Lost Creek Coal & Mineral Land Co. v. Hendon , 215 Ala. 212 ( 1926 )

The action is for breach of covenants of warranty in conveyances of real estate.

An amendment correcting the description of the lands to which title failed is alcomplished by amendment to the erroneous lowable. It matters not whether this is account or by adding a new count.

The mere fact that the description is by government numbers, S.W. 1/4 of N.E. 1/4 of a given section, in one count, and S.W. 1/4 of N.W. 1/4 of same section, in the amended count, does not make a departure apparent. Whether the new count relates to a separate transaction is a question of fact to be determined by the jury or judge sitting as a jury. Code of 1923, § 9513; Pearson v. City of Birmingham, 210 Ala. 296, 97 So. 916; Brown v. Loeb, 177 Ala. 106, 58 So. 330; First Nat. Bank v. Morgan,213 Ala. 125, 104 So. 403.

Where an original count claims a breach as to specified lands, a count added by amendment, setting up a breach of the same covenants in the same deed as to additional lands, presents no new cause of action. The transaction brought within the lis pendens is the deed with covenants alleged to have been breached. The amendment merely adds other breaches, making a fuller claim for the damages resulting. Ala. Con. Coal Iron Co. v. Heald, 154 Ala. 580, 45 So. 686. It clearly appears, from the evidence, that count 4 of original complaint, describing the property as S.W. 1/4 of N.E. 1/4, and counts C and D added by amendment, describing it as S.W. 1/4 of N.W. 1/4, same section, all relate to breach or breaches of warranty in the same deed, conveying both forties, dated July 21, 1908, acknowledged March 6, 1909, delivered to plaintiff at a later date, and marked Exhibit B, as shown by bill of exceptions. The evidence of failure of title related only to the half interest in S.W. 1/4 of N.W. 1/4. But whether intended to correct description or to claim for a further breach, counts C and D were not subject to motion to strike.

The counts filed in 1925 related back to the commencement of suit November 20, 1917. Suits of this character are subject to the statute of limitations of 10 years. Code, § 8943. This period had not elapsed when suit brought, and the plea of the statute of limitations was not sustained. Other counts are based upon covenants in a deed of date October 1, 1907, acknowledged November 12, 1907. The evidence shows the deed was placed in escrow and not delivered to plaintiff until December 1, 1907.

For many purposes, the delivery to the grantee of a deed theretofore held in escrow relates back to the date when put in escrow. Prewitt v. Ashford, 90 Ala. 294, 7 So. 831.

This rule does not effectuate a running of the statute of limitations, in actions for breach of warranty, while the deed is in escrow. The statute does not begin to run until the cause of action has accrued. No cause of action accrued until the event, upon which it was to become effective by actual delivery to the grantee, had transpired. Ashford v. Prewitt, 102 Ala. 264,14 So. 663, 48 Am. St. Rep. 37. The statute of limitation of 10 years had not effected a bar as to any of the counts.

Knowledge of the grantee of a defect in title does not avoid the warranty. Warranties cover defects within the legal effect of such covenants, whether known or unknown. Copeland v. McAdory, 100 Ala. 555, 13 So. 545; Anniston L. Mfg. Co. v. Griffis, 198 Ala. 122, 73 So. 418. Parol evidence of a contemporaneous agreement not to rely upon the covenants of warranty violates the well-known rule against contradicting, or varying by parol, the terms of a valid legal instrument.

Plea 8, setting up knowledge of want of title in the grantee, that he did not rely on the covenants of warranty, but that they were inserted, at his request, upon the faith of his statement that he wanted the lands included to give color of title and enable him to perfect the title thereto, was subject to the demurrer interposed by plaintiff and sustained by the court. Holly v. Younge, 27 Ala. 203.

The case of Prestwood v. Carlton, 162 Ala. 327, 50 So. 255, relied upon by appellant on this point, involved fraud and misrepresentations inducing the signing of the contract, and not promises or understandings going to the effect of the contract. The point is made that a covenantee, who, after acquiring his deed and before the bringing of suit, has conveyed the lands to another, cannot longer maintain an action for failure or partial failure of the title warranted to him. This, upon the theory that a recovery upon a covenant of warranty works a rescission, and that such title as was conveyed must be reinvested in the covenantor, and that the grantee, by a conveyance of the property, has disabled himself to reconvey.

The general principle has been announced that a recovery of the purchase money for breach of warranty works a rescission. Mackintosh v. Stewart, 181 Ala. 328, 62 So. 1035. Two applications of this principle are recognized. Where a recovery is had for breach of a covenant of seisin by failure of title, the grantee is estopped thereafter to set up the deed as a conveyance of such title. Probably the same rule would apply to all covenants. If the full measure of recovery is had by a person entitled to sue therefor, this satisfies the covenant; it can no longer be regarded as a binding provision of the deed in favor of the grantee or his privies in estate. Alger-Sullivan Lumber Co. v. Union Trust Co., 207 Ala. 138, 92 So. 254; Rawle on Covenants for Title, § 184.

Again, in actions, usually in equity, where the grantee seeks to recover or abate the entire purchase money, title having failed only in part, such relief can only be had upon a rescission and offer to place the covenantor in statu quo. Alger-Sullivan Lumber Co. v. Union Trust Co., supra.

But it is a rule too well established to need citation of authority, that, upon entire failure of title to a part of the acreage conveyed, or on failure of title to an undivided interest in the whole or part of the lands conveyed, the grantee may keep what he has and sue for partial failure of title. His recovery is only for what he has lost. In such case, there is no revesting of title in the grantor; there is nothing to be reinvested. The cause of action for breach of covenant of seisin, warranty of title, or other covenant breached when made, does not pass to a purchaser of the lands from the covenantee. The cause of action remains in him. Gulf Coal Coke Co. v. Musgrove, 195 Ala. 219, 70 So. 179.

This further question is raised. Can a former owner of the lands, who conveyed with full covenants of warranty, upon repurchase from one holding through mesne conveyances from his grantee, sue for defect or want of title existing at the time he sold the property? Can the covenantee recover for failure of title he himself has theretofore warranted to those through whom he claims by repurchase? 15 C. J. p. 1231, § 41, after stating the rule that knowledge of defect in the title does not avoid the warranty, says:

"The general rule, it seems, does not apply * * * where a former owner with full knowledge of the condition of the premises seeks to recover upon a warranty contained in a reconveyance to him from a subsequent owner" (citing Allen v. Kersey, 104 Ind. 1, 3 N.E. 557).

It is a well-known rule that an after-acquired title by the grantor vests in the grantee or his successor, by virtue of his covenants of warranty, under the doctrine of estoppel. Sayre v. Sheffield Land, Iron Coal Co., 106 Ala. 440, 18 So. 101. The revesting of the covenantor, with the same estate he has conveyed, extinguishes all covenants running with the land, because all the benefit of the warranty vests in him who is liable under the warranty. Co. Litt, 490a, Preston, Touchstone. 201; Rowle on Covenants of Title, § 223; Brown v. Metz, 33 Ill. 339, 85 Am. Dec. 277.

We are of opinion the principles underlying these rules lead to the conclusion that a former owner, conveying with covenants of seisin and general warranty, and later repurchasing the lands with like warranties from one holding through him, cannot sue for want of title outstanding at the time of his former ownership. The rule would be different, if he had been required by his grantee or successor to make good his own breach of warranty. This ruling negatives any right of recovery in this plaintiff for failure of title to the undivided half interest in the mineral rights in S.W. 1/4 of N.W. 1/4, sec. 24, T. 14, R. 9, Walker county, which was conveyed by this plaintiff by warranty deed to H. J. Dashiell, through whom, by mesne conveyances, this defendant acquired the same.

Dealing with the other calls to which title failed, the fact that plaintiff was furnished part of the purchase money by associates, and, after obtaining his deed with the covenants sued upon, he conveyed to his associates undivided interests in the property, in proportion to the amounts furnished as per prior agreement between them, did not limit plaintiff's recovery to the amount furnished by him. As between the parties to the deed, he furnished the entire purchase money, and, as covenantee, he is entitled to sue for the entire breach. A covenant of warranty is not a contract for the payment of money upon which suit must be brought in the name of the beneficial owner, under Code, § 5699.

We recognize the rule that, if the covenantee has his title perfected, before suit brought, by his vendor's purchase of the outstanding title or otherwise, without cost or expense to the covenantee, he can recover no more than nominal damages.

But such result, we think, does not follow from the fact that, after a subsequent conveyance of the property by the covenantee, his subvendee perfects his own title by purchasing the outstanding title; nor is the recovery for breach of covenant of seisin, a covenant broken when made, limited to the amount the subvendee may have paid to perfect his title.

We conclude the plaintiff is entitled to recover as to the following calls: First. N. 1/2 of N. 1/2 of N.E. 1/4 of S.W. 1/4, sec. 13, T. 14, R. 9, 10 acres. Second. E. 1/2 of S.W. 1/4 of S.E. 1/4, sec. 13, T. 4, R. 9, 20 acres. Third. W. 1/2 of S.W. 1/2 of N.E. 1/4, sec. 18, T. 14, R. 9. 20 acres.

The judgment for plaintiff for purchase money paid for these lands, with the interest thereon, aggregating $1,790, is affirmed.

The judgment will be here corrected by striking out the sum of $456 allowed for S.W. 1/4 of N.W. 1/4, sec. 24, T. 14, R. 9.

The appellee will pay the costs of the appeal.

Corrected and affirmed.

ANDERSON, C. J., and SOMERVILLE and THOMAS, JJ., concur.