Wiggins v. Pender.

Walker, J., after stating the case. The argument in this case was confined to the first contention of the defendant, *632 namely, that the plaintiff is not the assignee of the covenant contained in the deed from Armstrong to the Justices, as the covenant does not contain the word “assigns” and he can not therefore maintain this action for a breach of the same. This important question was discussed with much learning and ability, but the other exceptions were not argued by counsel, though they were not abandoned, and it is therefore our duty to consider and decide them in connection with the exception just mentioned. It is a mistake to suppose that the modern covenant for title is to be construed by the same rigid rule as the ancient warranty. The latter never existed in this State, and in England by Statute of 3 and 4 William IV, the effect of warranty in tolling a right of entry was taken away, and the writs of warrantia chartae — when the warrantee was im-pleaded in an ássize, and a voucher or vouchee to warranty in a real action, by the help of which the party wishing to obtain the protection of the warranty might have defended himself or received lands of equal value in place of those he had lost— were abolished, so that the warranty of real estate, which had long been disused, has no practical operation, and indeed we are told by Blackstone that the covenant in modern practice entirely superseded it. 2 Sharswood’s Blackstone, 303 and notes. The defendant’s counsel relied on the case of Smith v. Ingram, 130 N. C., 100, but it will be seen by reference to Coke that in the passage quoted in that case, viz, “if a man doth warrant land to another without this word ‘heirs’, his heirs shall not vouch; and regularly if he warrant land to a man and his heirs without naming assigns, his assignee shall not vouch,” he referred to the ancient warranty, for in the very next passage he says, “but note, there is a diversity between a warranty that is a covenant real, which bindeth the party to yield land or tenements in recompense, and the covenant an *633 nexed to the land which is to yield but damages, for that a covenant is in many cases extended further than the warranty.” Golee, 384B. He further says that even though the assignee is a stranger to the covenant, that is, not a privy in contract, he can nevertheless have an action on the covenant for a breach, because the covenant runs with the land. “In this case, the assigns shall have an action of covenant, albeit they were not named, for that the remedy by covenant doth run with the land, to’ give damages ix> the party grieved, and is in a manner appurtenant to the land. See in Spencer’s case, before remembered, divers other diversities between warranties and covenants which yield but damages.” Coke, 385A. And so it was resolved in Spencer’s case that if a man makes a feoffment by words sufficient to imply a warranty, the assign of the feofee shall not vouch, but if a man make a lease for years by words which imply a covenant, if the assignee of the lessee be evicted, he shall have a writ of covenant; for the lessee and his assignee hath the yearly profits of the land which shall grow by his labor and industry, for an annual rent, and, therefore, it is reasonable when he hath applied his labor, and employed his cost upon the land and be evicted (whereby he loses all), that he shall take such benefit of the demise and grant as the first lessee might, and the lessor hath no other prejudice than what his especial contract with the first lessee has boufid him to. The principle does not depend upon tenure, but upon privity of estate. The question involved is whether the parties have sufficient mutual relation to the land which the covenant concerns, or, as it is commonly expressed in the cases, whether there is a privity of estate, which is considered necessary when there is no privity of contract. It will be seen that the necessary relation is something different from the ancient privity of estate, and that in many eases the expression is used in a modern sense. . . The original and ancient warranty was a real covenant the remedy *634 on which was by voucher or writ of warrantia chartae, and which bound the covenantor to replace the lands in case of the eviction of the grantee^ by others of equal value. The modern covenants of title, which are often spoken of as personal covenants because the action on them is a personal action, have taken the place of this. All of these are for the benefit of the land, and as loss suffered by breach of any usually, if not always, falls on the owner of the land, there would seem much practical advantage if the owner of the land, who' suffers loss by a breach of any of them, could have his action against the covenantor. . . . But, however it may be with covenants of seizin and against incum-brances (which are necessarily broken, if at'all, when made) a covenant of warranty, that is, the covenant to warrant and defend is always regarded as a prospective covenant, the benefit of which will run with the land to' any successive grantee, and of which there will be no breach until eviction. . . . . This covenant of warranty binds the original grantor and his personal representatives to the owner of the land and any owner during whose possession a breach occurs can sue any or all previous covenantors, even though the deed under which he himself claims has no covenant of warranty. . . . . In order that an assign shall be SO' far identified in law with the original covenantee, he must have the same estate, that is, the same status or inheritance, and thus the same persona quoad the contract. The privity of estate which is thus required is privity of estate with the original covenantee, not with the original covenantor; and this is the only privity of which there is anything said in the ancient books. In this case, privity of estate is considered as something entirely different from tenure. Clearly the presence of tenure is not necessary to enable covenants either as to their bnefits or their burdens, to run with the land. Spencer’s Case, 1 Smith, L. C. (9th Ed.), 174 and notes. *635 It is said by Mr. Rawle in bis excellent work on Covenants that “In the earliest days of the law of which we have accurate knowledge, warranty, which like homage was a natural incident of tenure, passed with the transfer of the estate and inured to the benefit of the owner for the time being. When, later, deeds were introduced and the warranty was either express or was implied from the word of. grant, dedi, neither the heir nor the assign of the grantee could take advantage of the warranty unless expressly named. But while this was so as to warranty, it was not so as to certain covenants — and chiefly among those were the covenants for title — the benefits of which passed with the land to the heir or the assign though not expressly named. Just why or how this was so is nowhere stated in the old books with such precision as would preclude argument. In more modern times, amidst much differences of opinion, the doctrine has been variously supposed to depend upon privity of tenure, or privity of estate, upon the nature of the estate, upon the nature of the covenant and upon the relation of the covenant to the estate; and the difficulty of the questions themselves is not less great than the practical importance of their results. But whatever may have been the grounds on which' the doctrine was originally based, it has been from the earliest times consistently held both with regard to the ancient warranty and the modern covenants for title that they run with the land to its owner for the time being, that is to say, the owner of the land is considered entitled to the benefit of all the warranties and covenants which the prior owners in the chain of title may have given.” Rawle on Covenants, 5th Ed., p. 292, Sects. 203, 204. He further says, quoting from Coke the passage above mentioned: “As respects the rights of the assignee a distinction always existed between warranty and the covenants for title. Thus the warranty implied by the word dedi could not be taken advantage of by the assignee of him who had re *636 ceived it, but, ‘if a man make a lease for years by the word concessij or demisi (which implies a covenant), if the as-signee of the lessee be evicted, he shall have a writ of covenant.’ So, with respect to the warranty and the covenant when expressed in words. ‘Regularly,’ says Coke, ‘if a man warrant land to another and his heirs without naming assigns, his assignee shall not vouch,’ but with respect tO' a covenant, the rule is different, and the asignee could take advantage of it though not named.” Rawle, supra, Sec. 318. We have the authority of Chancellor Kent for saying that the remedy by the ancient warranty never had any practical existence in this country, and the personal covenants have superseded the old warranty, the remedy upon them being by action of covenant against the grantor or his representatives to recover compensation in damages for the land lost by the eviction for failure of title. Upon eviction of the freeholder, no action of covenant lay at common law upon the warranty. The party had only a writ of warrantia chartae upon his warranty to recover a recompense in value to the extent of the value of his freehold. The covenant of warranty and the covenant of quiet enjoyment are not strictly personal like the covenant of seizin, which is broken when the deed is delivered if the title is defective, but they are prospective in their operation and an ouster or eviction is necessary to constitute a breach. These covenants are, therefore, in the nature of real covenants and run with the land conveyed, and descend to the heirs and vest in assignees or purchasers. 4 Kent (13 Ed.), p. 471 (538) et seq. It is said in Minor’s Institutes: “Covenants which run with the land are those which affect the nature, quality or value of the thing granted, where there is a privity of estate between the contracting parties, as a covenant to be answerable for the title. Covenants of this description pass with the land and are binding on, and in favor of, the assignee, although *637 assigns be not expressly named. The most important by far of covenants which run with the land are those which relate to the title.” 2 Minor Inst., p. 718. “Covenants for title are terméd real covenants and pass to the assignees of the land by the common law, wbu may maintain actions on them against the vendor and his real and personal representatives, and as to covenants, relating to the land, it seems that an assignee may maintain an action on the covenants, although the covenants were entered into with the original grantee and his heirs only.” 2 Sudgen on Vendors (9 Ed.), p. 89. “A covenant which has for its object something annexed to or inherent in or connected with real property, such as a covenant for quiet enjoyment, for repairs, for payment of rent, runs with the thing demised, and the assignee, though not named therein, is bound thereby and entitled to the advantages of it.” 1 Leigh Nisi Prius, p. 620; Sacheverelle v. Froggath, 3 Saunders Rep., 371; Bally v. Wells, Wilson, 25; Tatem v. Chaplin, 2 H. Blk., 133; 3 Washburn on R. P., pp. 497-504. Certain covenants are appurtenant to the estate granted by the deed in which such covenants are contained and bind the assignees of the covenantor, and vest in the assignees of the covenantee in the same manner as if they had personally made them. In England, all covenants for title are considered as appurtenant to the land, and to run with.it. But in this country, the covenants for title, considered as running with the land, are those for quiet enjoyment, for further assurance, and of warranty. 2 Devlin on Deeds, Sec. 940; Myggatt v. Coe, 142 N. Y., 86. In the case of Bradford v. Long, 7 Bidd., 225, the court says: “In this country, the covenant of warranty is considered as only binding the party to give damages as a compensation for the loss of the land warranted; and such a covenant is in this respect more extensive than the ancient warranty, for the assign, though not named in the covenant, may have a remedy for breach of it,” citing Coke, *638 Sec. 386E and 385A, supra. “The covenant of general warranty is one that runs with the estate in reference to which it is made, and may be availed of by any one to .whom the same may come by conveyance sufficient to transfer the title to the land.” Chandler v. Brown, 59 N. H., 370. “It is of the nature of this covenant to partake of the estate in the land and to pass with it by descent or purchase, so long as it remains unbroken.” Ford v. Waldsworth, 19 Wend., 337. “It is a covenant incident to the estate, made for its security and protection, and beneficial to the person to whom the estate should come^ but to no other.” White v. Whitney, 3 Metc., 86. The above authorities establish the proposition that the covenant of warranty is a covenant real, in the sense that it is annexed or incident to the estate conveyed by the deed and runs with it inseparably for the benefit of all who may succeed to the title by purchase, and who sustain the relation toward the original covenantee of privies in estate, whether those who succeed to the title as assignees, are expressly named as such in the covenant, or not. Lewis v. Cook, 35 N. C., 193; Markland v. Crump, 18 N. C., 94; 27 Am. Dec., 230. In this State- the warranty has been treated as a personal covenant annexed to the estate and running with it as a safeguard and protection to the grantee and his heirs or the assignees or purchasers of the estate in question, and is not regarded strictly as a covenant real within the meaning of the old law and the operation of the principles concerning real actions. A more liberal construction is given to it with the view of “meeting more fully the intention of the parties and the ends of justice.” Spruill v. Leary, 35 N. C., 419; Southerland v. Stout, 68 N. C., 449; Markland v. Crump, 18 N. C., 94; Blount v. Harvey, 51 N. C., 186. But in this case we think the covenant by a clear and necessary implication, must enure to the benefit of the plain *639 tiff as assignee, although, the word “assigns” was not used in the warranty. The words “heirs and assigns,” are used in the habendum and the grantees are also named in the haben-dum, but not in the warranty. Can it be supposed that the grantor did not intend a covenant for the benefit of the grantee ? Yet this must be true unless it is held that the covenant should be construed as made for the benefit of him who is named in the habendum. In Herrin v. McEntyre, 8 N. C., 410, this court held that, when the habendum in a deed is to a man and his heirs forever, he may recover for an eviction on a general warranty though his name is not mentioned in the warranty, and though it is not stated in the clause of warranty to whose benefit it shall enure, for, “it is the nature of a warranty to run with the estate, and,” as Coke says, “though in the clause of the warranty it be not mentioned to whom, etc., yet shall it be intended to the feoffee ” Coke, Sec. 384. If it enure to the feoffee, when not named in the warranty, why not as well and with equal reason to the heirs and assigns to whom the estate is limited in the habendum, when they are not named in the warranty ? We conclude, therefore, that the plaintiff can. maintain this action for the breach of the covenant, unless barred of a recovery for some other reason set up in defense. The re-conveyance of the land by mortgage from the Justices to Armstrong did not have the effect of extinguishing the covenant, but the mortgagee was entitled to the benefit of the covenant in the mortgage as an indemnity against the acts of the Justices, in so far as necessary to protect the estate he held as security for the debt from any defect of title which might arise from said acts. There was no estoppel or re-butter, and, when the land was sold, the benefit of the original covenant passed to the purchaser. This subject is fully discussed in Rawle on Covenants, Sects. 266, 217 and 218, and *640 the cases are there collated. See also 3d Washburn on Real Property; Resser v. Carney, 52 Minn., 397; Lewis v. Cook, supra; Markland v. Crump, supra. “Where land is conveyed by deed of warranty and the same premises, at the same time, are reconveyed in mortgage with like covenants, the covenants in the mortgage deed will not operate to preclude the maintenance of an action on the covenants of the absolute deed.” Brown v. Staples, 28 Maine, 497. Nor will they operate by way of rebutter to prevent circuity of action.” Haynes v. Stevens, 11 N. H., 28; Sumner v. Barnard, 12 Metcalf, 459; Hubbard v. Norton, 10 Conn., 422. The plaintiff’s cause of action is not barred by the Statute of Limitations. It did not accrue until there was an eviction, which took place in 1901, and the statute does not commence to run until the right of action has accrued. We are also of the opinion that it sufficiently appears in the case that there was an eviction by one holding a paramount title. It is admitted that Mrs. Parrish brought her action against the plaintiff and recovered judgment and that, by process issuing upon said judgment, the plaintiff was evicted. Both parties, claimed under John Armstrong, and Mrs. Parrish held a deed from Armstrong prior in date to the deed from him to the Justices, under which the plaintiff in this action claims. As the parties were estopped to deny the title of John Armstrong, the older deed of Mrs. Parrish was sufficient to show that she held the better title, as between her and the plaintiff. The next question in the case relates to the damages and especially to the right of the plaintiff to have counsel fees, which he paid out in defending the suit of Parrish v. Wiggins, included in the recovery. The covenant of warranty is a contract of indemnity, and while the usual rule is that the plaintiff recovers only the amount of the purchase money and interest, it is held by many courts outside of this. State, that *641 be can recover also any amount be is compelled to pay, as costs and expenses, in defense of the title, so that be may be fully indemnified against any loss by reason of the breach of the covenant, provided always the cost and expenses so> paid by him are reasonable. It seems to be conceded in some of the cases that be is entitled to recover as a paid of bis compensation or damages the cost of defending the suit in which the judgment against him for the possession of the premises was given, and also that attorney’s fees may be included when the warrantor has been notified of the suit and requested or vouched to come in and defend the title, and it is held in the greater number of cases that be is entitled to recover attorney’s fees whether the covenantor was notified or not. The reason for this rule, as gathered from the cases, would seem to be based upon the following considerations: If the cove-nantee defends the suit in good faith and with proper diligence, what be does is for the benefit of the covenantor, and such expenses as are necessarily incurred by him are, therefore, inseparably connected with bis claim of indemnity. It would be too much to require the grantee in a deed of warranty to decide at bis peril on the validity of a title set up in opposition to that which the grantor undertook to convey. By the covenant, the grantor agrees not only to warrant, but to defend the title, and if the covenantee is compelled to make the defense or suffer a judgment by default, be should recover in an action on the covenant, as it is a contract of indemnity, what be has thus been compelled to pay out. Smith v. Compton, 23 E. C. L., 106; Sumner v. Williams, 8 Mass., 162; 5 Am. Dec., 83; Rickert v. Snyder, 9 Wendell, 416; Ryerson v. Ehapman, 66 Me., 557; Meservy v. Snell, 94 Iowa, 222; 58 Am. St. Rep., 391; Harding v. Larkin, 41 Ill., 420. Whether these considerations should induce us to allow counsel fees as a part of the damages is a question we need not decide until it is actually presented in a case before us. *642 While, as we have already said, it seems to- be held in a 'majority of the cases that the covenantee may increase his damages by the amount of reasonable costs and counsel fees paid by him in defending the suit for the recovery of the land without giving notice to the covenantor, we prefer to adopt the rule which appears to us to, be more in consonance with reason and right, and to recognize and enforce the just principle that a man should be heard before he is required to pay, or to have his day in court or at least a chance to have it. We think that the covenantor was entitled to notice to come in and defend the suit and that he should not be adjudged to pay any counsel fees without having had an opportunity to comply with his contract and defend the suit himself, or, if he desired to do so, to submit to a judgment and save any additional costs and expenses, if he should discover that his title was so defective as to render useless further insistence to the suit. This view is well expressed in the case of Chestnut v. Tyson, 105 Ala., 163. “If notice had been given to the appellants (covenantors) they might have thought' proper to defend the suit and employ their own counsel, or they might have come to the conclusion that the title of the plaintiff in the ejectment could not be successfully resisted and they might, therefore, have determined not to incur useless expense in making a defense, and preferred to perform their covenant by paying to the appellees the amount of damages to which they might be entitled. Of course, this rule would not apply to such of the costs of the ejectment suit as would be adjudged against the defendant therein, though no defense was made, as upon default, for instance; and these, we apprehend, might be recovered on the covenant notwithstanding notice to the covenantor had not been given, since it is only the expense of defending the suit which he would have upon notice, the election of incurring or not.” Chrisfield v. Storr, 36 Md., 129-151. *643 The rule we propose to adopt is the safest and best, as it is easy and convenient for the covenantor to give such notice, and, besides, important advantages might accrue to him from doing so. There is no hardship in the rule, as there would or might be, if a contrary rule were laid down. The appellant does not except to the allowance of the costs of the other suit in which plaintiff lost the land, but does except to the award of counsel fees as part of the damages, because no notice of the suit was given. As it does not appear in the case that any such notice was served on the defendant, this exception is sustained and the judgment of the court below is modified accordingly. The last objection to the plaintiff’s right to recover upon: the facts stated can not be sustained. It is not necessary, in this case, that real assets should have descended to the heirs of Armstrong. They are not sued in the case for the breach, and, in an action on the covenant, as distinguished from the ancient warranty, the plaintiff is not required to show that the heirs received real assets. The plaintiff is not trying to' avail himself of the warranty by way of rebutter. The ordinary covenants for title are personal covenants, in the sense that they are binding on the personal representative of the covenantor and, though they run with the land, they are not strictly real covenants within the meaning of the ancient feudal law. Carter v. Denman, 23 N. J. L., 260. This is like any other action on a covenant sounding in damages, and the judgment will be satisfied out of the assets of the covenantor, whether personal or real, in like manner as a recovery upon any other obligation. Under our present procedure, the plaintiff merely recovers judgment for his damages, and he must obtain satisfaction not by execution, but by a proceeding to have the assets, of the intestate applied to its payment. There must be assets, it is true, before the plaintiff’s claim can be satisfied, but the fact that no assets *644 have descended to the heirs will not defeat the plaintiff’s right to have a judgment against the administrator. If there are no personal or real assets, the plaintiff will get nothing on his judgment. That is all. There was error in the judgment of the court below as above indicated, and judgment will be entered in accordance with the principles stated in this opinion. Per Curiam. Judgment Modified and Affirmed.