William Farrell Lumber Co. v. Deshon

Wood, J., (after stating the facts.) A covenant against incumbrances in a deed is one in praesenti. If incumbrances exist, the covenant is broken &s soon as made. The breach of such a covenant is “single, entire and perfect in the first instance,” and the right of action accrues at once. Kawle, Cov. for Tit. §§ 189, 205; 4 Kent, Com. 471; Smith v. Jefts, 44 N. H. 482. The covenantee, however, is not compelled to sue at once; and, if he sue before he has been disturbed or has suffered injury by reason of the incumbrance (not having paid anything to remove or extinguish it), he can only recover nominal damages. The rule as respects the measure of damages is to treat the covenant against incumbrances as a covenant of indemnity. Rawle, Cov. for Title, § 188; Norton v. Babcock, 2 Metc. 510. In case of a breach, the covenantee should recover the damages he may have sustained in consequence thereof. Accordingly, where a covenantee in a deed is sued by the covenantor (who covnants against incumbrances) on a note given for the purchase money of the land conveyed, the covenantee, if he ask it, should receive credit for such sum as he has had to pay in order to protect his title against any incumbrance made or suffered by by the covenantor; See Morris v. Ham, 47 Ark. 293. Here the covenant against incumbrances was broken by reason of a forfeiture for the nonpayment of taxes which existed at the time of the execution of the deed containing the 'covenant. The appellant redeemed one of the tracts, but, failing to redeem the other, the title to which became absolute in the state, and, in order to get title, to this, it was compelled to purchase from the state, paying the sum of $151. Negligence cannot be predicated upon a failure by appellant to redeem from the tax forfeitures. True, it might have done so; but it was under no duty or obligation of that kind, and its right at law to stand on its covenant, and to recover damages for breach of same, cannot be affected by its failure or refusal to perform a duty which devolved upon another. Rawle, Cov. for Tit. § 181; Burk v. Clements, 16 Ind. 132; Elder v. True, 32 Me. 104; Stewart v. Drake, 14 N. J. L. 143; Miller v. Halsey, 14 N. J. L. 48. Appellee had broken his covenant, and it was his duty to see that no injury resulted to appellant’s title by reason of said breach. The court therefore erred in its declaration of law, and in refusing to allow the credit of $151, instead of $14.01. There was no appeal by appellee from the allowance in favor of the appellant of the amount of attorney’s lien. Reverse the judgment, and remand the cause for.a new trial.