Fidelity Service Ins. Co. v. A. B. Legg & Sons Burial Ins. Co.

• Decision Date: 18 October 1962
• Docket Number: 6 Div. 840
• Parties: FIDELITY SERVICE INSURANCE COMPANY v. A. B. LEGG & SONS BURIAL INSURANCE COMPANY, Inc.
• Court: Alabama Supreme Court

Page 811

145 So.2d 811

274 Ala. 94

FIDELITY SERVICE INSURANCE COMPANY v. A. B. LEGG & SONS BURIAL INSURANCE COMPANY, Inc.

6 Div. 840.

Supreme Court of Alabama.

Oct. 18, 1962.

Tweedy & Beech, Jasper, for appellant.

Fite & Fite, Jasper, for appellees.

HARWOOD, Justice.

Originally the appellant here had filed a suit against the appellees claiming $5,000.00 damages for breach of warranty in a deed by which the appellee had conveyed certain lands to the appellant. After delivery of the deed, the appellant resold a portion of the land described in the deed and subsequently was forced to repurchase the land that he had conveyed because of a defect in the title to the portion thereof.

Upon the filing of the suit for breach of warranty by the appellant, the appellee moved to transfer the cause to equity, which motion was granted.

In equity, the appellant filed a bill setting forth that the transactions which led to the execution of the deed referred to in the breach of warranty suit, the negotiations were handled by the agents or officers of the appellant, and by the agents or officers of the appellee; that in these negotiations the officers or agents of the appellant were fully informed by the agents of the appellee that certain of the lands under consideration had been previously conveyed to the Alabama Power Company; that the appellee did not sell the land described in the breach of warranty suit to the appellant and that the appellant did not buy such land; that the deed given the appellant should not have included the land described in the breach of warranty suit and if such land was included in the deed it was erroneously included due to a mutual mistake of the parties; that the appellee did not know at the time the deed was executed that the said land was included, but relied upon C. G. Harper, who wrote the deed, to omit therefrom the said land, C. G. Harper having been instructed by the appellee to omit said land; that the appellee relied upon the said Harper writing the deed according to such instructions and the appellee did not know the land was included therein at the time the deed was executed; that the appellee did not sell to the appellant the land described in the breach of warranty suit and the appellant did not pay the appellee for said land; that in executing the deed referred to in the breach of warranty suit the appellee relied upon said Harper to so write the deed as to comply with the agreement and understanding of the parties and the instructions of the appellee.

In the hearing on the bill the testimony was taken ore tenus before the court.

Mr. W. L. Legg and Mr. Joe Legg, officers of the A. B. Legg & Sons Burial Insurance Company, Inc., testified for the appellee, and Mr. Brooks Glass and Mr. Billy Graham, officers of the Fidelity Service Insurance Company, were the witnesses for the appellant.

The evidence presented by the Leggs was to the effect that several conferences were held between A. B. Legg, Jr., who was deceased at the time of the trial, W. L. Legg, and Joe Legg, representing the Legg Company, and Mr. Brooks Glass and Mr. Billy Graham, officers of Fidelity, concerning the land transfer. Each of the Leggs testified that Mr. Glass and Mr. Graham were told specifically that, of the 160 acres involved in this suit, a portion thereof which came up to 510 feet mean sea level had been sold to the Alabama Power Company with an easement to flood up to 522 feet mean sea level. The Leggs testified that a map was shown to Glass and Graham which indicated in color the area to be flooded, and that this area amounted to 114 acres and said 114 acres could not be conveyed by the Leggs because of the previous sale thereof to the Alabama Power Company; that comment was made that the remaining part of the 160 acres would be a valuable asset as lake front property; that when Mr. Graham commented he did not fully understand the transaction, the details were explained fully the second time and both Mr. Glass and Mr. Graham stated they then understood that the 114 acres would not be a part of the trade.

In this discussion it was also agreed that an area on which is located Natural Bridge. and 10 acres at a highway intersection leading to Natural Bridge, was to be excluded from the deed.

All witnesses testifying below agreed that the Natural Bridge area and the 10 acres at the highway intersection were to be excluded.

The deed was prepared by Mr. C. G. Harper, a retired employee of the Legg Company, who continued to come to the Legg office virtually every day. Mr. Joe Legg instructed Mr. Harper as to the contents of the deed and testified that he specifically instructed Mr. Harper to omit from the deed that portion of the property that had been sold to the Alabama Power Company, the Natural Bridge area, and the highway intersection acres.

After the deed had been prepared, Mr. A. B. Legg, Jr., deceased at the time of the trial, delivered the deed to Fidelity's office in Birmingham. Prior to delivery, the Leggs checked the deed to assure themselves that the Natural Bridge lands had been omitted from the description, but they did not check the exclusion of the land sold to the Power Company.

The Fidelity agents had no part in the preparation of the deed and did not see it until it was delivered.

Upon delivery of the deed, Mr. Legg also presented the deeds conveying the land to the Legg Company and also abstract of title, though the abstracts were not up-to-date.

For the appellant, Mr. Glass and Mr. Graham testified that the lands in the deed delivered to them were checked against the deeds of conveyance to the Legg Company and everything was in order.

They further testified that at the time of delivery of the deed to them they were informed by Mr. Legg that an additional 40 acres in Franklin County that had previously been discussed was excluded from the deed because the Leggs had found they did not own it. No mention was made at this time of the exclusion of the 114 acres involved in this suit.

Both Mr. Glass and Mr. Graham testified that there had never been any discussion with the Legg brothers relative to the exclusion of any property previously sold to the Alabama Power Company and that the only exclusions mentioned in their conferences were limited to the Natural Bridge property and the 10 acres at the highway intersection; and later upon the delivery of the deed the omission of the 40 acres in Franklin County. They each also denied that any map was every produced or shown in any of their conferences.

Testimony was also offered by Fidelity through its witnesses that the basis for the whole land transaction was a statement of assets and liabilities of the Legg Company of December 31, 1957, filed with the State Superintendent of Insurance. This statement shows a book value of the property of the Legg Company in Winston County as $17,200.00, at a value of $10.00 per acre. It is further shown that the deed recites a conveyance of 1,720 acres in Winston County of which the 160 acres involved in this suit was a part.

In rebuttal to this testimony the witnesses for the appellee, the Legg Company, testified that the statement of assets of December 31, 1957, was discussed but was not in itself the basis for the transaction in that there was a gentlemen's agreement that the Legg Company was to transfer all of its bonds to the ...