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STATE MUTUAL INSURANCE CO. v. McJENKIN INSURANCE & REALTY CO.
34068.
Complaint; from Fulton Civil Court-- Judge Lowe. March 7, 1952.
CARLISLE, J.
1. An eviction or its equivalent must be shown before recovery can be had on an action upon a breach of general warranty of the title to land. A constructive eviction is sufficient to support such a cause of action, and it exists where, as here, the outstanding paramount adverse title is to an easement in a strip of land along one side of the property warranted, reserved by the owner of the adjacent land as a means of ingress and egress and for light and air, and where such adjacent owner brings a damage suit for the continuing trespass brought about by the construction by the warrantee of a building on this strip of land, and the warrantee, in order to lessen the damages of such pending action, destroys the building. Under these circumstances the destruction of the building was not a voluntary act.
2. (a) Expenses of litigation, including attorney fees and costs, are not proper elements of damage in a suit on a breach of warranty.
(b) A mere refusal to pay a disputed claim is not the equivalent of stubborn litigiousness. No bad faith was alleged or proved against the defendant here. Accordingly, the recovery of attorney fees under Code 20-1401 was not authorized.
3. Code 20-1414 provides as follows: "Any necessary expense which one of two contracting parties incurs in complying with the contract may be recovered as damages." Applying this Code section to this action for breach of warranty, as has heretofore been done by our appellate courts, the plaintiff here alleged and proved damages of $900 occasioned by the construction and subsequent demolition of a building placed on the warranted premises by the warrantee, which the jury was authorized to final was a necessary expense. The evidence therefore authorizes a verdict for the plaintiff in this sum.
This case represents an appeal by State Mutual Insurance Company, defendant in the Civil Court of Fulton County, on an action for breach of warranty brought by McJenkin Insurance & Realty Company. The allegations of the petition are substantially as follows: that in 1944 the plaintiff realty company purchased a lot of land in the City of Atlanta from the defendant and received a warranty deed thereto, that, relying upon such warranty, it constructed a warehouse on the eastern end of said lot, that thereafter the owner of the adjoining lot, Mrs. Keeling, filed a suit alleging that she had an easement upon the eastern ten feet of the plaintiff's lot, and sought an injunction; that, upon being served with this action, the plaintiff vouched into court in this case the defendant insurance company, from which it had purchased the property; that the defendant failed and refused to defend the action, for which reason the plaintiff was forced to spend $500 in defending the suit and $36 in court record costs; that a judgment was obtained against it in the sum of $1500; that the plaintiff, to lessen its damages after this suit was filed but before judgment thereon, tore down and moved the warehouse at a cost to it of $900; that the defendant warrantor thereafter paid off the $1500 judgment and received a quitclaim deed to the land in dispute from Mrs. Keeler, owner of the easement, which inured to the benefit of the plaintiff; that the defendant, although vouched into court, has refused to pay the plaintiff's damages for which it is liable under its breach of warranty, has been stubbornly litigious, and is therefore liable to the defendant in the additional sum of $200 attorney fees for bringing this action. Pleadings in the original action were attached as exhibits to the petition. The defendant filed general and special demurrers, which were overruled (reference is omitted to those special demurrers which were sustained, as no error was assigned thereon); and on the trial of the case the facts above stated were proved by undisputed evidence or were admitted by stipulation. The jury returned a verdict of $1300 in favor of the plaintiff. A motion for a new trial, which was amended by the addition of 5 special grounds, was denied. The exceptions are to this judgment and the judgments sustaining the demurrers.
Webster, 79 Ga. App. 30 (52 S. E. 2d, 511), and cases there cited; Weatherly v. Parr, 72 Ga. App. 883 (35 S. E. 2d, 381); DuBois v. Smith, 76 Ga. App. 556 (46 S. E. 2d, 590). An easement, like a lien, is an assertion of a paramount qualified interest in the land; and its effect in this case was to cause an eviction of the plaintiff insofar as his exclusive use of the easement in the ten-foot strip in question was concerned. In Atlanta Title & Trust Co. v. Davis, 36 Ga. App. 257 (136 S. E. 164), recovery was permitted for a breach of a covenant in a policy of title insurance, a clear title having been certified, when in fact an easement existed over a part of the land in question. The fact that the defendant later acquired a quitclaim deed to the strip would not affect the rights of the parties prior to its acquisition. It follows, therefore, that the general demurrer to the petition and the special demurrer to the paragraph alleging the damages sustained by the plaintiff in demolishing its warehouse, on the sole ground that the moving of the warehouse was a voluntary act, were properly overruled. Under the facts of the original suit, the presence of a warehouse was a continuing trespass for which the plaintiff could have been held liable.
2. (a) Special demurrers were interposed to the alleged items of damage of $500 spent as attorney fees in the defense of the original suit against the owner of the easement and $36 costs of the court record. Such attorney fees, paid out in previous litigation, are not generally recoverable in a later suit under Code 20-1404, providing that the expenses of litigation may be allowed where the defendant has acted in bad faith, or has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense. Randolph v. Merchants &c. Banking & Loan Co., 58 Ga. App. 566, 573 (199 S. E. 549); Leathers v. Waters, 35 Ga. App. 757 (2) (134 S. E. 806); Woodland Hills Co. v. Coleman, 73 Ga. App. 409, 414 (9) (36 S. E. 2d, 826). It was held in Taylor v. Allen, 131 Ga. 416 (4) (62 S. E. 291), that expenses of litigation, including attorney fees and costs, are not proper elements of damage in a suit on a breach of warranty, and are not recoverable. This decision was followed in Neal v. Medlin, 36 Ga. App. 796 (138 S. E. 254). Accordingly, the special demurrers directed to these elements of damage should have been sustained, (b) As to the recovery of attorney fees in the present suit, which is based on a breach of warranty, it should be noted that attorney fees under Code 20-1404, supra, are generally limited to actions ex delicto, even though this section is classified in the Code under the chapter dealing with contracts. See Traders Insurance Co. v. Mann, 118 Ga. 381 (7), 384 (45 S. E. 426). The defendant here did not act in bad faith, since the record shows that it paid off the judgment in the case against the plaintiff in which it was vouched into court. It was not bound by that judgment to pay any additional damages the plaintiff sustained, such as the removal of the building. Nor is there any allegation that the defendant here acted in bad faith in the matter. A mere refusal to pay a disputed claim is not the equivalent of stubborn litigiousness. In Pone v. Barbre, 57 Ga. App. 684 (3), 691 (196 S. E. 287), it was held as follows: "Unless the defendant was guilty of deceit or fraud in the sale of the property, or acted in bad faith as respects the existence of the lien on the property when she sold it, the plaintiff can not, in a suit to recover damages for breach of the warranty, recover attorney's fees for prosecuting the action. Smith v. Williams, 117 Ga. 782 (4) (45 S. E. 394, 97 Am. St. R. 220)." It was therefore error to fail to sustain the special demurrer attacking this alleged element of damage.
3. The first three grounds of the amended motion for a new trial are treated in connection with the general grounds. Special ground 1 complains that the plaintiff was allowed to answer a question as to the improvements he had placed on the lot (other than the warehouse), on the ground that such testimony was irrelevant to any issue in the case. Special ground 2 excepts to the testimony that, after the warehouse was torn down, the plaintiff realized $100 in excess of the cost of tearing the same down, on the ground that the measure of damages would be the cost of replacement and not the difference between the cost of erection and the cost of taking away the building. Special ground 3 complains of the charge of the court on this subject to the effect that, if the plaintiff constructed the outbuilding under a reasonable belief that he had a right to do so, and demolished it under a reasonable belief that he was required to. do so either to comply with the terms of the easement or to lessen the damages, the jury would be authorized to find a verdict for the plaintiff in the amount of the reasonable expense of constructing and demolishing the outbuilding.
Beasley, 23 Ga. 17 (2); National Sheet Metal Co. v. McKenzie, 62 Ga. App. 292 (8 S. E. 2d, 93). The decisions in Croom v. Allen, 145 Ga. 347 (2) (89 S. E. 199), and Shaw Brothers v. Guthrie, 14 Ga. App. 303 (5) (80 S. E. 735), indicate that necessary expenses may also be sought in actions for a breach of warranty of title to realty. The provisions of Code 20-1412 do not limit the damages in all instances to the purchase price and interest alone (see Croom v. Allen and Shaw Brothers v. Guthrie, supra); and where, as here, a breach of a legal duty results in special damage to the plaintiff, we know of no rule of law under which such damage would not be recoverable. The special damage here was the loss of the $900 in erecting and demolishing the warehouse. Damages are generally awarded as compensation for the injury received. The erection of the building was made at a time when the plaintiff had every reason to think he had exclusive possession of the land in question. The demolition was made at a time when he knew he had no right to maintain the structure there, and when a damage suit for interference with the easement was pending against him. In consequence, both the admission of evidence as to this damage, and the charge of the court thereon, were without error. The evidence as to the value of other improvements, although immaterial, was not harmful to the defendant and offers no ground for reversal.
Since the verdict is authorized by the evidence only for $900, and since the verdict is for $1300, $400 in the verdict is not authorized by the evidence. The judgment, however, with the $400 written off, would cure the error of the court in overruling the special demurrer as to attorney fees, and the writing off of the $400 would cure the defect in the verdict. The judgment, therefore, is affirmed upon condition that on receipt of the remittitur from this court by the trial court the sum of $400 be written off by the plaintiff; otherwise the judgment is reversed.
Brackett & Brackett, R. B. Pullen, contra.
Graham Wright, Jas. C. Howard Jr., J. Hugh Rogers, for plaintiff in error.
DECIDED JULY 3, 1952.
Saturday May 23 05:03 EDT


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