17 Ky.L.Rptr. 1012
Court of Appeals of Kentucky.
PINE MOUNTAIN IRON & COAL CO. v. RICE et al.
Oct. 19, 1895.
Appeal from circuit court, Bell county. "Not to be officially reported." Action by B. A. Rice and another against Givens & Marimon and the Pine Mountain Iron & Coal Company on notes executed to plaintiffs by Givens & Marimon, which such company assumed and agreed to pay. From a judgment for plaintiffs, defendant company appeals. Affirmed. HAZELRIGG, J. In March, 1889, the appellee B. A. Rice sold and agreed to convey to Givens & Marimon, at the price of eight dollars per acre, a large body of land situated in the counties of Bell and Knox. The acreage was to be ascertained by actual survey made "by fair surface measurement," and a deed was to be executed with covenant of general warranty, except as against "an old claim known as the 'Morehouse Claim."' One-half the purchase price was to be paid upon the execution and delivery of the deed and the other in six months thereafter. Subsequently a survey was made, chiefly under the supervision of the vendees, and the quantity found to be 8,206 acres. Givens & Marimon, being without means, set to work to find a purchaser for the land, but not until January, 1890, were they able to consummate a sale, and at that time they notified Rice that they were ready to make the first payment and accept a deed. Accordingly, on January 8, 1890, a conveyance to Givens & Marimon was made by appellee and his wife for the land, consisting of 11 contiguous tracts, aggregating 8,206 acres. One-half the purchase price, amounting to $32,824, with certain interest, was paid down, and for the balance a note was executed to B. A. Rice for $21,882.66 2/3 , and to his wife for $10,941.33 1/3 , each due in 12 months, and with interest from October 6, 1889. It appears that when the deed and notes were about to be executed Givens & Marimon appealed to Rice to leave out the exception in the warranty of the Morehouse claim, saying that such a formal exception in the deed cast a suspicion on the title, and had already caused them trouble in a former attempt to sell the land. He refused, saying that his contract did not require him to give such a warranty, and, while that old claim was of no significance, it would be used to prevent his collection of the deferred payments. He was assured that such was not their purpose, and that a provision might be inserted in the deed that no defense was to be made against the collection of the notes. Accordingly this stipulation was inserted, to wit: "And there shall be no defense set up at law or in equity against the collection of any part of said sums," and in the notes there was written: "And there is to be no defense set up at law or in equity against the collection of this note, or any part thereof." The habendum of the deed contained a general warranty clause in the usual form. It appears that prior to this, Givens & Marimon had sold the land at $10 per acre to the appellant, Pine Mountain Iron & Coal Company, who agreed to pay to the Rices the purchase money due them from Givens & Marimon. The contract between these parties is not in the record. But it sufficiently appears that the appellant company agreed to pay the appellees the deferred purchase money after full notice of the terms of the contract of March, 1889, and the warranty as affected in the recital of the deed of January, 1890. In August, 1891, these notes still remaining unpaid, the appellees brought their respective actions (afterwards consolidated) against Givens & Marimon and the appellant, Pine Mountain Iron & Coal Company, who pleaded as a defense thereto: First, that a suit brought by Foster and others was then pending in the United States circuit court for the district of Kentucky to recover the land in question, and that appellees were insolvent, and appellee B. A. Rice a nonresident of this state; second, that upon a resurvey of the lands, made after appellant bought from Givens & Marimon, there was found to be only some 7,637 acres, whereas the deeds from the Rices to Givens & Marimon, and from the latter to the appellant, called for 8,206 acres. Upon a trial of the issues raised by these and subsequent pleadings the chancellor, in October, 1893, adjudged the appellees entitled to recover of the appellant the full amount of their respective notes, and ordered a sale of the land by lots on a credit of six months. On this appeal, counsel for the appellant insist that the company, when sued for the purchase price, though not evicted, may rely on the covenant of general warranty, there being probable danger from an adverse claim, and the warrantor being a nonresident, and insolvent. Opposing counsel do not controvert this doctrine, but insist that, whatever other effect may be given this general warranty clause, the parties to this transaction cannot rely on it to defeat the collection of the purchase money. And this, in our opinion, is the purport and meaning of the deed and the notes. The general warranty clause was to be operative, but not in such way as to prevent the collection of the purchase money. Such a covenant is not unreasonable, or the terms of it inconsistent. The vendor here simply said (and his testimony is conclusive on the point): "I am ready to defend my title against all comers. I know there is nothing in this Morehouse claim, but I also know you will use it to harass and defer me unreasonably in the collection of my purchase money. Therefore pay me, or agree to do so unconditionally." This is in effect a quitclaim only as to the parties to this conveyance and their privies, whatever it may be as to remote vendees. The agreement not to make defense by reason of this Morehouse claim, for that is the purport of the agreement, as clearly shown by the record, is not in violation of any public policy, or otherwise illegal. We know of no reason why it is not operative, not only on Givens & Marimon, but on the appellant, who stood in their places, and who expressly agreed to do so in the payment of these Rice notes. There is no merit in the appellant's claim of a deficit. The survey made under the supervision of the first vendees and by their employes was made in accordance with the contract calling for a fair surface measurement, and was accepted without complaint. There was no error in it so far as the record shows, and no allegation of any. If, by a different process of measurement, there was found to be less land, the appellees are not to be affected by it. It is contended, further, that the case did not stand for trial, and its submission over the objection of the appellant was error. The appellant's last rejoinder was filed only a few days before the hearing, and was in response to the reply of the appellees filed in February before, of which filing appellant claims to have been without notice. It is claimed, therefore, that an issue was thus formed only a few days before trial, and the failure to make the issue sooner was not the fault of the appellant. It appears, however, that the reply of February was filed in open court, and, moreover, was only a reiteration of the allegations of the reply of January 4, 1892, to which there had been a rejoinder filed on January 15, 1892, thus fully completing the issues in the case. These subsequent pleadings were filed, making the same issues of fact, solely because the suit in the federal court, after the original answer in this case had been filed, had been dismissed without prejudice, and immediately refiled. An amended answer was thought necessary to set up that fact. It was thought proper, therefore, to reform the issues; but it is evident that, if this was necessary, it was only as a matter of form. Another ground of complaint is that the land was adjudged to be indivisible, and the credit of six months was too short. The judgment, however, does not adjudge the lands indivisible. It only adjudges that "neither of said eleven tracts of land could, for the purposes of sale, be further advantageously divided," and only so many of tracts were ordered sold as would pay the judgment, beginning with tract No. 1. It is true that the credit was only six months. This was the credit originally asked by the vendees in the contract of March, 1889. Under the terms of the deed and the notes the money was due in January, 1891, and, in the absence of some reason showing the contrary, we are not inclined to hold the credit unreasonably short. The lands were not such as that their immediate use would materially aid the vendees in making the payment. They had no rental value. Judgment affirmed. Ky.App. 1895. PINE MOUNTAIN IRON & COAL CO. v. RICE et al. 32 S.W. 473, 17 Ky.L.Rptr. 1012

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