Mayhew v. Hardesty

The mortgagee of a term, after forfeiture, has the whole legal estate therein, and is liable on the real covenants m the lease whether ho becomes possessed of or occupies the premises in fact or not. To make a party liable under the covenants as assignee, he must he the assignee of the entire term, for otherwise he is but a mere sub-lessee, and as such not liable under the covenants. An interest in a term for more than seven years cannot be transferred or assigned, except in the mode prescribed by our registry laws, and no acts in pais short of a deed, duly executed and recorded, can transfer such interest. A bond of conveyance executed by a lessee to a purchaser of the lease, does not make such purchaser the legal assignee of the entire term, and he is not therefore liable under the covenants in the lease. A covenant to keep insured a factory, necessarily embraces the obligation to keep the fixed machinery, necessary to the operation of the factory, insured, among which would he included the water-wheel, shafting and gearing; the term “factory” embraces such fixed machinery.

Appear from the Court of Common Pleas of Baltimore city. Assumpsit by the appellant against the appellee to recover the amount paid by the plain tiff as premiums for certain policies of insurance. Plea, non assumpsit. Exception. The facts of the case appearing by the record are briefly these: Capron and wife, by deed dated the 26th of December 1845, leased to Heatb and Snowden, for ninety-nine years, renewable forever, two undivided thirds of certain lands, including certain water privileges appertaining to a factory about to be erected thereon, for the yearly rent of $900. This lease contained a covenant between the lessees, “their heirs, executors and administrators,” and the lessor, “bis heirs and assigns,” that the lessees, “their executors, administrators or assigns” should, during the continuance of the term, “ at their own proper cost and charge, insure or cause to be insured, and kept insured from loss or damage by fire, the factories and buildings erected or that may be erected” on the demised premises, in some insurance offices in the city of Baltimore; and should assign, to and for the use of tbe lessor, 1 wo undivided thirds of all the right and interest of the lessors or their executors, administrators or assigns, in each and every such policy of insurance, and shall pay the lessor, his heirs and assigns, or permit him or them to collect two-thirds of the money received on such policies to pay the rent, or by the permission of the lessor, his heirs or assigns, to apply the money to rebuilding or repairing such buildings as may be destroyed or injured by fire under the policies; and in case of default of the lessees to keep up the insurance or to assign the policies as aforesaid, then'the lessor, his heirs or assigns, may effect insurance thereon for his or their use at the expense of the” lessees, u their executors, administrators or assigns.” On the same day the lessees mortgaged to the lessor, to secure the punctual payment of the rent reserved in the above lease, all the machinery and fixtures then in or intended to be placed in the factory in course of erection on the demised premises. On the 6th of May 1846, and the 13th of January 1849, the lessor conveyed by two deeds, (one moiety by each,) the property in question, subject to the lease above stated, and the mortgaged machinery and fixtures, to Mayhew, the plaintiff, for $10,000. On the 12th of September 1849, the Avon-dale Manufacturing Company having acquired by mesne assignment all the interest of the lessees, Heath and Snowden, in the lease and demised property, mortgaged the same, with other property, to Hardesty, the defendant, to secure the payment of certain notes mentioned in the mortgage, the mortgagor covenanting to keep insured the buildings, machinery and fixtures, and until default in payment in the notes as they became due the mortgagor was to remain in possession of the property, but in case of failure to pay the same as they respectively fell due the mortgagee was to enter and possess the property. None of the notes mentioned in the above mortgage were paid at the time this suit was brought, though most of them had long since become due. In July 1850, Hardesty sold to Mason all his estate and interest in the property mortgaged to him, and Mason, by the authority and consent of Hardesty, then took possession of the same and has since continued to hold it, and has ever since regularly paid to Mayhew the ground-rent reserved by (he original lease. The arrears of ground-rent, due at the time of this purchase, was paid by Hardesty to Mayhew out of the purchase money paid by Mason. On the 14th of November 1850, Hardesty executed a bond of conveyance to Mason for the properly sold, reciting the terms of the purchase, in which, among other things, it was stipulated that Mason should keep •the factory and machinery insured until the payment of all the purchase money, and that the equity of redemption of the Avondale Manufacturing Company in the property had been conveyed to Hardesty by deed dated the 14th of November 1850. It was proved, that at the time of the original lease there were no buildings upon the land except two small houses; that the cotton factory, which was put in operation early in 184G or 1847, cost, exclusive of machinery, between $8000 and $10,000; and the cost of the movable machinery was from $12,000 to $15,000; that what is called fixed machinery includes the water-wheel, shafting and gearing; that there were two water-wheels of iron to the factory, which cost originally about $450 or $500; that in one of these wheels some alteration was made, which cost less than $400; that the other fixed machinery might have cost $500 or $1000. It was admitted that neither the original lessees nor Hardesty liad done anything in performance of the covenant for insurance in the original lease, between the 13th of October 1850 and the 4th of November 1852. The plaintiff, Mayhew, insured in the Etna Insurance Company on the 14th of October 1850, for one year, to the amount of $5000, viz., $2500 on the movable machinery in this factory, and $2500 on the building, paying therefor as premium $100; also in the Frauldin Fire Insurance Company of Philadelphia, on the 4th of November 1850, for one year, to the amount of $5000 outlie “cotton mill and water-wheel,” paying $1.00 premium; and also in the Etna Insurance Company on the 14th of October 1851, for one year, to the amount of $5000, viz., $2200 on the building and $2S00 “on the fixed machinery, including water-wheel, shafting, gearing,” &c., paying $100 premium. The property mentioned in these policies was on the demised premises at the time (he policies were effected. On these facts (lie plaintiil asLed the following instructions to the jury. 1st. That the plaintiff, as assignee of tlie reversion' in the property described in the lease from C apron to Heath and' Snowden, is entitled to recover the premiums or sum or sums of money paid by plaintiff to procure the insurance effected by the- policies given in evidence upon all the property described in those policies, except the property described as movable' machinery in the policy of the 14th of October 1850; if they find that tire said property was on the demised premises at the respective dates of said policies, and find that none of the notes described in the mortgage to Hardesty, given in evidence, have been paid, notwithstanding that said Hardesty had not possession of said mortgaged premises at the time when said premiums were paid or when some of them were paid. 2nd. That if they find the facts stated in the plaintiff’s first prayer, that then the plaintiff is entitled to recover the premiums or proportion of premiums paid for insurances effected on all the property described in all said policies, inclusive of the waterwheel but excepting the property described as cc movable machinery” and that described as “shafting, gearings,” See., although said Hardesty had not possession of said mortgaged premises when said premiums were paid. 3rd. That if they find the facts stated in the plaintiff’s first prayer, that then the plaintiff is entitled to recover the premiums or a due proportion of the premiums for effecting insurances effected on all the property described in all said policies, excepting the movable machinery, the water-wheel and shafting- and gearing, although said Hardesty had not possession of said mortgaged premises when said premiums were paid. 4th. If the jury find the facts stated in the first prayer, and' that Hardesty, in July 1850, contracted with Mason to sell all his estate and interest in the mortgaged premises, and to execute, at some future day, a deed therefor to Mason, upon certain conditions, to be performed according to the form and effect.of the bond of conveyance, dated the 14th of November 1850, and given in evidence, and that at the time of making this contract Hardesty agreed and stipulated, that Mason should or might take actual possession of and use the premises from and after the time of making this contract, and that in pursu&nce of this contract and agreement, Mason did take actual possession of the mortgaged premises from and after the time of making the contract, and has continued ever since to hold possession thereof, that then. Hardesty is to be considered in this action as a mortgagee in possession from and after the time of this contract; and then the plaintiff is entitled to recover the premiums paid by him to procure the insurance ■effected by the policies given in evidence upon all the property described in those policies, except the property described as “movable machinery” in the policy of the 14th of October 1850, if they find that none of the notes described in the mortgage to Hardesty, given in evidence, have been paid, and if they find that said policies were all effected after the date of the contract between Hardesty and Mason. 5th. If the jury find the facts stated in the first and fourth prayers, then the plaintiff is entitled to recover a due proportion of the premiums paid for effecting insurances on all the property described in all said policies, inclusive of the waterwheel, but excepting the movable machinery and that described as shafting and gearing. 6th. If they find the facts stated in the first and fourth prayers, then the plaintiff is entitled to recover the premiums, or a due proportion of the premiums, paid for effecting insurances on all the property described in all said policies, excepting the movable machinery, the water-wheel, shafting and gearing.. The court (Marshall, J.) rejected each and all of these prayers, and to this ruling the plaintiff excepted; and the verdict and judgment being against him, appealed.