Pioneer Coal Co. v. Asher
| Decision Date | 21 April 1925 |
| Citation | 210 Ky. 498,276 S.W. 487 |
| Parties | PIONEER COAL CO. v. ASHER. NIELD v. PIONEER COAL CO. ET AL. |
| Court | Kentucky Court of Appeals |
Rehearing Denied with Modification, Nov. 17, 1925.
Appeal from Circuit Court, Bell County.
Action by the Pioneer Coal Company against A. J. Asher, Sr., and C S. Nield. From judgment for defendant, A. J. Asher, Sr. plaintiff appeals, and from judgment for plaintiff against defendant C. S. Nield, he appeals. Reversed and remanded with directions to enter judgment on first appeal and affirmed on second appeal.
James H. Jeffries, of Pineville, for appellant Pioneer Coal Co.
W. T Davis and E. N. Ingram, both of Pineville, for appellant Nield.
Cleon K. Calvert, of Pineville, E. L. Worthington, of Maysville, and Martin T. Kelly, of Pineville, for appellee.
These two appeals on the same record will be disposed of in one opinion.
On May 10, 1907, A. J. Asher, in consideration of $35 an acre, conveyed, with general warranty, to the Edgemont Coal Company a number of tracts of land aggregating 3,000 acres. On August 15, 1911, the Edgemont Coal Company conveyed this land with other lands, with general warranty, to the Pioneer Coal Company in consideration of $57.50 an acre. The Edgemont Coal Company had done no business except to hold the title to the land. The sale to the Pioneer Coal Company included all its property. After the sale was made, and before a division of the proceeds among its stockholders, all the other stockholders transferred their stock to C. S. Nield, by a writing dated August 18, 1911, reserving the dividends coming to them out of the sale of the property and Nield agreed to pay these dividends to them. This writing includes the following stipulation:
"The said C. S. Nield, as a part of this obligation, guarantees that the said Edgemont Coal Company will perform its obligations to the Pioneer Coal Company as contained in a deed dated the 15th day of August, 1911."
Nield had subscribed for $12,000 of the stock of the company and had paid for $9,000. By the terms of the sale he was to get all of the purchase money of the property above a certain price for his commissions. He received in this way about $30,000, for his commissions, beside the dividends on his stock, which amounted to the sum he had paid with 6 per cent. interest from the time of the payment. The Pioneer Coal Company, learning that a part of the land was claimed adversely by Thomas R. Gordon and D. B. Logan, brought a suit against them to settle the question of title. A. J. Asher, the original grantor of the land, was notified of the action and testified on the trial, which resulted in a judgment in favor of the defendants for the land in controversy, which included all of three of the tracts conveyed and a part of the fourth. The judgment was rendered at the October term, 1917, of the circuit court. Thereupon the Pioneer Coal Company brought an ordinary action against the Edgemont Coal Company on its covenant of warranty to recover the price it had paid for this land, $18,785. No answer was filed to the petition, and a judgment by default was rendered on February 13, 1918. Execution was issued on the judgment and returned "no property found." Thereupon this action was brought by the Pioneer Coal Company under section 439 of the Code on February 8, 1919, against the Edgemont Coal Company, A. J. Asher and C. S. Nield. A judgment was sought against Asher on his warranty to the Edgemont Coal Company. Judgment was sought against Nield on the ground that he, as stockholder, had distributed the assets of the company, receiving a large amount himself as stockholder, and that, to secure this distribution, had guaranteed that the Edgemont Coal Company would perform its obligations to the Pioneer Coal Company as contained in its general warranty deed. Nield and Asher both demurred to the petition, their demurrer was overruled, the issues were made, proof taken, and on final hearing the circuit court dismissed the plaintiff's petition against A. J. Asher, and gave judgment against Nield. From the judgment dismissing its petition against A. J. Asher, the Pioneer Coal Company appeals; and Nield appeals from the judgment of the Pioneer Coal Company against him.
Asher's title to the land is based upon the James W. Davis 2,800-acre grant, surveyed March 25, 1850, and issued May 22, 1857. But in this grant five or six older small grants, which embraced land within the boundary of the larger grant, were excepted. The defendants in the ordinary action brought by the Pioneer Coal Company, as we understand the record, claimed under these grants and had extended their clearing beyond the bounds of the older patents. They defended that suit upon the ground that they and those under whom they claimed had been in the adverse possession of the land they claimed for more than 15 years before that suit was brought. The chief grounds relied upon by Asher in the defense of this action against him are: (1) That his deed to the Edgemont Coal Company was void under Kentucky Statutes, § 210, and that no action can be maintained upon the deed under section 216, Kentucky Statutes; (2) that the judgment in the original action, brought by the Pioneer Coal Company against the persons in possession is conclusive that his deed was champertous; (3) that his covenant was broken when the deed was made and did not run with the land to the Pioneer Coal Company; (4) that the Pioneer Coal Company cannot maintain the action against him under section 439 of the Code.
1. Asher, a few years before he made the deed, had cut a large quantity of timber from the land without question, and said when he sold the land that it was held by his tenants. The purchasers had the title examined by two experienced lawyers, and they bought and paid for the land in good faith, supposing they were getting a good title. But, however innocent the parties may have been, the statute against champerty applies. It provides as follows:
In Graves v. Leather, 17 B. Mon. 665, it was held that no action can be maintained on a deed containing a covenant of warranty of title to land which was adversely held at the date of the deed, if the deed was made since the act of 1824 against champerty. This opinion was followed and approved in Altemus v. Nickell, 115 Ky. 506, 74 S.W. 221, 102 Am. St. Rep. 333. After fully discussing the subject, the court added:
To the same effect, see Cardwell v. Sprigg, 7 Dana, 35; Crowley v. Vaughn, 11 Bush. 517.
Appellant insists that there is a conflict in the opinions of this court, and that the above is no longer in force, but we do not see that there is any conflict in the opinions relied on to show this. Luen v. Wilson, 85 Ky. 503, 3 S.W. 911, is rested upon the ground that the plaintiff could not be heard to say that his deed was champertous. This opinion was followed in Ft. Jefferson Improvement Co. v. Dupoyster, 108 Ky. 792, 51 S.W. 810, 48 L. R. A. 537, which rests on the same ground. That case was followed by Meade v. Ratliff, 133 Ky. 411, 118 S.W. 271, which turned on the question whether the deed had been rescinded. Though there are in each of these cases some expressions inconsistent with the rule above laid down, they were unnecessary for the decision of the case before the court, and are to be regarded as merely dictum. In Isaacs v. Maupin, 191 Ky. 528, 231 S.W. 49, no question of champerty was raised, as shown by the opinion. On the other hand, the court has in a great number of cases held that a champertous deed is absolutely void. The conveyance being void, there is nothing for the covenant of warranty to rest on. Lost Creek Coal Co. v. Napier's Heirs (Ky.) 89 S.W. 264; Bridgewater v. Byassee, (Ky.) 93 S.W. 35; Begley v. Valentine, 160 Ky. 526, 169 S.W. 1026; Big Sandy Co. v. Ramey, 162 Ky. 236, 172 S.W. 508; Lipps v. Turner, 164 Ky. 626, 176 S.W. 42; Miniard v. Napier, 167 Ky. 208, 180 S.W. 363; Moyne v. Neal, 168 Ky. 292, 181 S.W. 1119; Begley v. Erasmie, 205 Ky. 240, 265 S.W. 833; Colson v. Johnson, 208 Ky. 684, 271 S.W. 1033.
We therefore conclude that no action can be maintained on Asher's covenant of warranty so far as the land was then in the adverse possession of another.
2. The record contains a transcript of the pleadings and judgment in the original action brought by the Pioneer Coal Company. The petition alleged that the plaintiff was the owner and in possession of the land, and charged that the defendants had trespassed upon it and cut the timber, to its damage. The answer of the defendants denied the allegations of the petition, and pleaded that the land was owned by the defendants, that they and those under whom they claimed had been in actual adverse possession of the land for over 30 years, and that they were in such adverse possession when it was conveyed by Asher to the Edgemont Coal Company. These allegations were denied by reply. The judgment of the court is in these words:
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