Miller v. Kemp.*

• Decision Date: 17 September 1931
• Citation: 160 S.E. 203
• Court: Virginia Supreme Court
• Parties: MILLER v. KEMP.*

160 S.E. 203

MILLER

v.KEMP.^*

Supreme Court of Appeals of Virginia.

Sept. 17, 1931.

HOLT and CAMPBELL, JJ., dissenting.

Appeal from Chancery Court of City of Richmond.

Suit by John M. Miller, Jr., against George S. Kemp, wherein the defendant filed an answer in the nature of a cross-bill. From a decree dismissing the bill and the cross-bill, the complainant appeals.

Reversed, and cause remanded, with directions.

Argued before PRENTIS, C. J., and CAMPBELL, HOLT, HUDGINS, and GREGORY, JJ.

Arden Howell and Page & Leary, all of Richmond, for appellant.

Smith & Gordon, of Richmond, for appellee.

PRENTIS, C. J.

George S. Kemp agreed in writing to buy from John M. Miller, Jr., the residence and three lots, corner Seminary and Melrose avenue, Richmond, provided the title should be free from valid objections. Objections were made to the title for the reasons hereafter stated. Miller then filed his bill praying for specific performance, to which Kemp filed his answer, in which he asked for a declaratory judgment as to his rights, prayed that his answer might be treated as a cross-bill, averred that certain judgments against one J. R. Paschall are liens on an undivided one-half of the land he had agreed to buy, convened Paschall and the judgment creditors of Paschall as defendants, and prayed for general relief.

Upon the hearing, the trial court entered a decree dismissing the original bill of Miller, and the defendant, Kemp, by counsel, having stated at bar that he did not desire any affirmative relief, the cross-bill was, on his motion, dismissed. This appeal by Miller followed.

The facts essential to the determination of the legal questions raised are these:

The Lewis Ginter Land & Improvement Company (hereinafter called the land company), on September 23, 1907, entered into a written contract to sell to Thomas Gresham and J. R. Paschall six lots in Ginter Park, then a suburb of Richmond, at the price of $10,451.60, of which $1,045.16 was paid in cash, and the balance, with interest, was to be paid in equal installments in 1, 2, 3, 4, and 5 years thereafter. There were in the contract quite a number of building restrictions and other restrictions as to the use and sale of the premises. The vendor covenanted to convey the property with general warranty, and the vendees covenanted to execute notes for the deferred payments and to secure them by deed of trust within——days from the date of the contract, "provided the title to said real estate be found free from objection, and to sign the conveyance of said real estate for the purpose of making the covenants and agreements and assenting to the condi tions and restrictions therein on their part, as herein aforesaid."

Gresham and Paschall had been in the habit of buying and selling real estate together, but had no written partnership agreement. They settled their mutual accounts covering this transaction many years ago.

The provisions of this original contract of sale to Gresham and Paschall were waived, changed, or rescinded by the parties thereto, before it became executed, in many particulars: (a) No conveyance was then made in accordance with the land company's covenant, no notes for the deferred payments were given, and no deed of trust to secure them was executed by the vendees. (b) Within 46 days, November 8, 1907, the lot No. 6 was eliminated from the original contract and lot No. 1 (one of those here involved) was substituted therefor. This is evidenced by a memorandum written on the contract signed by the land company, Gresham, and Paschall, showing that one Charles G. Taylor, then owner of lot No. 1, conveyed it to Gresham, who thereupon conveyed it to the land company, which at the request of Gresham then conveyed lot No. 6, included in the original contract, to Taylor, (c) The purchase money was fully paid long before it became due under the contract, for, though the deferred payments were due in five annual installments, $2,458.30 thereof was paid October 31, 1908, and the balance $8,133.49 June 3, 1909. (d) The transfer of title of the six lots from the land company, instead of being made to Gresham and Paschall jointly in one conveyance, was by mutual consent made, one to Jennie L. Reed for lots 4 and 5, one to Thomas Gresham for lots 1, 2, and 3, and one to J. R. Paschall for lot No. 13, and these several conveyances were accepted by the parties manifestly in discharge of all the obligations of the land company, and of all of the rights of the vendees under the contract. Those three deeds were dated May 26, 1909, recorded June 3, 1909. At the same time, by separate deeds of trust also dated May 26,

1909, and also recorded June 3, 1909, Gresham and Paschall separately conveyed the specific lots, which had been simultaneously conveyed to them by the land company to trustees to secure two debts identical in amount ($10,000 each) to the land company.

It appears, therefore, that these conveyances were then accepted by all of those then interested therein as closing the original contract of sale, and as vesting Gresham and Paschall each with the legal title to the specific lots so conveyed to them in severalty.

The decree seems to be based upon the erroneous assumption that Gresham and Paschall, before the conveyances to them, had become the joint equitable owners of the property under a completely executed contract on their part The facts, however, arethat the several deeds to Reed, to Paschall, and to Gresham, and the two deeds of trust to secure the two personal debts of Gresham and Paschall to the land company, must have been all made pursuant to previous or contemporaneous agreements, for they were all dated May 26, 1909, while the original contract was still executory, because it is also shown that the balance of the purchase money was not paid until June 3, 1909, so that these deeds wore apparently interdependent. Certainly they clearly show the changes which were made in the original contract before it became executed. They demonstrate the fact that the payment of the purchase money June 3, 1909, and the delivery of the several conveyances were simultaneous, for all of these deeds were recorded June 3, 1909, the date when the contract as theretofore changed first became executed.

Both Gresham and Paschall built expensive dwellings on their respective lots, facing each other on Seminary avenue at Melrose. We are hero concerned chiefly with the three lots conveyed to Gresham, 1, 2, and 3. He built upon and occupied the premises as his residence until July, 1918—say nine years. He then sold the property to John M. Miller, Jr., the appellant, who occupied it until he entered into the contract with George S. Kemp, the appellee, February 28, 1929.

The deed dated May 26, 1909, recorded June 3, 1909, from the land company to Gresham, which is signed by Paschall and his wife, as parties of the third part, but is not acknowledged by them, contains this language: "And the said parties of the third part sign and seal this deed for the express purpose of waiving any and all rights and claims that they have, or may have, under a certain written contract with the party of the first part affecting the said three lots hereby conveyed and of consenting to the conveyance of said three lots to said Thomas Gresham."

Upon these words and the failure of Paschall and wife to acknowledge the deed for recordation rests the contention that Miller cannot now convey a good title to Kemp. It is held by the trial court that Paschall then had a complete equitable title to an undivided one-half interest in the lots 1, 2, and 3, so conveyed by the land company with Paschall's approval to Gresham, the consequence of all which is the holding that a number of judgments against Paschall, aggregating approximately $250,000, all of which were recovered during the period 1921 to 1926, more than ten years after the conveyance to Gresham and long after Gresham's conveyance to Miller, are adjudged to be liens on an undivided one-half of the lots of Miller, and to relieve Kemp of all of his obligations under his contract with Miller to buy the property.

Certainly it may be confidently said that but for the clause quoted Miller's title as an inno cent purchaser for value without notice could not have been questioned. It is also true that the insertion of the clause of itself created no new or additional right in Paschall. The only effect of the clause, then, was to supply notice of a pre-existing contract, while its avowed purpose was to assure Gresham that all such rights as might have previously existed, or might have arisen thereunder had been abrogated—satisfied. It clearly was not notice of any possible adverse claim of Paschall.

In holding that these contingent rights in this unperformed executory contract could not, while it was still executory, be waived by parol, the clear distinction between a complete equitable title in land and a mere equitable right or interest in such an executory contract is disregarded. An interest in an unperformed executory contract for the sale of land may be waived by parol. The contention which the trial court sustained is that this was a contract already executed before the date when the transaction was closed by payment of the purchase money and the delivery of the deed to Gresham, but the evidence and the several deeds dated May 26, 1909, recorded June 3, 1909, show the contrary.

All save one of the cases cited and relied on to sustain the decree relate to the liens of judgments against the former holder of the legal title to land whose vendee had failed to record his deed before these judgments became liens. They are inapplicable here because Paschall never was the holder of the legal title to the Gresham lots. The exception is the case of Flanary v. Kane, 102 va. 547, 46 S. E. 312, 681. Fourteen separate parcels of land, of which Barron had held the legal title to all but one, and a large number of judgments against Barron were involved. The...