Opinion
06-08-1927
SECURITY TRUST & SAVINGS BANK v. REED et al.
Wm. D. Lippincott, of Camden, for the motion. Knight & Orlando, of Camden, opposed.
(Syllabus by the Court.)
Suit by the Security Trust & Savings Bank, executor of the last will and testament of Caroline E. Colwell, deceased, against Leonard Reed and another, to foreclose a mortgage. On motion by complainant to strike out affirmative defenses. Motion granted.
The bill seeks foreclosure of a purchase-money mortgage. The answer of defendant mortgagor sets up, by way of defense, the claim that, at the time the land was conveyed to defendant and the purchase-money mortgage was executed by him, two prior mortgages existed against the premises, which mortgages are still outstanding and unpaid, and also the claim that, since the conveyance was executed, defendant has ascertained that his vendor did not have title to an undivided one-half part of the premises so conveyed. Credit is sought for the amount of the incumbrances and for the failure of title to part of the land. No fraud or mutual mistake is alleged. Nor does it appear that the deed of conveyance to defendant contained either covenants of title or covenants against incumbrances.
Motion is now made in behalf of complainant to strike out these affirmative defenses.
Wm. D. Lippincott, of Camden, for the motion.
Knight & Orlando, of Camden, opposed.
LEAMING, Vice Chancellor (after stating the facts as above), In the absence of fraud or mistake, defenses of this nature are wholly dependent upon the covenants contained in the deed of conveyance. When the deed from complainant to defendant contains a covenant against incumbrances the mortgagor will be entitled to a deduction for prior incumbrances. This is because in such circumstances that covenant may be deemed already broken when made and this court may appropriately determine an issue of that nature. When the deed contains a covenant of title, this court will not undertake to adjudicate an issue of title to determine whether the covenant has been broken, but will leave that issue for the courts of law. This is because the primary jurisdiction for adjudication of legal titles rests in courts of law. If there has been an ouster under a paramount title, the covenant of title may be deemed broken, and relief may be awarded; otherwise the utmost relief this court will grant in such circumstances is to stay the foreclosure pending an action at law. When the deed contains no covenants, no relief will be awarded. This is because, in buying without covenants, the doctrine of caveat emptor must apply, and the deed is to be regarded as the final expression and measure of the engagements of the respective parties. These views will be found to be adequately supported in the cases cited in Kuhnen v. Parker, 56 N. J. Eq. 286, 38 A. 641, and Hawthorne v. Odenson, 94 N. J. Eq. 588,120 A. 797, to which should be added Ratkewicz v. Kara, 89 N. J. Eq. 203, 103 A. 912.
It follows that, since the affirmative defenses disclose neither fraud nor mutual mistake nor covenants of title nor covenants against incumbrances, complainant's motion must prevail.