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DOUGLASS v. LEWIS.

SUPREME COURT OF THE UNITED STATES


decided: May 13, 1889.

DOUGLASS
v.
LEWIS.

ERROR TO THE SUPREME COURT OF THE TERRITORY OF NEW MEXICO.

Author: Fuller

[ 131 U.S. Page 80]

 MR. CHIEF JUSTICE FULLER, after stating the case, delivered the opinion of the court.

Assuming that defendants in error failed to sustain their plea that they "were lawfully seized of an indefeasible estate, and in possession of a title in fee simple in and to the said real property, and then had good right and full power to convey the same," counsel for plaintiff in error state their position "in the following propositions: 1. The covenant of warranty which is found written in the deed does not exclude the statutory covenants; these latter must be considered as express

[ 131 U.S. Page 81]

     covenants, having the same effect as though written out in full in the instrument of conveyance. 2. The statutory covenant of seisin is a general covenant, unlimited by any restrictive words found in the second statutory covenant. 3. The covenant of seisin is broken, if at all, as soon as it is made. 4. The plaintiff is only required to declare its breach, and need neither aver eviction or damages. 5. The burden of proof is on defendant. 6. The measure of damages is the purchase money and interest."

The defendants in error by their deed entered into a general covenant of warranty, but it is claimed that in virtue of the statute they are to be held in addition to a general covenant of seisin, a limited covenant as to encumbrances, and a general covenant of further assurance.

The statute relied on is as follows:

"The words 'bargained and sold,' or words to the same effect, in all conveyances of hereditary real estate, unless restricted in express terms on the part of the person conveying the same, himself and his heirs, to the person to whom the property is conveyed, his heirs and assignees, shall be limited to the following effect: First. That the grantor, at the time of the execution of said conveyance, is possessed of an irrevocable possession in fee simple to the property so conveyed. Second. That the said real estate, at the time of the execution of said conveyance, is free from all incumbrance made or suffered to be made by the grantor, or by any person claiming the same under him. Third. For the greater security of the person, his heirs and assignees, to whom said real estate is conveyed by the grantor and his heirs, suits may be instituted the same as if the conditions were stipulated in the said conveyance." Compiled Laws, New Mexico, 1884, § 2750, p. 1306.

The language used is somewhat ambiguous, arising, as the Supreme Court of the Territory informs us, from the section having been originally enacted in Spanish from English and then retranslated; but we are content with the view of that court that "hereditary real estate" means real estate of inheritance, and "possessed of an irrevocable possession in fee simple" means seized of an indefeasible estate in fee simple.

[ 131 U.S. Page 82]

     At common law, in the transfer of estates of freehold by deed, a warranty was implied from the word of feoffment, dedi, and from no other word, and from words of bargain and sale merely no covenant was implied in any case.

In 1707, the statute of 6 Anne, c. 35 was enacted, of which the 30th section is as follows:

"In all deeds of bargain and sale hereafter enrolled in pursuance of this act, whereby any estate of inheritance in fee simple is limited to the bargainee and his heirs, the words grant, bargain and sell shall amount to, and be construed and adjudged in all courts of judicature, to be express covenants to the barganiee and his heirs and assigns, from the bargainor for himself, his heirs, executors and administrators, that the bargainor, notwithstanding any act done by him, was at the time of the execution of such deed seized of the hereditaments and premises thereby granted, bargained and sold, of an indefeasible estate in fee simple, free from all encumbrances, (rents and services due to the lord of the fee only excepted,) and for quiet enjoyment thereof against the bargainor, his heirs and assigns, and all claiming under him, and also for further assurance thereof to be made by the bargainor, his heirs and assigns, and all claiming under him, unless the same shall be restrained and limited by express particular words contained in such deed; and that the bargainee, his heirs, executors, administrators and assigns, respectively, shall and may, in any action to be brought, assign a breach or breaches thereupon, as they might do in case such covenants were expressly inserted in such bargain and sale."

And in 1715, an act was passed by the colony of Pennsylvania, entitled "An act for acknowledging and recording of deeds," of which the 6th section declared that:

"All deeds to be recorded in pursuance of this act, whereby any estate of inheritance in fee simple shall hereafter be limited to the grantee and his heirs, the words grant, bargain, sell, shall be adjudged an express covenant to the grantee, his heirs and assigns, to wit, that the grantor was seized of an indefeasible estate in fee simple, freed from encumbrances done or suffered from the grantor (except the rents and services due

[ 131 U.S. Page 83]

     to the lord of the fee), as also for quiet enjoyment against the grantor, his heirs and assigns, unless limited by express words contained in such deed, and that the grantee, his heirs, executors, administrators and assigns, may in any action assign breaches as if such covenants were expressly inserted."

In Gratz v. Ewalt, 2 Binney, 95, 99, the construction of this statute was carefully considered, and Tilghman, C.J., in delivering the opinion, said: "The meaning is not clearly expressed; but I take it to be a covenant . . . that the estate was indefeasible as to any act of the grantor. For if it was intended that the covenant should be that the grantor was seized of an estate absolutely indefeasible, it was improper to add the subsequent words 'freed from incumbrance done or suffered by him.' . . . The words 'seized of an indefeasible estate in fee simple' are to be considered, therefore, not as standing alone, but in connection with the words next following, 'freed from encumbrances done or suffered from the grantor.' I am the more convinced that this was the intention of the legislature, by comparing the expressions in this act with the 30th section of the statute of 6 Anne, c. 35, which contains a provision on the same subject, and was evidently in the eye of the persons who framed our law. The British statute makes use of more words, and the intention is more clearly expressed. It declares that the words grant, bargain and sell shall amount to a covenant that the bargainor, notwithstanding any act done by him, was at the time of the execution of the deed seized of an indefeasible estate in fee simple, etc. Our law seems intended to express the substance of the British statute in fewer words, and has fallen into a degree of obscurity, which is often the consequence of attempting brevity. I can conceive no good reason why our legislature should have wished to carry this implied warranty farther than the British statute did; because it has bad effects to annex to words an arbitrary meaning far more extensive than their usual import, and which must be unknown to all but professional men. It might be very well to guard against secret acts of the grantor with which none but himself and those interested in keeping the secret could be acquainted. As for

[ 131 U.S. Page 84]

     any further warranty, if it was intended by the parties, it was best to leave them to the usual manner of expressing it in plain terms."

The statute of Anne, the Pennsylvania act, and the foregoing extract from the opinion of Chief Justice Tilghman, are given by Mr. Rawle in his admirable work on Covenants for Title, (5th ed. §§ 282, 283 et seq.,) and he states that "the construction thus given has never been departed from in Pennsylvania; and it is said by Chancellor Kent (4 Kent Com. 474) that 'by the decision in Gratz v. Ewalt the words of the statute are divested of all dangerous tendency, and that it will equally apply to the same statutory language in other States.'"

The provision upon this subject in the statutes of Alabama, Arkansas, Illinois and Mississippi, is substantially the same as in Pennsylvania, and the same construction has been put upon it by the courts. Stewart v. Anderson, 10 Alabama, 504; Winston v. Vaughan, 22 Arkansas, 72; Finley v. Steele, 23 Illinois, 56; Weems v. McCaughan, 7 Smedes & Marsh. 427. It is contended, however, that the statute of Missouri so differs from the statute of Anne and that of Pennsylvania as to require a different construction, which has been given it in Alexander v. Schreiber, 10 Missouri, 460, and that as the statute of New Mexico was taken from that of Missouri, the construction put upon the latter should be accepted as correct.

The language of the statute of Missouri (Gen. Stat. Missouri, 1865, p. 444, § 8) is as follows:

"The words 'grant,' 'bargain' and 'sell,' in all conveyances in which any estate of inheritance in fee simple is limited, shall, unless restrained by expressed terms contained in such conveyances, be construed to be the following express covenants on the part of the grantor, for himself and his heirs, to the grantee, his heirs and assigns: First, that the grantor was, at the time of the execution of such conveyance, seized of an indefeasible estate, in fee simple, in the real estate thereby granted; second, that such real estate was, at the time of the execution of such conveyance, free from encumbrances done or suffered by the grantor, or any person claiming under him; third, for further assurances of such real estate to be made by

[ 131 U.S. Page 85]

     the grantor and his heirs to the grantee and his heirs and assigns; and may be sued upon in the same manner as if such covenants were expressly inserted in the conveyance."

And the Supreme Court of Missouri, in Alexander v. Schreiber, ubi supra, after citing many cases holding that where a deed contains a limited covenant that the premises are free from encumbrances, and also a general covenant of warranty, the one does not limit the other, thus proceeds: "It is apparent from these cases, to which we have briefly referred, that whilst it is conceded that a special covenant will restrain a general one, where the two are absolutely irreconcilable, yet the courts have inclined very much to let both stand. A covenant is to be construed most strongly against the covenantor, and in giving effect to the intention of the parties to an instrument of conveyance, the courts have kept this principle in view. Where the particular covenants and the general covenants are entirely independent of each other and of a different character, they will all stand. The statute enumerates the three covenants which the words 'grant, bargain and sell' are declared to imply, as distinct and independent covenants. The second may be superfluous, but it does not therefore limit the first, which is independent of and inconsistent with it."

It appears to us, however, that where the question arises not upon the covenants in a deed, but upon the construction of a statute which turns certain words of grant into express covenants, the same rule of construction does not apply. In respect to deeds, the words are to be taken most strongly against the party using them, while in respect to statutes, if in derogation of the common law, as that under consideration is, they should be construed strictly. And, so construed, the statute of New Mexico seems clearly within the conclusion reached in Gratz v. Ewalt. The covenant that the grantor is "seized of an indefeasible estate in fee simple" is a covenant for a perfect title, and to couple with it a covenant that the land is free from encumbrances, "made or suffered to be made by the grantor, or by any person claiming the same under him," is incongruous and repugnant, unless the prior covenant is held to mean "notwithstanding any act done by the grantor."

[ 131 U.S. Page 86]

     But apart from this, as the statute invests the words "bargained and sold" with an effect they did not possess at common law, we think it was not intended that those words should so operate where the parties themselves have entered into covenants. In Weems v. McCaughan, 7 Smedes & Marsh. 422, 427, it is said: "The covenants raised by law from the use of particular words are only intended to be operative where the parties themselves have omitted to insert covenants. But where the party declares how far he will be bound to warrant, that is the extent of his covenant."

And the same result is reached and announced by the Supreme Court of Illinois in Finley v. Steele, 23 Illinois, 56, in which case Mr. Justice Walker, speaking for the court, says that "this statutory provision does not create this covenant against the intention of the parties;" that "the employment of any language from which it appears the parties intended that these words should not have such an effect," does away with the statutory covenant; that all statutes in derogation of the common law must be construed strictly; that if there is a doubt whether where there is a general covenant of warranty in the deed, such a case is embraced within the provisions of the statute, it should not be held as controlling the rights of the parties; that "there is scarcely a court before which this act has come for a construction, that has not characterized it as a provision of dangerous tendency, calculated to entrap the ignorant and unwary into liability which they never intended to incur;" that the rule is familiar that "the expression of one thing is the exclusion of another;" and "where the grantor inserts a covenant of general warranty, and omits all other covenants, that it must have been his intention to bind himself alone by the covenant he has inserted;" that under the statutory covenant "the breach occurs, if at all, upon the delivery of the deed, whilst under the covenant of general warranty a breach only takes place upon an eviction;" and that, "if the grantor were to write out this statutory covenant in a deed, and also insert a covenant of general warranty, it would present a very different question, as then it would by that act appear to be his intention

[ 131 U.S. Page 87]

     that both covenants should be operative. In such a case the court would have to give effect to each, so far as it was not limited by the other."

These views strike us as sensible and just, and we concur with the Supreme Court of the Territory in its approval of them.

Chancellor Kent pointed out in his Commentaries the danger from importing into a deed, express covenants created by statute, "of imposition upon the ignorant and unwary, if any covenant be implied, that is not stipulated in clear and precise terms."

The covenant of warranty and that of seisin or of right to convey are not equivalent covenants. Defect of title will sustain an action upon the one, while disturbance of possession is requisite to recover upon the other. And we cannot hold that Lewis and wife, in covenanting for quiet enjoyment, intended to be bound by a covenant outside of their express agreement, which might impose a liability upon them the instant their deed was executed and delivered. Covenants of seisin and of good right to convey are broken, if at all, when the deed is delivered, and if the grantor is not well seized, or if he has not the power to convey, an action at once accrues.

But as Douglass was in possession when he commenced his action, it does not appear to be material to him whether he stands upon the covenant of general warranty in the deed or of seisin in the statute.

While the Supreme Court of Missouri has held that the covenant created by the statute may be imposed upon a grantor, notwithstanding he has warranted generally in the conveyance, yet the rule is there equally well settled, that the statutory covenant of seisin is merely a covenant for indemnity, and that nominal damages only are recoverable until the estate coveyed is defeated or real injury sustained. Dickson v. Desire's Admir., 23 Missouri, 151; Collier v. Gamble, 10 Missouri, 467.

In that view the grantee is protected by the general covenant of warranty substantially to the same extent as by the statutory covenant, and the conclusion is strengthened that where one is expressly inserted in the deed the other ought not to be implied.

[ 131 U.S. Page 88]

     Lewis and wife had the right to contract that their grantee should not hold possession of the property and at the same time compel them to return the purchase money, and in either aspect there could be no substantial recovery here.

The judgment of the Supreme Court of the Territory is

Affirmed.

18890513

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