Colorado § 38-30-122 - No action against warrantor without notice and refusal to defend.

§ 38-30-122. No action against warrantor without notice and refusal to defend.

No right of action shall exist upon a covenant of warranty against a warrantor when possession of the premises warranted has been actually delivered to or taken by the warrantee, until the party menacing the possession of the grantee, his heirs, personal representatives, or assigns have commenced legal proceedings to obtain possession of the premises in question and the grantor, after notice, has refused to defend, at his own cost, the premises in such action.

Source: R.S. p. 108, § 11. G.L. § 170. G.S. § 208. R.S. 08: § 679. C.L. § 4887. CSA: C. 40, § 19. CRS 53: § 118-1-22. C.R.S. 1963: § 118-1-22.

ANNOTATION

Law reviews. For article, "Measure of Damages for the Breach of the Covenants of Quiet Enjoyment and Warranty", see 13 Dicta 278 (1936).

Section applies only to covenant of warranty. Seyfried v. Knoblauch, 44 Colo. 86, 96 P. 993 (1908).

Application of the statute is limited to grantees in possession of the property in dispute and shall not be used to delay the running of three-year statute of limitations on a claim involving a breach of warranty by a former grantee who conveyed and voluntarily relinquished possession of the property covered by the deed. Pagosa Springs Invs. v. Sivers, 886 P.2d 307 (Colo. App. 1994).

Section is inapplicable when possession is not obtained under the deed, not when the holder of the adverse title has obtained possession of the premises since the deed was made. Tierney v. Whiting, 2 Colo. 620 (1875).

"Legal proceedings" and "action" construed. The words "legal proceedings" and "action", as used in this section, mean a suit in court for the possession of the land. Ernst v. St. Clair, 71 Colo. 353, 206 P. 799 (1922).

This section does not bar action for breach of warranty deed since grantees never took possession of the property involved and are regarded as actually being evicted from property. Upton v. Griffitts, 831 P.2d 504 (Colo. App. 1992).

Accrual of cause of action for breach of warranty. Where a covenantee is never in possession of property conveyed, he cannot be menaced in his possession within the meaning of this section, hence a cause of action for breach of warranty accrues upon delivery of the conveyance. Bernklau v. Stevens, 150 Colo. 187, 371 P.2d 765 (1962).

This section clearly sets forth the commencement of legal proceedings by a third party as the date of accrual. Bernklau v. Stevens, 150 Colo. 187, 371 P.2d 765 (1962).

Water rights may be warranted. Water rights can be conveyed and the quality of the title may be warranted much like with real property. Navajo Dev. Co. v. Sanderson, 655 P.2d 1374 (Colo. 1982).

Applied in Seyfried v. Knoblauch, 44 Colo. 86, 96 P. 993 (1908); Stone v. Rozich, 88 Colo. 399, 297 P. 999 (1931).