veyed, it is pointed out in Scantlin v. Allison (1873) 12 Kan. 85: "Wheth

er this want of consideration can be set up in an action on the notes depends, as we suppose, upon whether there has been any breach of any covenant contained in the deed. Where there has been no breach of any covenant, and no fraud or material mistake, we suppose no want or failure of consideration can ever be shown. Thus, where a deed without covenants has been executed (a quitclaim deed), the deed alone is usually considered as sufficient consideration for the notes. And where the covenants contained in the deed are such only as run with the land, and such as can be broken only by an eviction, they alone, while existing unbroken, are usually considered a sufficient consideration for the notes. Indeed, until a breach of some covenant, no want or failure of consideration is supposed in law to exist, and the grantee has neither a cause of action for any want or failure of consideration, nor a defense to any action as against the grantor. But whenever any covenant in a deed is broken, then, we suppose, there is in fact and in law a want or failure of consideration, and such want or failure of consideration immediately becomes available to the grantee, either as a cause of action in the covenants, or as a defense to an action brought for the recovery of the purchase money." It is further pointed out that the covenants which may be broken at the time of the delivery of the deed are covenants of seisin, covenants for the right to convey, and covenants against encumbrances. And it is said that, when "either of these covenants is broken, the cause of action immediately accrues in favor of the grantee and against the grantor, and the grantee may immediately commence his action, whether he be in possession of the property attempted to be conveyed or not." The covenants in this case were that the land was free from encumbrance, and that the grantors had good and lawful authority to sell and convey the same, and that they would warrant and de

fend the title against the claims of all persons whatsoever. And it has been held that it is a good defense to an action to recover on a note, that it had been given for the purchase price of a tract of land, plaintiff's title to which was intrinsically and wholly defective, as there was a paramount outstanding title in a third person, and the plaintiff had conveyed by a deed containing warranties of title equivalent to a covenant of seisin. Tarpley v. Poage (1847) 2 Tex. 139. The court said: "Where the vendor has impliedly or expressly warranted his authority to sell, and it appears afterwards that his title is intrinsically defective, or there is sufficient evidence of a valid, subsisting, outstanding title in others, it would operate great injustice to compel the purchaser to pay the purchase money, and then, after final eviction consequent on a harassing litigation of the title, to institute a new action on the covenants of the conveyance against the vendor, then, perhaps, bankrupt, and who in this instance is, as appears from the evidence, already insolvent. The vendee must, by competent and sufficient evidence, establish the existence and validity of the outstanding title; but, when that is done, there is no reason why his remedy should be delayed until disturbed in the enjoyment of the land, and this even when the defendant is in possession, for the court has authority adequate to the adjustment of all the matters arising out of the controversy between the parties."

In

Decker v. Schulze (1895) 11 Wash. 47, 27 L.R.A. 335, 48 Am. St. Rep. 858, 39 Pac. 261, conceding that a covenant in a deed that the grantor is the owner in fee differs from covenants of quiet possession, warranty of title, and the like, and that a breach occurred at once if ownership in fee did not in fact exist, and that hence the vendee was not required to await eviction before maintaining an action, it was nevertheless held that equity had no jurisdiction to rescind a contract for a breach of this covenant.

The foregoing cases are referred

to merely as illustrative of a class of covenants which are not considered herein, and hence they are not exhaustive of the cases considering the rights of the grantee upon the breach of such a covenant.

b. As regards character of transaction; executory contracts distinguished.

It is to be noted that this annotation is limited to cases involving sales of land represented by deeds containing warranties of title under which the vendee has entered into possession. Such cases are to be distinguished from cases where the vendee has gone into possession under contracts of purchase or bonds for title. Cases of the latter class are not precedents as to the rights of the vendee in possession under a deed containing covenants of title.

The distinction in this regard between an executed and an executory contract is well pointed out in Buchanan v. Alwell (1847) 8 Humph. (Tenn.) 518, wherein the court says: "Where the purchaser has taken a deed with covenant of general warranty, under which he has entered, and remains in the undisturbed possession of the land conveyed to him, if there be no fraud in the transaction, he cannot, before eviction, on the mere ground of defective title, claim relief in equity, either against the payment of the purchase money, or to have the contract rescinded, or restitution of the purchase money. In such case, he must seek his remedy

. . upon the covenant of warranty in his deed. . . . But it is otherwise when the purchase money has not been paid and title made. If the purchaser is in possession under a mere equitable title, as a title bond, or covenant to convey, he has a clear and well-established right in equity to resist the payment of the purchase money, or to have the contract rescinded, and the purchase money advanced refunded to him on the ground of defect of title in the vendor. He will not be required to complete the purchase, or to accept a conveyance, unless the title can be made according to his contract."

It

is said in Payne v. Cabell (1828) 7 T. B. Mon. (Ky.) 202: “A vendee will not be compelled to accept a conveyance under an executory contract, until the vendor exhibits a regular deduced title, free from encumbrances, and apparently sufficient to assure the estate according to the contract. But a vendee who has accepted a deed, and the possession, with a covenant of warranty, is presumed to have inspected the derivations of title, and to have been satisfied with the assurances, and to have received the title papers."

On the same point, it is said in Buford v. Guthrie (1879) 14 Bush (Ky.) 677, that had the contract been executory, and the defect in title apparent, the court, after a considerable lapse of time, coupled with a great fall in the price of the land, may have been authorized by the authorities, at the instance of the vendee, to refuse to enforce the execution of the contract, but that a different rule applies to an executed contract.

It is pointed out in Yeates v. Pryor (1850) 11 Ark. 58: "There is a very marked distinction between executed contracts where the vendee has accepted a deed and entered into possession, and an executory contract where the vendee is called upon to approve and accept a title in affirmance and completion of such contract. When he has accepted a title he is presumed to have examined the evidences thereof and held them sufficient; and, in the absence of fraud, must, in most cases, rely upon his covenants of warranty, and show that he has been evicted, before he is heard to complain. . . But the case is very different where, under

an

executory contract, the vendor presents his title. The vendee is put upon inquiry, and has a right to demand such title as he contracted for.

The title offered by the vendor should be clear and free from encumbrance, doubt, or suspicion."

In Thompson v. Jackson (1825) 3 Rand. (Va.) 504, 15 Am. Dec. 721, in pointing out the distinction between an executed and an executory contract, the court said: "Executory

contracts for real property, and some other subjects, offer to the party the alternative of either suing at law for damages or asking the aid of equity to obtain the specific thing. The application to equity is not ex debito, but merely presents to the sound discretion of that forum this question: Is it better for the furtherance of justice, considering all the circumstances of the case, to give the party a specific execution, or to leave him to his legal remedy? Very different is the question where a party asks the court to rescind a contract, especially an executed contract. In the first case, the court merely decides which of two remedies a party shall pursue. In the second, it annihilates a solemn contract, rendered still more imposing by the fact that the parties have carried it into execution, thereby changing materially their situations, and giving birth to new rights and obligations. The vendor has parted with the title and possession of his land, and has taken his money, bonds, or other equivalent. The vendee has entered into possession, clothed with the fee or other estate purchased; and, for security of his title, has taken a deed with such covenants and warranty as his contract called for. To undo all this is a strong-handed measure, and none but a clear and strong case will justify it."

The view is expressed in Decker v. Schulze (1895) 11 Wash. 47, 27 L.R.A. 335, 48 Am. St. Rep. 858, 39 Pac. 261, that much of the apparent conflict that is found in the adjudicated cases on the right of the vendee in possession to rescind is due to a failure to observe the distinction which obtains between the rules applicable to a contract still executory and those applicable to one actually executed.

This is also the position taken in Cooper v. Singleton (1857) 19 Tex. 260, 70 Am. Dec. 333, wherein the court said: "The difference between the liabilities of the vendee, under an executory and executed contract, is this: That in the former, he should be relieved by showing defective title, unless on proof by the vendor that

this was known at the sale, and it was understood that such title should be taken as the vendor could give. In the latter, the vendee should establish beyond doubt that the title was a failure, in whole or in part; that there was danger of eviction; and also such circumstances as would prima facie repel the presumption that at the time of the purchase he knew and intended to run the risk of the defect."

And see Young v. Triplett (1824) 5 Litt. (Ky.) 247, where the court said: "In cases of executory contracts for land, when one party holds the notes for the purchase money and the other a bond for the conveyance, this court has invariably refused to permit a failure of consideration to be pleaded by the purchaser to the notes for the purchase money, because the purchaser has his counter contract on which he can make the vendor liable, and the vendor would still remain liable if the plea was allowed, as well as before, and therefore this liability was a consideration which would not be destroyed by the plea. Nor has the plea been allowed to the purchase money where the contract was executed on the part of the vendor, and he has conveyed with warranty; for this warranty imposes a liability of the vendor, not destroyed by the plea, and still leaving a valid consideration not affected by the plea."

II. Covenants of title; in general.

The covenant of warranty of title as used in modern conveyances combines many of the features of the ancient covenants of seisin as well as of ancient covenants of warranty. In form it is very similar to ancient covenants of warranty, although broader in its scope and extent. Decisions relative to the ancient covenant of warranty, however, have influenced to a considerable extent later decisions of the courts in construing the present covenants of title, especially as regards the right of the vendee to relief after he has entered into possession of the land under the conveyance. It is of interest, there

fore, to note the scope and effect of the ancient covenant of warranty. This covenant was purely prospective in its character, and obligated the lord of the fief to protect his vassals in the enjoyment of the property when such protection was required; hence it was not broken until the lord of the fief failed to give to the vassal the protection covenanted for. The purpose of making the warranty prospective in character appears from the fact that it is made binding upon the grantor's heirs and assigns.

Due to the character of the covenant it is not broken until there is an eviction, either actual or constructive. The mere existence of a paramount title does not constitute a breach of it; nor will the existence of an outstanding paramount title authorize the covenantee to abandon the possession, after he has once acquired it, before either a demand or a claim for possession has been made upon him by the holder of an outstanding adverse title. Thus, it is said in Beale v. Seivelly (1837)8 Leigh (Va.) 658, that a contract without other covenants than a warranty is, in effect, an agreement between the vendor and vendee that the vendor is never to be responsible until the vendee is turned out by superior title.

The question raised by this annotation involves the rights, if any, of a grantee in possession of real property under a deed containing general covenants of title. It has been pointed out that such covenants are prospective in their operation, and they are not ordinarily breached until the eviction or ouster of the grantee, even though his title is clouded by apparent outstanding adverse rights or claims. That such a condition may operate to the serious prejudice of the grantee cannot be questioned. Indeed, it is so recognized in TOWELS V. CAMPBELL (reported herewith) ante, 175, which holds that an action for breach of the covenant is the exclusive remedy.

The injustice of requiring the vendee in possession to depend upon his covenants is pointed out in Roake v. Sullivan (1910) 69 Misc. 429, 125 N. Y. Supp. 835, wherein the court said:

"I do not think that a grantee would always be relegated to his action on the covenant for his remedy in a case like this, and that, where an outstanding interest could not be easily purchased, and so affected the title that he could not obtain a loan, or sell the property, or build upon it, he might have relief in equity in an action to compel the grantor to close out the outstanding interest,-in other words, perform his contract and agreement, and in that suit might tender back a deed of the property and demand a return of the purchase money. I cannot find that any such action has ever been brought, but the authorities intimate that equity might grant such relief."

III. Breach of covenant as ground for affirmative relief.

a. In general.

It is a general rule that, in the absence of fraud, insolvency, or nonresidence of the vendor, a vendee, in the peaceable possession of land under and by virtue of a valid conveyance containing covenants of title and general warranty, is not entitled to a rescission of the contract, or a return of the purchase money or any part thereof, on the ground of a defect in the title of his vendor, although the vendee had no knowledge thereof at the time he accepted the conveyance and paid the purchase price.

United States. Kimball v. West (1872) 15 Wall. 377, 21 L. ed. 95; Noonan v. Lee (Noonan v. Braley) (1862) 2 Black, 500, 17 L. ed. 278; Patton v. Taylor (1849) 7 How. 133, 12 L. ed. 638; Andrus v. St. Louis Smelting & Ref. Co. (1889) 130 U. S. 643, 32 L. ed. 1054, 9 Sup. Ct. Rep. 645; White v. Ewing (1895) 16 C. C. A. 296, 37 U. S. App. 365, 69 Fed. 451; Jourolmon v. Ewing (1897) 26 C. C. A. 23, 47 U. S. App. 679, 80 Fed. 608; Alger v. Anderson (1899; C. C.) 92 Fed. 696.

V.

Illinois. Beebe Swartwout (1846) 8 Ill. 162. See Martin v. Chambers (1877) 84 Ill. 579.

Iowa. McDunn v. Des Moines (1872) 34 Iowa, 467; Lucas v. Crippen (1889) 76 Iowa, 507, 41 N. W. 205. Kansas.-Ingraham v. Ward (1896) 56 Kan. 550, 44 Pac. 14.

Kentucky. Upshaw v. Debow (1870) 7 Bush, 442; Buford v. Guthrie (1879) 14 Bush, 677; English v. Thomasson (1884) 82 Ky. 280; Creekmore v. Bryant (1914) 158 Ky. 166, 164 S. W. 337; Vaughn v. Wells (1918) 180 Ky. 485, 203 S. W. 191; Bryant v. Green (1921) 193 Ky. 139, 235 S. W. 10; Goatley v. Harmon (1923) 197 Ky. 669, 248 S. W. 212; Sellards v. Ward (1923) 199 Ky. 330, 250 S. W. 1009; TOWELS v. CAMPBELL (reported herewith) ante, 175; Abner v. York (1897) 19 Ky. L. Rep. 643, 41 S. W. 309; Russell v. Handy (1900) 22 Ky. L. Rep. 933, 59 S. W. 320.

Louisiana.-Davis v. Jelks

(1858)

13 La. Ann. 432; Cannon v. Female Orphan Soc. (1872) 24 La. Ann. 452. Maryland. Middlekauff v. Barrick (1846) 4 Gill, 290.

Michigan. Haldane V. Sweet (1884) 55 Mich. 196, 20 N. W. 902. Brown v. Manning

Minnesota. (1859) 3 Minn. 35, Gil. 13, 74 Am. Dec. 736; Miller v. Miller (1891) 47 Minn. 546, 50 N. W. 612; Paulsrud v. Peterson (1909) 109 Minn. 524, 121 N. W. 898, 122 N. W. 874.

New Mexico.

Reed v. Rogers (1914) 19 N. M. 177, 141 Pac. 611. New York. Ryerson v. Willis (1880) 81 N. Y. 277; Denston V. Morris (1833) 2 Edw. Ch. 37; Tallmadge v. Wallis (1840) 25 Wend. 107; Woodruff v. Bunce (1842) 9 Paige, 443; Abbott v. Allen (1817) 2 Johns. Ch. 519, 7 Am. Dec. 554; Kratenstein v. Weiss. (1910) 138 App. Div. 919, 123 N. Y. Supp. 545.

North Carolina.-Clanton v. Burges (1831) 17 N. C. (2 Dev. Eq.) 13. Oregon.-Fellows v. Evans (1898) 33 Or. 30, 53 Pac. 491.

South Carolina.-Garvin v. Cohen (1861) 47 S. C. L. (13 Rich.) 153.

Tennessee.-Barnett v. Clark (1858) 5 Sneed, 435; Senter v. Hill (1857) 5 Sneed, 505; Egan v. Yeaman (1897) Tenn. 46 S. W. 1012; Young v. Butler (1858) 1 Head, 639; Stipe v. Stipe (1858) 2 Head, 168; Topp v. White (1873) 12 Heisk. 165; Kansas City Land Co. v. Hill (1889) 87 Tenn. 589, 5 L.R.A. 45, 11 S. W. 797; McElya v. Hill (1900) 105 Tenn. 319, 59 S. W. 1025; Stokes v. Acklen (1898) Tenn. 46 S. W. 316; Matthews v. Crowder (1902) 111 Tenn. 737, 69 S. W. 779.

Texas.-Rancho

Bonito Land & Live Stock Co. v. North (1898) 92 Tex. 72, 45 S. W. 994.

Virginia. Thompson v. Jackson (1825) 3 Rand. 504, 15 Am. Dec. 721; Long v. Israel (1838) 9 Leigh, 556; Beale v. Seiveley (1837) 8 Leigh, 658; Max Meadows Land & Improv. Co. v. Brady (1895) 92 Va. 71, 22 S. E. 845. Washington. Decker v. Schulze (1895) 11 Wash. 47, 27 L.R.A. 335, 48