Dickson v. Desire's Administrator

LEONARD, Judge,

delivered tbe opinion of tbe court.

The question here is as to tbe capacity of tbe statute covenant of title, implied from the use of tbe words “ grant, bargain and sell,” to run with tbe land where tbe breach complained of is the total want of an estate in fee in tbe grantor. The possession of the land passed with the deed, and the title of the parties, whose claim to the damages is here sought to be enforced, is derived from the first grantee, through a sheriff’s conveyance, made upon an execution sale. It is thus seen that we are to deal with a question that has been the subject of frequent discussion in the courts of justice, on both sides of the Atlantic, and upon which it is impossible to reconcile the decisions not merely of different courts, but of the same courts at different periods of time. _ We proceed to state what we consider the general principles of law applicable to the subject, and then, applying these principles to the case before us, will state the practical results at which we have arrived.

The sale of a thing imports, from its very nature, an obligation on the part of the seller to secure to the purchaser the possession and enjoyment of the thing bought, the right to possess and enjoy being really that which is purchased. The obligation, therefore, is an incident of the transferred ownership, and goes along with it for its protection ; and, in order to afford the holder a just compensation when it is disturbed or lost, the benefit of the obligation devolves of course upon the successive owners. In this manner, it works out the purpose for which it is raised, by holding the original seller, who has the equivalent for the land in his own hands, to his just responsibility, and by yielding the indemnity to the party who has sustained the loss, and is entitled by succession as the last purchaser to the rights of the preceding proprietors in the same chain of title. This natural warranty of title, however, was not recognized by the common law. It was allowed upon the sale of a personal chattel, where the seller was in possession as the apparent owner ; but in reference to real property, the maxim *160 was adopted u caveat emptorand in such sales, therefore, a conventional warranty was resorted to in practice, which, attaching itself to the estate conveyed, ran along with the land as an incident to it for the benefit of the successive owners. The effect of this engagement was to oblige the warrantor to defend the estate to which it was annexed, into whosoever hands it went, which it accomplished by estoppel or rebutter, when the attack came from the warrantor himself, and by a recovery of other lands of equal value upon voucher or “ warraniia char-toe ,” when the attack came from a stranger ; and although this conventional warranty of the common law was considered so entirely an accessary obligation that it could subsist only as an incident to some estate in the land, this produced no inconvenience in the ancient system of conveyancing by feoffment and other similar assurances, which, operating upon the pos session, created by their own force estates de facto, (tortious estates, as they were called,) sufficient to support the warranty, and carry it along with the land to all the subsequent successors. In the progress of time, however, other modes of transfer were introduced under the statute of uses, which operated upon the right only ; and the present covenants of title superseded in English conveyancing the ancient warranty of the common law, which, yielding a recovery in money instead of land, were, for that reason, deemed personal covenants. But they also, without distinction, until broken, from their own nature and purpose, ran with the land, in the same manner as the ancient real warranty. When a breach occurs, however, they are converted into mere rights of action, and these rights are then arrested in the hands of the party who is the owner for the time being, and the action lies where it falls, under the ancient common law rule that forbids the assignment of these rights.

There seems, however, to be a distinction between the doctrine of the English courts and of some of the leading courts in the United States, as to the character of the breach of a covenant of seizin, that will produce this effect; the former *161 holding that it must be a final, complete' breach, giving a right of substantial recovery ; while in the latter, the doctrine seems to be that a mere nominal breach, from which no real damage results, is sufiicient to merge the covenant in the right of action, and to deprive it of the capacity of running with the land.The English doctrine is to be found in the case of Kingdon v. Nottle, (4 Maule & Selw. 53,) which was an action by the devisee of the land upon the covenant of seizin in the defendant’s conveyance in fee, and it has been followed in Indiana, (Morton v. Baker, 5 Blackf. 232 ); and in Ohio, (Backus v. McCoy, 3 Ohio; Foote v. Barnett, 10 id. 317 ; Devore v. Sunderland, 17 id. 55); and, in reference to the covenant against encumbrances in North Carolina, (McCrady v. Brisbane, 1, Nott & McCord, 104); and formerly in Massachusetts, (Prescott v. Trueman, 4 Mass. 627 , and Sprague v. Baker, 17 id. 588.) But now in Massachusetts, as well as New York, and several other states, the covenant of seizin is considered to be, under all circumstances, a covenant in the present tense, which, if broken at all, is broken at the moment of its creation, and is immediately converted into a mere chose in action, which is incapable of running with the land. The rule seems to be the \ same, both here and in England, that the breach extinguishes j the covenant and renders it incapable of running with the land; j but the difference is in its application — in determining under what circumstances the'breach is to be considered as having this effect; the English courts holding that the breach of the covenant of seizin is not final and complete until the right of substantial recovery exists, while in most of the United States this effect is supposed to result from the formal breach, without any regard to the question of damage.

In the English case of Kingdon v. Nottle, before referred to, where the possession passed with the deed, Lord Ellenborough remarked that “ here the covenant passes with the land to the devisee, and has been broken in the time of the devisee;* for, so long as the defendant has not a good title, there is a continuing breach, and it is not like a covenant to do an act of *162 solitary performance, but is in the nature of a covenant to do a thing toties quoties, as the exigency of the case may require. Here, according to the letter, there has been a breach in the testator’s lifetime ; but, according to the spirit, the substantial breach is in the time of the devisee, for she has thereby got the fruit of the covenant in not being able to dispose of the estate.” These observations were severely criticised in Mitchell v. Warner, ( 6 Conn. 497 ,) where it was said by the Chief Justice, "I affirm that the novel idea attending the breach in the testator’s lifetime, by calling it a continuing breach, is an ingenious suggestion, but of no substantial import. Every breach of contract is a continuing one until it is in some manner healed; but the great question is, to whom does it continue as a breach ? The only answer is to the person who had the title to the contract when it was first broken. It remains as it was, a breach to the same person who first had a cause of action upon it. If it be any thing more, it is not a continuing breach, but a new existence. In the next place, I assert that it is like a covenant to do an act of solitary performance ; and for this plain reason, that it is in its nature a covenant for a solitary act, and not for a successive one. It has no analogy to a covenant to do a future act at different times, which may undergo repeated breaches. It can not be partly broken and.partly sound, but the grantor is seized or not seized, and therefore the covenant is inviolate or violated wholly. I therefore conclude that the judges pronouncing it would have been of an opinion different from the one expressed, had they recognized the principle, here well established, that the breach of the covenant of seizin is in its nature total, and the measure of damages the whole consideration paid for the land.”

It is thus seen that the real point of difference is, that in England the covenant of seizin is, under some circumstances, a mere covenant of indemnity; but in most of the United States, it is always a present covenant, which, if ever broken, must be broken as soon as made, and upon which, of course, *163 only one recovery can be bad, tbe right to which accrues as soon as the covenant is entered into.

The true question would then seem to be, at what time the right of substantial recovery accrues; whether at the moment of the delivery of the deed; or, is it postponed under any circumstances until the actual damage is sustained ? It would seem quite impossible to hold, as we were asked to do in a case before us at the present term, that the cause of action accrues immediately, so as to set the statute of limitations in motion against the party, if we are to hold that during the whole period of its running, the party could not have recovered any thing more than nominal damages ; and it would seem quite unreasonable to say that the party could not have a real recovery upon the mere formal breach, because no actual damage has resulted to him from the want of title, and yet afterwards to allow him to recover not on account of; any damage that had accrued to himself,-but in respect to the loss that had fallen upon his grantee.

Our course of decision must, if possible, be such as to avoid these difficulties. In Collier v. Gamble, ( 10 Mo. 466 ,) the covenant was created, by the statute, and the land had passed and been enjoyed according to the deed, and the breach complained of was a paramount title in a stranger, that had not yet been either asserted or extinguished. In the opinion of the court, it is remarked that “ the existence of a paramount title, whether it has been asserted or not, is a breach of the statutory covenant; and if for such breach the grantee is permitted to recover the consideration money and interest, he may get both the purchase money and retain possession of the land under a title which is defeasible, but which may in fact never be defeated. In such cases, the reasonable rule is to recover nominal damages only, until the estate conveyed is defeated or the right to defeat it has been extinguished. (Prescott v. Trueman, 4 Mass. 627 ; and Wyman v. Bollard, 12 id. 302.) This avoids the manifest injustice of permitting the plaintiff to recover the value of the land, and at the same time retain posses *164 sion under a title which may never be disturbed, or the defects of which may be remedied by the payment of an inconsiderable sum. It is the rule which prevails in the construction of covenants against encumbrances, and our statutory covenant of seizin is, in fact, a covenant against encumbrances as well as of seizin.” And the judgment was, that, under the circumstances of the case, the party was entitled to a nominal recovery only ; and, although it was also decided that the covenant did not, in reference to the breach, run with the land, so as to pass the benefit of it to the grantee of the covenantee,’ yet we may remark that the suit for the use of the last purchaser was in the name of the first grantee, under an express assignment of the right of action ; and so the result of the decision, as to the substantial rights of the parties, is not inconsistent with any we shall hold in the present case. The same doctrine, in reference to the recovery being nominal, seems to have been applied under similar circumstances, not only in the states to which we have already referred, but also in New York, (Delavrye v. Morris, 7 Johns. 358 ); in Maine, (Bean v. Mayo, 5 Maine, 94); and Vermont, (Richardson v. Dow, 5 Verm. 9 ). The eifect of these decisions, we think, is to convert the covenant of seizin, under such circumstances, substantially into a covenant of indemnity against the damage that may result from the want of lawful title ; and if so, it leaves the capacity of the covenant to run with the land untouched, until the damage has actually resulted to the party. This is the view taken by the courts in Ohio, and, accordingly, in Backus’ administrator v. McCoy, (3 Ohio, 216,) the judge, who declared the opinion of the court, laid down the doctrine that “ when the heir or assignee acquires any interest in the land, however small, by even an imperfect or defective title, he shall be entitled to the benefit of all those covenants that concern the realty ; and when he has been evicted by permanent title, he is the party damnified by non-performance of the grantor’s covenants, and for such may sustain an action. This seems to be reasonable in itself, as well as in accordance with the terms of *165 the covenant. By considering the covenant of seizin as a real covenant attendant upon the inheritance, it will form part of every grantee’s security, and make that which otherwise must be either a dead letter or a means of injustice, a most useful and beneficial covenant — a dead letter, when an intermediate conveyance has taken place between the making of the covenant and the discovery of defect of title, and the covenantee refuses to bring suit — a means of injustice, when, after the co-venantee has sold and conveyed without covenants, he brings and sustains an action on the ground that the covenant was broken the moment it was entered into, and could not, therefore, be assigned. When lands are granted in fee by such a conveyance as will pass a fee, and the grantor covenants that he is seized in fee, we can perceive no objection, legal or equitable, to this covenant, as well as the covenant of warranty, passing with the land, so long as the purchaser and the successive grantees under him remain in the undisturbed possession and enjoyment of the landand it was again reasserted, many years afterwards, in the recent case of Devore v. Sunderland (17 Ohio, 55). We are disposed to take a similar view of our statute covenant. It proceeded, no doubt, from an instinctive feeling of the moral propriety of requiring a party, who sells land, and not merely his own interest in it, whatever that may be, and conveys it by words of transfer appropriated to such a transaction, to secure to the purchaser, and those who succeed him in his rights, the enjoyment of the property sold, and to indemnify them, if it should be lost, by reason of any defect of title. This construction, we think, will best promote the object the legislature had in view, and subserve the purposes of justice in transactions of this kind ; and we may remark here, historically, that the state of Maine, in the recent revision of her laws, has expressly provided that the right of action upon a covenant of seizin shall vest in the assignee of the land, so as to enable him to sue and recover in his own right after an eviction by a title paramount. (R. S. 1841, tit. 10, chap. 115, sec. 16; Prescott v.Hobbie, 30 Maine, *166 346.) When, therefore, a defeasible title, or the possession without any title, has passed under the deed, we shall consider the statute obligation in respect to the title rather as one of indemnity, which, running with the land until the damage is sustained, enures to the benefit of the party on whom the loss falls. The general doctrine of the old law, as to the real warranty, that when no estate passes to which the warranty can be annexed, the benefit of it does not run to a subsequent assignee, admitting it to be applicable to the modern covenants of title, is obviated in cases like the present by the American decisions, that a conveyance by a grantor in possession under a claim of title passes an estate to the grantee sufficient to carry the'covenants to any subsequent assignee. (Slater v. Rawson, Met. 489; Marston v. Hobbs, 2 Mass. 439 ; Willard v. Twitchel, 1 New Hamp. 178; Beddoes v. Wadsworth, 21 Wend. 120 .)

We proceed now to apply these principles to the case before us. The deed under which Desiré, the original grantor, derived his title, was ineffectual to pass the fee, on account of the defect in the certificate of acknowledgment, as has been again decided at the present term; but as the actual possession went along with the deed, the covenant attached itself to the land and ran with it, until the paramount title was discovered and asserted. The covenant accordingly passed under the sheriff’s conveyance to Dorsett, not as an independent subject of sale, but as an incident to the possession and apparent ownership of the land, upon the same principle that ic would have passed had the sale and transfer been made by the owner himself. When paramount title was asserted, the party upon whom the loss fell became entitled to an action on the covenant for the damage he had sustained. The amount of this damage, however, is not admitted in the agreed case, nor do we think there are sufficient facts in it from which we can ascertain the amount as a matter of law.

On a covenant of warranty or seizin, where the transaction remains between the original parties, the measure of damage is the value of the land at the time of the sale, as fixed *167 by the parties themselves in the price given and received. When, however, the original grantee-has sold the land to another, and the second purchaser has been evicted, the damage he has sustained is the value of the land at the time of his purchase, and his right of recovery against the first grantor upon the original covenant must, of course, be limited to his actual loss, although it can not exceed the liability of the first vendor to his immediate grantee. These are our present views upon this subject; but as the question as to the amount of. the damages has not been argued, and as the judgment must be reversed, what is said upon that subject need not be considered as concluding us in any subsequent investigation of the case. It is admitted that upon this covenant it is not necessary for the party to show an eviction, but then he must show an outstanding paramount title which has resulted in some damage to himself ; and if he insists that he has extinguished this title, and seeks to recover the cost of it, he must show affirmatively that the price paid was reasonable; and whether this were so or not depends on the value of the lot at the time of the compromise, and not upon what it was worth either when Mrs. Duncan purchased, or when it was subsequently sold at sheriff’s sale. Indeed it may be, for aught we know, that the whole lot, at the time of the compromise, was worth very little more than twice the sum then paid for half gí it. If, however, it were in fact worth the five hundred, and one half the purchase money paid by Dorsett, then the price paid was reasonable, and he and those claiming his rights are entitled, as we now think, to recover these two sums ; but whether he will be entitled to interest upon the half of his purchase money, depends'upon circumstances, not now disclosed. (Lawless v. Collier’s executors, 19 Mo. 485 .) The judgment is accordingly reversed, and the cause remanded ;

Judge Ryland concurring.