
    Supreme Court of Errors and Appeals. Nashviile.
    1813.
    TALBOT v. BEDFORD’S HEIRS.
    V Adjourned Case.
    For breach of a covenant of warranty, where there is no fraud, the measure of damages is the consideration price, with interest. [Acc. Elliott v. Thompson, 4 Hum. 99; 3 Head, 448. See Wilson v. Robertson, 1 Tenn. 464, and cases there cited, for the early rule.]
    Interest, by way of damages, has been adopted as the rule, in cases of contract for the conveyance of property, or for services performed, unattended with fraud; but a different rule will apply whenever it appears that dishonest or fraudulent practices have been used. [Acc. Noe v. Hodges, 5 Hum. 103, where this case is cited in the Reporter’s note.]
    The modern covenant to warrant and defend the title of land, includes a covenant of seisin of an indefeasible estate, and of a right to sell, and, as to the mode of redress, of quiet enjoyment. [Overruled, with its sequences, by Allison ». Allison, 1 Y. 16; Crutcher v. Stump, 5 Hay. 100; Randolph v. Meek, M. & Y. 61; where this case is cited; Ferriss v. Harshea, M. 6 Y. 48.]
    This was an action of covenant, founded on a warranty in a deed of bargain and sale, executed by Talbot to Thomas Bedford, in his lifetime. The clause of warranty was in these words: “ And the said Talbot, for himself, his heirs, &c., doth covenant and agree to and with the said Thomas Bedford, his heirs, and assigns, to warrant and forever defend the said tract of land so bargained and sold, unto the said Bedford, his heirs, and assigns, not only against himself but against the claim or claims of all and every person or persons whatever.” Upon this covenant a suit was brought in the County Court of Davidson against Talbot, by the heirs of Bedford, in which action the -plaintiffs assigned four breaches: —
    1. That a certain John Donnelson, in the lifetime of the ancestor, lawfully claiming title to said land, entered upon and took possession thereof, and that the said ancestor instituted an action of ejectment against the said Donnelson, upon the trial of which a verdict and judgment was rendered in favor of said Donnelson.
    2. That Talbot did not defend the title to the land, for that one John Donnelson, having a better adverse claim thereto, had kept Bedford in his lifetime, and his heirs since his death, out of the possession, &c.
    • 3. ■ That at the time of the conveyance and warranty, Talbot had no title to the land.
    4. That Donnelson, having a better adverse lawful claim to the land, did, since the death of the ancestor, lawfully evict the plaintiffs.
    To the first three breaches there was a demurrer; to the fourth, an issue was made to the country.
    The County Court overruled the demurrer. A writ of inquiry was thereupon awarded; and, to inquire of damages, as well as to try the issue, a jury was empanelled, who returned a verdict against Talbot.
    
      Upon the trial, the defendant, in the County Court, offered evidence of the value of the land at the time of the eviction, and also at the time of the trial. The admission of this evidence, was opposed by the counsel for Talbot, who requested the Court to instruct the jury that the measure of damages should be the value of the land at the time of the execution of the deed, to be ascertained .by the purchase-money, with interest, and the costs of the ejectment. But the Court refused to give the instructions, upon which an exception was taken.
    Talbot, to reverse-these several opinions of the County Court, took a writ of error to the Circuit Court. The case was afterwards adjourned to this Court, by the consent of the parties.
    
      Dickinson and Hayes, for the plaintiff in error,
    argued upon several grounds.
    1. This is a personal covenant, and a suit, consequently, cannot be maintained by the heirs if the breach happened in the lifetime of the ancestor. One of the breaches assigned alleges the eviction to have taken place in the lifetime of Thomas Bedford; the suit, therefore, ought to have been brought by his personal representative. 2 Johns. Rep. 1; Hob. 118; 2 Lev. 25 ; 4 Johns. Rep. 72; 1 Ventr. 176, 347; 4 Mass. Rep. 135 ; 1 Bac. Abr. tit. Covenant, let. E. 533.
    2. An allegation that the grantor had no title is not a sufficient breach. The declaration ought to allege expressly that the evictor had a good title; and it ought to set out the title specifically, so that the Court may see it is good, and not derived from the grantees. 1 Mass. Rep. 465 ; 3 Johns. 471; 2 Saund. 178 ; 4 Co. 80, Noke’s case; 3 T. R. 584; Cro. Ja. 674, 315, 444; Cro. Eliz. 833, 917; 1 Lev. 301.
    3. The Court below ought to have instructed the jury according to the request which was made. It has been determined, even in the case of a covenant of quiet enjoyment, that the measure of compensation shall be the consideration and interest. The case is much stronger in a covenant of warranty, where, of course, if the grantor had no title, the covenant is broken the moment it is executed. 2 H. Bl. 1078; 4 Dal. 4, 6; 1 Hen. & Mun. 201; 3 N. York Rep. Ill; 4 Johns. Rep. 1, 125; Blaine’s Prin. Eqy. 206; Sugd. 157; 4 Johns. Rep. 72; 4 Mass. Rep. 475 ; 3 Johns. Rep. 471.
    4. It does not appear that Talbot had any notice of the action of ejectment referred to in the breaches, and therefore the verdict and judgment ought not to affect him. 4 Mass. Rep. 135; Reeve’s His. Eng. Law, 438.
    
      Cooke, for the defendants in error,
    contended that in covenants which are broken by third persons, the declaration need only state that the. eviction was by lawful act or better adverse title. Cro. Eliz. 917; Cro. Ja. 315; 1 Lev. 301; 4 Co. 80, b. It is wholly useless and unnecessary to set out the nature of the title which occasioned the eviction. 2 Lev. 37; 1 Esp. 1ST. P. 367. In this case it is alleged in the breach that Donnelson had a better adverse legal claim. This allegation excludes the idea that the defendants were evicted by a title derived from themselves.
    The measure of damages can easily be ascertained by resorting to the nature of the covenant. The true rule of damages, in all cases of contract, is the value of the thing at the time the breach happens. Whenever the covenant is broken, that moment the cause of action accrues, and the plaintiff will have a right to demand the value, at that time, of that which he has lost. If this were a covenant of seisin, it is readily admitted that no more ought to be recovered than the value of the land when the deed was executed, to be ascertained by the agreed price of the parties ; because, if the grantor had no title at that time, the covenant would be broken the moment it was executed. But this is a covenant of warranty, and all the books agree that a covenant of warranty must be placed upon the same ground, as to a breach, with a covenant for quiet enjoyment. What is the understanding ? That the grantor will warrant and defend the title ; to wit, that the grantee shall not be disturbed in his enjoyment of the premises. When is such a covenant broken? Unquestionably, not until the enjoyment of the grantee is interrupted. He has no concern with the title of the grantor, — so long as nobody molests him, the title is defended. It will, therefore, follow that the true measure of damages in this case is the value of the land at the time the defendants were evicted by Donnelson, together with interest, and the costs which accrued in the action of ejectment. Kirb. Rep. 3; 2 Mass. Rep. 433, 453 ; 4 Mass. Rep. 108.
    The counsel was proceeding to answer the other points made by the plaintiff in error, but was stopped by the Court.
   Overton, J.

delivered the following opinion of the Court: —

In the argument of this case, it has been insisted by the counsel for the plaintiff in error,

1. That the breaches took place in the lifetime of the ancestor, whereby the right of action accrued to the executor, and not to the heirs of the decedent.

%■ That the declaration does not state the nature of the title by which the defendants were evicted.

3. That the Court below erred in not giving the instructions asked as to the measure of damages.

4. That Talbot had no notice of the ejectment, and that therefore the verdict and judgment ought not to affect him.

The third point having pressed itself upon the mind, and being the most extensive in its influence on society, will be first considered; and

1. A construction of this covenant will be attempted, with a view to the principles of the common law.

2. With a view to the existing mode of redress on such a contract, and the consequences of the disuse of the ancient modes in relation to the general law of contracts.

The language of the covenant is that the plaintiff binds himself, his heirs, &c. to “ warrant and forever defend.” This is precisely the same phraseology employed in the common law general warranty. It was a covenant running with the land. In many cases it differed from a personal covenant, or covenant in gross, which will be particularly noticed in the discussion of the second position assumed by the plaintiff’s counsel. The benefits resulting from the covenant descended to the heir of the warran-tee. In case of the warrantee’s being sued, his remedy was by voucher; and when that remedy did not apply, by warrantia charta. In either case a recovery was made, not in money, but in land of equal value. A claim to real estate is considered by Blackstone and other writers, in the compound view of a right of property, a right of possession, and possession itself. A warranty was an assurance that all these, particularly the first, was in the grantor. This is the means by which the other two were attained and preserved. Title was an important object of the contract; as by furnishing this, the warrantee was at all times able to defend himself .when impleaded. Hence, agreeably to the terms of the contract, the war-rantor being obliged to defend, must be vouched whenever the warrantee was sued. He received, notice of the institution of the suit, by which he was required to come into court and defend the title in the place of the warrantee, agreeably to • his engagement. If the title of the warrantor thus made defendant, proved defective, the warrantee could then recover the value in other lands ; which value was not to be estimated at the time of the eviction, but at the time the warranty was made.

By title here, is meant such a one as would bar the plaintiff of a recovery. If the action were , possessory, a superior possessory title would be sufficient; but if droitural, the warrantor must show one superior to the plaintiff’s, so as to preserve the possession of the terre-tenant or warrantee.

A complete assurance of the perpetual enjoyment of the land being the object of a warrantee in fee, it followed as a necessary inference that if the warrantor had not a complete title at the time of the warranty, his contract' was broken in a material part, as soon as made. This is demonstrated by the warrantee having it in his power to bring a suit on the warranty before being sued himself; and none can have voucher or viarrantia charta but the terre-tenant. He may have warrantia charta quia timet implaci-tari, but no execution shall be awarded; or in other words, no recovery in value shall be made until eviction in due course of law. This judgment as it is termed pro loco el tempore, bound the warrantor’s lands, which was the principal object.

Thus it appears that the warrantee or terre-tenant was not obliged to wait until he was sued, before he could commence suit; which, in many instances, if it were otherwise, would have proved ruinous. For the purpose of bringing suit, the contract was considered as broken at the time it was entered into; because the warrantor had not an indefeasible title.

It is not necessary to inquire minutely into the distinctions between a covenant of warranty affecting the realty, and covenants in gross, or personal covenants. In England the ancient warranty, or such a one as that now before the Court, has fallen into desuetude for nearly two hundred years, and covenants in gross substituted in its place; such as are mentioned in Sugden, 295. . With the introduction of these covenants, the ancient modes of proceeding by voucher and warrantia charta have ceased, and the common action of covenant has taken its place.

By some the ancient warranty has been compared with and esteemed equivalent to a modern covenant for quiet enjoyment.

This seems to be an imperfect view of the subject; the warranty at the common law, went farther than a bare covenant of quiet enjoyment; it extended to the title, which is not primarily contemplated by the other, — that relates to the possession alone.

It is more analogous to a covenant of seisin of an indefeasible estate. As it respects modern covenants, it is inclusive of a covenant of seisin of an indefeasible estate, and a right to sell; and as to the mode of redress, of quiet enjoyment.

But as covenants in gross cannot be extended by equitable construction, each must depend upon the words used. Thus, agreeably to the English law, a covenant of seisin simply, and a covenant of seisin of an indefeasible estate, convey different ideas.

In the first case the covenantor may be seised of an estate, and yet not have an indefeasible estate. So as to quiet enjoyment, the covenantor may not be seised of an estate by title, and if the covenantee enjoys without disturbance, the covenant is not broken.

2. It is important to consider the existing mode of redress and its consequences. It is agreed on all hands that those used anciently were by voucher and warrantia charta, and are now no longer in use. Even on the common law warranty as this is, an action of covenant must be brought. 2 Mass. Bep. 438; N. Car. Law. Repos. 81. It is further admitted that instead of the recovery in value of land, as was contemplated at common law, the recovery must be now had in damages ; and thus we are led to consider this contract on the broad foundation of contracts in general.

Contracts divide themselves into those which are executed and those which are executory. Mr. Sugden in his valuable treatise on vendors and purchasers, has made no distinction in principle, between real and personal contracts. It is believed that the law of contracts is the law of reason ; nor can any ground of distinction be perceived, as it respects the measure of damages, between those which relate to land and those which relate to personal property. Agreeably to ancient practice, damages on a breach of contract was left very much to the discretion of juries ; but in the gradual improvement of the science of law, particularly as relates to this subject, that which was formerly left in a state of uncertainty, is now reduced to settled and permanent principles.

As to damages arising from torts, they must, from necessity, remain in a state of uncertainty in a great measure. Not so respecting the quantum of damages to be recovered upon the breach of a contract.

As a rule of justice it may be safely stated that in all cases of contract for the delivery or conveyance of property, either real or personal, or for services to be performed, where the contract is unattended with fraud, deceit, indulgence, or delay, on the part of the obligor, and where the sum to be paid or duty to be performed, is specific and known to the obligor, and the contract either fails, or there’ is simply a delay of execution, the value of the property or services to be performed at the time of the execution, or intended execution of the contract, with interest thereon, should be the measure of damages ; and this must be considered the rule of law by those who have made the modern cases their study. An agreement respects something done, or to be done; in other words, executed or executory. As defined by Plowden, agregatio mentium in re aliqua facta vel facienda. Formerly interest was only allowed as a compensation for delay in payment of money. This rule has gradually been extending itself to contracts for property, estimating the value of the property in money at the time the contract should have been performed, allowing interest thereon until the time of the judgment. 2 Hay. Rep. 334, 336; 3 Call, 95; Hardin, 31; 3 Call, 300 ; 2 Burr. 1171. I am aware that most of these authorities do not contemplate interest on the value of property; but it is surely most conformable to that certainty in which the law delights, as well as to the nature of interest, agreeably to the modern books. It is intended as a recompense for the delay in performing some duty, the certainty of which is known to the obligor; but if the demand be unliquidated or uncertain, interest cannot be allowed. On the ground of reason and some of the authorities, it is not material whether the duty to be performed is in money or property. The same injury arises from a non-compliance; and why should not the same measure of compensation be applied where the obligor knows what he has to do ?

Whenever agreements will admit of it, we have perceived a laudable disposition in the courts of justice to substitute certainty for uncertainty, in relation to compensation for the non-execution of contracts. Ordinary interest as such, or in the form of damages, seems to have been wisely adopted as the principle of this substitution. It nearly concerns a civilized and commercial people that individuals should know the result of failing to comply with contracts honestly made. The law presumes that all contracts are bona fide, nor will it presume the reverse. It is on this presumption of law, as well as on the spirit of the statute of 1786, that the above general rule with respect to the measure of damages is founded. Whenever it appears that dishonest or fraudulent practices or conduct, in the formation or execution of a contract, has taken place, a different rule must apply. When a man who has contracted to deliver or convey property, or to perform services, fails to do so, the law will presume that the person with whom the contract was made would have derived a benefit from the performance of such contract equivalent to the interest of the money which represents its value. Reasoning like this is peculiarly applicable to this country where, owing to the newness of the settlement, titles are perplexed and unsettled. The most conscientious man may believe he has a good title to land, to which a better one is afterwards discovered. To make the vendor pay for the increased value or improvements of land, under such circumstances, would not only be repugnant to the genius of the common law, but such an intolerable burden that but few discreet persons would be willing to incur such a measure of justice. We should not only depart from the common law, in paying cash instead of land, which is much more easily obtained, but pay much more than that law contemplated.

Why should there be any difference as to the measure of damages on non-compliance, between a contract for real and personal property ? In the •first case, a person when selling must expressly stipulate as to the goodness of the title; if he does not the law presumes the buyer took all risks on himself; but different, in this respect, is the sale of personal property, the vendor impliedly warrants the title. This difference only relates to the manner in which an obligation arises. When the subject-matter of the contract fails in either case, the measure of damages is the same; if an executed contract, the consideration money and interest; if executory, which contemplates some future act to be done, then the value of the property at the time the contract contemplated an execution of the agreement, with interest.

In all cases respecting either real or personal property, the language of the Court of Appeals of Kentucky may be adopted. “ It is conceived that the value of any personal property on the day it is bargained to be delivered, together with legal interest thereon, is the most equitable general rule by which to ascertain damages when there is a failure of compliance. Indeed, when the property is of a perishable nature, or is wanted for immediate use or market, no other just rule can be discovered. Hardin’s Rep. 31. Perishable or not, money is the only medium in which an injury of this sort is estimated. Every species of property is capable of alienation for money; and the more easy and less encumbered such alien-ations are, the better for society. In this view, it is material that vendors and purchasers should know the consequences or amount of compensation for failing to comply with contracts honestly made, and with a bona fide intention. In the case before the Court the contract has failed, but no fraud or other peculiar circumstances appear. The measure of compensation ought to be the value of the land when the deed was executed, together with interest on that sum until a judgment is recovered.

We will incidentally remark that cases may occur where only a part of the land is lost. The just rule then would, be to take the whole tract at what it cost, with interest, and calculating it in parcels, according to the particular value of each parcel, and in proportion to the cost and interest of the whole. In this tnanner the particular value of the part lost may be ascertained. The part lost might be of much greater or less value, on account of quality, water, &c., than the part held, and consequently to estimate dam.ages simply according to the number of acres in proportion to the purchase-money, would be to lose sight of justice. 5 Johns. Rep. 49.

The contract under consideration, as to the title, is certainly an executed one ; it is an assurance of an indefeasible title, and, although the time of ascertaining whether such title existed or not was deferred until eviction, it would relate to the time of the execution of the contract. Since, as to the mode of redress, warranty is now considered as a personal covenant, and, consequently, a right to sue not confined to the terre-tenant, it is not necessary that a right of recovery should depend on an eviction in due course of law. The principal object of the contract being an assurance of title, if that did not exist at the time of making the warranty, any person entitled to its benefit, as the heir or assignee, may bring an action of covenant immediately, or at any time after such warranty is made; recover a judgment, and have execution as in other cases. To stop after obtaining a judgment and defer satisfaction until the bargainee has been regularly evicted, as the law was formerly understood, will oppose the existing anal-ogles of the law of contracts and of property, leave the warrantee liable to loss, if not ruin, by the insolvency of the warrantor, and produce injurious restraints on the alienation of real property, by the lien of judgments.

It may not, however, be improper to remark that it would be just that the warrantee should surrender the possession before he brings a suit, and equity would probably restrain him from collecting the amount of his judgment until he had done so.

And if the warrantor acquires a good title subsequent to the warranty, and before a suit is brought for a breach, perhaps he may make it available; hut we do not decide this point. 4 Cranch, 421; 4 Dal. 4SG ; 4 Johns. Rep. 1.

In relation to interest, see the Act of 1786, ch. 4, § 5; 1 Hay. Rep. 142 ; 1 P. Wms. 895 ; 1 Atk. 4; 1 Johns. Rep. 315 ; 6 Johns. Rep. 45; 2 Johns. Rep. 280 ; 2 Hay.- Rep. 17 ; 4 Dal. 289 ; 3 Hen. & Mun. 448, 548. And as to damages, 1 Johns. Rep. 223; Add. Rep. 23; 4 Johns. Rep. 125 ; 1 Bay, 105, 357; 5 Mass. Rep. 437 ; 4 Amer. Law Jour. 147 ; 4 Mass. Rep. 109; 2 Mass. Rep. 455 ; 1 Mass. Rep. 125 ; Sugd. 312, 373, 327, 157.

From this examination it appears that the County Coui’t erred in refusing to charge the jury as requested.

The fourth exception taken by the plaintiff’s counsel, that the plaintiff did not receive notice of the action so as to enable him to defend it is not tenable. When the remedy on a warranty changed, many of the consequences of the ancient modes of proceeding changed with it. In every case of covenant to indemnify, the obligee, if sued, may or may not give notice to the obligor to come in and defend the suit. If lie does, the obli-gor is barred by the verdict; but if notice be not given the obligor may contest the former verdict in an action brought against him.

Nor can the second exception of the plaintiff’s counsel be supported. The declaration is well enough; it is as broad and minute as the covenant, and that is all the law requires. There was no necessity to set out the nature of Donnelson’s paramount title.

The first exception is that the breach took place in the lifetime of the ancestor, whereby the right of action accrued to the executors, and not to the heirs, of the deceased.

Though the mode of redress and medium of compensation on a warranty is changed, the rights of the parties are not thereby altered. This part of the subject not having been much spoken to at the bar, some doubt existed.; but upon further consideration, it appears to us clearly that the impression of the Court was correct, and that the action is proper in the name of the heirs. Had the ancestor brought an action on the covenant; his personal representatives would have been entitled to the benefit'. As this was not the case, the warranty descended to the heirs as at common law; they are entitled to the benefit of it, and consequently to a compensation for a breach. The authorities referred to by the plaintiff’s counsel relate to covenants in gross, and not to covenants of warranty as understood at the common law.

But upon the third point made by the plaintiff, as to the measure of damages, the judgment of the County Court must be reversed. 
      
       Obiginal Note. — 22 Vin. Abr. 419-421, 427.
     
      
       Original Note. —3 Bur. 1639; 4 Am. Law J. 157.
     
      
       Original Note. — Bul. N. P. 132; Bur. 1202; 1 Plow. 1S2.
     
      
       Original Note. — 7 Johns. B. 605; 3 Johns. B. 281; 1 Johns. B. 521.
     