192 Ky. 542 | Ky. Ct. App. | 1921
Opinion of the -Court by
— Affirming.
The appellant, J. FrecTMiles, was plaintiff below and the appellee, The United Oil Company, was defendant below. The action was filed in the Estill circuit court by plaintiff to recover damages of defendant for the breach
The beginning step towards the formation of the alleged contract sued on was a writing in the nature of a letter addressed to plaintiff by the treasurer of the defendant on May 15, 1917, which writing, or letter, is signed “The United Oil Co., Inc., by C. J. Weideman, Treas.,” and the body of it says: “You are hereby authorized and empowered and we hereby give you the right to offer and negotiate the sale of our United Oil Company property, incorporation of Kentucky, comprising the following twelve hundred and eighty (1,280) acres of leases, more or less, a copy of said leases hereto attached and made a part hereof, for the sum of one million five hundred thousand ($1,500,000.00) dollars, net to us. We further authorize you to bring any representative to our property to check up and gauge same, at your expense, and we will accept and make transfer of the property for the above consideration. This authorization to hold good and be binding on the above named corporation for forty (40) days from the date hereof.” Following the incorporation of that writing into the petition the various leases of defendant on the 1,280 acres are set out in hac verba and they occupy twenty-eight pages of the pleading. The petition then continues by inserting numerous letters and telegrams from Weideman, the treasurer of defendant, to plaintiff and a few telegrams and one letter from himself to Weideman, in which for the most part Weideman was pressing plaintiff to bring to a close the sale of the leases, since the president of defendant and some of its other officers and stockholders were disinclined to accept the terms stated in the writing of May 15, and for the further reason that other prospective purchasers of the leases were appearing upon the scene. In one of the letters from Weideman to plaintiff the treasurer was insisting on knowing the names of those whom plaintiff had in mind as prospective purchas
It will at once appear that plaintiff’s right to recover is based upon the two propositions; (a), that the negotiations above outlined formed a complete and binding contract for plaintiff to sell the leases of defendant for the named consideration, and (b), that its failure to do so brought about exclusively by its defective titles to some of its leases, which titles plaintiff alleged defendant impliedly warranted by the execution of the writing of May 15, hereinbefore inserted. It is alleged in thte petition that the defendant “in offering and proposing to sell the leases, claimed by defendant to be owned by defendant, covering the twelve hundred and eighty (1,280) acres, the defendant held itself out to plaintiff as having good and merchantable titles thereto for the purposes set out in said leases, and defendant by implication of law undertook, offered and proposed to pass, convey and transfer to any purchaser thereof good and merchantable titles, and the right of peaceable and quiet enjoyment thereof.” Manifestly if either one of these propositions is untrue plaintiff’s right to maintain the suit fails and the, demurrer to the petition was properly sustained.
We have concluded to consider the two propositions in the reverse order in which they are stated above and to first inquire whether, assuming that the negotiations reached the stage of a completed contract, defendant agreed in the above copied writing of May 15 to warrant the titles of its lessors to any part of the 1,280 aces upon which it held leases, or whether it agreed with plaintiff that any purchaser to whom he might sell the leases would obtain “the right of peaceable and quiet enjoyment thereof.” It is certain that there were no express covenants to the above effect and unless the law raised them by implication none existed.
Our investigation has convinced us that no such implied covenants arise from the mere act of assigning a lease, and no agreement for such covenants will be implied in favor of a produced purchaser by a broker or one authorized to procure such a purchaser where the only agreement with the broker was to “transfer” the lease. Supporting our conclusion the text in 16 R. C. L., 843, says: “No covenants for title are implied in the assignment of a lease. Although the word ‘grant’ or ‘demise’ will in a lease create an implied covenant against the lessor, yet the same words in an assignment will not create an implied covenant against the assignor, the object and intent of the parties in making an assignment being to put the assignee in the place of the lessee; when that is done, the assignor ceases to have any further concern with the contract unless he has bound himself by express covenants.” In a note to the case of Crouch v. Fowle, 32 Amer. Dec. 350, on page 356, the annotator says: “No covenants for title are implied in the assignment of a lease; Rawle on Cov. 463; Landydale v. Cheynet, Cro. Eliz. 157; Walso v. Hall, 14 Mass. (Tyng) 486; Blair v. Rankin, 11 Mo. 440.” To the same effect s the ease of McClenahan v. Gwynn, 3 Munford (Va.) 556. In the Waldo case, which was a suit by an assignee of a lease against his assignor for breach of an alleged implied warranty of title of the lessor growing out of the assignment, the court in denying the plaintiff relief said: “There is no instance produced, nor can we find any, of an action by an assignee against an assignor, upon a covenant in lato, for an eviction in consequece of an act done by the original lessor; although there are express resolutions, that it lies for the assignee against the assignor upon express covenants.” The Blair case was the same character of suit, except the language of the assignment was broad enough to create an implied warranty of title by a lessor and to that extent was a stronger case for the assignee (a position occupied by plaintiff here), than are the facts of the instant case. The court in drawing the distinction between the implied warranty of the lessor, and one between the lessee as assignor of the lease, said: “Although the word grant or demise will in a lease create an implied covenant against the lessor, yet it is nowhere said that the same words will in an assignment create an
We have -been unable to find any case or any authority (except as hereinafter stated) contrary to the doctrine of those referred to. There is a statement in the text of 24 Cyc. 948, that the better rule is, in the absence of a stipulation to the contrary, “there is an implied undertaking (by the assignor) to make out the lessor’s title to the demised premises,” and there is cited in support of the text the cases of Jeffers v. Easton, 113 Cal. 345; Krause v. Krause, 58 Ill. App. 559; Wetzell v. Richcreek, 53 Ohio St. 62, and two English cases, one of which is Purvis v. Rayer, 9 Price, 488.
We have examined those cases and when analyzed they do not, according’ to our conclusion, support the text except the Illinois case of Krause v. Krause, which but meagerly does so. The Wetzell case was not only bottomed upon fraudulent representations made by the assignor of the lease but plaintiff also relied upon an express written guaranty of all the rights which the lease proposed to confer. The court discussed the question of implied warranties by an assignor of a lease but declined to rest the opinion upon that doctrine which is shown by this statement found therein: ‘£ But it is not deemed necessary to determine here what, if any, obligation may be implied from the assignment of the lease. It is, of course, competent for the parties to introduce into the assignment any covenant or stipulation pertinent to the subject which they have agreed upon; and, it is not unusual for the assignor to covenant that the indenture of lease is good, that he has power to assign, that lie will save the assignee harmless from former grants and incumbrances, and for quiet enjoyment. 2 Taylor on Landlord and Tenant, section 431. The instrument of guaranty by the defendants, and delivered to the plaintiff contemporaneously with the delivery of the assigned lease and the payment of the balance of its purchase price, was founded upon a sufficient consideration, and became a part of the contract of assignment. By it, the defendant stipulated that the lease was in full force and effect at the time of its assignment and delivery to the plaintiff, and guaranteed to him the rights and title of said lease.’
In the Ulinios case the opinion contains a very meager statement of the facts- and does not pretend to state any of the terms of the assignment. The only reference to the question' now under consideration in the entire opinion is this short statement: “In every contract for sale of land, a condition is implied for a good title, and if the sale be of a lease, that the lessor had such a title as made the lease good. Fry, Spec. Per., sec. 354; Purvis v. Rayer, 9 Price 488.” We have examined the authorities referred to in that statement and they not only do not sustain it but the reference to the work on Specific Performance by Mr. Fry (section 354) does not even deal with the point. Excepting the Illinois case of Krause v. Krause (which is only an intermediate court opinion), and the dictum in the Jeffers case, we have been unable to find any opinion of any American court contrary to the above quoted text from 16 P. C. L. The doctrine therein announced is not only supported by the great weight of authority, but we think it is sustained by much the better reasoning. OBy merely transferring his lease the lessee only places his assignee in the'same relationship toward the lessor as was occupied by the lessee, and all warran
However, if it were otherwise we think it could be conclusively shown that plaintiff never entered into any contract with defendant for the purchase of its physical properties, or entered into any other contract except one with the stockholders of defendant for the purchase of their stock, which is altogether a different contract than one for the purchase of its properties. An essential fact entitling plaintiff to recover was that he should find a willing purchaser within the forty days mentioned in the writing of May 15. He claims that his telegram of June 14, hereinbefore referred to, was a notification to defendant that he had found such purchaser within that time. We do not so construe that telegram on its face; but if we should assume that it was sufficient for that purpose, other parts of the petition conclusively show that defendant had not found a purchaser within the forty days and had not entered into any contract for any purpose until July 13,1917, long after the expiration of the forty days; and while that date was within the extended period given to the contract of June 20 for the purchase of the stock it was, as we have seen, an entirely different one from that sued on in this case. Blagen v. Thompson, 18 L. R. A. 315, and Cincinnati Equipment Co. v. Big Muddy River Consolidated Coal Co., 158 Ky. 247.
But we will not further elaborate the second proposition, since the disposition made of the first one is sufficient to sustain the. judgment, and it is accordingly affirmed.