160 Ky. 18 | Ky. Ct. App. | 1914
Opinion of the Court by
Affirming.
This suit is for specific performance of a contract for sale of about 460 acres of coal lands in Pike county
The appellee, Andrew W. Campbell, succeeded to the rights of the second parties, the nine children, by purchase, and seeks to enforce those, rights against the appellants, Dotson and Elijah Wolford. The main difference between the parties here is the construction of the contract. As to the other nine children, who intervene and seek a rescission of their contract for the sale of their interest in the land to Campbell, the question is whether any fraud was practiced by their attorney, E. D. Stephenson, in inducing them to enter into the contract.
This tract of land has been a bone of contention in that community ever since 1900. Old man Boone Wolford, as above stated, was the father of ten children, and owned 530 acres of land. In January, 1901, he contracted to sell the coal rights under 200 acres of it to Ralph Steeíe and D. F. Wolford, for $300, and the same year, and a short while afterwards, he sold, in fee simple, 70 acres of the balance to W. R. Wolford. It might be added here, to explain the beginning of appellee Campbell’s interest in it, that W. R. Wolford soon afterwards conveyed the coal rights under this 70 acres to Campbell.
■ In November following (1901), Boone Wolford, ignoring these sales, entered into a written contract with the Ohio & Big Sandy Land Association, and which contract was duly recorded, reciting that “he has sold and hereby agrees to convey to the grantee” the coal underlying the whole 530-acre tract, for a consideration of $2.00 per acre, $51.00 of which was paid in cash, and the balance was to be paid on demand, when accompanied by a complete survey and abstract showing good title. After this, Boone Wolford refused to execute a deed to Steele for the 200 acres, which he had agreed to convey to him, and Steele brought suit to enforce the contract. The circuit court adjudged a conveyance. On appeal to this court (27 K. L. R. 88-1177), the judgment was reversed on the ground of undue influence, but it was held that Steele was entitled to a lien on the land for the $300, which he had paid to ^ Wolford, with interest. The case was returned with directions to enter a judgment to
In April, 1907, Boone Wolford having died, the other nine children, feeling very much aggrieved at Dotson and E. S. Wolford for the manner in which it was thought their father had been over-reached and defrauded in the sale of his property, employed E. D. Stephenson as their attorney, and instituted an action to cancel their father’s deed on the ground of fraud and mental incapacity. Dotson and Wolford answered with a denial of all the allegations, and set up the fact that the Mason Coal Company was a necessary party, for the reason that it was the assignee of the Ohio & Big Sandy Land Association contract obtained from Boone Wolford in 1901, and alleging also that the Mason Company was asserting rights of title and ownership. The Mason Company, while answering with a claim of the property, seemed content with the encouragement it could give to the family fight in the hope of their ultimate exhaustion. E. D. Stephenson, attorney for the nine children, realized the danger of this situation, and suggested to his clients, and to Dotson and Wolford, the advisability of a compromise between themselves, and then a joint fight against the Mason Coal Company to cancel the old contract. Acting upon this suggestion, a contract of compromise was entered into and signed by the parties, and was incorporated in the court order dismissing the case as between the children and Dotson. As this contract is the foundation of the controversy, it is well to copy it in full :
“This cause is dismissed settled as between the plaintiffs and the defendants, E. S. Wolford and Geo. W. Dot,son, and the settlement is fully set out in a written con
“This agreement made and entered into this 25th day of June, 1908, by and between E. S. Wolford, and Geo. W. Dotson, parties of the first part, and J. H. Wolford, Moses Wolford, W. R. Wolford, Daniel Wolford, Polly Wolford, Minda Dotson, Clarinda Mounts, Kenas Mounts, Dorsey Mounts, Dolly McCoy, Sarah Eldridge and Lizzie Wolford, parties of the second part,
“Witnesseth: That whereas, there is a suit pending in the Pike Circuit Court between J. H. Wolford, &c. plaintiffs (all of whom are parties of the second part), and E. S. Wolford, &c. defendants, parties of the first part of this agreement, over the title to a tract of coal and mineral containing 150 acres, more or less, situated on the Boone Wolford Branch of Peter Creek, in Pike County, Ky., and bounded as follows: On the north by the lands of Harrison Charles; on the south by the lands of Majestic Coal Company; on the east by the lands of Dave Mounts; and on the west by the lands of J. G. Wolford. The parties hereto agree to settle the aforesaid suit among themselves on the following terms:
“First: It is agreed by and between the parties hereto that said E. S. Wolford and Geo. W. Dotson, together with their wives, for and in consideration of a sum equal to 200 acres of the aforesaid tract of mineral shall, when the title to said tract of minerals cleared up, execute a deed for all their right, title and interests in the aforesaid tract of mineral to any persons or corporation to whom said property may be sold by the parties hereto, provided said property shall not be sold for less than $25.00 per acre.
“Second: It is further agreed by and between the parties hereto, that upon the execution of the deed by the parties of the first part as provided hereinabove the parties of the second part, bind themselves to pay unto the parties of the first part, out of the proceeds of the sale of said property, them a sum equal to the value of, 200 acres of said property at the price per acre realized out of the sale of same.
“Third: It is further agreed by the parties hereto that upon the execution of this agreement an agreed-order shall be entered in said cause dismissing same as, settled as between the parties hereto.
“Witness the following signatures this, the day and year first aboye written.”
In the hope of compromising and eliminating the claim of the Mason Company, and thus clearing up the title to the lands of himself and the Wolfords, Campbell, on his own initiative, opened negotiations with the Mason Company for the purchase of their claim, and offered $10 per acre for it. The local officials of the Mason Company received the proposition with favor, and submitted it to the chief officials with recommendation that it be accepted. Encouraged by this, Campbell, construing the Wolford compromise contract as giving the nine children the right to contract for the sale of the Wolford land, provided it was not sold for less than $25.00 per acre, opened negotiations with these nine children. This was in January or February, 1910. He discovered that Attorney Stephenson had an interest in it, under his employment contract, to the extent of 20% of its value, and he proposed to the children to pay $25.00 per acre and take upon himself an obligation to settle Stephen.son’s fee. These propositions were verbal, and in that way were accepted by each of the nine children. Prior to that, however, Campbell had purchased outright the interest of one of the children. In May, 1910, after receiving this assurance from the nine children, Campbell approached Stephenson, and told him of his verbal offer to his clients, and of their acceptance of it, and of his proposal to the Mason Company, and his belief that' that
During August of 1910, Campbell took title bonds from each of the nine heirs, agreeing to pay $25 per acre within one year, the trade to be closed in conformity with the compromise contract above set forth. Some of these title bonds were executed in Stephenson’s office and in his presence. He does not deny that he approved of them, or that he may have advised the heirs to make them. He explains that the heirs were perfectly familiar, not only with the value of coal lands in this section, but of the nature of the claim which the Mason Company was setting up against them. Some of them, for many years, had been engaged as coal miners. The heirs insist that Stephenson did not tell them that Campbell had the land sold for $50 per acre. Stephenson says that he did not tell them this for the reason that it had not been sold, and he did not know it ever would be. But all concerned knew the purpose was to clear the title and sell the land. After he had taken the title bonds, Campbell received notice that the Mason Company had, on advice of their attorneys, rejected his proposition. Campbell, unwilling to let the deal fall through, offered to exchange 1,012 acres of land, which he owned in West Virginia, adjacent to some Mason Company’s land over there, for the Mason Company’s claim to the Boone Wolford land. This proposition was accepted without any hesitation, for it appears that the Mason Company had pending a sale of its West Virginia land to the Kentland Company, .and, to close that deal, it was very necessary to include in it the Campbell land. As to the value of
At this point, it might be remarked, that these ten years of strife and dissension among the heirs had degenerated into an unseemly struggle between two rival coal corporations for possession of the property. While it is as valuable as any other land in that section for the coal underlying it, at least 200 acres of this land had a special value because of its location between the work
This brings us to a consideration of the attitude of Attorney Stephenson, and the effect of it on the conveyance made by the nine children.
This court has been emphatic in its denunciation of anything amounting to fraud on the part of an attorney towards his clients; and it is the policy of the court, where complaint is made by a client, to examine critically transactions between them, that the rights of the client may be protected against any attempt of the attorney to secure any advantage to himself. “A person standing in the relation of an attorney must bring everything to the knowledge of his client that he knows pertaining to such position. Cases of undue concealment sometime arise from relation of client and attorney. In these cases, the law, in order to prevent undue advantage over the unlimited confidence which the relation naturally creates, requires that there must be the utmost degree of good faith in all transactions between the parties.” Story’s Equity Jurisprudence, Sec. 310; Palms Admr. v. Howard, 129 Ky., 668; Cline v. Charles, 124 S. W., 347; Hill v. Philips, 7 B. Mon., 308.
Subjecting the transaction, as far as Attorney Stephenson is concerned, to the closest scrutiny, we are unable to see that he did anything, or failed to disclose anything to the detriment of his clients. They knew that his fee was unpaid, and of their own volition, uninfluenced by Stephenson, they had agreed to trade on terms imposing upon Campbell payment or settlement of this fee, and there is no pretense that they did not
This brings us .to a consideration of the question, whether the nine heirs, that is, the second parties to the compromise contract, have a right to sell the property at $25.00 pér acre, and compel Dotson and Wolford to make conveyance therefor. •
The contract provides, in substance: That Dotson and Wolford shall hold the legal title, and that after the title is cleared, they would make a deed to any purchaser to whom it may be sold “by the parties hereto,” provided, the sale be for not less than $25.00 per acre. Upon the making of such deed, the second parties, that is, the nine children, agreed to pay to Dotson and Wolford, the first parties, “a sum equal to the value of the 200 acres of said property at the price per acre realized out of the sale of the same.” Singling out the clause, above quoted, which, provides for a sale of the property “by the parties hereto,” it would seem, that no valid contract for sale could be made without the concurrence and
Some other minor questions and collateral issues are raised on the original and cross-appeal, but considering the whole case, we are convinced that the judgment of the lower court did substantial justice, and it is, therefore, affirmed.