14. quit-claim deed is exactly similar in form to a bargain and sale deed, except that in place of the words "grant and release" the terms used are "remise, release and quit claim." A quit claim deed will convey the entire estate of the grantor in the same manner as a bargain and sale deed, but it is usually employed to release some claim, real or supposed, upon the property.
15. full covenant and warranty deed is like the bargain and sale deed in form except that five covenants made by the grantor are added to it. These covenants do not help the transfer of the title in any way, but are as surances respecting the title conveyed.
The form of the covenants in New York deeds is as follows: M. Explanation of the five covenants.—The five covenants contained in the full covenant and war ranty deed may be considered in the order in which they appear.
The covenant of seizen. ' This covenant signifies that the grantor owns the property, possesses it and has a good right to convey it to the grantee.
Covenant of quiet enjoyment, "that the party of the second part shall quietly enjoy the said premises." This means that the grantee shall not be disturbed in his possession of the property by reason of any right or cause of action which existed at the time of delivery of the deed.
Covenant against encumbrances. The grantor covenants that the title to the premises is free from all encumbrances. If any encumbrances exist and it has been agreed that the grantee takes subject to them, they should be set forth in the deed, either after the description or after the habendum. Then the clause will read, "That the said premises are free from encumbrances, except as aforesaid." Covenant for further assurance. This covenant provides that whenever necessary the grantor will give other instruments to perfect the title of the grantee. This may be useful in case the deed should prove to be defective in any respect. If the grantor under this deed can remove the defect—whatever it may be—by executing or procuring a further assur ance of title, he must do so.
Covenant of warranty. This is the most impor tant of the five covenants. It means an absolute guarantee of the title on the part of the grantor.
17. Covenants divided into two classes.—Two of the covenants relate to the past and three relate to the future. Those which relate to the future are said to "run with the land." The two which relate to the past, and which do not run with the land are the cov enant of seizen and the covenant against encum brances. If these two covenants are broken, the breach occurs when the deed is delivered. Subse quent conveyances may operate to assign the cause of action on the breach, but the right of action ac crues, and the time of limitation begins to run, at the time of delivery of the deed.
The other three covenants run with the land. They are binding covenants passing with the title to the land until broken, and enforceable by the owner at the time any breach occurs. The time of limitation begins to run, not from the delivery of the deed, but from the date the covenant is broken. After being broken, the covenant no longer runs with the land; the right of action, however, may pass by assignment.
18. Breach of covenants.—The covenant of seizen is broken at the time of delivery of the .deed if any of the elements of ownership, possession and right to convey do not exist. The covenant against encum brances is also broken at that time if encumbrances not mentioned in the deed are in existence against the property. The covenant of quiet enjoyment might not be broken even tho the grantor did not have a title in lee simple absolute. If the fee could be de feated by any contingency, the breach of this cov enant would not occur until the grantee or those claiming under' him were ousted from the enjoyment of the property. The covenant for further assurance is not broken until the grantor fails to give some other instrument when such action becomes necessary. He can then be sued for specific performance, or for dam ages after performance has been demanded and re fused.
The covenant of warranty cannot be invoked un til the owner claiming under it has been actually ousted of his ownership, i.e., deprived of all the land or some essential portion. He can then claim dam ages under the covenant. The measure of damage is not the value of the land at the time of the breach, but the consideration paid for the conveyance con taining the covenant.
There is no obligation on the part of the grantor to make good under any covenant until there is loss or liability thru loss. In some states the rule regard ing the covenant against encumbrances is that the mere existence of an encumbrance shall be sufficient to call upon the maker of a covenant to respond. In New York the rule is more limited—the holder of the covenant must actually buy his way out before he can recover against the covenantor.
19. Covenants do not guarantee marketability.— The covenant of warranty is in no manner an assur ance that the title to the property conveyed is market able. There are many ways in which a title may prove unmarketable for which there is no redress upon any covenant in the deed. A house may en croach upon a neighbor's land, and the owner may have no right to maintain it there. If he tries to sell the house, the purchaser may decline to take the title. He will be in possession of an unmarketable title, but he has not been ousted of anything which is within the bounds of the land described in the deed and has not been deprived of any valuable thing which was conveyed to him. Therefore, he has no re dress under the covenant of warranty. A building may have an important projection upon a public street, so that the title is unmarketable, and a pur chaser would not take it, neither would a lender lend on it, and yet there may be no redress under any cov enant. The title may also be unmarketable because of some defect in the chain of title, or because of the possibility of some lien (such as a lien of decedents' debts) being asserted against it. A purchaser might not be compelled to take the title under the circum stances, and yet there would not be a breach of any of the covenants contained in the warranty deed we have analyzed.