Statutes Authorizing the Defense. The hardship of this rule has, however, been to a certain extent changed by statute.1

Authorization of the Defense Independently of Statutes. And the policy of the courts of law in some jurisdictions, even in the absence of statutory provision, is to allow the grantee to set up, as a partial defense to the recovery of the consideration, the amount of damages that he would be entitled to recover in an action on the covenant in the deed.

Expenses of Removing Incumbrances. And where this is permitted, whether under some statutory provision or independently of statutes, he will, of course, be allowed the amount necessarily expended in removing an incumbrance.3

New Jersey.

462.

Long v. Long, 14 N. J. Eq.

Statement of Rule. - In Bowley v Holway, 124 Mass. 395, Morton, J., said: In suits to recover the price of personal property sold it is well settled that a partial want or failure of the consideration, or a breach of the warranty of title or quality, may be shown in defense, in reduction of damages. This rule is adopted to avoid circuity of action, because all the rights of the parties growing out of the same transaction can be justly and conveniently settled in one suit. But according to the weight of the authorities, when the consideration consists of real estate conveyed by deed with covenants of title, the grantee, in the absence of fraud, cannot show, in defense of an action for the consideration, a breach of the covenants of the deed, but he is remitted to his action upon his covenants.

Ind. 450].

Illinois. Wad

v. Reeves, 14 Ind. 163

[citing Ind. Dig. 357; Reese v. McQuilkin, 7

Minnesota.

New York.

Y.) 372.

- Lowry v. Hurd, 7 Minn. 356.
Merritt v. Gouley, 58 Hun (N.

Ohio. Great Western Stock Co. v. Saas, 24 Ohio St. 542; Templeton v. Kraner, 24 Ohio St. 554; Cincinnati v. Brachman, 35 Ohio St. 289. See also Purcell 7. Heeny, 28 Ohio St. 39. Pennsylvania. Ives v. Niles, 5 Watts (Pa.) 323. 328.

Wisconsin. Walker v. Wilson, 13 Wis. 522; Hall. Gale, 14 Wis. 54; Akerly v. Vilas, 21 Wis. 88; Eaton v. Tallmadge, 22 Wis. 526. Insolvency Laws. In Morrison v. Jewell, 34

Me. 146, it was held that though a partial failure of title could not be set up as a defense in an action at law, yet in case of the insolvency of the grantor, the grantee in an action by the administrator of the grantor could set off the damages recoverable on the breach of cove.

nant.

2. Breach of Covenant Entitling Covenantee to Desha Damages Held a Defense - Arkansas. v. Robinson, 17 Ark. 228. See also Wheat v. Dotson, 12 Ark. 699; Smith v. Capers, 13 Ark, 9; Robinson v. Mace, 16 Ark. 97.

Florida. - Coy v. Downie, 14 Fla. 544.
Kentucky. Butt v. Riffe, 78 Ky. 353.
Mississippi. - Williams v. Harris, 2 How.
(Miss.) 627. See also Brewer v. Harris, 2
Smed. & M. (Miss.) 84, 41 Am. Dec. 587.
Missouri. - Ash v. Holder, 36 Mo. 163.
New York. M'Allister v. Reab, 4 Wend.
(N. Y.) 485, 492.

Pennsylvania. - Christy v. Reynolds, 16 S. & R. (Pa.) 258; Wilson v. Cochran, 46 Pa. St.

Indiana. Baker v. Railsback, 4 Ind. 533; Smith v. Ackerman, 5 Blackf. (Ind.) 541; Stilwell v. Chappell, 30 Ind. 72; Doremus v. Bond, 8 Blackf. (Ind.) 368. See also Burk v. Clements, 16 Ind. 132.

Iowa. Brandt v. Foster, 5 Iowa 287; Camp v. Douglas, 10 Iowa 586. See also Zent . Picken, 54 Iowa 535.

Maine. Rand 2. Webber, 64 Me. 191.
Massachusetts.

- Davis v. Bean, 114 Mass.

Myers v. Estell, 47 Miss. 4. Nesbitt v. Campbell, 5 Neb. 429,

Pennsylvania. - Tod v. Gallagher, 16 S. & R. (Pa.) 261, 16 Am. Dec. 571.

In an action on a note given for the purchase price of land conveyed by deed with warranty, the defendant may recoup what he was compelled to pay to remove an incumbrance from the land. Davis v. Bean, 114 Mass. 358.

Recoupment Limited to Amount Actually Paid for Removal of Incumbrance. The grantee can only recoup the amount paid for the removal

(3) Necessity of a Substantial Breach. Where, however, the covenants in the deed have not been broken, or there has been merely a technical breach of the covenant for which the grantee would be entitled to recover merely nominal damages, in an action on the covenants in the deed the general rule is that the covenants would constitute no defense, either partial or total, to the recovery of the purchase price.

(4) Right to Detain Purchase Money Dependent on Covenants. — The right of a grantee to detain the unpaid purchase money, or recover it back if already

paid, where there is a defect in the title or incumbrance upon the land, is dependent upon the covenants in his deed; in other words, he can have no relief as to the purchase money unless he has taken the precaution to protect himself by appropriate covenants. Although it was suggested in an early case that, while he may not recover the purchase money paid, he is entitled to detain such purchase money as is unpaid, this view has been rejected in all except two 3 of the United States in which the question has arisen, and it is now a generally accepted rule that a purchaser of land who has received no covenants which cover the defect or incumbrance complained of cannot, in the absence of fraud or mistake, either recover back or detain any part of the purchase money.4

2. In Equity a. IN GENERAL. A suit in equity will not lie for the recov ery of damages for breach of the usual covenants in a deed, the remedy at law being adequate.5

b. RELIEF AGAINST COLLECTION OF PURCHASE PRICE-(1) Covenants Not Broken-(a) General Rule. Where the purchaser has been let into possession of the land, and has continued in possession without interruption from the owner of the paramount title, and would not therefore be entitled in an action at law to recover substantial damages on the covenants in his deed, a court of equity will not, as a general rule, on account of defects in the title, restrain the collection of the purchase price, but will leave the purchaser to seek his remedy at law by action on the covenants in the deed. And this is

1. See supra, this title, the division Introductory; subd. Origin and Purpose of Covenants for Title.

*

2. In Maynard's Case, 2 Freem. 1, Rep. temp. Finch 288, (under the name Maynard v. Moseley) 3 Swanst. 651, Lord Nottingham said: He that purchases lands without any covenants or warranties against prior titles, * if the land be afterwards evicted by an eigne title, can never exhibit a bill in equity to have his purchase money again upon that account; possibly there may be equity to stop the payment of such purchase money as is behind, but never to recover what is paid; for the chancery mends no man's bargain, though it sometimes mends his assurance.'

3. Pennsylvania and Texas Doctrine. - In the state of Pennsylvania and, it seems, also in Texas, a grantee may, independently of the covenants in his deed, defend himself from the payment of the purchase money by reason of a clear outstanding defect or incumbrance, unless the intention was that he was to run the risk of it. Steinhauer v. Witman, 1 S. & R. (Pa.) 438; Hart v. Porter, 5 S. & R. (Pa.) 201; Tarpley v. Pooge, 2 Tex. 139; Johnson v. Long, 27 Tex. 21; Demare v. Bennett, 29 Tex. 262; Groesbeck v. Harris, 82 Tex. 411. See the title VENDOR AND PURCHASER.

4. Prevailing Rule. Urmston v. Pate, 4 Cruise 90 (4th ed.); Craig v. Hopkins, 2 Coll. Decis. 517: Thomas v. Powell, 2 Cox 394; Bree v. Holbech, 2 Doug. 655. See the title VENDOR AND PURCHASER.

5. Suit in Equity for Breach of Covenants Not Maintainable. Smoot v. Coffin, 4 Mackey (D. C.) 407; Ferguson v. Bullock, 1 A. K. Marsh. (Ky.) 71; Lawless v. Helm, 1 A. K. Marsh. (Ky.) 457; Miller v. Long. 3 A. K. Marsh. (Ky.) 334: Bradford v. Long, 4 Bibb (Ky.) 225; Chesterman v. Gardner, 5 Johns. Ch. (N. Y.) 29, 9 Am. Dec. 265.

In Watkins v. Owen, 2 J. J. Marsh. (Ky.) 142, it was held that a court of equity has no

jurisdiction of a bill by the grantee of land, with covenants of general warranty, for the investigation of a title, and the assessment of damages in case the title is defective, because of the fact that a suit is threatened by the claimant of the adverse title.

Refusal of Joint Covenantee to Join in an Action. - The mere refusal of a joint covenantee to join in an action for breach of the covenant is not ground for a bill in equity unless it further appears that the refusal proceeded from improper motives. Forbes v. Whitlock, 3 Edw. Ch. (N. Y.) 446.

Covenant by Married Woman. — The remedy, however, against the heirs of a married woman for breach of the covenants in her deed is in equity, and not at law, as her liability is merely an equitable one imposed upon her separate estate. Barlow v. Delany, 36 Fed. Rep.

Arkansas. - Hoppes 7. Cheek, 21 Ark. 588; Worthington v. Curd, 22 Ark. 281; Bolton v. Branch, 22 Ark. 435; Busby v. Treadwell, 24 Ark. 456.

Georgia. Cantrell . Cobb, 43 Ga. 193: Alen v. Thornton, 51 Ga. 594; Odel v. Reed, 54 Ga. 142.

Illinois. Harding v. Commercial Loan Co., 84 Ill. 251.

Kentucky. - Taylor v. Lyon, 2 Dana (Ky.) 276; Wiley v. Fitzpatrick, 3 J. J. Marsh. (Ky.) 584: Morrison v. Beckwith, 4 T. B. Mon. (Ky.) 73, 16 Am. Dec. 136. Maryland.

Gayle v. Fattle, 14 Md. 69.

especially true where the grantee had notice of the defects in the title.1

(b) More Liberal Rule. In some jurisdictions, however, the courts of equity have gone far beyond everything sanctioned by the Court of Chancery in England or the courts of equity in most of the United States, and have, irrespective of the solvency or insolvency of the grantor, and though the purchaser has not been disturbed in his possession, given relief to the purchaser against the payment of the purchase money where the title has been questioned by suit, either prosecuted or threatened, or where the purchaser shows clearly that the title is defective.2

Limitation of the Rule. No court of equity, however, has gone to the extent

-

Griggs v. Detroit, etc., R. Co.,

Michigan.
10 Mich. 117.
Mississippi. Coleman v. Rowe, 5 How.
(Miss.) 460, 37 Am. Dec. 164; Vick v. Percy, 7
Smed. & M. (Miss.) 256, 45 Am. Dec. 303;
Walker v. Gilbert, 7 Smed. & M. (Miss.) 456;
McDonald v. Green, 9 Smed. & M. (Miss.) 138;
Wailes v. Cooper, 24 Miss. 232; Wofford v.
Ashcraft, 47 Miss. 641.

Missouri. Swain v. Burnley, 1 Mo. 404; Barton v. Rector, 7 Mo. 528; Cooley v. Rankin, 11 Mo. 643; Connor v. Eddy, 25 Mo. 75; Mitchell v. McMullen, 59 Mo. 252.

New Jersey. - Hile v. Davison, 20 N. J. Eq.

228.

New York. - Bumpus v. Platner, 1 Johns. Ch. (N. Y.) 213; Denston v. Morris, 2 Edw. Ch. (N. Y.) 37; Abbott v. Allen, 2 Johns. Ch. (N. Y.) 519, 7 Am. Dec. 554; Leggett v. M'Carty, 3 Edw. Ch. (N. Y.) 124; Bates v. Delavan, 5 Paige (N. Y.) 299; Griffith v. Kempshall, Clarke Ch. (N. Y.) 571; Woodruff v. Bunce, 9 Paige (N. Y.) 443, 38 Am. Dec. 559: Edwards v. Bodine, 26 Wend. (N. Y.)

Virginia. Beale v. Seiveley, 8 Leigh (Va.) 658; Long v. Israel, 9 Leigh (Va.) 556.

See, however, Johnson v. Gere, 2 Johns. Ch. (N. Y.) 546, wherein proceedings on a bond and mortgage given in payment of land sold with covenants of warranty were enjoined until the determination of an action of ejectment by a person claiming under a paramount title.

In Gayle v. Fattle, 14 Md. 69, it was held that the mere claim by a third person of a paramount title, not alleged by the bill to enjoin the collection of the purchase price to be valid, and the bringing suit upon that claim against the purchaser, are not sufficient to authorize a court of equity to stay by injunction proceedings at law for the recovery of the unpaid purchase money.

1. Notice of Defect Additional Ground for Denying Equitable Relief. James v. Hays, 34 Ind. 272; Anderson v. Lincoln, 5 How. (Miss.) 279; Stone v. Buckner, 12 Smed. & M. (Miss.) 73; Gartman v. Jones, 24 Miss. 234; Wilkins v. Hogue, 2 Jones Eq. (55 N. Car.) 479; Merritt 3. Hunt, 4 Ired. Eq. (39 N. Car.) 406; Demaret . Bennett, 29 Tex. 262. See also Wamsley v. Stalnaker, 24 W. Va. 226.

2. More Liberal Rule- Florida. - Yonge v. McCormack, 6 Fla. 368, 63 Am. Dec. 214. Buchanan v. Lornan, 3 Gill Maryland. (Md.) 51; Dorsey v. Hobbs, 10 Md. 412. New Jersey. - Van Riper v. Williams, 2 N. J. Eq. 407. Virginia. Ralston v. Miller, 3 Rand. (Va.) 49, 15 Am. Dec. 704: Koger v. Kane, 5 Leigh (Va.) 606; Gay v. Hancock, 1 Rand. (Va.) 72; Miller v. Argyle, 5 Leigh (Va.) 460; Bullitt v. Songster, 3 Munf. (Va.) 55.

West Virginia.

Renick v. Renick, 5 W. Va. 285; Wamsley v. Stalnaker, 24 W. Va. 214. In Clarke v. Hardgrove, 7 Gratt. (Va.) 399, it was held that where the grantee clearly shows that at the institution of the suit the title to a portion of the land conveyed to him was de fective, he has a right, notwithstanding a deed with general warranty had been made, to enjoin the collection of the purchase money. In this case the court said that it was not incumbent upon the purchaser in case of a clearly defective title to risk the hazard of the vendor's insolvency.

-

Pendency of Action by Adverse Claimant. — In Jaques v. Esler, 4 N. J. Eq. 461, it was held that the purchaser of land by deed of warranty has a right to relief in equity against the vendor who seeks to enforce the payment of a bond given for the purchase money, until a suit actually brought to recover the premises by a person claiming them by a paramount title shall have been determined. In this case the question of the solvency or insolvency of the vendor was not raised, and the chancellor, in delivering the opinion, said: "He [the grantee] is not obliged to look merely to the covenants in the deed; he is not to be driven to such circuity of action, nor to rely upon that as his only security. The fund in his hands is a security, of which it would be inequitable to deprive him."

Existence of Adverse Claim Insufficient. — In Glenn v. Whipple, 12 N. J. Eq. 50, it was held that the mere existence of an adverse claim (a right of dower) was insufficient to entitle the grantee to equitable relief, unless an action to enforce such claim had been instituted. See also Van Waggoner v. McEwen, 2 N. J. Eq. 412, cited in Glenn v. Whipple, 12 N. J. Eq. 50.

of granting relief against the collection of the purchase money unless there was reasonable apprehension of danger to the grantee by reason of the defects in the title, or unless the purchaser could show clearly the defect in the title.2

(c) Insolvency and Nonresidence of Grantor as Ground for Equitable Relief — aa. INSOLVENCY. Where it is shown that the grantor is insolvent and that an adverse title is being asserted, courts of equity, under their quia timet jurisdiction, have enjoined the collection of the purchase price.3 The danger, however, of injury to the grantee by reason of the defects in the title must be imminent. And it has been held necessary also, in order that such relief may be granted, that the grantee did not have notice of the defects in the title at the time of his purchase.5

bb. NONRESIDENCE. As in case of the insolvency of the grantor, the fact that he is a nonresident has also been held to entitle the grantee to equitable relief from the payment of the purchase money.

1. Reasonable Possibility of Injury from Defects of Title Essential. Collins. Clayton, 53 Ga. 649.

In Wamsley v. Stalnaker, 24 W. Va. 214, it was held that equity would not enjoin the collection of a judgment at law for purchase money merely on account of judgments against the vendor, exceeding the value of the land conveyed, which were liens upon the land, where it appeared that the vendor owned other lands greatly exceeding in value the amount of the judgment, which were first bound to pay the judgments before the land conveyed could be subjected to their payment, and where the bill contained no allegation that the vendor was insolvent or that any suit was brought or threatened to subject the land conveyed to the grantee to the payment of the judgment, or that there was the least probability that any such suit would be brought.

2. Defect in Title Must Be Clearly Shown.Ralston v. Miller, 3 Rand. (Va.) 44, 15 Am. Dec. 704.

In Yancey v. Lewis, 4 Hen. & M. (Va.) 390, it was held that where a purchaser seeks equitable relief against a judgment at law for the purchase price, on the ground of a defect in the grantor's title, it is not enough to allege such defect or want of title, but he must prove an actual eviction or a superior title in some third person.

3. Insolvency of Grantor as Ground for Equitable Relief Alabama. - Culium V'. Branch of State Bank, 4 Ala. 21, 37 Am. Dec. 725; McLemore v. Mabson, 20 Ala. 137.

Georgia. McGehee v. Jones, 10 Ga. 135. Indiana. - Fehrle 7. Turner, 77 Ind. 530. Kentucky. Simpson v. Hawkins, 1 Dana (Ky.) 303; Morrison v. Beckwith, 4 T. B. Mon. (Ky.) 75, 16 Am. Dec. 136; Denny v. Wickliffe, 1 Metc. (Ky.) 216.

---

Mississippi. Wilty v. Hightower, 6 Smed. & M. (Miss.) 345; Johnson v. Jones, 13 Smed. & M. (Miss.) 580.

Foote v. Clark, 102 Mo. 394.
-Young . Butler,

I

Head

(Tenn.) 640; Ingram v. Morgan, 4 Humph. (Tenn.) 66, 40 Am. Dec. 626.

See, however, Peters v. Bowman, 98 U. S. 56: Strong . Downing, 34 Ind. 300.

Basis of Equitable Relief. -The ground upon which the chancellor interferes in such cases is the prevention of the irreparable mischief which otherwise might result from the

Outstanding Incumbrance. Where the covenants are broken by the existence of an outstanding incumbrance (dower right), and the grantor is insolvent, equity will restrain the collection of so much of the purchase money as will compensate for the injuries resulting from the breach, or order its appropriation to the extinguishment of the incumbrance. Lemore v. Mabson, 20 Ala. 137.

Mc

Incumbrance Not Asserted. In Worthington v. Curd, 22 Ark. 277, however, it was held that the mere existence of the incumbrance would not entitle the purchaser to equitable relief on account of the insolvency of the grantor, unless the incumbrance was actually being prosecuted.

4. Hoag v. Rathbun, Clarke Ch. (N. Y.) 12; Miller v. Avery, 2 Barb. Ch. (N. Y.) 582. See, however, Johnson v. Gere, 2 Johns. Ch. (N. Y.) 546.

5. Known Defects. Worthington v. Curd, 22 Ark. 277; Morrison v. Beckwith, 4 T. B. Mon. (Ky.) 73, 16 Am. Dec. 136; Henry v. Elliott, 6 Jones Eq. (59 N. Car.) 175. See, however, Wailes v. Cooper, 24 Miss. 233: Jaques v. Esler, 4 N. J. Eq. 461.

In Rawlins v. Timberlake, 6 T. B. Mon. (Ky.) 232, Bibb, C. J., said: Upon what principle of equity could the chancellor interfere to stop the purchase money whilst the purchaser is in full enjoyment of his purchase, receiving rents and profits, using the buildings and grounds, when the title is precisely as the parties knew and contemplated at the sale and purchase? Would it accord with equity or reciprocity to help the purchaser keep the price and the tenements purchased by tying up the purchaser to wait the issue of a suit pending, and known, and within the contemplation of the parties, when the one made and the other accepted the covenant of warranty?"

6. Nonresidence of Grantor. McGehee . Jones, 10 Ga. 135; Wiley v. Fitzpatrick, 3 J. J. Marsh. (Ky.) 582; Hatcher v. Andrews, 5 Bush