240 S.W.2d 101 | Ky. Ct. App. | 1951
On October 9, 1946, appellant, B. D. Fannon, leased a coal mine from O. J. Bailey for the sum of $100, which lease covered 25 acres of land located on the Harlan-Hyden highway in Harlan county. On November 9, 1946, appellant entered into a contract with appellees, John Car-den, W. A. Harris, and Boyd Garrett, who were doing business under the trade name of Beech Fork Coal Company, by the terms of which appellant conveyed his right, title, and interest in said lease to ap-pellees and also sold and conveyed to them his' title and interest irt and to mine equipment located upon the leased premises. In consideration of the assignment appellees paid to the assignor the sum of $1000 'in cash and executed a promissory note in
The record discloses that prior to the time appellant leased this mine from Bailey, an opening had been driven into the mountain for the depth of about 100 feet and that at the . time.negotiations were being con-, ducted, which culminated in the assignment of the lease here involved, this opening contained water which made it difficult' to reach the face of the coal at the end of the shaft. After he had obtained the lease from Bailey, appellant scraped the dirt, from an outcropping of the seam with a bulldozer for the distance of about 50 feet for the purpose of starting a new entry for the same seam. Two of the appellees visited the mine with appellant and there viewed the premises. The face of the outcropping of coal contained three streaks of dirt. Appellee Carden testified that appellant Fannon assured them that he had measured the face of the coal in the old entry and there the seam was 42 inches in width and there was but one streak of dirt in it which he represented to be no more than the thickness of his finger. He stated that he did not examine the seam himself because the old entry was filled with water. Appellee Harris, who also was present, corroborated this testimony and stated that he told Fannon that the coal was full of dirt and Fannon had replied that he had been back to the face of' the opening and that the width of the coal there was 40 to 42 inches of clean coal with but one small streak of dirt. This testimony is denied by the appellant who stated that he had never been back in the old mine himself and that .he made ,no representations about the condition of the coal at the face of the old opening. There is other testimony -that tends to support both sides of this controversy.
Appellant contends that because no fiduciary relation existed between him and the appellees and since the appellees had ample opportunity to view the coal mining properties before they purchased the assignment, the doctrine of caveat emptor applies and appellees were not entitled to rely on any representation as to the quality of the coal underlying the leased premises.
As a general rule where no direct representation is made by the vendor concerning definite facts and the purchaser has sufficient opportunity to observe the condition of the premises, the maxim of caveat emptor is applicable, but the facts here -present a different case. The appellant did not merely give an estimation or an opinion of his own concerning the quality of -coal. If the testimony of appellees’ witnesses is accepted as true, he made a definite, positive statement that he had visited the face of the seam at the end'of the old entry and there found the coal to be in good condition: In Black on' Rescission and Cancellation (2nd Ed.) Sec. 426, it is said: “False representations by the vendor as to the' existence, quantity, or -quality of valuable minerals said to underlie the surface furnish ground for-rescission'by the purchaser, if direct and positive assertions of fact and if justifiably relied oh by him. Such, for instance, is a statement as to the quantity of coal which has been taken from á coal mine on the premises within the preceding year.”
We are of opinion that there is a clear preponderance of evidence to the effect that appellant made direct and positive representations concerning the quality of the coal at the end of the old shaft from which the chancellor properly might conclude that appellant knowingly made, them and that they were in good faith relied upon by ap-pellees before the contract of lease was made, and, in such a situation, we are not inclined to disturb his judgment insofar as it rescinds the contract and cancels the note sued upon. Combs v. Combs, 307 Ky. 790, 212 S.W.2d 307.
Appellant further contends that if it is decided that a misrepresentation was, in fact, made, the injured parties must take those steps which are necessary to minimize the extent of the injury.
It is well to remember that after ’ the contract of November 9, 1946 was executed and appellees took possession under its terms, appellant lost all control over the property and had no means by which he could control or in-any way influence the actions of the appellees. They were free to select any method of operation that suited their fancy. Their perceptions of businesslike caution w.ere their own. Appellant had no control over the expenditures to be made or the methods to be used in developing the seam of coal.
Appellees had excused themselves from the impact of application of the doctrine of caveat emptor by accepting and relying on the statements of appellant but, after entering the premises and commencing operation of the mine, they were charged with the duty .of prudent procedure .in its development and, if they failed in this duty and suffered damages thereby,, the loss should be charged to them alone.
The appellees, as stated above, were not charged with the duty to examine the face of the seam in the old entry because it was
“Q, 21 How long would it have taken you to let that water out ? (Defendant objects.) A. I guess three or four hours or five. I don’t know how long.
“Q. 22 It would have been a matter of a short time to let that water out? A. Four or five hours.
“Q. 23 How long did you work up there before you found this coal at the face of the entry was dirty? A. I will say we were in there a month.
“Q. 24 You worked there a month in order to get to the face of this other seam? A. Yes; we built a shute.
“Q. 25 In four or five hours, you could have dug a ditch and let the water run out and looked in the mine? A. I took Mr. Fannon’s word, Mr. Fannon could have said ‘Boys, I will go in there with you,’
“Q. 47 How much would it have cost you to have some man dig a ditch there to drain that water out? A. We didn’t do that.
“Q. 48 How much would it have cost? (Defendant objects.) A. Ten dollars.
Appellee Carden in testifying about operations after their assumption of control of the premises stated: “When we got started in the new opening, we drove approximately thirty feet, and when we got in 15 feet, about three streaks of dirt showed up on the outside but when we got inside, there come another one about fifteen feet, about two inches or better from' the top,. and that made four streaks of dirt. We turned to the .left and out a breakthrough from the new opening; we were driving into the old opening, and drained the water out; then we went to the face of the old opening, and four streaks of dirt just like a layer cake. It was streaks of dirt.”
It is apparent from the above statement that the condition of the coal had not changed after the shaft had been driven 15 feet and we assume from said statement that it was only necessary to drive 30 feet into the old opening. He testified as follows :
“Q. 22 How far were the two openings apart? A. Approximately 20 feet.
“Q. 23 Where was the opening driven, 130 to 150 feet? A. 130 to 150 feet.”
So it would appear that after having driven only about 30 feet and having connected the new opening with the old opening, they continued to drive the new opening at least 100 feet, during all of which time the quality of the coal did not improve. In the case of Raleigh v. Clark, 114 Ky. 732, 71 S.W. 857, 859, the court quoted with approval from Sedgwick on Damages, this rule: “It is frequently said that it is the duty of the plaintiff to reduce the damages as far as possible. It is more correct to say that by consequences, which the plaintiff acting as prudent men ordinarily do, can avoid, he is not legally damaged. Such consequences can hardly be the direct or natural consequence of the defendant's wrong, since it is at the plaintiff’s option to suffer them. They are really excluded from the recovery as remote.”
In view of the fact that appellees could have ascertained the true quality of the coal in the old entry in a few hours by the simple process of digging a ditch through the bank slide which had dammed the water in the entry, we are of opinion that the damages resulting from the expense of driving, on their own volition, the new entry are remote and are not the natural consequence of appellant’s wrong.
This case has presented difficulties because appellees in their counterclaim combined, without objection, a suit for cancellation of the contract and the note executed thereunder with a suit - for damages for false representation but, since we have indicated that such damages were not the
Wherefore the judgment is affirmed in part, reversed in part, and the case remanded for proceedings not inconsistent with this opinion.