Summary of Babb v. Weemer, Ct. of App. California 1964

Facts: Weemer formerly owned the property. IN 1956 she took out a promissory note with a bank on the interest of the property.  In 1958 she conveyed by grant to the Rosettes who in turn executed a promissory note and second deed. Rosettes then issued a grant deed to PL Babbs. 1960 Rosettes conveyed the property to Babbs with a clause apart from original instrument. “Subject to encumbrances and easements of record.”

Issue:  Whether the implied covenant runs the land from the original grantor to the present grantee?

Holding: No

Procedure:  SUMMARY APPEAL from a judgment of the Superior Court of Los Angeles County.  Affirmed, with penalty for frivolous appeal. Action for damages for the alleged breach of an implied covenant in a grant deed and to recover certain costs paid by plaintiffs to prevent foreclosure by defendant of a second trust deed held on the subject real property. Judgment for defendant affirmed.

Rule: From the use of the word “grant,” in any conveyance, containing the following covenants, and none other, are implied, unless restrained by express terms contained in such conveyance.

Ct. Rationale: Original grant deed by Weemer contained no specific reference to the first trust deed.  Here, the encumbrance of which plaintiffs complain was and is a completely valid first lien on the property representing a money loan to the prior owner. When the Rosettes acquired the property from by the grant deed which failed to mention the existing trust deed the express written contract of sale between the parties, contained in the escrow instructions, fully set forth the existence of the trust deed which was a determining factor in the purchase price. No damages for any purported breach of covenant could have been asserted then by the Rosettes, and none may be asserted now by plaintiffs who took title expressly subject to all encumbrances of record.

PL A: (Babbs) The grant deed from Weemer to Rosettes was conveyed as though free and clear of encumbrances when it was not.  The grantor’s liability extends remote grantee, not immediate.

Def A: (Weemer) The PL admitted taking the property from the Rosettes expressly, “subject to encumbrances and easements of record,” with direct knowledge of the trust deed.(First Memorandum) There can be no implied covenant where the subject matter is agreed upon.

Supplemental Rule:(1) the implication must arise from the language used or it must be indispensable to effectuate the intention of the parties; (2) it must appear from the language used that it was so clearly within the contemplation of the parties that they deemed it unnecessary to express it; (3) implied covenants can only be justified on the grounds of legal necessity; (4) a promise can be implied only where it can be rightfully assumed that it would have been made if attention had been called to it; (5) there can be no implied covenant where the subject is completely covered by the contract.”