Rorer Iron Co v. Wife

• Decision Date: 16 June 1887
• Parties: Rorer Iron Co. v. Trout and Wife.
• Court: Virginia Supreme Court

2 S.E. 713

(83 Va. 397)

Rorer Iron Co.

v.Trout and Wife.

Supreme Court of Appeals of Virginia.

June 16, 1887.

1. Equity—Cancellation of Lease—Ground of Relief.

A bill in equity which seeks to have canceled a lease of mining lands which was claimed to have been procured from the complainants by means of fraudulent representations as to material facts peculiarly within the knowledge of the lessees, whereby an unconscionable advantage was taken of the owners of the property, states valid ground for relief.

2. Same—False Representations—Matters of Opinion.

Where the evidence in a suit to cancel a lease for 20 years, of mining lands, showed that the lessees represented to the lessors that they had the means, and intended to mine and transport daily such a quantity of ore that the royalty thereon, which was the only consideration for the lease, at the rate agreed upon, would yield the lessors at least $10 per day, collectible every night, and that they promised to commence operations within 60 days, but that they wholly failed to fulfill their promises, held, that such representations were not matters of opinion, and that the failure to make them good was ground for canceling the lease.¹

3. Same—Purchase for Value—Pleading.

In a suit to cancel a lease on the ground of fraud, a defendant cannot take advantage of the defense that he is, or claims title through, a purchaser for value without notice, unless such defense is set out in his plea or answer, including the statement that his vendor was in possession of the premises at the time of transfer.

4. Estoppel—From Prosecuting Suit—Agreement to Dismiss.

When it appears that the complainants in such suit promised to dismiss their suit in consideration of an order for $50, but that, instead of being dismissed, it waS continued, and the order for $50 was never presented for payment, and thus the agreement was not executed, held, that by such agreement complainants are not estopped from prosecuting their claim, although one of the defendants expended money relying on the information that said suit had been settled, when it does not appear that his information as to the dismissal of the suit came from complainants, because, having notice of the existence of the suit, he is bound to know its termination.

Appeal from circuit court, Roanoke county.

Peem & Cocke, for appellant,

Geo. W. Hansbrough, for appellees.

Richardson, J. This is an appeal from a decree of the circuit court of Roanoke county, rendered March 28, 1885, in the chancery cause wherein Jacob M. Trout and wife were complainants, and A. Lewis, M. P. Preston, E. G. McClanahan, J. C. Green, F.J. Chapman, F. Rorer, S. Coit, and Rorer Iron Company, defendants. The suit was instituted August 25, 1882, against the two first-named defendants only; the others having been made parties afterwards on the petition of said defendant company. The object of the suit was to annul a deed of lease executed by said Trout and wife on the twenty-ninth of April, 1881, granting to said A. Lewis and M. P. Preston the privilege for 20 years to mine and haul off all iron and other minerals on their tract of land; the lessees to pay 10 cents a ton for all minerals obtained from the premises, and to commence developing in 60 days from the date of the lease. The bill avers, as grounds for such annulment, that the lessees, in order to induce the complainants to execute the lease, made to them certain representations which were material, and which were relied on by the complainants as true, but which were false, and thereby procured the lease; that the representations were that certain tilings existed, the existence whereof was a matter peculiarly within the lessee's knowledge; that these things were that the lessees were about to engage on a large scale in the business of mining, transporting to market, and selling iron ores; that they had made or were about making extensive preparations; that they intended to set to work, tomine complainant's ores, a large force, and employ as many as 20 wagons to haul the ore; that their preparations or means would enable them to transport and ship as much as from 100 to 500 tons per day; that they would develop in 60 days, and go to mining and hauling directly afterwards; and that the bonus of 10 cents a ton, which they would allow him, would yield complainant an income of at least $10 a day, which he might draw every night, if he chose.

The record discloses the fact that said representations were made by Lewis, in the presence of Preston, at the house of the complainants, on the twenty-ninth of April, 1881, just preceding the drawing and signing of the deed of lease. The alleged representations were deposed to by the complainant Jacob M. Trout, and by his daughters, Mrs. Engleman and Miss Laura Trout, all of whom substantially agree; and their statement is supported, in an important particular, by George Wertz, who deposed that Lewis told him that he (Lewis) had to commence delivering ore from complainants' land within 60 or 90 days.

Preston, in his own deposition, said that he made no such statements; that he was writing at the time the conversation was going on between Lewis and the complainants, and paid no attention to it. Yet, in his answer to the bill, he denied its averments as to those representations. On the contrary, Lewis, who is alleged to have made the representations, did not answer the bill, but let it go for confessed as to himself. Nevertheless, he gave his deposition, in which he denied those averments; yet admitted that, during most of the time he was at complainants' house, Mrs. Engleman and her sister were in the porch close enough to hear the conversation.

It is in evidence, and not denied, that the lessees had made no such preparations, and had no such means, to mine, transport, and market the minerals, and that they did not mine, or attempt to mine, any ores on the complainants' land, or pay them any such bonus at any time before the institution of this suit, nor any one else for them. It appears from the record that by deed of October 21, 1881, Lewis and Preston exchanged one undivided fourth of the Trout lease, and of six other leases upon adjacent lands, with E. G. McClan-ahan, for two-thirds of 50 acres of mineral lands also adjacent; and that, by deed of same date, those three conveyed one undivided fourth of the seven leases and 50 acres of mineral land to F. J. Chapman and J. C. Green; and that by deed of July 4, 1882, Lewis conveyed his remaining fourth interest in those leases and land, and other lands, to F. Rorer. It also appears that on the second of September, 1882, Chapman and Rorer, knowing of this suit, got J. M. Trout to promise, as they say, "to dismiss" this suit, and to sign a note addressed to his own counsel, directing him "to dismiss" it, and stating it had been "satisfactorily settled, " and gave J. M. Trout an order on McClan-ahan, who was absent, for $50, which note was delivered; yet the suit was not dismissed, but only continued; and which order was never presented for payment, nor paid, but was returned. J. M. Trout says he only promised "to continue the suit till the next spring, and signed no contract of any sort, and received no money, and merely signed, without reading, a note to his own counsel, who had the suit continued with his approbation, and that he returned the order without attempting to collect it. The note, however, did not literally direct the counsel either to dismiss or continue the suit, but did direct him "to stop the proceedings, " and did state that the suit had been satisfactorily settled, and was handed to the counsel by Mr. Ballard, who, it seems, was acting as attorney for Chapman and others, and was practicing in said circuit court, and their counsel in this cause. It does not appear that, at the ensuing term, any motion was made to dismiss this suit, or that any opposition was offered to its continuance.

It also appears by deed dated September 9, 1882, but not recorded until the fifth of October of that year, that Preston, McClanahan, Chapman, Green, and Rorer conveyed the said seven leases, (including the Trout lease here in question,) and the said 50 acres of mineral land, and other lands and leases, to one Samuel Coit. All of these parties knew of the pendency and purpose of this suit, and knew, or had opportunity to know, that it had not been dismissed; though it is not disclosed by the record that it was proved, or even alleged, that Coit was present, or that his name was mentioned at the transaction of second of September, 1882, or that Trout's note to his counsel was ever exhibited to Coit, or that Trout had ever seen or heard of him before he received the said conveyance. And, lastly, it appears that by deed of January 18, 1883, Coit conveyed the said leases and mineral lands to the Rorer Iron Company.

At the April term, 1883, this corporation filed its petition in this suit. It recited the Trout lease of April 29, 1881, and the several successive alienations whereby it became sole owner. It stated that, after this suit was brought, J. M. Trout had, for $50 then and there paid, promised McClanahan and his co-tenants to dismiss the suit, and by an order signed by him had directed his counsel to dismiss it, of all of which the corporation claimed to have had notice before the conveyance of eighteenth of January, 1883, and relied on such promise as an estoppel to this suit. The petition then prayed that said corporation and the intermediate alienees be made parties, and that J M. Trout " be specially required to state if the allegations of the petition in reference to the dismissal of this suit are true."

To this petition J. M. Trout filed his answer, to which the corporation replied generally. In response to the special inquiry, J. M. Trout pronounced the allegation in reference to the dismissal of the suit untrue, and repeated his statement as already given. Accordingly the bill was amended by this addition: "And,...