Adams v. Henderson

• Decision Date: 06 December 1897
• Docket Number: No. 70,70
• Citation: 168 U.S. 573,18 S.Ct. 179,42 L.Ed. 584
• Parties: ADAMS et al. v. HENDERSON et al
• Court: U.S. Supreme Court

168 U.S. 573

18 S.Ct. 179

42 L.Ed. 584

ADAMS et al.

v HENDERSON et al.

No. 70.

December 6, 1897.

J. M. Wilson, for appellants.

C. C. Richards, for appellees.

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court.

By a final decree of the district court of the Fourth judicial district of the territory of Utah, a contract for the sale of certain land, made March 27, 1890, between L. B. Adams and W. N. Shilling, on one side, and Edward A. Reed and H. H. Henderson, on the other side, and three promissory notes given by the purchasers, together with a mortgage executed by them to secure the payment of such notes, were adjudged to be null and void.

It was also adjudged that Henderson and Burgitt (the latter having become guardian of the person and estate of Reed, who was incapable of conducting his own affairs) recover of Adams and Shilling the amount paid by Henderson and Reed on the agreed price of the land purchased by them from Adams and Shilling.

The decree was affirmed by the supreme court of the territory (40 Pac. 720), and the case is here for review upon the appeal of Adams and Shilling.

The material facts out of which the case arises, and which are embodied in a report of a special master in chancery, are as follows:

In March, 1890, Shilling and Adams, in response to an inquiry made by Reed and Henderson, stated that they owned and had a good, indefeasible title in fee simple to 440 acres of land lying a few miles west of Ogden City, Weber county, Utah territory.

The lands referred to—as as understood by all parties at the time—were the E. 1/2 of section 9, township 5 N., of range 2 W. of the Salt Lake meridian, the S. 1/2 of the S. W. 1/4 of said section, and the N. E. 1/4 of the S. W. 1/4 of that section.

Reed and Henderson had not at that time seen the land, and had no knowledge as to the title. But Shilling and Adams promised that they would furnish an abstract of title. Reed and Henderson, relying and acting upon the representation of Adams and Shilling that they had a good and indefeasible estate in fee simple to the lands inquired about, without investigation the title, purchased an undivided two-thirds interest in the 440 acres for the sum of $7,333.32, of which one-third was to be paid, and was paid, in cash, and time was given for the payment of the balance, with interest. They would not have made the purchase if they had not believed the above representation as to title to be true.

On the 27th of March, 1890, Reed and Henderson received from Adams and Shilling a deed of general warranty for the following land: An undivided two-thirds of the E. 1/2 of section 9, township 6 N., of range 2 W. of the Salt Lake meridian, of the S. 1/2 of the S. W. 1/4 of that section, and of the N. E. 1/4 of the S. W. 1/4 of the same section, in Weber county, Utah.

The land contracted for, it will be observed, was in town- ship 5, while the land actually conveyed was in township 6. But the grantors intended by the above deed to convey an undivided two-thirds of the land in township 5, and the grantees supposed that the estate embraced by the conveyance was that which they intended to purchase. But, by mistake of the scrivener, the premises conveyed were described as lying in township 6.

At the time the above deed was received, the grantees, in addition to the cash payment of one-third of the purchase price, executed two promissory notes, payable to the grantors, for the sum of $2,444.45, each bearing 8 per cent. interest, payable one year and six months from March 26, 1890, and secured by a mortgage on the premises. But in that mortgage, by the mistake of the scrivener who prepared it, the land was described as lying in township 6. The mortgage was duly signed, witnessed, and acknowledged; Reed and Henderson, at the time, fully believing and acting upon the representation of the grantors as to title, and paying to the grantors the interest on said notes down to and including September 26, 1890, which amounted to $180. They also signed a promissory note of June 26, 1891, payable to the Utah National Bank of Ogden, Utah, for the sum of $391.10, as the interest on the above notes, which were held by the bank. The note last named was brought into court, and, when the final decree was rendered, it was still in court for the defendants.

The plaintiffs, Shilling and Adams, failed to furnish an abstract of title; and Reed and Henderson, having an opportunity to sell the land in township 5, and assuming that that was the land conveyed to and mortgaged back by themselves, procured an abstract on the 3d day of September, 1891.

The above lands in township 5 are within 10 miles of the line of the Union Pacific Railroad, and within the limits of the lands granted to that company by the act of congress of July 1, 1862 (12 Stat. 489). They lie in a valley at the base of the Wasatch Mountains, and had theretofore been used and cultivated as agricultural lands. But no exploration or examination has ever been made on them for coal or minerals of any kind or description.

As bearing on the condition of the title to the land in township 5, it may be stated that the Union Pacific Railroad Company twice mortgaged all the lands granted to it by the act of congress of July 1, 1862, and the act amendatory thereof approved July 2, 1864 (12 Stat. 489, c. 120; 13 Stat. 356, c. 216),—one of the mortgages being dated April 16, 1867, and the other, December 18, 1873.

Adams and Shilling acquired, by proper conveyance made in 1889, all the interest of the Union Pacific Railroad Co pany in the lands in township 5 sold by them to Reed and Henderson, and freed from the liens created by the above mortgages, except that the deed received by them from that company contained a clause reserving 'to the said Union Pacific Railroad Company the exclusive right to prospect for coal and other minerals within and underlying said lands, and to mine for and remove the same if found, and for this purpose it shall have the right of way over and across said lands, a space necessary for the conduct of said business thereon, without charge or liability for damage therefor.'

No patent has ever issued from the government for the land in township 5.

Parties applied to Reed and Henderson for the purchase of that land, but they declined and refused to buy, and a sale by them was defeated.

Within two days of the 3d of September, 1891, and before the bringing of this action, Reed and Henderson ascertained that the plaintiffs were not the owners of, and had no title to, the land which the deed from Adams and Shilling purported to convey to them; that is, to the land in township 6.

On or about the 4th day of September, 1891, Reed and Henderson notified Adams and Shilling that they rescined the contract of sale, and demanded, not only the return to them of the moneys paid on account of their purchase, with interest, but the surrender of the two notes of $2,444.45 each, bearing date March 27, 1890, and the note for $391.10, dated June 26, 1891. All of those notes had been returned by the bank to Adams and Shilling.

After Reed and Henderson notified Adams and Shilling of the rescission of the contract of sale, and before the bringing of this suit, Adams and Shilling tendered another deed,—a special warranty deed, containing a proper description of the land intended to be sold by them to Reed and Henderson. The latter refused to accept that deed, saying that they rescinded the contract of sale; that Adams and Shilling did not have a good title to the land described therein; and urging the objection, also, that the deed was not one of general warranty. The deed so tendered was dated September 29, 1891.

At the time Adams and Shilling tendered the deed of special warranty, the title to the land therein described was incumbered by the above reservation, in the deed of 1889, made by the Union Pacific Railroad Company to Adams and Shilling, of an exclusive right in the Union Pacific Railroad Company to mine, under said land, for coal and other minerals, and to remove the same.

Subsequently, the Union Pacific Railroad Company executed and delivered to Reed and Henderson a quitclaim deed dated November 2, 1891, and which was acknowledged November 17, 1891, and duly recorded on the 8th of January, 1892. This deed released the land in township 5 from the claim of that company under the...