Cover v. McAden

• Decision Date: 02 June 1922
• Docket Number: 550.
• Citation: 112 S.E. 817,183 N.C. 641
• Parties: COVER ET AL. v. MCADEN ET AL.
• Court: North Carolina Supreme Court

112 S.E. 817

183 N.C. 641

COVER ET AL. v. MCADEN ET AL.

No. 550.

Supreme Court of North Carolina

June 2, 1922

Appeal from Superior Court, Buncombe County; Shaw, Judge.

Action by S.E. Cover and others against H. M. McAden and others. From the judgment, all parties appeal. Affirmed.

Clark C.J., dissenting.

Civil action to recover damages for alleged breach of warranty of title, heard by Shaw, judge, at the April term, 1922, of Buncombe, the cause having been removed from Cherokee by consent. The parties waived a trial by jury and agreed that the court, after hearing the evidence and the argument should answer the issues. The plaintiff introduced in evidence the following:

(1) A deed from Edwin B. Olmsted and wife to Levi Stevens, dated February 7, 1868, purporting to convey about 5,000 acres of land in Cherokee county.

(2) A deed for the same land from Levi Stevens and wife to the United States of America, dated March 15, 1869.

(3) An agreement between J. H. McAden, trustee, and F. P. Cover dated October 29, 1902, by which McAden was to sell and Cover was to buy certain tracts in Cherokee and Clay containing several thousand acres.

(4) A deed, with several, but not joint, covenants of warranty, from H. M. McAden and others to S.E. Cover and others dated February ______, 1905, executed in pursuance of said agreement.

(5) A deed, with the usual covenants of warranty, from S.E. Cover and others to the Hiawassee Lumber Company conveying the land described in the deed from McAden to Cover.

It was admitted that the plaintiffs are the children of F. P. Cover. It is not necessary to refer particularly to the orders making additional parties or to the special proceedings for the sale of the interest of minors.

Plaintiffs introduced also a judgment of the District Court of the United States for the Western District of North Carolina rendered at March term, 1919, in an action entitled "United States v. Hiawassee Lumber Company," adjudging that the plaintiff in that action was the owner of the land conveyed in the Olmsted and Stevens deeds. This is a part of the land conveyed by McAden and others to the Covers and by the Covers to the Hiawassee Lumber Company.

The plaintiffs alleged that the United States was seized in fee of the land described in grant No. 3110 at the date of the deed from McAden and others to the Covers, and that the makers had no title to convey, and that, after the District Court adjudged the United States to be the owner of this land, the plaintiffs paid to the Hiawassee Lumber Company the amount received as the purchase price with interest at 6 per cent. from date of receipt to date of payment, namely, May 22, 1919. The plaintiffs have sued to recover $5,922, with interest. His honor answered the issues, finding that defendants, except the minors, covenanted to warrant and defend the title to the lands described in the complaint, that title vested in the United States by virtue of the Olmsted and Stevens deeds, that the plaintiffs and defendants had notice of the action of the United States against Hiawassee Lumber Company, that plaintiffs accounted to the Hiawassee Lumber Company for the loss caused by its breach of warranty, and that the judgment of the district court and plaintiffs' settlement with Hiawassee Lumber Company constituted an ouster, and assessed certain damages. His honor answered the seventh issue as follows:

"Is the cause of action of the plaintiffs barred by the statute of limitations, as alleged in the answer? Answer: Yes; the court being of the opinion that plaintiffs are estopped by reason of the judgment in United States Circuit Court in the case of United States v. Hiawassee Lumber Company to deny that their cause of action arose upon the execution of the deed to them by the defendants in 1905; and the court further is of the opinion, and so holds, that under the judgment above mentioned the title to the lands in controversy, in so far as plaintiffs and defendants are concerned, was in the United States, and, the plaintiffs and defendants having neither of them been in the actual possession of any part of said property, that the plaintiffs' cause of action arose immediately upon the execution and delivery of the said deed to them by the defendants."

Judgment. All parties appealed.

Martin, Rollins & Wright, of Asheville, for plaintiffs.

Tillett & Guthrie, of Charlotte, for defendants.

ADAMS J.

The United States acquired its title on March 15, 1869. In February, 1905, McAden and his cotenants executed their deed to the Covers, and on May 17, 1906, the Covers made a conveyance to the Hiawassee Lumber Company, reserving certain timber and minerals, with right of entry for purposes designated in the deed. On August 19, 1910, the United States brought suit against the Hiawassee Lumber Company in the District Court for the Western District of North Carolina, and at the March term, 1919, recovered a final judgment declaring the plaintiff in that action to be the owner of the land in controversy. In answer to the fourth issue his honor concluded that the District Court had adjudged the United States to be the owner of 2,632 acres of the land embraced in the deed executed to the Covers by McAden and his cotenants. This land was included also in the deed from the Covers to the Hiawassee Lumber Company. After rendition of the final judgment in the District Court the plaintiffs refunded to the Hiawassee Lumber Company the consideration received by them and their predecessors, with interest from the date of payment, and on December 16, 1919, instituted the present action to recover of the defendants the sum of $5,922, the amount refunded, with interest thereon from March 1, 1905, as damages for the defendants' alleged breach of warranty. Among other defenses the defendants pleaded the statute of limitations in bar of the plaintiffs' recovery; and this plea necessarily involves the preliminary question whether the plaintiffs' alleged cause of action is defeated by lapse of time.

In view of the plaintiffs' contention it may be advisable to note the distinction between a covenant of seizin and a covenant of warranty. The former is a covenant in præsenti, or a covenant that a particular state of things exists when the deed is delivered--juris et seisinæ conjunctio--and if it does not exist the delivery of the deed containing such a covenant causes an instant breach. A covenant of warranty is prospective. It is an agreement or assurance by the grantor of an estate that the grantee and his heirs and assigns shall enjoy it without interruption by virtue of a paramount title, or that they shall not by force of a paramount title be evicted from the land or deprived of its possession. Rawle on Covenants, § 205; Burdick on Real Prop. § 301; Wiggins v. Pender, 132 N.C. 634, 44 S.E. 362, 61 L. R. A. 772. This distinction is further observable in the conditions or circumstances that usually characterize the breach of each covenant. If the grantor is not seized, or if an incumbrance exists, the covenant of seizin is broken immediately upon the execution of the deed; but, generally speaking, a covenant of warranty, being prospective in its nature, is broken only by eviction, actual or constructive, under a paramount title existing at the time the conveyance is made. Burdick, supra, 814; Wiggins v. Pender, supra; Price v. Deal, 90 N.C. 290; Coble v. Wellborn, 13 N.C. 388; Britton v. Ruffin, 123 N.C. 67, 31 S.E. 271; Griffin v. Thomas, 128 N.C. 310, 38 S.E. 903; Cedar Works v. Lumber Co., 161 N.C. 614, 77 S.E. 70.

We must therefore inquire whether at the time the plaintiffs and the defendants executed their respective deeds there was a paramount title in the United States, and, if so, whether the Hiawassee Lumber Company, after vouching in the plaintiffs, was actually or constructively evicted from any part of the purchased premises by virtue of such title. Although there is no contention that the judgment of the District Court does not conclude the Hiawassee Lumber Company, it is necessary to decide whether it likewise concludes the plaintiffs. The answer depends in part on the question of notice and the relation existing between the plaintiffs and the Hiawassee Lumber Company at the time the judgment was rendered. At common law the lord, when vouched in or notified, was required to appear and protect his vassal in the enjoyment of his fief, and, failing to do so, to give to the vassal another fief of equal value. If the warrantor had no lands or tenements, and if there was neither voucher nor writ of warrantia chartæ (warranty of deed or title), there could be no recovery in value; but in the modern law a covenant of warranty is treated as an agreement of the warrantor to make good by compensation in money any loss directly caused by failure of the title which his deed purports to convey. It is not always essential to the grantee's right of action on the covenant that he should give his covenantor notice to come in and defend the title. But, if no notice is given, the covenantee, in his suit against the covenantor for breach of warranty, does not make out a prima facie case by showing judgment and eviction; he must show in addition that he was evicted under a paramount title, unless the covenantor was a party to the suit that brought about the eviction. 15 C.J. 1265, § 97. In Jones v. Balsley, 154 N.C. 68, 69 S.E. 827, Walker, J., approved the doctrine stated in Carroll v. Nodine, 41 Or. 412, 69 P. 51, 93 Am. St. Rep. 748, to this effect:

"Before an indemnitor can be expected to defend, he must have reasonable notice of the pendency of the suit or action by which he is to be bound, and afforded an opportunity to participate in or interpose such defense as he may desire; and it is only by

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