250 F. 30 | 5th Cir. | 1918
Lead Opinion
By a deed bearing' date December 3, 1906, the appellee, William Hurt, sold and conveyed to W. H. Garrett 85,844.95 acres of land in Texas at the price of $343,379.80, of which $50,000 was paid in cash, $106,058.80 was to be paid to the holders of a lien on all the land, to -which appellee’s title was subordinate, the debt secured by that lien being assumed by appellee’s vendee, and $181,321, evidenced by the vendee’s 10 notes, was secured by a vendor’s lien and by the vendee’s deed of trust covering the” land sold. This was a suit by Hurt to foreclose the liens in his favor on the part of the land covered thereby which had not been released before the suit was brought. Twelve defendants, each of whom acquired part of the unreleased, land with constructive notice of the above-mentioned liens, appeal from a decree in favor of Hurt, which adjudged $78,935.23 to be the amount due to him on the purchase-money notes, and decreed the foreclosure and sale of the unreleased land.
“Xliis conveyance in trust is made with the express agreement and understanding that a tulJ release of this trust, as well as a ful] release of the vendor’s lien, will be executed and delivered to the said W. H. Garrett, his heirs or assigns, as io any quantity or parcel of land embraced in this conveyance not less than 040 acres upon payment of such part of the entire unpaid purchase money as is prorated, owing and unpaid on the land for which such release may be demanded.”
■ An evident purpose of this provision was to enable the purchaser, or any one who might succeed him in ownership, to subdivide the land and sell parcels of it freed of the liens on the whole. The language of the provision gave notice to any subsequent purchaser of a part of the land that the existence of the right to have such part released from the liens on the whole was dependent upon the payment oí a pro rata part of the entire unpaid purchase money, including as well what was payable to the appellee’s lien creditors as what was payable to himself. When the appellants made their several purchases, not long after the appellee’s sale and conveyance, they had constructive notice of what was required to be done to clear the land they bought of the liens covering that and other land. No one of the appellants undertook to comply with the provision quoted until years after his purchase was made. That provision may be regarded as an offer by the appellee to subsequent purchasers of subdivisions of not less than 640 acres of the tract sold to release such subdivisions from the liens in favor of the appellee upon the payment to him of a pro rata part of the entire purchase money owing and unpaid. Evidently it was contemplated that the privi-
Modified and affirmed.
Dissenting Opinion
(dissenting). I regret that I cannot entirely concur in the conclusion reached by my Brethren. William Hurt, ap-
“Tills conveyance in trust is made with, the express agreement and understanding that a full release of this trust, as well as a full release of the vendor’s lien, will be executed and delivered to the said W. H. Garrett, his heirs and assigns, as to any quantity or parcel of land embraced in this conveyance, not less than 610 acres, npon payment of such part of the entire unpaid purchase money as is pro rata owing and unpaid on the land for which such release may be demanded.”
In the contract under which Hurt had purchased the land was a like provision. The circumstances under which the sales were made indicate the reason for the provision. It was contemplated that the land should be sold in small tracts, and it was realized that it would be necessary that releases be provided for, in order that a good title might be given to the purchaser. By the terms of the provision, its benefits could he secured by the heirs and assigns of the purchaser.
The appellants insist that the provision quoted fixed on each tract of land sold a definite amount of $2.19 per acre, upon payment of which the purchaser is to have his land released. This contention is upon the assumption that the release is to be had upon payment of the proportionate part of the amount secured by the 'deed of trust. Taking into consideration the original provision in the deed to Hurt, and the clause in the provision quoted, to the effect that the release is to be had upon payment of such part of the entire unpaid purchase money as is pro rata clue upon the particular tract, the conclusion is reached that, primarily, and alter payment of the $50,000, the payment to be made to secure a release was, instead of $2.19, $3.41 per acre, or the total purchase price remaining unpaid, divided by the total acreage.
The provision required the payment, in order to secure a release, of such part of the unpaid purchase money “owing and unpaid on the land for which such release may be demanded.” It was contemplated, of course, that the land would be paid for in accordance with the terms of the deed and of the notes given as part of the purchase price, and it was contemplated that, to secure a release, the purchaser would be in position to demand the release upon payment of the “pro rata part” remaining unpaid “on the land for which such release may be de
The evidence indicates that releases were made upon such a basis that, if all of the acreage had been released on the same basis, the payments for releases would have beep insufficient to have discharged the entire indebtedness. The seller of the land, the plaintiff, had, of course, the right to release any tract that he might choose to release; and if, as was the case, his vendee joined in the request for the release at this inadequate price, both of the parties would be bound by the action, and the release would be in all respects .effective. This, not by virtue of the contract, but because the vendor would have a right, notwithstanding the contract, to give away his property if he wanted to. Such a release, however, could not have the effect of placing a subpurchaser in a less favorable position than prior to such release. If, to illustrate, there had been outstanding so much of the unpaid purchase price as would have required a payment of $3 per acre for its discharge, and the plaintiff, at the request of his vendee, had released certain of the lands at $2 per acre, whereby there would be due upon what was left a larger amount than $3 per acre, subpurchasers, whose rights had been fixed prior to that time, would nevertheless have the right, by paying the $3 an acre, to secure releases.
It is insisted by appellants that the course of conduct between the plaintiff and the purchaser in the giving of releases to a number of the subpurchasers at $1.90 and less created a condition which authorized other subpurchasers to secure releases for like amounts. As suggested, the limit of the restriction upon the plaintiff was that he could not execute a release that would injuriously affect persons whose rights had already been fixed. He did not, by taking less than he had a right to demand, do anything that he did not have a right to do. But this action on his part could not take away rights which had already been fixed in other people, nor did it give them new rights. The clause was executed for the purpose of making it practicable for the vendee (purchaser) to resell the land, by making it possible to give good titles to the subpurchaser, without taking up the notes executed for the purchase price before they were due. If a construction is given to it which would authorize the plaintiff, the original vendor, to accept releases for an amount less than he had a "right to demand, with the effect of adding this deficit to the amount which subpurchasers subsequently demanding releases would have to pay, the value of the clause would be entirely destroyed.
The actual course of events in this case illustrates, as well as any facts which might be imagined, the effect of such a construction. The evidence shows that releases were accepted as low as $1.63 per acre. At a subsequent date, and at a time when the appellants in this case
The sales to appellant were made in 1907 and early in 1908. Subsequent to these sales their vendors (the purchasers) paid off the notes to Garrett, aggregating $106,058.80, which they had assumed when the land was purchased from Hurt. It is insisted that this payment did not reduce the amount which appellants would have to pay in order to entitle them to releases. It is suggested that the status is the same as if they had contracted to pay a fixed and certain sum before they were entitled to releases, and that they were not entitled, under any circumstances, to have this amount reduced by payments by somebody else. These subpurchasers have warranty deeds from the persons who paid off the notes executed by Hurt, and which they had assumed. The payment of these notes made their obligations to their vendees (the subpurchasers) good pro tanto. If they had paid off all their obligations to Hurt, the warranties of the deeds would have been made good. If they had paid, as they contracted, not only would the amount required for the releases have been reduced, but would have been wiped out entirely. Indeed, the necessity for individual releases would have been eliminated. It could just as well be said that the purchasers (from Hurt) could recover from the subpurchasers amounts paid by them which reduced the amount required to be paid to secure releases for subpurchasers as to suggest that payments made by the purchaser did not have the effect of reducing the amount required to be paid by the subpurchaser for releases. The obligations were the obligations of the purchaser. It was contemplated that they should be paid. It was contemplated that the subpurchaser should make his payments to the purchaser. The release clause was made for the convenience of the purchaser and the safety of the subpurchaser.
Each appellant has already paid to the purchaser a sum largely in excess of that required to pay his proportionate part of all the liens upon the land, including the notes of Hurt, which were assumed, and the notes to Hurt, for a part of which judgment is now rendered. To illustrate: The proportionate part of the original lien chargeable against the section sold to appellant Eorkenbrock was $2,176. He has already paid $4,560 on his land, and he is now called upon, in addition, to pay $2,176 and interest and attorney’s fees. The money which he paid was used in the discharge of the $106,058.80 lien, but he is not to get any benefit, so far as a release is co’ncerned, from the payment. The appellants in this case were subpurchasers of about 12,000 acres of
To further elucidate the views expressed: After the payment of the $50,000 there remained unpaid the notes due to Garrett, $106,-058.80, and the notes due to Hurt, $187,321, a total of $293,379. To have secured a release at that time, the required amount per acre would have been determined by dividing the $293,379 by the total acreage, 85,844, and the result would have been $3.41 per acre. About December 1, 1908, the $106,058.80 was paid. Other payments to that time reduced the debt (according to the auditor whose report was the basis of the judgment) to $129,617. There had been released to this time (according to the list furnished by plaintiff) 35,642 acres, leaving a balance of 50,202 acres. The debt, divided by the acreage, would give as a result 2.58. At that time the subpurchaser would have had to pay, to be entitled to a release, $2.58 per acre. Between December 1, 1908, and December 1, 1912, the debt was reduced $63,102, leaving unpaid $66,515 (auditor’s figures). During this period 34,020 acres of the land were released. The persons securing releases, instead of paying $2.58 per acre, paid on an average $1.85 (interest excluded in both cases). After December 1, 1912, in order to secure a release on the balance of the land, 16,182 acres, it would have been necessary to pay $4.16 per acre, the result of dividing $66,515 by 16,182. The increase from $2.58 to $4.16 resulted from giving releases for less than could have been demanded. The interest for the period between December 1, 1908, and December 1, 1912, would have been 24 per cent., and would have increased the $2.58 to $3.20. To the date of the decree, March 5, 1917, 8 years and 3 months, the interest would have increased the $2.58 to $3.85. Appellants, instead of paying $3.85 per acre, are compelled by the decree to pay more than $6 per acre.
Appellants’ contention that the amount to be paid by them was to be determined without adding interest to the purchase price is entirely without merit. The interest provided for is a part of the purchase price. While nothing could be done by any one else to injuriously affect their status, and while they were entitled to get the benefit of any payment which the purchaser might have made, if, the amount payable to secure a release having become fixed, the subpurchaser fails then tó demand a release, the amount payable necessarily increases with the accruing interest. The evidence indicates that the appellants, before suit was instituted, were undertaking to discharge whatever amounts might be necessary for them to pay in order to secure releases. They made- tender of the amounts which they thought due. The plain
Appellants claim that the amount of the judgment is excessive. The transactions ran over a period of years, and involve many separate payments of money. The court permitted the introduction of a statement made by an auditor, which became the basis for the judgment which was rendered. In addition to this there was introduced the day-book (in the form of a journal) and ledger of the plaintiff. There was also introduced a statement as to releases made by him as a part of an answer to an interrogatory. The daybook and ledger were made by the plaintiff contemporaneously with the transactions from which he received money. lie testifies:
“These hooks, my journal and ledger, are my records as I kept them regarding lands I released. When I would give a release, I would enter It on my daybook here, showing what a man paid, and the section of land and the number of acres, and- then I transferred those items into the ledger.”
The daybook entries are copied into the record, accompanied by memoranda indicating the differences between the daybook and the ledger. These daybook and ledger entries do not correspond with the result of the auditor’s work. It is insisted by appellants that the account books of plaintiff show payments to the amount, exclusive of the payment of the notes assumed by the vendee, of $201,706.89, and they claim that the release statement shows (with items which should be added) payments to the amount of $207,428.73. The amount actually shown by the daybook is $178,685.59. Appellants insist that an item of $21,772.80, dated November 18, 1907, is shown by the clay-book. No credit for this amount is given. It is charged up against the owners of the land for releases, but there is no corresponding credit of payment. It is reasonably apparent, from the circumstances and the entries in the books, that, prior to that time, $50,000 having been paid, the release was demanded and made on account of such payment. This item, together with the item of $1,248, under date of May 1, 1914 (which is also charged up, but for which no- credit is given), constitute the difference between the amount claimed by appellants to have been paid according to the daybook, and the amount which the daybook in fact showed. The release statement, as introduced in evidence, shows only $116,113.66. This statement is entirely valueless in reaching the amount of money due on the debt. It not only omits the amount of payment in cash primarily made, for which no releases were demanded, but also omits 12 or more items of payments for releases that are indicated by the daybook.
While appellants’ insistence that the amount due is either $32,358.61 or $38,070.45 cannot be sustained by the record, a careful examina
The court suggests that the statement of evidence was not approved by the District Judge. Counsel for appellee, understanding, doubtless, the conditions by which this was brought about, does not undertake to take advantage of this fact. It is also suggested that the principal debtor acknowledged a greater indebtedness than that found due. Such an acknowledgment is apparently in conflict with the facts, and ought not to bind the other defendants.
The defendants John Carson, T. F. Jensen, and F. C. Shoemaker impleaded the First International Bank of South Bend, Wash., reciting that they had purchased certain of the lands in controversy, and that these lands had been conveyed to M. J. Johnson, as trustee for themselves, that .said Johnson had executed a mortgage to the first International Bank, but that he had, in fact, no right to make the mortgage, and that it was of no effect. The First International Bank filed an answer, and disclaimed any interest in the land. The defendants complain at the failure of the judgment to remove this cloud from their title. No reason appears why this should not be done. This would not require a reversal; the necessary modification in the judgment could be made here.
The judgment should be further modified as hereinbefore indicated.