Facts: P purchased 80 acres of land from D under general warranty. They took
possession after no exceptions were found and recorded their deed. In 1974, P granted a
coal option to CCC for the coal rights to the entire tract for 6k. Two years later, P
discovered that they only owned 1/3 interest to the subsurface coal rights
P argued that the covenant of seisin has been violated because it turns out the conveyance
was not a fee simple absolute as to the coal rights. The court determined that because
seisin is a present covenant, the statute of limitations (10 years) had run out by the time P
had sued. The court acknowledges that the covenant of seisin has been breached.
P then argued, post-trial, that the covenant of quiet enjoyment had been breached
because there was a limitation on the rights of the land that did not allow P to enjoy the
land as they so choose. The court determines that there was no adverse party asserting
any rights to the land against P. Until such time as one holding paramount title interferes
with P’s right to possession (e.g. by beginning to mine the coal) there can be no
constructive eviction and, therefore, no breach of the covenant of quiet enjoyment.
P also argued a breach of the covenant against encumbrances. An encumbrance 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. The court’s
problem here is that encumbrances usually apply to liens, or mortgages, and here P does
not actually lose any interest in the land. Additionally, against encumbrances is a present
interest, and the statute of limitations had run out.
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