Geiszler v. . De Graaf
4 Bedell 339, 59 N.E. 993, 166 N.Y. 339 (1901)
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Rule of Law:
A covenant against incumbrances runs with the land and may be enforced by a remote grantee; however, the chain of liability is broken if an intermediate grantee takes title expressly 'subject to' the incumbrance.
Facts:
- On January 29, 1892, the defendants' testator conveyed lands to Knabe with a covenant against incumbrances.
- At the time of this conveyance, the lands were encumbered by a local assessment lien.
- On March 12, 1892, Knabe conveyed the same lands to Breirly, with the deed expressly stating the transfer was 'subject to the assessment.'
- On October 2, 1893, Breirly conveyed the lands to the plaintiff, Geiszler, with a covenant against incumbrances.
- On October 23, 1896, Geiszler paid the assessment, which then amounted to $341.31, to discharge the lien on his property.
Procedural Posture:
- The plaintiff, Geiszler, a remote grantee, sued the personal representatives of the original grantor to recover the amount he paid to clear an assessment lien.
- The intermediate appellate court ruled in favor of the defendants, finding that the covenant did not run with the land to the plaintiff.
- The plaintiff appealed to the Court of Appeals of New York, the state's highest court.
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Issue:
Does a covenant against incumbrances run with the land to a remote grantee, and if so, can the remote grantee recover from the original covenantor if an intermediate grantee took the property expressly subject to the incumbrance?
Opinions:
Majority - O'Brien, J.
No. While a covenant against incumbrances does run with the land to a remote grantee, the plaintiff cannot recover in this case because the chain of covenantal liability was extinguished by an intermediate conveyance. The court first overturned the old common-law rule that a covenant against incumbrances was personal and broken upon delivery, holding that since choses in action are now assignable, the reason for the old rule is obsolete. Therefore, the covenant against incumbrances runs with the land, similar to covenants of warranty or quiet enjoyment. However, the plaintiff's claim fails because his immediate grantor, Breirly, took the title expressly 'subject to' the assessment. This action relieved all prior grantors of liability to Breirly, as it is presumed Breirly received a reduction in the purchase price equivalent to the amount of the incumbrance. Because Breirly had no cause of action against the original grantor, he could not transmit one to the plaintiff. The plaintiff's only remedy is against his immediate grantor, Breirly, on the new covenant made in that deed.
Analysis:
This case is significant for modernizing New York property law by holding that a covenant against incumbrances runs with the land, thereby protecting remote grantees. It explicitly rejects the obsolete common-law distinction between covenants broken upon conveyance and those broken upon eviction. However, the decision also establishes a critical limitation: the covenant's protection is severed if an intermediate owner takes the property 'subject to' the known incumbrance. This ruling protects original grantors from liability where a subsequent purchaser has already been compensated for the defect in title through a reduced purchase price, preventing a potential windfall for the remote grantee.
