Case ID: va_108/html/0563-01.html
Source: Caselaw Access Project
Author: {"author": "Whittle, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Staunton.
    Steinman v. Hagan and Others.
    September, 10, 1908.
    Absent, Keith, P.
    1. Specific Performance — Parties—Vendor Holding Legal Title — Sub-Purchasers. — In a suit by a vendor who has not parted with his legal title against his vendee for the specific performance of a contract for the sale of real estate, a sub-purchaser of the vendee is not a necessary party. He is bound by any decree against his vendor affecting the title. The effect of the outstanding legal title is to admonish a spb-purchaser that he takes in subordination to the rights of the owner of such title. With respect to such owner, he is a mere intruder, and as against the paramount title a deed from his vendor invests him with no estate, legal or equitable. As a general rule, only parties to the contract are necessary to such a suit.
    Appeal from a decree of the Circuit Court of Wise county. Decree for defendants. Complainant appeals.
    
      Affirmed.
    
    The opinion states the case.
    
      Irvine & Morison, Geo. A. Smith and A. O. Anderson, for the appellant.
    
      Bond & Bruce and C. T. Duncan, for the appellees.
   Whittle, J.,

delivered the opinion of the court.

The essential facts of this case are these: On June 2, 1870, the appellee, Patrick Hagan, conveyed 264 acres of land situated in Wise county, Virginia, which included the 80 acres involved in this litigation, to Felix Campbell, by deed recorded September 5, 1870. On Jnne 3, 1870, Campbell, for tbe same consideration, reconveyed tbe identical land to Hagan, who withheld tbe deed from record until June 29, 1881. In tbe mean time, namely, on August 22, 1870, tbe attorney in fact for Campbell executed a title bond for tbe 80 acres to Anderson Wells, tbe bond reciting that it was in ratification of a previous contract between Hagan and Wells. And on December 15, 1874, Wells conveyed tbe coal and minerals underlying tbe tract to tbe appellant, Steinman, and Price. On tbe day following, Price conveyed bis half interest to Steinman, who put both deeds to record.

In 1876, Campbell instituted for Hagan’s benefit a suit in equity against Wells to enforce specific performance of tbe contract of sale; whereupon, tbe land having been decreed to be sold was bought by Hagan for tbe amount of purchase money due, with interest and costs. Tbe sale was confirmed and title conveyed to Hagan by a special commissioner of tbe court; and tbe deed recorded December 10, 1877. In 1894, Hagan leased tbe coal under a large boundary of land, including tbe Wells tract, to tbe Ayres Coal Company, who in turn assigned their lease to the Horton Coal Company.

On December 19, 1906, this suit in equity was brought by Steinman against tbe appellees, alleging tbe foregoing facts (and others not material to be stated), for tbe purpose of setting aside tbe commissioner’s deed to Hagan, and tbe mining lease to tbe Horton Coal Company, so far as they affected tbe coal and minerals in dispute. Tbe prayer of tbe bill is that tbe land may be sold (tbe surface primarily) ; or at Hagan’s election that bis deed be permitted to stand, and that be be required to convey tbe coal and minerals to Steinman; and also that tbe mining lease to tbe Ayers Coal Company, and certain supplemental leases to tbe Horton Coal Company, to tbe extent to which they affect tbe coal and minerals in question, be set aside and cancelled.

From a decree, dismissing on demurrer the original and amended bills, this appeal was allowed.

Though the alleged laches of Steinman is relied on by Hagan as constituting a complete bar to his recovery, we deem it only necessai'y to consider the question of the conclusiveness of the decrees in the case of Campbell, for Hagan, against Wells, upon Steinman’s right to the relief sought in this suit.

In its last analysis, that proposition depends upon whether or not Steinman was a necessary party to the. former litigation. The general rule is well settled, that a person is not a necessary party when there is no proper privity or common interest between him and the plaintiff, such as would warrant the court in decreeing between them.

Here, we have no allegation that Hagan knew of the conveyance from Wells to Steinman at the time he brought suit to enforce his vendor’s lien; and the law devolved no duty upon him to search the records in quest of derivative purchasers from Wells. On the other hand, Steinman had constructive notice that Wells was not the holder of the legal title; and he was, therefore, informed that any interest which he might acquire from that source would be taken in subordination to the superior rights of the owner of the legal title. With respect to such owner, he was a mere intruder, and as against the paramount title the deed from his vendor invested him with no estate, either legal or equitable. Hpon this principle is founded the general doctrine, that in suits of this character the only necessary parties are parties to the contract.

The rule is thus stated in Story’s Eq. Pleading (10th ed.), secs. 226-226b: “In the first place (as we have seen), the rule as to necessary parties does not extend to all persons who may be consequentially interested, or affected by the suit; * . * * So, in the case of a common bill for the specific performance of a contract of sale of real estate, the only proper parties in general are the parties to the contract itself. Special cases may indeed exist, in which the rule may be otherwise; but they stand upon their own peculiar grounds.”

Waterman on Specific Performance, at sec. 59, states the rule as follows: “Sub-Purchaser Not to be Made a Party: — A purchaser from the vendee is not as a rule a proper party to a bill filed by the vendor; nor the original purchaser, when his vendee has been accepted in his place by the vendor. Where a suit was brought by the vendor against both the purchaser and the sub-purchaser, it was dismissed by the vice chancellor as against the latter, though specific performance was decreed against the original contractor, and the case was affirmed on appeal.”

To the same effect is Frye on Specific Performance, sec. 140: “The general rule with regard to suits to enforce contracts was, that the parties to the contract, or their representatives, were the necessary and sufficient parties to the suit — that all the parties to the contract should be parties to the suit and no one else. The contract is what constitutes the rights and regulates the liabilities of the parties. In a stranger there is no liability; and against him, therefore, there was no more right to enforce specific performance in equity than to recover damages at law.” See also, 20 Am. & Eng. Enc. Pl. & Pr., 414; Willard v. Tayloe, 8 Wall., 557, 19 L. Ed. 501.

The effect of the outstanding legal title was to admonish Steinman, that what was actually done in the suit against his vendor might lawfully be done, and that he, although not a party, would be concluded by the proceeding. He dealt with the property with open eyes, and must abide the consequences of his own imprudence. Devlin on Deeds, sec. 711.

We find no error in the decree of the circuit court, and it is affirmed.

Affirmed.