Opinion
No. 37391.
February 27, 1950.
1. Vendor and purchaser — warranty, breach of, vendee not precluded from recovery, when.
A vendor conveyed a tract of land by a general warranty deed without any reservation of the minerals, when he owned only a half interest in the minerals. His vendee, having later discovered the defect in the title, excepted a half interest in the minerals in his deed to a purchaser from him. Held, that the first vendee was not precluded from maintaining an action against the first vendor for breach of warranty, the first vendee being the only person who did not receive all he bought.
2. Vendor and purchaser — warranty, breach of — measure of damages.
In an action for breach of warranty of a half interest in the minerals in a tract of land, an instruction was correct which stated that the measure of damages is the difference between the fair market value of the land with the entire mineral interest therein, and the fair market value of the land with only half of the mineral rights therein, each as of the date of the warranty deed; and the fact that no mention is made in the instruction as to sand and gravel did not render it misleading when all the attorneys, parties and witnesses knew that the oil and gas rights were the only features really at issue in the case.
3. Vendor and purchaser — warranty, breach of — enhancement of value — does not inure to benefit of warrantor.
The fact that the value of the land as conveyed had enhanced in value between the date of purchase and the date of its sale by the first vendee did not inure to the benefit of the first vendor in an action against him for a breach of warranty, the damages being fixed by law as of the date of the first conveyance wherein the breach of the warranty occurred.
4. Appeal — new point not raised in trial court, not reviewable on appeal.
Where the entire case is tried in the trial court on the assumption by all parties that a prior reservation in the vendor's chain of title of a half interest in the minerals was valid and that therefore there was a breach of the vendor's warranty in his conveyance of the entire interest, the question will not be permitted to be raised for the first time on appeal that the reservation in prior deed was invalid.
Headnotes as approved by Smith, J.
APPEAL from the circuit court of Washington County; ARTHUR JORDAN, Judge.
J.W. Kellum, for appellants.
Since the court is bound to assume that the allegations of the declaration are pleaded as strongly in favor of Pratt as they could be, on the hearing of the demurrer, the declaration must be strictly construed against him. Yazoo M.V.R. Co. v. Craig, 118 Miss. 299, 79 So. 102, certiorari denied 39 S.Ct. 11, 248 U.S. 573, 63 L.Ed. 427; Bradley v. City of Jackson, 153 Miss. 136, 119 So. 811; Hart v. North American Acc. Ins. Co., 154 Miss. 400, 122 So. 471.
In the tenth paragraph of his declaration he alleges that after the purchase of the lands from the Merediths he subsequently sold same. We construe the word "sale" as an assignment or transfer for value. State v. Austin, 23 So. 34, and the word "land" as embracing all mineral rights. Gulf Refining Co. of Louisiana v. Terry, 163 Miss. 869, 142 So. 457; therefore, any action Pratt might have had would be assigned to his (Pratt's) vendees, because his purchaser would get, by operation of law, the Merediths' covenants. Brooks v. Black, 68 Miss. 161, 8 So. 332; Brunt v. McLaurin, 178 Miss. 86, 172 So. 309.
The measure of damages on a total failure of title, on covenant of warranty, is the value of the land at the execution of the deed, and the evidence of that value is the consideration money, with interest and costs. Brooks v. Black, supra, but in this case Pratt later conveyed the property for more money than he paid the Merediths therefor, therefore we are unable to see that he had any element of damages whatsoever recoverable under the laws of this state for certainly speculative damages are not allowable. Hill v. Samuel, 31 Miss. 307; Kirkpatrick v. Miller, 50 Miss. 521.
The appellants assign as error the giving of the following instruction for Pratt: "The court instructs the jury for the plaintiff that if you find for the plaintiff you shall assess his damages and the measure of damages should be the difference in the fair market value of the land purchased, in March 1943, with all mineral rights being conveyed, and the fair market value of the land as of that same date, with only one-half of the mineral rights conveyed", because, assuming there was a valid title in the Federal Land Bank at the time of their conveyance of the property, they conveyed all sand and gravel, and, of course, sand and gravel are minerals. Northern Pac. R. Co. v. Soderberg, 43 C.C.A. 620, 104 F. 425; Murray v. Allred, 100 Tenn. 100, 43 S.W. 355, 39 L.R.A. 249, 66 Am. St. Rep. 740. There was no proof in the record to support the granting such an instruction.
Pratt likewise failed to show that the Merediths' covenant of general warranty had been broken. Burrus v. Wilkinson, 31 Miss. 544. The covenant was not broken as long as Pratt had not been dispossessed, either by judicial process or by actually yielding possession to a paramount title, it has also been held by this court that such covenant is not broken by purchasing in an outstanding title, under which the vendee might have been evicted. Burrus v. Wilkinson, supra. In Witty v. Hightower, 12 S M 481, the purchaser an outstanding paramount title, and claimed that thereby had occurred a breach of the covenant. But this court held that was not enough; there should be an eviction, or at the time of sale there was, in a stranger, a paramount title and adverse possession under it, holding out the purchaser, which would be equivalent to an eviction; and in Dennis v. Heath, 11 S M 218, it was said that a recovery in ejectment did not work a breach of the covenant because that did not destroy the seizin of the vendee. Entry under the judgment, either with or without legal process, causes the eviction.
It is well settled in this state that one must recover realty on the strength of his own title, and not on the weakness, or entire want of title on the part of his adversary. Section 211, Griffith's Chancery Practice; Jones v. Rogers, 85 Miss. 802, 38 So. 742; and, as to any title vested in the Federal Land Bank, we think plaintiff's proof falls far short of the proof required of him, and it was his duty to establish, as a condition precedent to recovery, that their (the bank's) title was a paramount title against which the Merediths were bound to defend. There is no evidence in this record which shows that the Federal Land Bank ever acquired any title to any property involved herein, and it was the burden of Pratt to prove that their (the bank's) title was paramount to that of the Merediths, therefore we think that, by the mere introduction of an excerpt of a deed whereby the bank had at one time conveyed the lands and reserved certain minerals, Pratt failed to establish the proof required of him. Dyer v. Britton, 53 Miss. 279; Allen v. Miller, 99 Miss. 75, 54 So. 731; Coopwood v. McCandless, 99 Miss. 364, 54 So. 1007; Staton v. Henry, 130 Miss. 372, 94 So. 237.
The above rules would apply if Pratt had never reconveyed the lands; however, since his declaration and proof shows that he subsequently sold same, then any right of action for a breach of warranty on the part of the Merediths would be vested in Pratt's vendees, and not Pratt. Brooks v. Black, supra; Brunt v. McLaurin, supra.
B.B. Wilkes, for appellee.
Appellants contend on page 5 of their brief that since appellee resold the property which he purchased from appellants, therefore, any action he might have would be assigned to his (Pratt's) vendees because his purchasers would get, by operation of law, the Merediths' covenants. In support of this proposition, appellants cite Brooks v. Black, 68 Miss. 161, 8 So. 332, and Brunt v. McLaurin, 1178 Miss. 86, 172 So. 309.
Such a contention has no merit whatsoever under the facts of our case. In the two cases cited above, there arises the situation where the vendor executed a warranty deed to the vendee who in turn executed a warranty deed to a third person. The vendee received full consideration in executing the deed to the third person, and hence it was correctly held that the third person became the assignee of any claim the vendee had against the vendor for breach of covenant. We submit that this is elementary law.
But our case presents a quite different problem. Pratt received from the Merediths a general warranty deed and paid full value for the property, thinking that he was receiving the full mineral rights. Later, and before he resold the land, he discovered that under the aforesaid conveyance, he had actually received only one-half the mineral rights in the land. Hence, in his deed, when he resold the property, he transferred only one-half the mineral rights and made no attempt to convey all the mineral rights. He was not paid the full value he would have received had he owned all the mineral rights. When Pratt resold the land, his vendee received exactly what he paid for and what he bargained for and was in no way damaged. Pratt is the only one who did not receive what he bargained for when he bought the land. The Brooks and Burnt cases are, therefore, clearly distinguishable from our case and have no bearing on it.
We agree with appellants that the measure of damages on a total failure of title, on covenant of warranty, is the value of the land at the execution of the deed, and the evidence of that value is the consideration money, with interest and costs. However, we disagree with appellants when they say that appellee later conveyed the property for more money than he paid the appellants therefor, and therefore he had no element of damages. And we cite Am. Jur. Vol. 14, Par. 47, "Covenants, Conditions and Restrictions"; A.L.R. Vol. 61, P. 89.
The fact that Pratt later sold the land for more than he paid for it is immaterial when assessing damages in this case. The damage had already been done. The undisputed testimony is that land values in the section where the land is located increased substantially between March, 1943, when Pratt bought it from the Merediths, and December, 1947, when he resold it. Had he been in a position to convey the entire mineral rights along with the land in December, 1947, it is quite obvious from the record that he would have been in a position to command a much higher price for his land than he actually received.
On page 6 of their brief, appellants assign as error the granting of the following instruction by the court for Pratt: "The court instructs the jury for the plaintiff that if you find for the plaintiff you shall assess his damages and the measure of damages should be the difference in the fair market value of the land purchased, in March, 1943, with all mineral rights being conveyed, and the fair market value of the land as of that same date, with only one-half of the mineral rights conveyed."
Their only objection to this instruction, as stated in their brief, is that all the sand and gravel were conveyed in the deed from the Merediths to Pratt and they say that, of course, sand and gravel are minerals. This is not the law. The correct rule regarding what substances are embraced within the term "minerals" is found in Am. Jur., Vol. 36, Par. 35, "Mines and Minerals", and in Staples v. Young, 1 Ir. R. 135, and Waring v. Foden, 86 A.L.R. 969.
In Steinman Development Co. v. W.M. Ritter Lbr. Co., (D.C.) 290 Fed. 832 (Affirmed in C.C.A. 4th) 290 Fed. 841, it was held that "minerals" should not be construed as meaning all the sand to be found on the premises.
On page 6 of their brief, appellants contend that Pratt failed to show that the Merediths' covenant of general warranty had been broken. They contend that the covenant was not broken so long as Pratt had not been dispossessed, either by judicial process or by actually yielding possession to a paramount title. Such a contention has no support among the authorities. Indeed, the law in Mississippi is to the contrary. In Coopwood v. McCandless, 99 Miss. 364, 54 So. 1007, it was contended that the suit was for breach of the covenant of general warranty and for the suit to be sustained, it was contended that there must be either an actual eviction by judicial process, or a surrender of possession to a valid, subsisting, paramount legal title, asserted against the covenantee. The court pointed out that there are two remedies that the covenantee may invoke without waiting for eviction or surrender of the premises — these two actions being assumpsit or suit in chancery. The court then said that even though it should appear that the covenantee intended to ground his case on the technical action on the covenant of general warranty, the court will always look to the substance and not the form of the declaration.
Cases cited by appellants holding that there must be an eviction or the equivalent to an eviction have no application to the case at bar. This is not a situation where the grantors owned only part of the land or where there was a mortgage against the land. Here, title to the land itself was good, but the grantors owned only one-half the mineral rights. The Federal Land Bank owned one-half the mineral rights and undoubtedly already had these leased out and was receiving the proceeds therefrom. After buying the land, Pratt discovered prior to the time that he resold it that he actually owned only one-half the mineral rights. There was, of course, no one who had any authority to evict or dispossess him. Our case is, therefore, clearly distinguishable from the cases cited in appellants' brief.
This is an action at law upon an alleged breach of warranty, to which the defense was apparently based upon the theory there was no fraud and deceit practiced by appellants, defendants below, upon appellee, plaintiff below.
Appellee bought from appellants certain lands in Washington County under a general warranty deed, except as to a trust deed thereon assumed by the said purchaser, and taxes through and including 1942. It was, however, agreed in the record that at the date of this transaction there was a deed on record from the Federal Land Bank to an undisclosed vendee containing the following: "There is excepted from this deed and reserved unto the grantor a one-half interest in such of the oil, gas and other minerals in and upon the above land (except sand and gravel) as may be legally owned by the grantor, the remaining mineral interest is hereby conveyed without warranty." The total consideration to appellants from appellee was $41,275.00.
Appellee knew nothing of this reservation until a representative of an oil company informed him of it, although he testified that appellants did not actually misrepresent the title, independently of the warranty in their deed to him. He knew nothing of the reservation, however, at the time of his purchase. At that time the fair market value of the entire land, including all minerals was $65.00 per acre, while without the part reserved, as shown supra, such value was only $55.00 per acre. There are 635 acres in the tract, appellee claimed.
Four years later appellee sold this land, less that portion reserved by The Federal Land Bank aforesaid, for an aggregate price of $41,500.00. It is his contention here that he would have obtained more money except that he could get nothing for the minerals he did not own and hence could not and did not convey, and appellee's damages are based on this discrepancy. Qualified witnesses testified it amounted to various amounts per acre, as of the date of appellee's purchase, in 1943, with a minimum of $5.00 and a maximum of $10.00 per acre. None of this testimony was contradicted by appellants, who, however, did contend that appellee on the resale suffered no loss, since he obtained thereby more than he had paid originally. Again without contradiction, proof was made of substantial enhancement of land values in the area involved since appellee's purchase and his conveyance of the land to his vendee. The jury returned a verdict of $3,175.00. There was no motion for a new trial.
(Hn 1) Appellants make three points here, which we will discuss briefly. The first is, that since a covenant of warranty in a deed is a covenant running with the land, and appellee was not the owner at the time of the litigation, having conveyed it to another, his vendee only could bring suit for breach of warranty, and that appellee had no right to do so. Brunt et al. v. McLaurin, 178 Miss. 86, 172 So. 309; and Brooks v. Black, 68 Miss. 161, 8 So. 332, 11 L.R.A. 176, 24 Am. St. Rep. 259, are cited in support of this contention. Such principle of law is not available to appellants because appellee did not convey and warrant to his vendee the reserved one-half of the minerals, and said vendee received all he bought.
(Hn 2) The next point is that the court erred in granting appellee the following instruction: "The Court instructs the jury for the plaintiff that if you find for the plaintiff you shall assess his damages, and the measure of damages should be the difference in the fair market value of the land purchased, in March, 1943, with all mineral rights being conveyed, and the fair market value of the land as of that same date, with only one-half of the mineral rights conveyed." March 18, 1943, was the date of appellee's purchase from appellants, whose objection to the instruction is that it does not, like the reservation of The Federal Land Bank, except sand and gravel, and that they are minerals. Both parties cite authorities, some holding them to be minerals, more and later authorities holding them not to be. It is immaterial, we think, because the lawyers, the parties, the witnesses all knew that the bone of contention was oil and gas, and the case was so tried, and the jury was not misled. The instruction otherwise gave a correct definition of the measure of damages.
(Hn 3) It must be borne in mind that this damage is fixed by the law as of the date of appellee's purchase from appellants, and hence the enhancement in value of the land between that date, and the time four years later when appellee conveyed to his vendee, would not inure to the benefit of appellants to sustain their plea that no damages were proven. There is no proof in the record that such mineral interests have any present value, even if it were pertinent here.
Finally, appellants argue that appellee failed to make out his case because there is no evidence in the record, other than inference to be drawn from the language of the reservation by The Federal Land Bank, that it ever validly acquired title to the land or had validly made such reservation. Conceding that to be true, for the discussion merely, the case was tried in the court below by all concerned on the assumption that the reservation was valid. Appellants never raised the point there, but raised it here for the first time. We have repeatedly held that (Hn 4) ordinarily we will not consider for adjudication here a new theory, different from that of the trial in the lower court. We therefore in this case see no reason for any exception to this general rule, and discuss the contention no further.
The damages may seem somewhat high, but no motion for a new trial was made; and hence we cannot review this feature. The evidence of unimpeached and qualified witnesses supported it. Indeed, there is no assignment of error on this precise question.
The judgment is affirmed.
Affirmed.