Simons v. Diamond Match Co.

Ostrander, J.

(after stating the facts). The declaration does not by direct averment, or by the averment of facts or circumstances, allege or import a breach of any covenant in the deed from defendant to Rothwell. The averments may be held sufficient to supply, inferentially, *246 the information that the premises were occupied at the time the said covenants were made. Employing this inference, they are sufficient to apprise defendant that the persons so occupying remained in possession after the deed was delivered to Rothwell, and that as against plaintiff their right to remain in possession was judicially determined. But in these averments no breach of any covenant is assigned. If it could be said that the averment that possession was demanded of defendant as well as of the occupiers is consistent only with the idea that defendant was unable to deliver possession, we are no better advised. The idea that an averment of eviction is to be found in the declaration is consistent only with the other idea that the deed to Rothwell conveyed the title to the premises and with the title constructive possession, since neither Rothwell nor plaintiff had actual possession. In this view of the matter, the covenant of warranty is not involved. And even if it should be assumed that the occupiers held under prior valid leases, and that the covenant against incumbrances was for that reason broken, it was broken when it was made. It is apparent, and is admitted, that the grantee, Rothwell, suffered nominal damages only. The contention is made that the testimony establishes the fact that plaintiff, and not Rothwell, was the real purchaser from defendant, and that therefore the covenants inured to the benefit of plaintiff. Clearly, no such theory as this is suggested in the declaration. In my opinion, the declaration is wholly bad, and the objection to receiving any testimony should have been sustained.

Some of my brethren do not agree with me, and are of opinion that, inasmuch as no demurrer to the declaration was interposed and a trial has been had, and especially because the declaration avers that the proceedings instituted by plaintiff to recover possession of the premises were so .instituted at the request of defendant, and were conducted with the advice and assistance of defendant, we should treat the declaration as sufficiently averring a breach of *247 one or more of the covenants in the deed from the defendant to Roth well. The information obtained from the testimony is that the parties in possession of the premises had leases, for years, from a former proprietor. After the chancery foreclosure the tenants attorned to the defendant upon the terms of their respective leases. They declined to enter into new arrangements with plaintiff.

An incumbrance, within the meaning of covenants in deeds, has been broadly defined as “every right to, or interest in the land granted, to the diminution of the value of the land, but consistent with the passing of the fee of it by the conveyance” (Prescott v. Trueman, 4 Mass. 627 , 629 [ 3 Am. Dec. 246 ]), used with approval by Cooley, J., in Post v. Campau, 42 Mich. 90, 95 ( 3 N. W. 272 ). See, also, 2 Greenleaf on Evidence (16th Ed.), § 242; Rawle on Covenants for Title (5th Ed.), §§ 75, 76. It is believed not to have been the practice in this State to except from the operation of the covenant against incumbrances outstanding leases. Yet it is clear that a term for years, under a prior lease, falls within the definition, and such a lease has been held to be an incumbrance within the meaning of the covenant. Rawle on Covenants for Title (5th Ed.), §§ 77, 78; Edwards v. Clark, 83 Mich. 246 ( 47 N. W. 112 , 10 L. R. A. 659). In some jurisdictions it is held that, where the purchaser accepts a covenant against incumbrances with knowledge of the tenant’s possession and claim, the lease will not be considered a breach of the covenant. In this State, although the deed is held to pass to the purchaser, as an incident of the reversion, the right to collect the rent reserved in the outstanding lease, evidence is not admitted to show that an existing incumbrance was to be regarded in fact as no incumbrance. And one who purchased with knowledge, and who had the benefit of the leases, was denied relief in equity. Haldane v. Sweet, 55 Mich. 196 ( 20 N. W. 902 ). Whatever doubt may have at any time been cast upon the doctrine that a bare covenant that the premises demised “ are free from all incumbrances whatever” is per *248 sonal, broken when made, if at all, and does not run with the land, no such doubt now. exists. Pease v. Warner, 158 Mich. 140 ( 116 N. W. 994 ). There is testimony tending to prove that defendant assured plaintiff that the tenants in possession had no right to possession, and assisted plaintiff in his attempt to secure possession through legal proceedings. I know of no way to add these oral assurances to the written covenants in the deed from defendant to Rothwell, so as to extend or enlarge the effect of those covenants. The fact remains that defendant covenanted with Rothwell that the premises were free from all incumbrances. They were not. The covenant was broken, and Rothwell had his right of action. It is conceded that his damages were nominal. He assigned his right to plaintiff, who is limited in his recovery to such damages as Rothwell had suffered.

As to the covenant of seisin, it also was broken, if at all, when made, and Rothwell’s right of action was an immediate one. It is contended, however, that a breach of the covenant of warranty is made out, and that this covenant is, as well, one for quiet enjoyment. It is conceded that, to constitute a breach of this covenant, there must be an eviction or a disturbance of possession under paramount titles and asserted that plaintiff’s possession was disturbed when he was held out of possession by the tenants. Conceding, for the purposes of the argument, that the particular covenant may be treated as a covenant for quiet enjoyment (see Peck v. Houghtaling, 35 Mich. 127 ; Rawle on Covenants for Title [5th Ed.], § 114, and notes), if the outstanding lease was a breach of the covenant, it was broken — the eviction, if there was one, took place — when the deed from defendant to Rothwell was made. Rothwell was not let into possession. Assuming that he had, by virtue of his conveyance, the constructive possession, he was evicted. The paramount title was then asserted, and for the breach Rothwell had his right of action. True, the covenant is prospective in character, and, until breach occurs, passes with the estate by descent *249 or purchase. But it is conceded that the right of action for the breach does not pass with a subsequent deed of the land. One who has parted with his interest in land parts with his right to enforce the covenants in his grantor’s deed, or in prior deeds, atleast, until he is made liable upon his own covenants and has satisfied his liability. These considerations do not afford the plaintiff any aid, and, in my opinion, they do support the proposition that an outstanding lease is in no instance a breach of the covenant of warranty, and should in all cases be held to be a breach of the covenant against incumbrances. Plaintiff’s title is not assailed What he seeks is indemnity for a loss of the use of the property he owns. He does not choose to assert his demand against his immediate covenantor. His rights are in any event limited by the damages accruing to his assignor, Rothwell.

In the view of the matter which has been indicated, the other questions raised and discussed by counsel become unimportant. A judgment should have been directed for the plaintiff for nominal damages, with costs to defendant. The judgment of the court below is reversed, with costs of both courts, and a judgment will be entered in the court below for the plaintiff for nominal damages.

Blair, C. J., and Grant, Montgomery, and Hooker, JJ., concurred.