Brown v. Taylor

• Decision Date: 22 May 1905
• Parties: BROWN v. TAYLOR.
• Court: Tennessee Supreme Court

88 S.W. 933

115 Tenn. 1

BROWN v. TAYLOR.

Supreme Court of Tennessee.

May 22, 1905

Appeal from Circuit Court, Shelby County; J. S. Galloway, Judge.

Action by Harris L. Brown against Ford N. Taylor. From the judgment rendered, both parties appeal. Modified.

R. G Brown, for plaintiff.

Flippin & Neuhardt, for defendant.

McALISTER J.

The plaintiff below, Harris L. Brown, recovered judgment against the defendant, Ford N. Taylor, for the sum of $92.65, as damages for breach of covenant against incumbrances contained in a deed for the sale of land. Both sides appealed and have assigned errors.

The cause was heard by the circuit judge, without the aid of a jury, upon evidence which is practically undisputed. The record reveals that on the 29th of February, 1904, Ford N Taylor and wife conveyed to Harris L. Brown, by deed duly executed and recorded, a tract of land in the suburbs of Memphis, for which Brown agreed to pay the sum of $5,600 whereof $1,400 was paid in cash, and notes executed for the balance of the purchase money, due in one, two, and three years, with interest from date. The deed contained the usual covenants and warranties that the premises were free from incumbrances and that the grantors would forever defend the same against all lawful claims whatever.

It is disclosed by the record that the property was purchased by Brown for the purpose of making a subdivision, and it was agreed that, upon certain cash payments being made, any portion of the property desired would be released from the operation of the trust deed executed to secure the deferred payments.

It further appears that at the date of the deed there was an incumbrance on the land, consisting of an outstanding lease with 10 months to run before its expiration. It was contended on behalf of Taylor that Brown had actual knowledge of the incumbrance, and that the lessee thereby became his own tenant. It is shown that Taylor, the vendor, before executing the conveyance, stated to the agent who was negotiating the contract of sale that there was a gardener on the land who had a lease until such time as he could get his crop gathered for that year, probably some time in September or October and that he desired this gardener to be protected. It is further shown that this agent, before the deed was executed or title examined, communicated to Brown the fact that there was a gardener on the place and Taylor wanted him protected, and that this gardener was at the time paying as rental the sum of $7.50 per month. Brown replied that he did not know about the $7.50 per month, but supposed the matter could be arranged in some way. Plaintiff below now seeks to recover damages for breach of the covenant against incumbrances, upon the facts stated in regard to the existence of an outstanding lease on the premises. It is denied on behalf of Taylor that Brown is entitled to any recovery, for the reason that he accepted a deed with full knowledge of this incumbrance, and that he must look to the tenant for his protection. Counsel for defendant cites in support of his contention Ballard's Law of Real Property, vol. 6, § 142, in which the rule is thus stated: "Where the grantee in a conveyance of lands in fee simple which contains a covenant against incumbrances, and before execution and delivery of the deed, has actual knowledge of the existence of a lease made between grantor in said conveyance and a tenant, the tenant being in actual possession of the premises, the grantee cannot maintain against his grantor an action for breach of covenant"--citing Demars v. Koehler, 60 N. J. Law, 314, 38 A. 808. In the last case the court said: "There can exist no question in law that an outstanding term of an unexpired lease on the premises conveyed is an incumbrance, within the covenant against incumbrances contained in the deed of conveyance. Fritz v. Pusey, 31 Minn. 368, 18 N.W. 94; Jarvis v. Buttrick, 1 Metc. (Mass.) 480; Batchelder v. Sturgis, 3 Cush. 201; Carter v. Denmans' Ex., 23 N. J. Law, 261-272; Grice v. Scarborough, 2 Spears, 649, 42 Am. Dec. 391; Maupin on Real Estate, p. 293, § 125."

While this rule is undoubtedly supported by highly respectable authority, it is not in our view the sound rule, and is not sanctioned by the weight of authority. The true rule has thus been formulated in the Cyclopedia of Law and Procedure, vol 11, p. 1066, as follows: "Knowledge on the part of the purchaser of the existence of incumbrances on the land will not prevent him from recovering damages on account of it, where he protects himself by proper covenants in his deed"--that is to say, we may add, a covenant against incumbrances. The author cites in support of the text cases from 23 states of the Union, including the case of Perkins v. Williams, 5 Cold. (Tenn.) 512. In the last case cited, decided by this court in 1868, it was held that covenant of seisin embraces a defect of title, constituting want of seisin to covenant, although such defect of title was known to covenantee at the time of the making of the covenant. "Knowledge by covenant or of such a defect will not bar his action at law for breach of covenant"--citing American notes to Wallam v. Hearn, 2 Leading Equity Cases; also, Rawle on Covenants, c. 13. It is true that the matter involved in the last case was an alleged breach of covenant of seisin, and it was held that, while equity would not lend its aid to rescind a...