Opinion ID: 1112737
Heading Depth: 1
Heading Rank: 3

Heading: Damages for breach of covenants of title.

Text: Appellant asserts that it is entitled to recover, as damages, the amount of mortgage proceeds paid to Dennis Carlisle by its subrogor, plus litigation costs and interest. Appellant further contends its recovery should neither be barred nor be limited to merely nominal damages, even though appellees received no consideration for their conveyances. In situations where there has been a complete failure of title and a grantee has sought recovery from his immediate grantor, the maximum recovery allowed has been the purchase price paid. Allinder v. Bessemer C.I. & L. Co., 164 Ala. 275, 277, 51 So. 234, 235 (1909). With respect to an action against a remote grantor, however, there appears to be a difference of opinion as to whether damages are to be determined by the consideration paid by the grantee bringing the suit to his immediate grantor or by the consideration paid to the original grantor or covenantor, not exceeding in either case, however, the consideration paid for the conveyance by the defendant in the action. 20 Am.Jur.2d Covenants, Conditions, Etc., § 163 (1965). Here, however, the facts indicate that no consideration was ever paid to or received by any of the appellees, Albert Moore Owen, James R. Owen, Jr., or Cheryl C. Owen. Consequently, since there was no evidence that the remote grantors received any consideration for their conveyances purportedly conveying title to the subject property, appellant, as subrogee of GECC, is entitled to an award of nominal damages only, for the breach of the covenant of quiet enjoyment contained in Albert Owen's deed, and not the amount of the mortgage made by GECC. See 20 Am. Jur.2d Covenants, Conditions, Etc., § 163 (1965). Furthermore, appellant is not entitled to recover an award of legal fees under the covenant of warranty by Albert Owen to defend the title of the grantee and his successor against all lawful claims. In Chicago, Mobile Development Co. v. G.C. Coggin Co., 259 Ala. 152, 66 So.2d 151 (1953), the Court held: The duty to warrant and defend the title conveyed to the [grantees] against the lawful claims of all persons does not justify a charge for attorneys' fees whenever that title is brought into question in a court proceeding. As we have shown, it is no more than a warranty for quiet enjoyment. There is no authority which holds, so far as we can find, that under that warranty a duty arises to pay the expenses of litigation whenever that title is involved, but only in a suit with the claimant of an outstanding superior right, usually seeking to obtain possession in order to profit by that right. But even on the theory insisted on by the [grantees], this suit did not seek to call into question their warranty to complainant. Complainant neither sought nor obtained a decree against the [grantees] nor a decision as to any right against them on their warranty. But if it had done so, the warranty of appellant to defend them did not cover such a situation so far as we are able to discover in the law. No such authority has come to our attention. On the other hand, there is authority opposed to that theory. 21 C.J.S., Covenants, § 150, p. 1030, note 84. The cases noted are directly in point. Smith v. Nussbaum, Mo.App., 71 S.W.2d 82, 87; Myers v. Munson, 65 Iowa 423, 21 N.W. 759; see, 61 A.L.R. 167 et seq. 259 Ala. at 162, 66 So.2d at 158. The facts of this case reveal that the legal actions here were not an attack on title by a third party possessing paramount title, but instead, were instigated by appellant or its subrogor, GECC. Thus, attorneys' fees in this instance are precluded under Chicago, Mobile Development Co. v. G.C. Coggin Co., supra . The judgment of the trial court is hereby reversed and the cause remanded to that court for a determination of the amount of nominal damages appellant is entitled to recover as consistent with the holding of this opinion. REVERSED AND REMANDED. TORBERT, C.J., and JONES, SHORES and BEATTY, JJ., concur.