Court of Appeals of Kentucky.
May 6, 1909.
ACTION: Judgment for plaintiff affirmed.
ACTION: Judgment of dismissal reversed, with directions.

Appeal from Circuit Court, Knox County.
"Not to be officially reported."

Action by M. W. Hawn against W. H. Detherage and others. There was a judgment for plaintiff against the mentioned defendant, and a judgment of dismissal as to the other defendants, and plaintiff and the mentioned defendant appeal, respectively, from the judgments against them.

These two appeals, involving the same question of law and fact, are heard together. To present clearly the issues, we will take from the pleadings the substantial points of difference between the parties.

In April, 1905, Hawn sold to Detherage a sawmill engine for $775, which sum he alleged Detherage agreed to pay in lumber at the price of $9 per 1,000 feet for buckeye and $9.50 per 1,000 feet for other kinds, the lumber to be manufactured at the mill out of logs then at the mill or near by; and, if the lumber so manufactured amounted to more than the price of the engine, Hawn was to have the surplus at the price mentioned. He averred that soon after Detherage purchased the engine, he sold a one-third interest therein to Lunsford, another one-third interest to Lawson, retaining a third himself, and that all of them agreed to carry out the contract made by Detherage, but that in violation of the contract they manufactured the logs into lumber and refused to let him have any of it, but sold the same, promising to pay him in money the price of the engine in place of the lumber. He asked judgment against all three of them for the amount of his debt and interest. Detherage filed a separate answer and counterclaim, in which he admitted the purchase of the engine and the agreement upon his part to pay for the same in lumber at the price stated by Hawn, but denied that he or Lunsford or Lawson ever agreed with Hawn to pay him money in lieu of lumber, and set up that the lumber necessary to pay for the engine was sawed and tendered to Hawn, but he refused to accept the same and permitted it to remain in the lumber yards until it was damaged to the extent of $400, for which amount he sought judgment on his counterclaim against Hawn. He further set up that one Mason had a mortgage on the engine at the time it was sold to him by Hawn, of which mortgage lien he had no notice, and furthermore that there was a defect in the engine that greatly impaired its working capacity, and upon this account he also asked damages upon his counterclaim. Lunsford and Lawson also filed answers in which they admitted having bought from Detherage an interest in the engine, but averred that, when they discovered there was a mortgage on it, they rescinded the contract. They further denied any agreement to pay the purchase price or any part of it in money. The Masons came into the case by appropriate pleadings and set up their mortgage lien, and asked for personal judgment against Hawn, and that their lien upon the engine be enforced and the property sold for the purpose of satisfying the same. Other pleadings completed the issues, which are, in substance, as before stated, and in March, 1907, an order was entered directing a sale of the engine to satisfy the lien of Mason, which amounted to some $600. In May, 1907, the engine was sold under this order, and purchased by Hawn for $305. A large amount of evidence was taken in support of the respective contentions of the parties, and, the case coming on for hearing, a judgment was rendered in favor of Hawn against Detherage for the amount of the purchase price of the engine with interest, credited by $305, May 25, 1907, but his petition as to Lunsford and Lawson was dismissed.

It is the contention of Detherage upon this appeal that the judgment should be reversed because:
(1) Under the contract the purchase price of the engine was to be paid in lumber and in no other way, and hence it was erroneous to render a judgment for money;
(2) that Hawn violated his contract in refusing to accept the lumber, which was tendered to him in payment of the engine;
(3) because of a want of consideration growing out of the fact that the engine at the time of the sale was incumbered by a lien and afterwards sold to satisfy it;
(4) because the court erred in refusing to award him damages upon his counterclaim growing out of the failure of Hawn to take the lumber when tendered, and his misrepresentations as to the condition of the engine.

Hawn in his petition does state that under the original contract between himself and Detherage he was to be paid in lumber for the engine, but he also states that, after sawing the lumber that he should have received, Detherage and his partners appropriated the lumber to their own use and then promised to pay him in money the price of the engine. A direct issue was made upon this point by the pleadings, and in our opinion Hawn under the pleadings was only entitled to a money judgment, as he abandoned his right to recover the lumber and rested his case upon the ground that the first contract under which he was to receive lumber was merged in the contract under which he was to be paid in money.

And this brings us to the second point, which involves a question of fact, namely, whether or not the contract was modified as claimed by Hawn. If the contract under which Hawn was to receive lumber in payment of the mill was never modified, and if the purchaser tendered to Hawn the lumber agreed upon in payment of the mill, it would follow as a matter of course that Hawn was not entitled to a money judgment, or indeed to any relief. The evidence upon this issue is very conflicting, but there is sufficient to justify us in sustaining Hawn's theory of the transaction. Three facts stand out prominently in this record. One is that Detherage bought the mill from Hawn for $775; the other is that neither he, Lunsford, nor Lawson ever paid him a cent; and yet another is that Hawn did not receive any lumber.

In reference to the third point, it is conceded that, at the time the engine was sold, it was incumbered by a mortgage executed by Hawn to Mason; but the evidence tends to show that Hawn notified Detherage of this fact when he sold him the engine, and it is clearly established that the mortgage debt did not amount to as much as Detherage agreed to pay for the engine. So that, even if it should be conceded that Detherage did not know of the mortgage lien when he purchased the engine, yet his rights were not prejudiced by the existence of the mortgage, because he knew of it long before any action was taken by the mortgagee and could at any time have satisfied the mortgage debt out of the amount due Hawn for the property.

In reference to the charge that Hawn practiced a fraud upon Detherage when he sold him the engine by concealing from him the fact that there was a defect in the engine and the further fact that it was incumbered by a mortgage, the weight of the evidence tends to show that Detherage when he bought the engine knew that Mason had a mortgage on it, and the amount of it, and also that there was a defect in it.

Concerning the claim asserted by Detherage for damages growing chiefly out of the fact that Hawn refused to take the lumber, and it was thereby permitted to decay at the mill, we may repeat that in our opinion the evidence conduces to show that the trade by which Hawn was to take the lumber in payment of the engine was so modified as that he should be paid in money, and hence it follows as a matter of course that Detherage cannot assert any claim for damages against Hawn on account of his failure to take the lumber. It is further shown by the evidence, and without contradiction, that Detherage, Lunsford, and Lawson, or one of them, sold nearly all of the lumber.

To sum up our conclusion on the appeal of Detherage v. Hawn, we are of the opinion, from a careful reading of the record:

(1) That, when Detherage sold an interest in the engine to Lunsford and Lawson, the original contract was modified, and it was agreed that Hawn should be paid in money, and that out of the money due Hawn these parties would satisfy the mortgage lien and pay to Hawn the balance due on the engine, and hence they have no cause of action against Hawn on account of his failure to take the lumber or because it was damaged by delay in removing it from the mill.

(2) That Detherage and his partners are not entitled to any reduction in the purchase price because of the defect in the engine or growing out of the fact that there was a lien on it at the time of the purchase. The weight of the evidence is to the effect that, when Detherage purchased the mill, he knew of the defect in the engine, and also that there was a mortgage, and both he and his partners promised to satisfy the mortgage debt, and by paying it at any time before the sale of the engine under the order of court they could have prevented the sale, retained the engine, and have credit on the amount due Hawn by the sum paid to extinguish the mortgage; but they did not see proper to pursue this course, and, if they were deprived of the engine, it was their own fault, and so the only relief they are entitled to on this score is to have credit by the amount the engine sold for at the decretal sale, and this the lower court allowed in rendering judgment against Detherage.

(3) We are further of the opinion that the weight of the evidence favors the view that, when Lunsford and Lawson purchased an interest in the engine, they assumed in connection with, and as partners of, Detherage to pay Hawn for the engine in money, and therefore they are jointly and severally liable with Detherage for the amount due on the engine.

Wherefore the judgment on the appeal of Detherage v. Hawn is affirmed; and the judgment on the appeal of Hawn v. Lunsford and Lawson is reversed, with directions to enter a judgment in favor of Hawn against Lunsford and Lawson for $775, with interest from April 8, 1906, subject to a credit of $305, May 25, 1907.

Ky.App. 1909.


118 S.W. 986

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