Planters Nat. Bank Of Fredericksburg v. E. G. Heflin Co. Inc

• Citation: 184 S.E. 216
• Parties: PLANTERS NAT. BANK OF FREDERICKSBURG. v. E. G. HEFLIN CO., Inc.
• Decision Date: 12 March 1936
• Court: Supreme Court of Virginia

184 S.E. 216

PLANTERS NAT. BANK OF FREDERICKSBURG.

v.E. G. HEFLIN CO., Inc.

Supreme Court of Appeals of Virginia.

March 12, 1936.

Appeal from Corporation Court of City of Fredericksburg..

Suit by the E. G. Heflin Company, Inc., against the Planters National Bank of Fredericksburg, Va., a corporation. Decree for plaintiff, and defendant appeals.

Affirmed.

Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, CHINN, and EGGLESTON, JJ.

C. O'Conor Goolrick, of Fredericksburg; for appellant.

F. M. Chichester and S. Bernard Coleman, both of Fredericksburg, for appellee.

HOLT, Justice.

In 1929 the Planters National Bank of Fredericksburg, Va., was the owner of a small parcel of land in that city, and sold a part of it to the Richmond, Fredericksburg & Potomac Railroad. The preliminary negotiations which led to this sale were carried on for the bank through Mr. A. B. Young, its real estate agent. Formal authority for the execution of a deed was given by resolution of the board of directors on March 4, 1930. For reasons unimportant here, there was some delay. The deed itself bears date the 4th of July, 1930, and was acknowledged on July 14th of that year.

Between this lot and the main industrial line of said railroad lay another lot, also owned by the bank. It, too, had been, placed for sale in the hands of Mr. Young.

The E. G. Heflin Company was operating a wood-working plant. Mr. Young tells us that:

"After the Richmond, Fredericksburg & Potomac Railroad Company had bought the lower end of it, I had in mind that Mr. Heflin wanted to move his shop. It was reported he wanted to move. I went in to see Mr. Goolrick and asked him if he wanted to sell the upper end. I am not positive about this, but am rather inclined to think Mr. Goolrick stated Mr. Heflin had already asked him the price of it."

Mr. William K. Goolrick was president of the bank, and Mr. E. G. Heflin was president of the Heflin Company.

Negotiations were begun and in February, 1930, Mr. Heflin agreed to purchase at the price of $6,500. Of this $50 earnestmoney was paid in cash. Sale was formally authorized by resolution of March 4, 1930. The deed itself bears date July 29, 1930, was acknowledged October 18, 1930, and recorded on January 31, 1933.

The consideration expressed was "$1,500.-00 cash in hand paid and other valuable consideration." This other valuable consideration defendant claims was $5,000 to be thereafter paid. Plaintiff contends that it was to pay $5,000 at the end of three years, and when adequate railroad facilities had been installed, which installation the bank itself promised and guaranteed. This balance due was evidenced by note of July 30, 1930, payable on or before three years from date, and secured by trust deed of even date acknowledged on October 18, 1930, and recorded on January 31, 1933. Of this $1,500 item, $50 had already been paid; for the residue a note of $1,450 was given and in a short time thereafter paid.

Both Young and Goolrick knew the purpose for which the lot was purchased--to be used as a factory site. This Heflin explained to Young and made it plain. He said: "That is the only thing I told him it could be used for."

When the deed was presented to him, he found there no provisions about this spur track and consulted counsel. The matter remained in abeyance until Mr. Goolrick obtained from the railroad this letter, which Mr. Heflin read:

"September 9, 1930.

"Mr. Wm. K. Goolrick, President, "The Planters National Bank, "Fredericksburg, Va.

"Dear Mr. Goolrick: Replying to your favor of the 6th instant, this is to confirm understanding had between your Bank and this Company during the negotiations whereby this company purchased from your bank a piece of property in Fredericksburg conveyed by deed bearing date the 14th day of July, 1930, namely, that the Railroad Company is obliged to build within three years from the date of the said conveyance a spur track connected with its industrial track and reaching the remainder of the property still owned by your Company just north of the property acquired by the Railroad Company, the location of the said track being substantially as shown on the print attached to the deed of conveyance.

"The building of this track across the several city streets will, of course, depend upon our ability to secure consent of the City of Fredericksburg and the necessary authority therefor.

"Will you kindly acknowledge receipt of this letter and oblige?

"Yours very truly, "Norman Call, Vice-President."

This letter was shown to Heflin on October 18, 1930, and thereupon the deed and deed of trust were executed.

On his cross-examination this appears:

"Q. If Mr. Young had given you this so-called guarantee in February, 1930, why did you wish anything else?

"A. I wished something else showing that they had this agreement with the Railroad Company, the guarantee from the Bank.

"Q. Was the letter of September 9, 1930, acquired in order to show you?

"A. Yes, sir.

"Q. You acted on that letter?

"A. Yes, and the guarantee of the Bank that they would see that the obligation would be carried out.

"O. You were familiar with the contents of the letter long before you concluded the deal and signed the deed of trust?

"A. No, sir. The letter was given to me the date the deed was signed.

"Q. You read it before you signed it?

"A. Yes, sir.

"Q. You never saw the letter of September 9, 1930, until the day you executed the deed on October 18, 1930?

"A. That is right.

"Q. Where were you when you read it?

"A. As I stated, I don't know whether in Mr. Goolrick's office or in Mr. Frank Chichester's office.

"Q. Did Mr. Goolrick make any representations to you?

"A. He said the Bank had received that letter and would see that it was carried out."

Heflin further tells us that Young from the beginning had promised that this side track would be built. The bank in answer says that he had no authority to make such promise, but Goolrick, its president, did, and Heflin more than once testifies that he also as a major inducement made a like promise.

The railroad did not build this spur track nor attempt to build it, and there is fair reason to believe that it either abandonedits purpose or postponed its execution for an indefinite time. The three-year period was drawing to a close. On January 30, 1933, Heflin wrote to the bank asking what had been done. The bank made no answer. On February 3, 1933, he again wrote, complaining of the delay, and called attention to the fact that the deed and trust deed had been recorded on January 31st of that year. Still no answer was made. On June 7, 1933, the bank wrote to Heflin calling attention to unpaid interest due January 30, 1933, in amount $150. This letter he did not answer, and on June 27, 1933, the bank again wrote, said that its last letter had not been answered and threatened suit. Heflin replied: "When you answer my letter to you dated January 30th, and February 3rd, I will then answer your of the June 27th, 1933."

On July 28, 1933, he wrote to the bank demanding return of payments made. This was about the time of the termination of the three-year period. Had the original plans been carried out this balance due would not have been due until the spur track had been built. Until built Heflin tells us that this lot was worthless to his company for the purpose of its purchase and that the bank must have known. We have seen that the deed and deed of trust were not recorded until January 31, 1933. Goolrick said that this delay was at the request of Heflin, who thought that its recordation would hurt his company's credit. Heflin said that he never made any such request, that his company owed nobody anything, and that Young had promised not to record these papers until this spur track was built. Probably Young had no power to make such a promise, but it is of moment to note that recordation was as a fact long delayed.

The defendant contends that no promise or guaranty of any kind was made, but that it gave to Heflin all the information which it had about the railroad's plan, and that Heflin acted upon his own judgment based upon the railroad's letter shown to him, and upon the results of a visit which he made to the railroad company's office in Richmond before the transaction was concluded. This Heflin denied, and said that his trip to Richmond was long after the contract had been executed, and contends, as we have seen, that the contract rests upon the bank's promise, and that with it alone was there any contract relations.

After the cause had been matured, the presiding judge, on April 23, 1932, himself heard testimony in open court. And on October 31, 1934, apparently on his own motion ordered that an issue be made up to be tried at the bar of court, the issue being whether or not the deed and deed of trust were delivered absolutely or upon condition. To the issues thus framed, the Heflin Company objected on the ground that there had been a total failure of consideration. In short, that there had been misrepresentations and that guaranties given had not been fulfilled. Afterwards on December 11, 1934, the court set aside its order for an issue out of chancery and proceeded to finally dispose of this cause upon its merits. It directed that the deed and deed of trust be canceled and the payments made be refunded. The bank took back its lot and the Heflin Company the money which it had paid.

Relative to the issue, the presumption is that the chancellor properly exercised the discretion vested in him. He is the keeper of his own conscience.

"It is not necessary to multiply authorities. They are unanimous to the effect that the matter is one resting within the sound judicial discretion of the court." Massie v. Parrish, 140 Va. 717, 125 S.E. 691, 694.

The mere fact that there is conflict in testimony is not enough. Stevens v. Duckett, 107 Va. 17, 57 S.E. 601; Bunkley v. Commonwealth, 130 Va. 55, 108 S.E. 1; Hunter v. Bane, 153 Va. 165, 149 S.E. 467; Barbour v. Barbour, 155 Va....