Madden v. Caldwell Land Co.

• Decision Date: 01 March 1909
• Citation: 16 Idaho 59,100 P. 358
• Parties: ADA F. MADDEN, Respondent, v. THE CALDWELL LAND COMPANY, a Corporation, Appellant
• Court: Idaho Supreme Court

100 P. 358

16 Idaho 59

ADA F. MADDEN, Respondent, v. THE CALDWELL LAND COMPANY, a Corporation, Appellant

Supreme Court of Idaho

March 1, 1909

ACTION FOR DAMAGES-BREACH OF COVENANT OF WARRANTY-BREACH OF COVENANT FOR QUIET AND PEACEABLEE POSSESSION-CONSTRUCTIVE FRAUD-MEASURE OF DAMAGES-ATTORNEY'S FEES.

1. Where a vendor has a good and fee simple title to a tract of land, and conveys the same to a purchaser by deed of warranty with full covenants, and thereafter deeds and conveys the same tract of land to another bona fide purchaser for value and the subsequent purchaser places his deed of record in advance of the recording of the first deed, and thereby takes the paramount title, the acts and conduct of the vendor in executing and delivering the subsequent conveyance constitute and amount to constructive fraud within contemplation of law although no actual fraudulent intent existed in the mind of the grantor at the time of executing the subsequent conveyance.

2. Where the action of a vendor in reconveying property manifests a gross and culpable carelessness and negligence and results in defeating the title of a prior vendee and his eviction from the premises, the law will impute to such vendor a fraudulent intent from the results of which it will not permit him to escape.

3. From the fact that a vendee of real property has failed to record his deed, and thereby lost the title and right of possession as against a subsequent vendee of the same property, his vendor cannot be heard to complain of his failure to record the conveyance as a protection against the vendor's subsequent wrongful acts committed in violation of the covenants of his deed.

4. Where a vendor having a good and perfect title conveys the property with covenants of warranty and for peaceable and quiet possession, and thereafter deeds the same property to another purchaser, and the latter places his deed of record prior to the recording of the first conveyance, and thereby takes the paramount title and right of possession, and the first vendee is evicted and sues his vendor for damages for breach of the covenants, the measure of damages to be adopted is the same as in cases where the vendor has contracted and agreed to convey, and thereafter, having good title and right to convey, declines and refuses so to do.

5. ID.-In such case the measure of damages to be applied is that of adequate compensation for the actual injury sustained, or as it is sometimes expressed, "damages for loss of the bargain."

6. ID.-ID.-In such case the vendee whose title has been defeated by the wrongful acts of his vendor is entitled to recover such reasonable attorney's fees as were necessarily expended by him in an endeavor to sustain his title and right of possession.

7. Held, that under the facts of this case the evicted vendee is entitled to fix the amount of damages sustained as of the date of the eviction by the judgment of the district court.

(Syllabus by the court.)

APPEAL from the District Court of the Seventh Judicial District, for Canyon County. Hon. Ed. L. Bryan, Judge.

Action of plaintiff for damages for breach of covenants of a deed of warranty. Judgment for plaintiff and defendant appealed. Affirmed.

Judgment affirmed. Costs awarded in favor of respondent.

Smith & Scatterday, and W. A. Stone, for Appellant.

In an action for a breach of the covenant of warranty, or quiet enjoyment where there has been a total loss of the land to the grantee, the measure of damages in the absence of fraud is the consideration money paid, with interest. (Citing same authorities given in opinion.)

It is not necessary that there should be an actual dispossession of the grantee, nor is it necessary that a paramount title should have been established by a judgment, before the covenantee will be authorized to surrender the possession and sue his covenantor. (11 Cyc. 1127 (c); McGary v. Hastings, 39 Cal. 360, 2 Am. Rep. 456; Harr v. Shaffer, 52 W.Va. 207, 43 S.E. 89; Meservey v. Snell, 94 Ia. 222, 58 Am. St. 391, 62 N.W. 767; 3 Washburn on Real Property, pp. 506-512; 2 Sutherland on Damages, 3d ed., sec. 604; Rawle on Covenants, sec. 132; Drew v. Towle, 30 N.H. 531, 64 Am. Dec. 309 (313); Green v. Irving, 54 Miss. 450, 28 Am. Rep. 360 (369); Morrow v. Baird, 114 Tenn. 552, 86 S.W. 1080; Merrill v. Suing, 66 Neb. 404, 92 N.W. 618; Prestwood v. McGowin, 128 Ala. 267, 86 Am. St. 136, 29 So. 386; Lowery v. Yawn, 111 Ga. 61, 36 S.E. 294; Hodges v. Latham, 98 N.C. 239, 2 Am. St. 333, 3 S.E. 495.)

Plaintiff should not recover of this defendant the value of the improvements placed on the land after she became aware of an outstanding, paramount title. That was a matter to be adjusted between her and the owner of the paramount title. (11 Cyc. 1175 (c); Willson v. Willson, 25 N.H. 229, 57 Am. Dec. 320; Pitcher v. Livingstone, 4 Johns. 1, 4 Am. Dec. 229; Phillips v. Smith, 1 Car. Law Rep. 475, 6 Am. Dec. 542; Backus' Admr. v. McCoy, 3 Ohio 211, 17 Am. Dec. 585.)

Griffiths & Griffiths, and Rice, Thompson & Buckner, for Respondent.

It was the duty of this defendant to inform itself, and know what property it owned and had the right to convey, and the failure to so inform itself, and therefore recklessly conveying property without knowing whether it does or does not own the same, is such gross negligence as to impute a fraudulent motive and render the defendant liable for all damages sustained by reason of such negligence in the conveying of property which it does not own. (Shotwell v. Nicollet Nat. Bank, 43 Minn. 389, 45 N.W. 842; McBroom v. Rives, 1 Stew. (Ala.) 72; Conyers v. Graham, 81 Ga. 615, 8 S.E. 521; Kirby v. Ingersoll, 1 Harr. (Mich.) 172; Daniels v. Benedict, 97 F. 367, 38 C. C. A. 592; Henshaw v. Bissell, 18 Wall. 255, 21 L.Ed. 835.)

The appellant here can secure no advantage by reason of the fact that the deed it first issued was not recorded. (Sicard v. Davis, 6 Pet. 124, 8 L.Ed. 342; Goodenough v. Warren, F. Cas. No. 5534, 5 Saw. 494; Dravo v. Fabel, 25 F. 116; Landers v. Bolton, 26 Cal. 393; sec. 3004, Rev. Stat. of Idaho.)

For the breach of a covenant or contract in this class of cases the measure of damages is universally held to be the value of the property or the value of the vendee's bargain, together with any special damages that can be shown as the direct result of such breach. (Burdick v. Seymour, 39 Iowa 452; Dalton v. Bowker, 8 Nev. 190; Vallentyne v. Imm. Land Co., 95 Minn. 195, 103 N.W. 1028; Fleckten v. Spicer, 63 Minn. 454, 65 N.W. 926; Taylor v. Holter, 1 Mont. 688; Johnson v. McMullin, 3 Wyo. 237, 21 P. 701, 4 L. R. A. 670; Cade v. Brown, 1 Wash.St. 401, 25 P. 457; West Coast Mfg. & Inv. Co. v. West Coast Imp. Co., 31 Wash. 610, 72 P. 455; Neppach v. Oregon & C. R. Co., 46 Ore. 374, 80 P. 482; Williams v. Hillman Inv. Co., 48 Wash. 695, 94 P. 653; Smith v. Lander (Tex. Civ. App.), 89 S.W. 19; Whitworth v. Pool, 29 Ky. Law Rep. 1104, 96 S.W. 880.)

AILSHIE, J. Sullivan, C. J., and Stewart, J., concur.

OPINION

AILSHIE, J.

This appeal is taken from a judgment and order denying a motion for a new trial. The action was commenced in the district court for Canyon county to recover damages from the defendant for breach of a covenant of warranty and quiet and peaceable possession contained in a deed of conveyance of real estate. On August 7, 1904, the plaintiff, Ada F. Madden, who is respondent in this court, purchased from appellant, the Caldwell Land Company, Ltd., a tract of land in the city of Caldwell, and paid the purchase price and received a warranty deed for the same. She neglected to record this deed for some months thereafter. In the meantime, and on September 28, 1904, the land company sold the same tract of land to one I. S. Froman and received the purchase price and executed and delivered to him a warranty deed for the land. Froman immediately placed his deed on record. He thereafter commenced an action in ejectment against the respondent in this case, and on appeal to this court it was held that, having previously recorded his deed and having no notice of the conveyance to Miss Madden, he was entitled to a judgment of ouster against her. (Froman v. Madden, 13 Idaho 138, 88 P. 894.) The case was remanded, and thereafter the case came on for trial in the district court and judgment was entered in favor of Froman and against Madden, ousting and ejecting the latter from the premises, Madden thereafter commenced this action against her grantor, the land company, for damages on account of breach of the covenant of warranty and for quiet and peaceable possession. The covenants of the deed are as follows:

"And the said party of the first part, for itself and its successors and assigns, the said premises in the quiet and peaceable possession of the said party of the second part, her heirs and assigns, against the said party of the first part and its successors and assigns, and against all and every person or persons whomsoever, lawfully claiming, or to claim, the same, shall and will warrant and by these presents forever defend."

It is admitted by the land company that it is liable to the respondent in damages, and the only question that is controverted is that of the measure of damages to be allowed. It is contended by appellant that the measure of damages in an action for breach of covenant of warranty or quiet enjoyment, where there has been a total loss of the land to the grantee, is the consideration money paid with interest thereon. In support of this contention a great many authorities have been cited. (11 Cyc. 1169e (1); Rawle on Covenants, sec. 164; Sutherland on Damages, 3d ed., sec. 605; 4 Kent's Commentaries, sec. 477; Tiedeman on Real Property, 3d ed., sec. 625; McGary v Hastings, 39 Cal. 360, 2 Am. Rep. 456; Staats v. Ten Eyk's...