Lisenby v. Newton

BRITT, C. Prettyman Barr, the plaintiff’s intestate, entered into a written contract with defendant Newton whereby Barr agreed to sell and Newton agreed to buy a certain tract of land; Newton promising to pay the stipulated price and interest thereon within two years from the date of the contract, and Barr covenanting to convey the land to Newton or his assigns on receiving such payment. The contract contained a provision that the stipulations thereof “are to apply to and bind the heirs, executors, administrators, and assigns of the respective parties.” Afterward, in consideration of a sum of money to him paid by defendant Sharpies, said Newton assigned all his right, title, and interest in and to the contract; and the premises which were the subject thereof, to said Sharpies. In virtue of such assignment Sharpies took possession of the land and made certain payments to Barr of principal and interest on account of the contract price. Plaintiff brought this suit on said contract against both Newton and Sharpies. The superior court rendered a decree ascertaining the amount of purchase money due from defendant Newton and ordering the sale of the land to raise such amount, with costs, etc., but directing also that no personal judgment for deficiency be taken against Sharpies. Plaintiff contends on appeal that Sharpies was personally responsible for the purchase money and interest.

Of course, no assignee of the purchaser in an executory contract for the sale of real estate can require the vendor to convey unless the purchase money be paid, but this conditional right to a conveyance is quite a different thing from personal liability to compulsory payment at the suit of the vendor; such liability can result only from some express or implied contract of the assignee, and is not implied from the mere assignment of the original contract, although followed by possession of the landy There are authorities which deny that a covenant can in any case run with an equity, or without a legal estate in the land; we need not inquire what limitations attend the principle, for it [573]is clear that the promise to pay the agreed price in a contract for the purchase of real estate is not of itself a covenant accompanying the equitable interest of the purchaser into the hands of his assignee. (Champion v. Brown, 6 Johns. Ch. 398; 10 Am. Dec. 343; Civ. Code, sec. 1461, et seq; see Fresno etc. Co. v. Rowell, 80 Cal. 114; 13 Am. St. Rep. 112. ) Hence, if Sharpies is liable at all in this action it must be in consequence of the clause of the contract which in terms extends the obligations of the instrument to the assigns of the parties; but since the promise to pay was only the personal covenant of the promisor, the attempt to include in its force the assigns of the vendee is inoperative; it was not competent for the parties in this manner to create a contract for such assigns. Such is the ancient rule of the common law; thus, it is said in the Touchstone: “In some eases an assignee shall be charged though he be not named, and in some cases shall not be charged though he be named, and in some cases he shall be charged when he is named.....And if the covenant be to do a thing merely collateral; in that case it will not bind the assignees albeit they be named expressly. Also when a contract is personal only, and a man doth bind himself and his assigns; his assigns shall not be bound hereby” (pp. 178, 179.) And in Sir Edward Coke’s report of Spencer’s case, 5 Coke, 16 a, we are informed that: “It was resolved .... if a man demises a house and land for years, with a stock or sum of money rendering rent, and the lessee covenants for him, his executors, administrators, and assigns, to deliver the stock or sum of money at the end of the term, yet the assignee shall not be charged with this covenant; for although the rent reserved was increased in respect of the stock or sum, yet the rent did not issue out of the stock or sum, but out of the land only; and therefore, as to the stock or sum, the covenant is personal and shall bind the covenantor, his executors and administrators and not his assignee.” The illustrious reporter remarked further: “Observe, reader, your old books, for they are the fountains out of which these resolutions issue.” Equally, in the case before us, the covenant is to pay a sum in gross not issuing out of the land, and not for its benefit or protection; in other words, it is a personal and not a real covenant, and possesses no transitive quality. (See 1 Smith’s Leading Cases, 6th Am. ed., 158, 162, 211.)