## Facts

- N.H. Harris conveyed land to Noah Laney by deed containing a general covenant of warranty.
- Laney later died, and his heirs succeeded to his rights under the covenant.
- A superior (paramount) title was asserted, resulting in Laney’s successors being evicted or otherwise losing title, triggering an alleged breach of the warranty.
- After Harris died, his estate was partially insolvent.
- The administrator of Harris’s estate filed an equity proceeding seeking direction on payment of estate debts, including the Laney heirs’ claim based on the breached warranty.
- The amount allowed on the Laney heirs’ claim would affect distribution of limited estate assets among creditors.

## Issues

1. What is the proper measure of damages for breach of a general covenant of warranty when the grantee (or heirs) is evicted under a paramount title and seeks recovery from the warrantor (or the warrantor’s estate)?
2. Specifically, should damages be based on land value (at conveyance or eviction, with or without improvements) or on the purchase price with interest?

## Decision

- The court held that damages for breach of the covenant of warranty are measured by the purchase money paid for the land plus interest from the time of purchase.
- The court rejected measures based on the value of the land at eviction, including approaches that would incorporate improvements.
- In the estate-administration context, this measure governed the amount allowable as the Laney heirs’ claim against the partially insolvent estate.

## Legal Principles

- For breach of a deed’s general warranty following eviction by a paramount title, the standard recovery is the consideration paid, with interest from the date of purchase.
- The covenant of warranty functions as contractual security for title, not as compensation for later changes in market value or for improvements made by the grantee.
- A purchase-price-based measure is favored for evidentiary certainty and administrability because the consideration is a fixed, provable amount tied to the parties’ transaction.

## Conclusion

The court set damages for breach of a general warranty covenant at the purchase price paid, with interest from the time of purchase, and applied that measure to determine the allowable claim against the warrantor’s partially insolvent estate after eviction by a superior title.


Davis v. Smith, 5 Ga. 274, 48 Am. Dec. 279 (Ga. 1848)