Smith v. Peoples Bank & Trust Co.

119 S.E.2d 623, 254 N.C. 588, 1961 N.C. LEXIS 508

• Court: Supreme Court of North Carolina
• Decided: May 3, 1961
• Status: Published

Opinion

Bobbitt, J.

The deed of November 27, 1946, contains a representation that defendant in its capacity as trustee under the will of C. G. Shearin owns and conveys four undivided one-sixth interests in the land described therein. The source of C. G. Shearin’s title to each undivided one-sixth interest is stated. The ownership of the undivided one-sixth interest referred to in the deed as having been acquired by C. G. Shearin “under the Will of G. T. Shearin,” was in controversy in the Nash County special proceeding.

Presumably, the judgment in the Nash County special proceeding is based upon an interpretation of the will of G. T. Shearin. Plaintiff alleges he paid $800.00 in attorneys’ fees in defense of his title. It may be fairly inferred that plaintiff then contended the deed of November 27, 1946, conveyed to him the undivided one-sixth interest in controversy. Plaintiff did not appeal from the adverse judgment. The complaint contains no allegations as to the provisions of the will of G. T. Shearin.

Plaintiff does not allege a breach of the special warranty in the deed. It is not alleged that defendant, either in its capacity as trustee or in its corporate capacity, encumbered the undivided one-sixth interest or committed any act or deed adversely affecting such interest. Moreover, the facts alleged are insufficient to state a cause of action in tort. According to plaintiff's allegations, both plaintiff and defendant acted in the belief that C. G. Shearin acquired an undivided one-sixth interest under the will of G. T. Shearin.

The gist of the cause of action alleged by plaintiff is that the representation as to ownership in said deed was breached “on the 10th day of December 1959,” by the entry of the decree in the Nash County special proceeding.

Considered in the light most favorable to plaintiff, the representation as to ownership in said deed constitutes a covenant of seizin. When so considered, plaintiff’s cause of action, if any, for breach thereof, arose immediately upon delivery of said deed.

In Cover v. McAden, 183 N.C. 641, 112 S.E. 817, Adams, J., explains clearly the distinction between a covenant of seizin and a covenant of warranty: “The former is a covenant in praesenti, or a covenant that a particular state of things exists when the dead is delivered— juris et seidnae conjunctio — and if it does not exist the delivery of the deed containing such a covenant causes an instant breach. A covenant of warranty is prospective. It is an agreement or assurance by the grantor of an estate that the grantee and his heirs and assigns shall enjoy it without interruption by virtue of a paramount title, or that they shall not by force of a paramount title be evicted from the land or deprived of its possession. (Citations) This distinction is further observable in the conditions or circumstances that usually characterize the breach of each covenant. If the grantor is not seized, or if an encumbrance exists, the covenant of seizin is broken immediately upon the execution of the deed; but generally speaking, a covenant of warranty, being prospective in its nature, is broken only by eviction, actual or constructive, under a paramount title existing at the time the conveyance is made. (Citations)”

“The covenant of seizin does not run with the land, and is broken when the deed is delivered, if the grantor does not own the lands according to his covenant, the right of action accrues at once to him, and to him alone. (Citations)” Varser, J., in New Bern v. Hinton, 190 N.C. 108, 129 S.E. 181.

“The covenant of warranty and the covenant of quiet enjoyment are not strictly personal, like the covenant of seizin, which is broken when the deed is delivered if the title is defective, but they are prospective in their operation, and an ouster or eviction is necessary to constitute a breach. These covenants are, therefore, in the nature of real covenants and run with the land conveyed, and descend to the heirs and vest in assignees or purchasers. 4 Kent (13 Ed.), p. 471 (538) et seq.” Walker, J., in Wiggins v. Pender, 132 N.C. 628, 636, 44 S.E. 362. Hence, as stated by Denny, J., in Shimer v. Traub, 244 N.C. 466, 94 S.E. 2d 363: “It is the law in this State that a cause of action for breach of warranty of title to real estate does not arise until there has been an ouster or eviction of the grantee or grantees under a superior title. (Citations)”

Plaintiff bases his right to recover on the decree entered December 10, 1959, in the Nash County special proceeding. He relies on Shuford v. Phillips, 235 N.C. 387, 70 S.E. 2d 193, and decisions of like import. See Culbreth v. Britt Corp., 231 N.C. 76, 56 S.E. 2d 15; Cover v. McAden, supra; Jones v. Balsley, 154 N.C. 61, 69 S.E. 827. In these cases, the action was to recover for breach of a covenant of warranty. In such case, an adjudication that there was an outstanding paramount or superior title is binding on the covenantor, although not a party to the action, if the covenantor is given notice of the action and an opportunity to defend his title. But such prior adjudication is not prerequisite to or determinative of a covenantee’s right to maintain an action for breach of a covenant of seizin.

As stated in his brief, “(p)laintiff entered into possession in 1946 and enjoyed possession until December 10, 1959, the date on which the Superior Court of Nash County ruled that Charles Lee Shearin and Cora Mae Shearin were the owners of a one-sixth (1/6) undivided interest in the land.” When considered as a cause of action for breach of a covenant of seizin, plaintiff’s cause of action, if any, arose when the deed was delivered, that is, on or about November 27, 1946. Plaintiff has failed to allege facts sufficient to show such covenant was then breached. He relies solely on the decree entered December 10,1959, in the Nash County special proceeding. There is no allegation that defendant was a party to the Nash County special proceeding, either in its corporate capacity or in its capacity as trustee. The decree therein is not determinative of plaintiff’s right to maintain a cause of acton for breach of the covenant of seizin.

On this appeal, whether plaintiff has a cause of action against defendant, either in its corporate capacity or in its capacity as trustee, for money had and received, or on other grounds, is not presented. “Plaintiff’s recovery is to be had, if at all, on the theory of the complaint and not otherwise.” Suggs v. Braxton, 227 N.C. 50, 40 S.E. 2d 470; Manley v. News Co., 241 N.C. 455, 460, 85 S.E. 2d 672.

Since, in our view, the gist of the cause of action presently alleged is that the representation in said deed as to ownership was breached “on the 10th day of December 1959,” by the entry of the decree in the Nash County special proceeding, the portion of the judgment sustaining the demurrer to the amended complaint is affirmed. However, the allegations of the amended complaint do not affirmatively disclose a defective cause of action, that is, that plaintiff has no cause of action against defendant. The demurrer should have been sustained without prejudice to plaintiff’s right to move for leave to amend. Skipper v. Cheatham, 249 N.C. 706, 711, 107 S.E. 2d 625, and cases cited. Hence, the portion of the judgment dismissing the action is erroneous and should be stricken. It is so ordered. As so modified, the judgment is affirmed.

Modified and affirmed.

MooRE, J. concurs in result.