Johnston v. Markle Paper Co.

Citations

• 153 Pa. 189
• 25 A. 560
• 1893 Pa. LEXIS 1072

Syllabus

<p>Implied covenants in deed — Payment.</p> <p>The covenant against incumbrances implied in the words “ grant, bargain and sell,” will not be enforced to compel the payment of a mortgage existing on the land but not mentioned in the deed, where, under an agreement between the parties, other land is subsequently conveyed to the grantee, as payment of the mortgage.</p> <p>Peed- — Implied covenant against incumbrances — Payment.</p> <p>Three sisters owned as tenants in common two mill properties known as mill A. and mill B. On mill A. was a mortgage for $37,250. The mills were idle and unproductive, and the three sisters with other parties formed a corporation, to which mill A. was conveyed for the consideration of $70,000 in the paid-up capital stock of the corporation at par. No reference was made to the mortgage in the deed, because it was agreed that mill B. should also be conveyed to the corporation to be used for the payment of the mortgage, and to help to secure a working capital. Subsequently mill B. was conveyed to the company for a nominal consideration of $20,000, no part of which was paid or secured in any manner to the grantors. The company failed to sell mill B, and the mortgage remained unpaid, and the corporation was without working capital. A failure resulted, and the corporate property was sold for the benefit of creditors. A bill in equity was subsequently filed by a creditor of the company against the three sisters to compel the payment of the mortgage on mill A. Held, that the conveyance of mill B. to the corporation effected a payment of the mortgage, and that under the circumstances the covenant against incumbrances, implied from the words “ grant, bargain and sell,” could not be enforced.</p> <p>Equity — Creditors' bill — Intervention of parties — Participation in fund— Costs.</p> <p>On a creditor’s bill to enforce payment of unpaid subscriptions to the stock of a corporation, where other creditors subsequently intervene, the court may compel th