Opinion ID: 1144948
Heading Depth: 1
Heading Rank: 10

Heading: Purchasers' Relief :

Text: In Fellows v. Evans, 33 Or. 30, 53 P. 491, 492 (1898), the court spoke of the executed contract of sale of real estate where there was a failure of title: ... [T]he law is well settled that, in the absence of fraud, an executed sale of real estate will not be rescinded for that cause, but in such case the purchaser must look for protection to the covenants of the deed... . It is said in 91 C.J.S. Vendor & Purchaser, § 161(b), Executed Contracts, p. 1122: Where the purchaser enters into possession[ [5] ] under a contract executed by a conveyance with covenants of warranty, he is not entitled to rescind for failure of title in the vendor or for defect in the title, at least in the absence of other grounds for rescission, such as fraud, or insolvency of the vendor, especially where he knew of the defects before the conveyance, or delayed taking action until after the vendor had perfected his title, or has refused the vendor's offer to correct any mistake he has made in the conveyance. His remedy is in an action at law on the covenants. ... (Emphasis supplied.) In Decker v. Schulze, 11 Wash. 47, 39 P. 261, 263 (1895), the court held that, after a conveyance, a purchaser has no remedy except `... upon the convenants he has obtained, although evicted for want of title; and, however fatal the defect of title may be, if there is no fraudulent concealment on the part of the seller, the purchaser's only remedy is under the covenants,' 1 Sugd. Vend. p. 383; ... See, also, Annotation  Vendee in Possession  Rescission, Breach of covenant as ground for affirmative relief, 50 A.L.R. 180, 185, together with citations, where it is said: It is a general rule that, in the absence of fraud, insolvency, or nonresidence of the vendor, a vendee, in the peaceable possession [See, fn. 5, supra] 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. An annotation in 65 A.L.R. 1142 upon the same subject is to the same effect. As the rule is stated in 20 Am.Jur.2d, Covenants, Conditions, and Restrictions § 111, p. 668, [a] court of equity will not ordinarily interfere to grant relief merely because of a breach of a covenant of title in a conveyance of land, and generally, in the absence of fraud or some other facts rendering the remedy at law inadequate, a purchaser who accepts a conveyance with covenants of title is required to enforce claims based upon breaches of those covenants by an action at law for damages, upon the familiar principle that the jurisdiction of equity cannot be invoked by one who has adequate remedy at law for redress of his wrongs.... In Jolley v. Idaho Securities, Inc., 99 Idaho 373, 414 P.2d 879 (1966), rescission of the entire deal was specifically sought and denied, the court saying that [t]he record fails to sustain the contention that appellants were entitled to rescission of the exchange of deeds. Petition for rehearing was then denied with this statement: The trial court by its findings of fact, conclusions of law and decree, in addition to denying appellants' claim for rescission of the contract on the asserted grounds of misrepresentation, also found and concluded that the agreement was executed by acceptance and recording of the deed. Under such circumstances where the deed had been delivered and the vendee is in possession, in the absence of fraud or misrepresentation, the purchaser is relegated to this action for damages for defects in the vendor's title... . 414 P.2d at 891. We are aware that the deed in the case at Bar has not been recorded, but this court has held that recording of the deed is not necessary to the transfer of title. As was said in Whalon v. North Platte Canal & Colonization Co., 11 Wyo. 313, 71 P. 995, 999 (1903): With hardly an exception, under similar statutes it is held that neither an acknowledgement of a deed nor its recording are essential to pass the legal title as between the parties to the instrument.... The rule was reiterated in North American Uranium, Inc. v. Johnston, 77 Wyo. 332, 316 P.2d 325, 328 (1957). The rights and obligations of the parties having merged in the warranty deed, the purchasers' relief being in damages for breach of warranty rather than rescission, the statutory provisions relating to the covenants of the deed become pertinent. Section 34-2-103, W.S. 1977, provides: Every deed in substance in the above form [§ 34-2-102][ [6] ], when otherwise duly executed, shall be deemed and held a conveyance in fee simple, to the grantee, his heirs and assigns, with covenants on the part of the grantor, (a) that at the time of the making and delivery of such deed he was lawfully seized of an indefeasible estate in fee simple in and to the premises therein described, and had good right and power to convey the same; (b) that the same were then free from all incumbrances; and (c) that he warrants to the grantee, his heirs and assigns, the quiet and peaceful possession of such premises, and will defend the title thereto against all persons who may lawfully claim the same. And such covenants shall be obligatory upon the grantor, his heirs and personal representatives, as fully, and with like effect as if written at length in such deed. According to the present state of the record, we are not, at this time, able to answer the question of whether or not there has been a breach of the warranty deed with its covenants as contemplated by the statute. The County Clerk, by affidavit, states that she refused to record the warranty deed because it constituted an illegal subdivision of properties owned by the grantors. By virtue of a letter attached to her affidavit as an exhibit, it appears that she relied upon the provisions of Ch. 176, § 18-289.19, S.L. of Wyoming 1975, which are now found in § 18-5-310, W.S. 1977, which provides: The county clerk of each county shall not accept, file or record in the official records of the county any deed of conveyance or any contract or agreement to convey any land subject to this article until a subdivision permit has been issued by the board. In her affidavit, the County Clerk also stated that she relied upon advice from the County Assessor with respect to recordability of deeds. The County Assessor, in his affidavit, alludes to § 34-12-102, W.S. 1977, setting forth the duty to file a plat with respect to any tract or parcel of land which has been subdivided into three or more parts. [7] That statute reflects that [t]he duty to file for record a plat, as provided herein ..., shall attach as a covenant of warranty, in all conveyances of any part or parcel of such subdivisions by the original owners or proprietors, against any and all assessments, costs and damages, paid, lost or incurred by any grantee, or person claiming under him, in consequence of the omission on the part of said owner or proprietors to file such plat. If there be violations of the warranties in the warranty deed, it is necessary for there to be a factual determination as to which of these statutory provisions, in fact, were invoked or should have been invoked. Arguably, invocation of the latter provision might not lead to a finding of a violation of the statute. Depending upon the actual facts of ownership, the former provision may not have been a valid basis for refusing to record the deed. Depending upon the factual resolutions, however, the district court would find either that there was a breach of the warranties or that there was not. If there were no breach, this finding would amount to a disposition of the case. If a breach of the warranties in the deed were found, then rescission is not an available remedy in this instance because it is possible to accomplish the subdivision plat and thereby make the deed recordable. Volume 8A, Thompson on Real Property, § 4487, at page 535, says: ... In the absence of fraud, an executed sale of real estate will not be rescinded for failure of title, but the purchaser's remedy then is an action on the covenants of the deed... . See, also, Kimball v. West, 15 Wall. 377, 82 U.S. 377, 21 L.Ed. 95 (1872); Refeld v. Woodfolk, 22 How. 318, 63 U.S. 318, 16 L.Ed. 370 (1859); and Andrus v. St. Louis Smelting and Refining Company, 130 U.S. 643, 9 S.Ct. 645, 32 L.Ed. 1054 (1889). We reverse and remand for further proceedings not inconsistent with the directives of this opinion.