Allemong v. Bank

• Decision Date: 23 November 1904
• Court: Virginia Supreme Court
• Parties: ALLEMONG et al. v. AUGUSTA NAT. BANK et al.

48 S.E. 897

103 Va. 243

ALLEMONG et al.

v.AUGUSTA NAT. BANK et al.

Supreme Court of Appeals of Virginia.

Nov. 23, 1904.

ccntracts — independent covenants—construction.

1. On a settlement of a conveyance of land claimed to be invalid the purchaser surrendered a portion of the land, with its right to recover the part of the price paid, and the vendors surrendered their right to enforce the balance of the contract, and certain of their number executed an acquittance to the purchaser of an independent indebtedness due them. A further agreement was made between the vendors that the property surrendered by the purchaser should be held by a trustee for the vendors' benefit, and should be sold for $100,000, or, by consent of all parties, for less; the proceeds to be distributed, first, in satisfaction of the individual indebtedness so released, and the balance to be distributed pro rata. Held that, where the sale authorized by the agreement was never made, an action would lie in equity to compel a sale of the property and a distribution of proceeds by first paying the amount of indebtedness released by certain of the vendors, and then a division of the balance pro rata.

2. The provision for the satisfaction of the individual indebtedness released and the pro rata division of the balance is not dependent on the prior provision for a sale for $100,000, so as to require a pro rata deduction of the amount to be applied to the satisfaction of the individual indebtedness on a forced sale for a less amount.

Appeal from Circuit Court, Rockingham County.

Action between J. W. F. Allemong and others and the Augusta National Bank and others. From a judgment in favor of the latter, the former appeal. Affirmed.

John E. Roller and A. A. Phleger, for appellants.

Patrick & Gordon and Sipe & Harris, for appellees.

WHITTLE, J. This controversy involves the construction of a clause in a written contract of settlement entered into March 2, 1892, between appellants, J. W. F. Allemong, J. T. Shickel, D. B. Strouse, and James Bon-sack, of the one part, and appellees, Jed. Hotchkiss, H. M. Bell, and R. H. Catlett, of the other part.

It appears that appellants and appellees sold the Mt. Vernon iron property, of which they were equal owners, to the Grottoes Company for $100,000, half of which was paid cash, leaving a balance of $50,000 and j interest due as of September 1, 1891. The Grottoes Company, having been advised that the sale was invalid, were threatening suit to set aside the same and recover the cash payment, when a compromise was effected by which the company relinquished to their vendors all claim to that part of the property lying east of the Shenandoah Railroad, and abandoned the assertion of their right to recover the $50,000 theretofore paid by them, in consideration of which appellants and appellees conveyed to the company the residue of the property, consisting of 57 acres of land, lying west of the Shenandoah Railroad, and released them from liability for the balance due upon the original contract of sale. Appellees, in addition to the above inducements, to consummate the compromise, with the knowledge and consent of appellants, executed to the Grottoes Company an acquittance for $23,389.35, the amount of an individual indebtedness due from the Grottoes Company to them on the purchase price of the Grottoes of the Shenandoah property. It further appears that appellees had received $6,230 more than their half of the cash payment on the original sale, for which amount, in pursuance of the contract of settlement, they executed their joint negotiable notes to appellants. The contract also contains the following provisions:

"Now the parties hereto agree that the Mt. Vernon property lying east of the S. V. R. R., free of all claims of the Grottoes Company, shall be held for the benefit of the parties hereto in the name of Jed Hotchkiss, trustee, and shall be sold by the parties of the first part [appellees] whenever the same can be sold for $100,000 or more, or by consent of all parties for less, and that the proceeds shall be divided among the parties thereto, as follows: 1st There shall be paid to the parties of the first part the amount released by them on the Grottoes of the Shenandoah property, to-wit: $21,000, without interest; and 2nd. The balance shall be distributed one-half to the parties of the first part and the other half to the parties of the second part."

The sale authorized by this agreement was never effected, and, Hotchkiss having assigned his interest in the $21,000 to the Augusta National Bank, that institution filed a bill in equity against appellants and other parties in interest,...