46 P.2d 428 | Utah | 1935
The time-table in this case is important. On November 18, 1925, the defendants conveyed to the plaintiff certain real property in Salt Lake county, Utah, by a warranty deed, subject only to a mortgage of $2,000. At the time of conveyance there were unpaid taxes for the year 1923 amounting to $82.39, which were a lien upon said property. On the 22d day of May, 1928, plaintiff paid to Salt Lake county the sum of $126.56 in extinguishment of the lien of the aforesaid taxes. On April 29, 1933, plaintiff brought this action against the defendants for the amount paid to extinguish the lien, and judgment was rendered in his favor and against the defendants for said amount, from which judgment defendants appeal.
The case came up on the judgment roll and a stipulation that at the time the warranty deed was given by the defendants to the plaintiff, to wit, November 18, 1925, there existed on the records of the county recorder's office of Salt Lake county a tax sale on the premises recorded March 13, 1, 2 1923. It thus appears that the taxes were for the year 1922 instead of 1923, as alleged in the *487
complaint, and as found by the court. A tax sale for 1923 taxes could not be recorded on March 13, 1923. Neither the stipulation nor the judgment roll reveals what the transaction was between the plaintiff and the county wherein the sum of $126.56 was paid. It does not appear whether the property went to tax deed to the county and was sold at the May sale or a private sale at one of the meetings of the commission thereafter, or whether it was redeemed before the county made a sale, all of which three possibilities could have happened under Comp. Laws Utah 1917, § 6056, as amended by Laws Utah 1921, chap. 140, and now known as R.S. Utah 1933, 80-10-68. The stipulation speaks of the extinguishment of the said tax lien on May 22, 1928, and from this we would presume that the property had been redeemed and not purchased at a sale from the county. As a technical matter, the lien of the tax is extinguished by the auditor's tax deed to the county. See Hanson v. Burris 86 U. 424,
The defendants and appellants set up in the lower court sections 6466, 6467, and 6474, Comp. Laws Utah 1917, as a bar to the bringing of the action. It will be noted that more than six years elapsed between the time the plaintiff obtained his deed from the defendants and the time when this action was brought, the deed being obtained on November 18, 1925, and the action being brought on April 29, 1933. But not quite five years elapsed between the time the plaintiff paid out the $126.56 and the time this action was brought. The warranty deed was in the form provided by section 4881, Comp. Laws Utah 1917, now known as section 78-1-11, R.S. Utah 1933. It is provided by said section that by such deed the grantor covenants with the grantee that (1) he is lawfully seized of the property; (2) that he has good right to convey the same; (3) that he guarantees the grantee, his heirs and assigns in the quiet possession thereof; (4) that the premises are free from all encumbrances, and (5) that the grantor, his heirs and personal representatives will forever warrant and defend the title thereof in the grantee, his heirs and assigns against all lawful claims whatsoever. The plaintiff sued upon the fourth covenant implied by the deed, to wit, the covenant against encumbrances. The defendants set up the statute of limitations, especially section 6466, Comp. Laws 1917, contending that if there was a violation of the covenant against encumbrances by virtue of the presence of a lien for taxes at the time of the conveyance, the covenant was broken eo instanti with delivery of conveyance, and the statute was set in motion at that time; that more than six years had run since the statute was set in motion, and that the plainiff was therefore barred. The plaintiff contended that the statute was set in motion, as far as the action for the recovery of the $126.56 was concerned, at the time when said money was paid to the county, to wit, on May 22, 1928. This makes the issue between the parties.
The plaintiff bases his contention on two propositions: First, that the covenant against encumbrances runs with *489 the land, and therefore can be sued on when the holder of the land is damaged, regardless of whether six or more years have run since the conveyance; and, second, that under the modern view of the law a covenant against encumbrances is to be deemed a contract to indemnify, and that the obligation to indemnify only arises when there is something to be indemnified for.
Evidently in England a covenant against encumbrances was deemed as a covenant for quiet enjoyment and required an eviction, construction or actual, by the lienholder before the covenantee or his assigns could sue for substantial damages. It was also held in England to run with the land. In this country, the early decisions held otherwise. Most of the eastern states early held that a covenant that "I am seised," a covenant that "I have good right to convey," and the covenant that the premises were free of all encumbrances, were covenants in praesenti, and that if the facts covenanted to be true were not so, the covenants were broken when made, and the right to enforce them was a chose in action, which, according to the common law, could not be assigned so as to enable an assignee to bring an action in his own name. But the covenant "I will warrant and defend" (generally called warranty of title) and the covenant for the quiet enjoyment were in futuro and ran with the land, and that whenever the covenantee or his assigns was evicted by title paramount, either constructive or actual, he had a remedy against the covenantor, and not until then. Thayer v. Clemence (1839) 22 Pick. (Mass.) 490; Pillsbury v. Mitchell (1856)
Some of the states, especially in recent years, have swung the other way as to a covenant of seisin and a covenant against encumbrances running with the land. See note to 17 L.R.A. (N.S.) 1191, where it is said, anent the covenant of seisin cases of In re Hanlin's Estate,
"The rule respecting the implied covenant of seisin — that is a covenant in praesenti is broken, if at all, when made, and the essential consequences of its strict application to the effect that there is but one breach for which but one recovery is permitted — does not obtain in Missouri. On the contrary, it has been settled with us from an early period in the judicial history of the state that the covenant of indefeasible seisin implied in the statutory words `grant, bargain and sale' is more than a covenant in praesenti. It is, in fact, when either some title, although defeasible or possession of the premises accompanies the deed, a continuing covenant of indemnity having capacity to run with the land, annexed and incident to the indefeasible estate, if it be such, * * * or if it be defeasible, and some title is conveyed, then to the defeasible estate, * * * or if possession be given under the deed, and no title, then as incident to such possession, * * * and so on to successive grantees, until the paramount title is asserted and results in damage to the actual possessor."
In other words, this case held that a covenant of seisin was in the same category as a covenant of warranty, but a covenant against encumbrances in Missouri, if we can judge by the case ofBuren v. Hubbell, supra, is still unassignable and does not run with the land. It was stated in the Buren Case that,
"It is the well settled law in this state that a covenant against incumbrances is a covenant in presenti and is broken the instant it is made." *493
This seems anomalous. In most jurisdictions a covenant of seisin is treated in the same class as a covenant against encumbrances; yet in Missouri a covenant of seisin is treated in the class of a covenant of warranty and runs with the land, whilst a covenant against encumbrances is held not to run. In fact, as shown hereafter, it is more consistent to hold that a covenant of seisin should not run with the land because usually an entire and complete damage is ascertainable immediately; otherwise, with a breach of a covenant against encumbranceswhere there exists a money charge, and especially since the cases hold that the damage in such case cannot be recovered ahead of payment of the charge by the covenantee. At any rate, the Leet Case shows a tendency to treat these covenants as running with the land. See Note to 17 L.R.A. (N.S.) 1179, et seq., as to covenant of seisin. Also Brooks v. Mohl,
"It is only by thus distinguishing between encumbrances that the covenant can have reasonable effect in all cases, and, when the courts thus discriminate, there is no difficulty in giving substantial redress under definite and inflexible rules of law. When the law can be just and also certain, there is no reason why an unjust certainty should be perpetuated."
In the opinion of that noted jurist, a covenant consisting of a right of way would not run with the land, "but a covenant against a money charge must attach itself to the title conveyed, and accompany it, not only for the protection of the covenantee, but for the protection of any of his assigns, whom the encumbrance may eventually damnify." Judge Cooley stated that he realized that his view was opposed to the decided current of American authority, but that he was supported by adjudications in the states of Ohio, Illinois, and Iowa, and found some support in Missouri and Indiana. We have already referred to the Missouri cases. This was in 1879. We believe that there has been more of a swing to Judge Cooley's view, and that today many respectable authorities consider that a covenant against encumbrances, when it applies to money charges or liens against lands which can be removed by payment, is to be considered as a covenant to indemnify. See Thompson v. Conran's Estate (Mo.App.)
In the instant case it is possible to determine the question of whether the statute is set in motion at the date of the extinguishment of the lien without deciding whether a covenant against encumbrances runs with the land. Certainly if it does, a grantee from the purchaser and any 3 successive grantee may sue and the statute of limitations does not begin to run against the payment of the money to relieve the land of the charge until it is paid. In *495 this case, as in the case of Post v. Campau, supra, there was no transfer of the title by the covenantee, that is, by Soderberg. He still retained it at the time he paid the money and at the time he brought suit. Therefore, the question as to whether a remote grantee may sue is not involved. We have considered the question of whether a covenant against encumbrances runs with the land, because if it should have been determined that it did, it would have settled this matter at all events in favor of plaintiff. Be that as it may, we believe that the plaintiff's action in this case is not barred by the statute, whether it is put upon the basis that a covenant against encumbrances runs with the land or upon the basis that it is, in effect, an indemnity agreement, which may be another way of saying the same thing, or whether it is placed upon the theory that a new cause of action arises when the money is paid. In the case of Leet v. Gratz, supra, it was held in the case of a covenant of seisin that an action might be brought at once by the covenantee so as to recover for the technical breach, and then later another action could be brought, when substantial damages accrue because of the covenantee being evicted, or when he paid off the debt with regard to which it was a lien. It was held in the Leet Case that this would not be spliting causes of action, because they were different causes of action, and could not be litigated in one suit unless they both arose before the time of bringing the action.
It has been held that damages cannot be recovered by the covenantee for what it would cost to extinguish the lien until he has in fact extinguished it. See King v. Union Trust Co.,
"The statute of limitations commences to run only from the time the cause of action accrues, and a cause of action does not accrue until the person owning it can successfully maintain an action thereon; the unfailing test is to decide upon the precise point of time when the owner of the right can institute a suit to enforce it and prosecute the same to a successful result."
The difficulty with holding that a cause of action arises each time that the buyer is forced to extinguish a lien is that it runs afoul of a number of those cases where a cause of action accrues at one time and consequential damages ensue from said cause at a later date. Thus, it is stated in the note to 126 Am. St. Rep. 944, that:
"An action resting upon a breach of contract generally accrues at the time the contract is broken, although substantial damages from the breach are not sustained until afterward. The gist of the action is the breach, not the consequential damages which subsequently accrue; they are not the result of a new or continued breach, but relate back to the original breach which gave the right of action and without which they could not exist."
In the case of a violation of a covenant against encumbrances, if it is so considered, the breach really is committed *497 at the time of the conveyance if there is a lien on the premises which the covenantor covenanted was not there. The damage suffered by the buyer because of the necessity to extinguish a charge against the land was a damage suffered because of the failure of the covenantor to convey the property without the said charge, and thus arose from the breach of the covenant, which breach occurred eo instanti at the time of the conveyance. If, on the other hand, the covenant against encumbrances is looked at according to its true content and its true intention, it should be looked at as a covenant to indemnify. Then no breach occurs until the duty to indemnify is violated, that is, until the buyer pays and demands and the covenantor refuses to respond. Until the buyer pays to extinguish the charge against the land, he cannot ask for indemnity. We believe that this view is most consonant with justice and works in harmoniously with the fabric of those cases where an act occurs which is a violation of a duty and thus starts the statute regardless of when the damage may accrue or be felt; such cases, for instance, as the breach of a contract to insure property against loss by fire, where the statute begins to run at the expiration of a reasonable time within which the policy could be issued and not at the time the fire occurred. In a certain class of cases for malpractice on the part of a surgeon, the negligent act may occur a long time before its consequences have reacted against the patient. In those cases the statute is held to run from the time the act causing the damage is done, and not when the damage is felt, although in some cases the difficulty is surmounted by holding the act a continuing one as long as the active cause is still operating, as in the case of a sponge left in a patient, or that the duty to remove it still continues as long as the relationship of doctor and patient continues. Also, the case of attorneys at law and abstracters, the breach of duty occurs when the act of unskillfulness or negligence occurs, according to the holdings of many courts, yet proof of actual damage might not be possible until years later. *498
We believe that the logical fabric and the law will be better maintained and yet justice be done by holding that a covenant against encumbrances is, in effect, a covenant to indemnify where the encumbrance is a charge or lien against the land which can be extinguished by payment. Thus the statute 4 can be held to begin to run only when the grantee is damnified. In the following cases it was held that the statute of limitations ran from the time that the conveyance was delivered, because the right of action arose at that time. Guerin v.Smith (1886)
"As the covenants of seisin and against incumbrances were at once broken, the statute of limitations at once began to run against them as against all other personal actions, and they were barred many years since. No reason has been suggested upon which they can be taken out of the statute, and we do not perceive how they can be without entirely disregarding its terms. * * * If a party does not choose to investigate his title, or enforce his possession within the period of limitation, he must take the consequences of his own neglect."
In the case of Jewett v. Fisher (1899)
In Clark v. Swift (1841) 3 Metc. (Mass.) 390, it was held that:
"If there be an incumbrance on land at the time when it is conveyed with a covenant against incumbrances, the covenant is broken as soon as it is made, a cause of action immediately accrues to the grantee, and unless the action is commenced within twenty years from that time, it is barred by the statute of limitations."
If we consider only the cases founded on a breach of a covenant against encumbrances, the authorities contrary to the rule enunciated in this case, to the effect that the statute is set in motion for the purpose of recovering moneys paid to extinguish a lien when the money is paid, are not formidable. As stated before, we believe that the rule herein enunciated is more in keeping with justice. *500
While setting forth the facts in this case, we called attention to the fact that in all probability an auditor's deed to this property had been given to the county in 1927 for the unpaid taxes of 1922. In the case of Bray v. Fletcher,
The judgment is affirmed, with costs to respondent.
ELIAS HANSEN, C.J., and FOLLAND, EPHRAIM HANSON, and MOFFAT, JJ., concur. *501
