Mercer County State Bank of Manhaven, a Corp. v. Hayes
| Decision Date | 08 August 1916 |
| Citation | 159 N.W. 74,34 N.D. 601 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Mercer County, S. L. Nuchols, J.
Action to foreclose a mortgage. Judgment for defendants. Plaintiff appeals.
Reversed.
Reversed and remanded with directions. Respondents paid the costs and disbursements of the appeal.
H. L Berry and Thorstein Hyland (Hyland & Madden of counsel), for appellant.
Parties claiming a breach of warranty may rescind the contract, or they may stand on it and sue for damages. They cannot do both. Defendants here have elected to stand on their contract, but their defenses are inconsistent with their election. Nichols & S. Co. v. Dallier, 23 N.D. 532 137 N.W. 570.
A failure of consideration must be a total failure to be a defense. A partial failure can avail only as a set-off recoupment, or counterclaim. Neither the pleadings nor the evidence in this case warrant a finding of damages. Noble v. Olympia Brewing Co. 64 Wash. 461, 36 L.R.A.(N.S.) 467, 117 P. 241; Bowne v. Wolcott, 1 N.D. 420, 48 N.W. 336; Frazer v. Peoria County, 74 Ill. 282; Kincaid v. Brittain, 5 Sneed, 119; Recohs v Younglove, 8 Baxt. 385; Hartford & S. Ore Co. v. Miller, 41 Conn. 112, 3 Mor. Min. Rep. 353; Kimball v. Bryant, 25 Minn. 496; Cockrell v. Proctor, 65 Mo. 41; 2 Sutherland, Damages, 265; Mayne, Damages, 143; Smith v. Hughes, 50 Wis. 620, 7 N.W. 653; Hencke v. Johnson, 62 Iowa 555, 17 N.W. 766.
"A purchaser of land who is in undisturbed possession, and has received a conveyance of the same with warranty, cannot have relief in equity against payment of the purchase price, on the ground of a defect in the title." Abbott v. Allen, 2 Johns. Ch. 519, 7 Am. Dec. 554; Bumpus v. Platner, 1 Johns. Ch. 218; Yeates v. Pryor, 11 Ark. 74; Peay v. Wright, 22 Ark. 205; Hunter v. Bradford, 3 Fla. 286; Roberts v. Woolbright, Ga. Dec. pt. 1, p. 100; McGehee v. Jones, 10 Ga. 133; Bowlin v. Pollock, 7 T. B. Mon. 49; Timms v. Shannon, 19 Md. 315, 81 Am. Dec. 632; Vick v. Percy, 7 Smedes & M. 256, 45 Am. Dec. 303; Guice v. Sellers, 43 Miss. 56, 5 Am. Rep. 476; Mitchell v. McMullen, 59 Mo. 252; Edwards v. Bodine, 26 Wend. 114; Re Livingston, 9 Paige, 445; Hill v. Butler, 6 Ohio St. 217; Van Lew v. Parr, 2 Rich. Eq. 337; Holt v. Payne, 3 Tex. 478; Patton v. Taylor, 7 How. 159, 12 L.Ed. 649; Walker v. Wilson, 13 Wis. 525.
It has been held that there is a distinction between the covenant of seisin and other covenants; and that by reason of this distinction, damages for a breach of the covenant of seisin might be set up as a counterclaim by the purchaser in an action to foreclose a mortgage given to secure the purchase money.
But, this distinction is repudiated in many jurisdictions. Farbham v. Hotchkiss, 2 Keyes, 15; Jones v. Stanton, 11 Mo. 436; Woodruff v. Bunce, 9 Paige, 443, 38 Am. Dec. 559; Randall v. Bourguardez, 23 Fla. 264, 11 Am. St. Rep. 379, 2 So. 310; Dunn v. Mills, 70 Kan. 656, 79 P. 146, 3 Ann. Cas. 363; Harvey v. Morris, 63 Mo. 475; Reeve v. Downs, 22 Kan. 330; McIndoe v. Morman, 26 Wis. 588, 7 Am. Rep. 96; McLeod v. Barnum, 131 Cal. 605, 63 P. 924; Sanderlin v. Willis, 94 Ga. 171, 21 S.E. 291.
Where the purchaser does not elect to rescind, it is considered that he is willing to receive such title as the vendor is able to give, and content with the personal responsibility of the vendor upon his covenants, in case title actually fails and he is afterwards dispossessed. Worthington v. Curd, 22 Ark. 277; Garvin v. Cohen, 13 Rich. L. 153; Helvenstein v. Higgason, 35 Ala. 259; Wiley v. Howard, 15 Ind. 169; McGehee v. Jones, 10 Ga. 127; Watson v. Kemp, 41 Ga. 586; Smith v. Hudson, 45 Ga. 208; Booth v. Saffold, 46 Ga. 278; Dahl v. Stakke, 12 N.D. 325, 96 N.W. 353; Harvey v. Morris, 63 Mo. 477; Rhorer v. Bila, 83 Cal. 51, 23 P. 274; Florence Oil & Ref. Co. v. McCandless, 26 Colo. 534, 58 P. 1084; Pershing v. Canfield, 70 Mo. 140.
In the absence of fraud, a purchaser under a warranty deed is not entitled to restoration of the purchase money until after eviction. Brown v. Smith, 5 How. (Miss.) 387; Hunter v. Bradford, 3 Fla. 269; Roberts v. Woolbright, Ga. Dec. pt. 1, p. 98; Timms v. Shannon, 19 Md. 296, 81 Am. Dec. 632; Vick v. Percy, 7 Smedes & M. 256, 45 Am. Dec. 303; Anderson v. Lincoln, 5 How. (Miss.) 279; Waddell v. Beach, 9 N.J.Eq. 793; Seidman v. Geib, 16 Daly, 434, 19 N.Y. Civ. Proc. Rep. 359, 11 N.Y.S. 705; Champlin v. Laytin, 6 Paige, 189; Chesterman v. Gardner, 5 Johns. Ch. 29, 9 Am. Dec. 265; Failing v. Osborne, 3 Ore. 498; Briggs v. Gillam, Rich. Eq. Cas. 432.
In all cases where a party has entered into possession of land under color of title, and in good faith has made permanent improvements, he may recover the reasonable value thereof as against another party recovering the property under a paramount title. McKenzie v. Gussner, 22 N.D. 445, 37 L.R.A.(N.S.) 918, 134 N.W. 33; Jackson v. Loomis, 15 Am. Dec. 347, and note, 4 Cow. 168; Waterman Hall v. Waterman, 220 Ill. 569, 4 L.R.A.(N.S.) 776, 77 N.E. 142; Webb v. Wheeler, 80 Neb. 438, 17 L.R.A.(N.S.) 1178, 114 N.W. 636.
John F. Sullivan, for respondents.
Specifications of error not presented and argued in the brief are waived. Foster County Implement Co. v. Smith, 17 N.D. 178, 115 N.W. 663.
The property here involved is not so valuable to defendants as it would have been had the title been perfect, and by reason of the defects they are entitled to damages. To this end they are entitled to resist payment of that part of the purchase price represented by the note in question. Williams v. Neely, 69 L.R.A. 232, 67 C. C. A. 171, 134 F. 1; Zent v. Picken, 54 Iowa 535, 6 N.W. 750.
"In the United States a large majority of the courts hold that the covenant of seisin, if broken at all, is broken as soon as made, and consequently cannot run with the land nor pass to an assignee." 11 Cyc. 1085, and note 93, 1086, 1088, 1106, 1110, 1144; Pringle v. Witten, 1 Bay, 256, 1 Am. Dec. 612; Bell v. Huggins, 1 Bay, 326; Sumter v. Welsh, 2 Bay, 558; Moore v. Lanhan, 3 Hill, L. 304; Fitzhugh v. Croghan, 2 J. J. Marsh. 429, 19 Am. Dec. 139; Richardson v. Dorr, 5 Vt. 9; Egan v. Martin, 71 Mo.App. 60; Coleman v. Clark, 80 Mo.App. 339; Kinzie v. Riley, 100 Va. 709, 42 S.E. 872.
The measure of damages on a breach of the covenant of seisin is as a general rule the purchase money with interest. Overhiser v. McCollister, 10 Ind. 41; Campbell v. Spears, 120 Iowa 670, 94 N.W. 1126; Dahl v. Stakke, 12 N.D. 325, 96 N.W. 353.
"The real consideration for the notes in this case was the title to the land free from encumbrances." 8 Am. & Eng. Enc. Law, 208.
A covenant against encumbrances is broken at once when made, if encumbrances exist. Williams v. Neely, supra; Conwell v. Clifford, 45 Ind. 392.
Failure of consideration, or want of consideration, is always a good defense. Scudder v. Andrews, 2 McLean, 464, Fed. Cas. No. 12,564; Frisbie v. Hoffnagle, 11 Johns. 50; Redding v. Lamb, 81 Mich. 318, 45 N.W. 997.
Where a part of the land so with warranty is held adversely, and this was known to plaintiff, he cannot recover the purchase price. Ballard v. Burrows, 51 Iowa 81, 50 N.W. 74; Sparrow v. Smith, 63 Mich. 209, 29 N.W. 691.
Where grantors make express covenant of warranty, they cannot set up knowledge of vice in their title to exonerate themselves from the obligation of their contract. New Orleans v. Gaines (New Orleans v. Whitney), 138 U.S. 595, 34 L.Ed. 1102, 11 S.Ct. 428; Real v. Hollister, 20 Neb. 112, 29 N.W. 189; Bowne v. Wolcott, 1 N.D. 415, 48 N.W. 336; Carroll v. Safford, 3 How. 441, 11 L.Ed. 671; Le Roy v. Beard, 8 How. 451, 12 L.Ed. 1151; Pollard v. Dwight, 4 Cranch, 421, 2 L.Ed. 666; Zent v. Picken, 54 Iowa 535, 6 N.W. 750.
A covenant against encumbrances is a personal obligation, and does not run with the land, and is broken at the time the conveyance is made. Campbell v. McClure, 45 Neb. 608, 63 N.W. 920; Kane v. Mink, 64 Iowa 84, 19 N.W. 852; Sherwood v. Landon, 57 Mich. 219, 23 N.W. 778; Allen v. Allen, 48 Minn. 462, 51 N.W. 473; Lowry v. Tilleny, 31 Minn. 500, 18 N.W. 452; Davidson v. Cox, 10 Neb. 150, 4 N.W. 1035; Duvall v. Craig, 2 Wheat. 45, 4 L.Ed. 180; Mitchell v. Kepler, 75 Iowa 207, 39 N.W. 241; Koepke v. Winterfield, 116 Wis. 44, 92 N.W. 437; Batterton v. Smith, 3 Kan.App. 419, 43 P. 275; West Coast Mfg. & Invest. Co. v. West Coast Improv. Co. 25 Wash. 627, 62 L.R.A. 763, 66 P. 97; Bolinger v. Brake, 4 Kan.App. 180, 45 P. 950.
Where a grantor in a deed with covenant of seisin has neither title to nor possession of the land described, the grantee may immediately on discovering such fact sue for the price paid. Rombough v. Koons, 6 Wash. 558, 34 P. 135; Potwin v. Blasher, 9 Wash. 460, 37 P. 710; Bryant v. Mosher, 96 Neb. 555, 148 N.W. 329; Gale v. Frazier, 4 Dak. 196, 30 N.W. 138.
Covenants which do not run with the land are covenants of seisin, of the right to convey, and covenants against encumbrances. McCulloch v. Bauer, 24 N.D. 109, 39 N.W. 318; McVeety v. Harvey Mercantile Co. 24 N.D. 245, 139 N.W. 586, Ann. Cas. 1915B, 1028.
"The action being one for breach of the covenant of seisin, to sustain it, there was no necessity for proving an eviction." Seyfried v. Knoblauch, 44 Colo. 86, 96 P. 993; Webb v. Wheeler, 80 Neb. 438, 17 L.R.A.(N.S.) 1178, 114 N.W. 636; Beck v. Staats, 80 Neb. 482, 16 L.R.A.(N.S.) 768, 114 N.W. 633; Sherwood v. Landon, 57 Mich. 219, 23 N.W. 778; Matteson v. Vaughn, 38 Mich. 373; Pierce v. Johnson, 4 Vt. 247; Westrope v. Chambers, 51 Tex. 178; Mitchell v. Kepler, 75 Iowa 207, 39 N.W. 241; Hayden v. Patterson, 39 Colo. 15, 88 P. 437.
Defendant in such a case does not have to wait until eviction before asserting his rights. When sued...
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