in three years, and that the defendant would not bring any action on any covenant of warranty or on the contract during three years.
Before the expiration of three years from the date of the transfer of the property, Kaufman and Sarason began the foreclosure of their second mortgage, and the amount due was found to be $5,135.84, and November 5th, 1918, fixed as the day of redemption. November 4th, 1918, the defendant paid that mortgage and charged Nunziata with the amount paid as a payment on the purchase price. The plaintiff claims that, as the contract gave her three years to discharge this incumbrance, the court improperly ruled that the contract did not deprive the defendant of the right to discharge the mortgage under the circumstances, protect his property and credit the amount paid as a part of the purchase price.
The situation presented by the failure of Nunziata to discharge this mortgage before the day of redemption, compelled the defendant to protect his property; and as he did so by paying an indebtedness of Nunziata that she was, under the warranty of her deed to him, obligated to pay, this payment by the defendant was properly credited by him as a payment on the purchase price.
It is to be borne in mind that this action is one begun by Nunziata before the three-year term provided for in Exhibit A had expired.
Nunziata claims that Exhibit A gave the defendant as his exclusive relief, when an incumbrancer threatened a foreclosure of the land he had bought, a right of action, at the expiration of three years from March 12th, 1917, against her on her covenant of warranty or on her breach of contract. Such a claim as to the meaning of Exhibit A under all the surrounding circumstances is so unreasonable as not to be sustainable.
In the same way, the defendant's payment of the mortgage to Angelo Porto was properly credited as a payment on the purchase price. The assignment of error, that the defendant paid more to discharge the Porto mortgage than the face of the mortgage warranted, cannot be considered, because no such claim was made in the court below and ruled upon.
The construction placed upon the contract (Exhibit A), that in view of all the surrounding circumstances the rent from the premises transferred belonged from the date of the transfer to the grantee, the defendant, was correct. Normally the purchaser of property is entitled to the rents, and where the rents had been previously assigned, as in this case, to a third party to collect and expend for the grantor, a transfer of the property with an agreement by the grantor to discharge such assignment, and a right of action given against the grantor on a warranty against such assignment, presents a situation which could not legally or logically be held to import that the rents belonged to the grantor after the conveyance to the purchaser.
If Nunziata failed to compel Angelo Porto to apply the rents collected by him on the debt secured by the Kaufman and Sarason mortgage, as he had agreed to do, and the grantee arranged with Porto to credit the rents collected on a mortgage by Nunziata on the property which the grantee was compelled to pay, such proceeding was not questionable and the grantor cannot complain because such rents collected were not treated as her money.
The construction of the contract by the court, as in no way prohibiting the course of conduct followed by the defendant in dealing with the situations created by the failure of Nunziata to discharge incumbrances when they became a menace to the possession and control of the property, was correct.
It follows that the statement of account made by the court, as set forth in the statement of facts above, was correct, and the judgment therefrom was properly rendered.