Brief Fact Summary. The Plaintiffs purchased 80 acres of land from William and Faith Bost in 1957 and took possession and recorded their deed. Thereafter, Plaintiffs granted a coal option to Consolidated Coal Company for the coal rights on the land for $6,000. However, approximately two years later, on May 4, 1976, the Plaintiffs “discovered” that a predecessor in title had reserved two-thirds of the coal interest in himself, and, based on that fact, the Plaintiffs and the coal company renegotiated their contract for $2,000. Plaintiffs then sued the executor of Faith Bost, Plaintiffs’ 1957 grantee, for alleged breach of the covenant of seisen.
Synopsis of Rule of Law. The Court held that a suit based on a breach of a covenant of seisen must be brought within 10-years of the passing of the impaired title. In contrast to a breach of a covenant of seisen, the covenant of warranty of quiet enjoyment is prospective in nature and is breached only when there is actual or constructive eviction of the covenantee by the paramount titleholder.
Facts. Plaintiffs purchased 80 acres of land from William and Faith Bost in 1957, and took possession and recorded their deed. Thereafter, Plaintiffs granted a coal option to Consolidated Coal Company for the coal rights on the land for $6,000, but approximately two years later, on May 4, 1976, Plaintiffs “discovered” that a predecessor in title had reserved two-thirds of the coal interest in himself, and, based on that fact, the Plaintiffs and the coal company renegotiated their contract for $2,000. Plaintiffs then sued the executor of Faith Bost, Plaintiffs’ 1957 grantee, for alleged breach of the covenant of seisen. The lower court found that the complaint was barred by the 10-year statute of limitations, and that, despite a breach of the covenant of seisen, the Defendant must prevail. The intermediate appellate court reversed and remanded. The Defendant appealed.
Issue. Is the complaint of Plaintiffs barred by the statute of limitations?
Held. Yes. Intermediate appellate court reversed, trial court decision upheld.
The deed, which the Plaintiffs received was a statutory form warranty deed, which is held by statute to warrant that the grantor is, at the time of the conveyance, lawfully seized and has the power to convey an estate of the quality and quantity, which he professes to convey. This is a covenant of seisen.
The statutory deed also warrants a covenant against incumbrances. An incumbrance is any right to, or interest in, land, which may subsist in a third party to the diminution of the value of the estate, but consistent with the passing of the fee by conveyance.
There is also a warranty of quiet enjoyment. The grantor warrants to the grantee, his heirs and assigns, the possession of the premises and that he will defend the title granted by the terms of the deed against persons who may lawfully claim the same and that such covenant is obligatory upon the grantor, his heirs and assigns.
The Court held that a suit based on a breach of a covenant of seisen must be brought within 10-years of the passing of the impaired title. In contrast to a breach of a covenant of seisen, the covenant of warranty of quiet enjoyment is prospective in nature and is breached only when there is actual or constructive eviction of the covenantee by the paramount titleholder. What that would require in this case is for the predecessor in title who retained a two-thirds interest in the coal rights to enter onto the land and begin mining.
The Court found that there had been a breach of the covenant of seisen, but that such breach was not actionable as barred by statute of limitations. The Court found that there had not yet been a breach of the covenant of warranty of quiet enjoyment and that the mineral rights were “vacant,” due to the fact that no one was currently mining.
Discussion. This case illustrates the concepts of warranty of seisen and warranty of quiet enjoyment. The difference is important to understand. A breach of the covenant of seisen means that there exists a person with a paramount title. A breach of the warranty of quiet enjoyment requires the paramount title holder to actually perform some act not consistent with complete seisen in the complaining party. That act is called a constructive eviction.