Stebbins v. Wolf

The opinion of the court was delivered by JohnstoN, J.: One of the disputed points in this case is in regard to the measure of damages for a breach of the covenant of warranty in the conveyance of real estate. The land was purchased from Stebbins by Gottleib Wolf, on November 26,1876, and the consideration agreed to be paid was $375. He held possession of the land from that time until April 1, 1882, when he was evicted by the owner of the paramount title, Elizabeth W. Long. The value of the land at the time of the eviction was $2,300. Wolf insists that the measure of damages is the value of the land at the time of eviction, while the other party contends that the agreed value of the land at the time it was conveyed [770] is the true r.ule for assessing the damages. The latter theory is substantially the one adopted by the trial court. It was held that the purchaser was entitled to the consideration paid for the land, with interest thereon from the time of conveyance, together with reasonable costs and expenses incurred by the purchaser in defending his title, allowing the vendor credit for such benefits as the purchaser derived from the conveyance, and for which he was not answerable to the owner of the paramount title. There is some conflict of decision upon the rule for assessing damages in such a case, but the weight of authority supports the theory which the court below adopted. (Rawle on Covenants for Title, 4th ed., p. 242, and cases cited; 3 Washb. on Real Pr., 423; 2 Sutherland on Damages, 280; 1 Sedg-wick on Damages, p. 338, and note.) In this country the value of land fluctuates, and is frequently enhanced to an enormous extent. The construction of a railroad near to, or the building of a town upon the land,, or other adventitious circumstances occurring between the sale and the discovery of the defective title, might enhance its value an hundred fold, and to require the vendor to pay such increased value would be a hardship and an injustice. The rule measuring the damages by the value of the land as agreed upon by the parties at the time of its alienation is more reasonable and just, and while this general rule is subject to modification by circumstances, we think it is applicable to the facts in this case. The plaintiff in error, W. R. Stebbins, complains of the rulings of the court, first, in allowing Wolf interest on the consideration-money for the whole time from the date of the deed till the eviction; and second, in failing to set off the full benefits which Wolf derived from the tax lien and the moneys paid thereon by Long in the ejectment action, in reduction of damages in this action. In respect to interest on the purchase-price of the land, it appears that Wolf entered upon and held possession of the land from the time of its purchase down until April 1, 1882, when he was evicted in the suit brought against him by Eliza [771] beth W. Long. In that action he was held to account to Long for the rents and profits of the land from the service of the summons on May 27, 1879. From the time of the sale until the last-named date, the rents and profits arising from his possession and use of the land amounted to $160. He was not required to account to Long for the use of the land during this period, and as interest is given to counterbalance the claim of the true owner for mesne profits, we think Wolf ought not to recover interest on the consideration-money while he had the use of the premises free of expense. The rule in regard to the recovery of interest as an item of damages, has been well stated, as follows: “ Interest is not recovered when the premises have been occupied by the warrantee, and he has not accounted nor is accountable for the rents and profits. It would be unjust. He who buys a farm or house and lot, agrees to part with the use of the consideration forever, for the use of the farm or house and lot forever. As long as he has the use of the farm, or house and lot, so long should the seller have the use of the consideration. In such case the use and occupation are presumed to be equal to the use of the purchase-money. And if not, the grantee has no ground for complaint while he is undisturbed in the enjoyment of that for which he was content to pay the purchase-money.” (2 Sutherland on Damages, p. 300. See also Combs v. Tarleton’s Adm’rs, 2 Dana, 465; Wead v. Larkin, 49 Ill. 99; Thompson v. Jones, 11 B. Mon. 365; Clark v. Parr, 14 Ohio, 121; Whiting v. Dewey, 15 Pick. 428; 2 Wait’s Actions and Defenses, p.401.) We think therefore that Wolf ought to be limited in his recovery of damages on account of interest on the purchase-money to that which would accrue after the service of the summons upon him in the ejectment action, during which time he was held to account for mesne profits arising from the use and occupation of the premises, and which amount to $74.67. Upon the other assignment of error by Stebbins, the agreed facts show that Stebbins held the land under a tax deed. The lands were sold to him for the unpaid taxes of 1871, and he paid the subsequent taxes and charges on the lands down to and including the semi-annual payment of taxes in 1876. After [772] that time the taxes levied against the land were paid by Wolf. In the ejectment action in which the judgment of eviction was rendered, Wolf not only received the benefit of all lasting and valuable improvements made upon the land, but he recovered from Long upon the tax lien against the premises the total sum of $692.90. Of this sum, $563.77 was paid to him by reason of the taxes which Stebbins had paid upon the land, and the liberal interest allowed thereon by the statute of the state. The court, however, did not allow Stebbins this amount in. reduction of damages for the breach of the warranty, but only credited him with $277.12, being the amount of Stebbins’s tax-title interest in the land at the time of its sale. In this we think there was error. Generally, the warrantor is entitled to all the benefits which the purchaser derives from the defective Conveyance in reduction of the amount of recovery against him for a breach of the warranty. It was solely by reason of the tax title and interest conveyed by Stebbins that Wolf received so large a sum of money from Long. The statute for the recovery of taxes provides that where the holder of a tax deed, or anyone claiming under him by virtue of such deed, is defeated in an action for the recovery of the land sold, the successful party before being let into possession shall be required to pay to the other party not only the amount of the taxes, interest and costs which have accrued up to the date of the tax deed, but also interest thereafter on the total amount at the high rate of twenty per cent, per annum. The tax interest or lien conveyed to Wolf by Stebbins rapidly increased on account of this large rate of interest. It was a benefit which flowed directly from the defective conveyance made to Wolf, and as he is not held to account for this benefit to anyone.else, it should be considered in assessing the damages in a suit upon the covenant of warranty, against the vendor. (King v. Kerr, 5 Ohio, 155; Booker v. Bell, 3 Bibb, 173.) We are therefore of opinion that Stebbins is entitled to a credit by way of reduction of damages, for the taxes paid by him, together with all interest which had accrued thereon up to the time of judgment in the .action wherein these taxes and interest were paid to Wolf. [773] We are further of the opinion that the item of $194.70, allowed by the trial court to Wolf for costs and expenses, was incurred by him in good faith in defending the ejectment action brought by Long against him, and is a reasonable and proper charge against the defendant in this case. Measuring the damages, then, by the rules stated, we find, under the agreed statement of facts, that the items of damages chargeable against Stebbins at the time of the eviction of Wolf are as follows: The purchase-price of the land at the time of sale. §375 00 Interest on the purchase-price from May 27,1879. 74 67 Costs and expenses in defending suit wherein judgment of eviction was rendered. 194 70 Total. §644 37 Deduct amount received by Wolf for taxes paid by Stebbins, and interest thereon. 563 77 Amount due Wolf April 1,1882. §80 60 Wolf is therefore only entitled to a judgment for this balance, together with the interest thereon at seven per cent, until November 12, 1883, the date of judgment in this case, which amounts to $89.66. The judgment of the district court will therefore be modified by awarding judgment in favor of the plaintiff Wolf for $89.66. The costs in this court will be divided. Ml the Justices concurring.