Alabama Coal & Coke Co. v. Gulf Coal & Coke Co.

• Decision Date: 02 February 1911
• Citation: 171 Ala. 544,54 So. 685
• Parties: ALABAMA COAL & COKE CO. v. GULF COAL & COKE CO.
• Court: Alabama Supreme Court

54 So. 685

171 Ala. 544

ALABAMA COAL & COKE CO. v. GULF COAL & COKE CO.

Supreme Court of Alabama

February 2, 1911

Appeal from Law and Equity Court, Walker County; T. L. Sowell Judge.

Suit by the Alabama Coal & Coke Company against the Gulf Coal & Coke Company. From a decree sustaining a demurrer to the bill complainant appeals. Affirmed.

See also, 165 Ala. 304, 51 So. 570.

Smith &amp Smith and J. D. Acuff, for appellant.

Brooks & Stoutz and W. C. Davis, for appellee.

MAYFIELD J.

The bill is filed by appellant to establish title to land by an equitable estoppel, and to cancel a deed under which appellee claims title, as a cloud on appellant's title. The facts out of which the estoppel is alleged to arise, such as to defeat appellee's legal title and to decree in appellant the equitable title, are stated as follows by the appellant: "On the 22d of November, 1882, John C. Key executed a deed to said lands and acknowledged the same and left said deed with the purchasing agent of Thomas Peters to be delivered to him when paid for, and if not paid for in 30 or 60 days to be returned to said John C. Key. Said land was not paid for within the time specified, and said deed was never returned to said Key, but was on, to wit, the 25th day of January, 1883, duly filed for record, and recorded on the same day. On the 23d day of May, 1883, said Thomas Peters, by virtue of his apparent ownership of said land, obtained a loan from Samuel Noble, by executing a mortgage on said land; said mortgage being in form a deed. Said Noble had no knowledge or notice of the infirmities of the title of said Peters. Said mortgage was duly foreclosed and the register in chancery conveyed said land to T. G. Bush and A. L. Tyler, who were innocent purchasers for value, without any knowledge or notice of any infirmities in the title to said land; and appellant obtained title by purchase from said Bush and Tyler, as innocent purchasers for value. John C. Key had knowledge of the record of said deed, and with such knowledge negligently permitted the said deed to remain in the possession of said Thomas Peters, and did not require said Thomas Peters to convey the land back to him; but, a few days before said Thomas Peters conveyed said land to said Noble, said Key conveyed the same to Musgrove Bros., who had actual knowledge of the record of said deed from John C. Key to Thomas Peters, and said Musgrove Bros. neglected for a long time to record their deed, and until after said Thomas Peters had conveyed said land to said Noble; and Gulf Coal Company acquired said land with full knowledge of the existence of said deed to Thomas Peters, and also of the deed from him to Samuel Noble; and said John C. Key has not been paid by appellee, or any of its grantors for said land; and that appellee paid Musgrove Bros. therefor with stock in said company, which stock they still have, and is subject to cancellation." Appellant insists that John C. Key was guilty of gross negligence in turning said deed executed by him over to said Hancock, the purchasing agent of said Peters, the grantee; and that he was guilty of additional negligence in not requiring said Thomas Peters to reconvey the said land to him, when he found out that said deed was of record; and that by his negligence he put it in the power of said Thomas Peters to sell said land, or mortgage the same to Samuel Noble for money loaned; and that all the subsequent purchasers of said land have parted with their money on the strength of the evidence of title in Thomas Peters, with which said John C. Key had clothed him; and that by reason of such negligence said John C. Key and his grantees are estopped from saying that said deed from said John C. Key to said Thomas Peters was not delivered, and especially as said land has been purchased by several innocent purchasers, and great length of time has expired. Respondent demurred to the bill, assigning laches among numerous other grounds. The chancellor sustained the demurrer generally, without assigning any particular ground or reason. From that decree this appeal is prosecuted.

The bill was certainly demurrable for laches if for no other infirmity.

If it was actionable negligence on the part of Key to allow his deed to remain in the hands of Peters for five or six months, and to fail for that length of time to compel Peters to reconvey the land to him, before Key conveyed to Musgrove Bros., such as to forever estop Key, Musgrove Bros., and those who claim through the latter, from asserting their legal title against those who claim through Peters, what must be said of the negligence of Noble and of those claiming under him, in waiting more than a quarter of a century before attempting to assert their equity against those who, all this time, held the legal title to these lands?

If Noble or those under whom he claims had actual knowledge of all these facts, of course they would be barred by the statute of limitations of 10 and 20 years. If they did not have actual knowledge thereof, they were guilty of laches in failing to discover them for more than 20 years.

No actual fraudulent intent is averred; it is only alleged that it was negligence in Key to fail to compel Peters to reconvey to him (Key) before he conveyed to Musgrove Bros.--which status was, at most, a matter of only a few months' duration.

"Whenever ignorance of fact is urged as an excuse for delay, the general doctrines on the subject of knowledge, actual and constructive, may be said to apply. One must have been diligent and have made such inquiry and investigation as the circumstances reasonably permitted or suggested. Means of knowledge are equivalent to knowledge, and knowledge of facts sufficient to suggest inquiries which if made would lead to knowledge of the facts in question is sufficient to charge one with notice of the latter facts. The known facts must however, point with some directness toward the unknown, although a mere suspicion of the crucial facts may raise a duty to inquire. Equity as well as law charges a party with notice of public statutes, with such knowledge as might be gained by an inspection of the records of land title, where such inspection is required by law or suggested by ordinary prudence, and with knowledge of facts disclosed by the records of judicial proceedings to which he was party, but not of proceedings to which he was not a party and which did not affect him. As a party is generally charged with the laches of his privies or agents, it follows that knowledge of an ancestor will be imputed to an heir, that of a plaintiff to his coplaintiff, and that of an attorney to his client. The knowledge of others who might have sued but did not may raise the presumption of invalidity...