Geiszler v. . De Graaf
59 N.E. 993, 166 N.Y. 339, 4 Bedell 339 (1901)
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Rule of Law:
A covenant against incumbrances runs with the land to a remote grantee, but this right of enforcement is extinguished if an intermediate grantee in the chain of title takes the property expressly 'subject to' the incumbrance.
Facts:
- On January 29, 1892, the defendants' testator, De Graaf, owned land encumbered by a local assessment.
- On that day, De Graaf conveyed the land to Knabe with a deed containing a full covenant against incumbrances.
- On March 12, 1892, Knabe conveyed the land to Breirly through a deed that expressly stated the property was 'subject to the assessment.'
- On October 2, 1893, Breirly conveyed the land to the plaintiff, Geiszler, with a covenant against incumbrances.
- On October 23, 1896, Geiszler paid $341.31 to discharge the lien of the assessment on the land.
Procedural Posture:
- The plaintiff, Geiszler, a remote grantee, sued the personal representatives of the original grantor, De Graaf, to recover the sum he paid to discharge an assessment.
- The Appellate Division of the Supreme Court of New York ruled against the plaintiff.
- The plaintiff appealed the decision to the Court of Appeals of New York, the state's highest court.
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Issue:
Does a remote grantee have a right to recover from an original grantor for breach of a covenant against incumbrances, even when an intermediate owner in the chain of title took the property expressly 'subject to' that incumbrance?
Opinions:
Majority - O'Brien, J.
No, a remote grantee does not have a right to recover from an original grantor for breach of a covenant against incumbrances when an intermediate owner took the property expressly 'subject to' that incumbrance. First, the court holds that the covenant against incumbrances is not merely a personal promise but runs with the land, allowing a remote grantee to sue a prior grantor. The court abandons the old common law rule, reasoning that its foundation—the non-assignability of choses in action—is now obsolete. However, the plaintiff's right to recover is blocked by a 'fatal obstacle.' The intermediate grantee, Breirly, accepted a deed that was expressly 'subject to the assessment.' The court presumes this means the purchase price was reduced by the amount of the assessment, effectively providing Breirly with the funds to pay it. By accepting the property on these terms, Breirly extinguished his right to sue any prior grantors on the covenant. Because the plaintiff Geiszler acquired only such rights as his immediate grantor (Breirly) could assert against prior grantors, and Breirly had no such right, Breirly could not transmit a cause of action to Geiszler. The chain of liability was broken, and Geiszler's only remedy is against his own grantor, Breirly, on the new covenant in that deed.
Analysis:
This decision modernizes New York property law by establishing that a covenant against incumbrances runs with the land, aligning the state with the modern trend and rejecting an obsolete common-law rule. However, its greater significance lies in the major exception it carves out: the chain of liability is severed when any grantee in the chain of title accepts the property 'subject to' a known incumbrance. This creates a bright-line rule that protects original covenantors from liability where an intermediate owner has effectively assumed responsibility for the defect, presumably in exchange for a lower purchase price. The ruling underscores the critical importance of the specific language used in deeds for determining the rights of subsequent purchasers.
