Hyatt v. Ogletree

• Decision Date: 03 November 1942
• Docket Number: 8 Div. 221.
• Citation: 12 So.2d 397,31 Ala.App. 8
• Parties: HYATT et al. v. OGLETREE.
• Court: Alabama Court of Appeals

12 So.2d 397

31 Ala.App. 8

HYATT et al. v. OGLETREE.

8 Div. 221.

Alabama Court of Appeals

November 3, 1942

Rehearing Denied Nov. 24, 1942.

Marion F. Lusk, of Guntersville, for appellants.

Scruggs & Creel, of Guntersville, for appellee.

SIMPSON, Judge.

The suit is for breach of general covenants of warranty in a deed.

The appellant, Hyatt, was the grantee who sues the grantor Ogletree.

(The plaintiffs, husband and wife, are referred to as singular.)

The recited consideration of the deed is "one dollar and other considerations", but it is conceded that nothing was paid. The deed contains a recital that a quitclaim deed conveying the property, was previously given by the grantor to the grantee and that the warranty deed was "made to perfect and warrant the title in the grantee."

The question presented by the appeal is whether, under the facts the grantee, who paid off a tax lien to clear his title after grantor refused to do so, can recover the sum so paid from the grantor.

The facts are:

The United States Internal Revenue Collector filed a tax lien against the land, January 21, 1938, under Revised Statutes Section 3186, Title 26 U.S.C.A. §§ 1560-1562, 26 U.S.C.A. Int.Rev.Code, §§ 3670-3672, at which time one Bailey owned the property. Some years prior to this, Bailey had given a mortgage thereon to defendant, Ogletree. In 1939, the mortgage being in default, Bailey executed a deed in lieu of foreclosure, conveying the property to his mortgagee, Ogletree. Thereafter, according to the stipulation of facts in the bill of exceptions: "Mr. Bailey traded his right to the lands to Mr. and Mrs. Hyatt, the plaintiffs, and they went to Dr. Ogletree and had him execute a quitclaim deed to the Hyatts. The consideration for the land was paid to Dr. Ogletree and he received all of it; the amount received by Dr. Ogletree was no more than the mortgage indebtedness, the amount paid by Hyatt was $700.00, which was less than the amount owing on the mortgage at the time of foreclosure by several hundred dollars, and Dr. Ogletree received all the money paid by the Hyatts, and at Bailey's request, executed to the Hyatts a quitclaim deed, sometime later the plaintiffs went to Dr. Ogletree and obtained from him a warranty deed and the parties are not agreed upon what took place at that time, but no money passed when it was executed." Neither party appears to have known of the existence of the lien until after the giving of the quitclaim deed and it appears that Ogletree's first knowledge of it was after he had given the warranty deed.

The quitclaim deed from Ogletree to Hyatt, mentioned in the stipulation above, was under date of October, 1939, and the warranty deed, February 23, 1940. Soon after the giving of the warranty deed, Hyatt demanded that Ogletree discharge the tax lien, still pending against the land, and Ogletree declined to do it. Hyatt then paid it, and in May, 1940, filed the present suit for reimbursement.

The only disputed facts are those surrounding the execution of the warranty deed.

The suit is for breach of warranty in this second deed. The lower court, sitting without a jury, rendered judgment for the defendant and the plaintiff, Hyatt appeals.

Our first observation is that recovery, if due, can rest only upon one of two hypotheses, either: (1) the second deed (warranty) must have been an entirely separate transaction for which value was paid (in which case recovery would be limited to the consideration paid), or, if no consideration was paid therefor, (2) the last conveyance must have been given to reform the first which, by mutual mistake of the parties, did not express their true intention. In this latter event, the second (warranty) deed would be supported by the consideration of the first (quitclaim) deed.

The First Theory.

This proposition is easily disposed of by adverting to the uncontradicted evidence, showing that no consideration was paid for the new, warranty deed.

Viewed in this aspect then, as a new and independent transaction, unrelated to the original transaction, there manifestly can be no recovery, for the plaintiff is limited therein to the consideration paid. "The damages for the breach of a covenant against encumbrances are to be assessed at such a sum as will afford a just compensation for the injury actually suffered by the covenantee, not, however, to exceed the consideration paid", etc. 14 Am.Jur. 599, Section 178; Mixon v. Burleson, 203 Ala. 84(2), 82 So. 98; 61 A.L.R. 140 et seq.

The authorities cited by appellant (Stewart v. Stewart, 171 Ala. 485, 54 So. 604, Ann.Cas.1913A, 925; Bethea v. McCullough, 195 Ala. 480, 70 So. 680), holding that in the absence of fraud or mistake the grantor may not dispute the operation and effect of a deed reciting a nominal consideration, have no applicability to the principle here involved.

The consideration of the deed is only prima facie and, generally, may be inquired into. "Parol evidence is admissible to show the true consideration of like kind as expressed in the deed, that it is greater or less, but evidence going to show a consideration of a different kind is not admissible." Union Bank & Trust Co. v. Royall, 226 Ala. 670, 672, 148 So. 399, 401; Pruett v. First National Bank, 229 Ala. 441, 444, 157 So. 846; Gilliland v. Hawkins, 216 Ala. 97, 101, 112 So. 454.

The Second Theory.

No new consideration was paid for the new deed and, according to its recitals, it was ...