Case ID: ala_138/html/0185-01.html
Source: Caselaw Access Project
Author: {"author": "McCLELLAN, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sidney Land & Colony Co. v. Milner, Caldwell & Flowers Lumber Co.
    
      Bill in Equity to abate the Purchase Price of Land (md ' for Injunction.
    
    1. Bill to abate the ¿purchase price of land and to enjoin the foreclosure of mortgage; when admission as to some of the averments of fh/e bill will not authorize relief. — When in a bill filed to abate the purchase price of' land sold and to enjoin the foreclosure of a mortgage given to secure the payment of the purchase money of su.ch lands, it is averred that the land so sold and conveyed to the complainant aggregated more than twenty thousand acres, and the purchase price fixed was forty' thousand dollars, and the mortgage was given to secure the deferred payment of thirty-five thousand dollars, and it is further averred that at the ti'me of the sale and conveyance by the respondent to the complainant, a large quantity of the land aggregating several thousand dollars in value was not owned by the defendant, as represented, but was in the possession of other persons, and the defendant in his answer fully, directly and positively denies the averment of a want a title to the lands conveyed, with the exception of a five acre lot, and as to this he confesses, the answer averring facts to show that said five acres were included in the deed by mistake or oversight, and offering to abate the purchase price as to the value of said land, as valued in the sale, a court of equity, on a comparison of benefits and detriments, will not enjoin the foreclosure of the mortgage on the twenty thousand acres of land to enforce the payment of the thirty-five thousand dollars, in order to conserve the complainant’s right to an abatement of the price as to the five acre lot.
    
      2. Same; when injunction properly dissolved. — When a bill is filed by a purchaser to abate the purchase price of lands purchased by him and to enjoin the foreclosure of a mortgage given to secure the deferred payments, upon the ground that at the time of the sale and execution of the conveyance, the defendant, vendor was not the owner of a large portion of the lands so conveyed, as represented, but that said lands were owned and were in the possession of third persons, and in his answer the defendant fully, positively, directly and categorically denies the averments of the bill of a want of title to all of the lands, the interlocutory injunction restraining the foreclosure of the mortgage to secure the deferred payments of the purchase money is properly dissolved upon the denials of the answer, on motion made by the respondent.
    Appeal from the Chancery Court of Butler.
    „ Heard, before the Hon. W. L. Parks.
    The facts in the case are’sufficiently stated in the opinion.
    Jesse F. Stallings and Ward & Hougi-iton, for appellant.
    If the vendee has received a\deed and its covenants are broken by an outstanding incumbrance, it is competent for a court of equity when the vendor is insolvent, to restrain the collection of so much of the purchase money as will compensate for the injuries resulting from the breach, or order it appropriated to the ex-tinguishment. of the incumbrance. — McLemore v. Mai-son, 20 Ala. 137; Wilkinson r. Hearcy, 74 Ala. 242; Ma-gee ■v. McMillan d, 30 Ala. 420; Kelly v. Allen. 34 Ala. 663; Lindsey v. Veasy, 62 Ala. 421; Jackson v. Elliott, 100 Ala. 669. And in a proper case when vendor is solvent the court will order a recission of the contract and repayment of the monev paid. — Perry v. Boyd, 126 Ala. 162.
    The next question of importance is as to the insolvency of respondent. It is admitted by the answer that the claim against complainant is its sole assets, but it seeks to avoid the effect of the allegation that the proceeds would be divided amongst its stockholders, by averring that its stockholders are solvent. This is an affirmative, independent averment, not a denial of the allegation, and consequently not of weight on the motion to dissolve. — ■ Jackson v. Jackson, 91 Ala. 202; Birmingham■ R. R. v. Bessemer, 98 Ala. 274. It should not be considered for any purpose. — Mabel Mining Co. v. Pearson, 121 Ala. 567.
    Gbaham & Steiner and Lane & Crenshaw, contra —
    
    It is the general rule that a sworn answer will be taken as true when responsive to the bill, and contains full, fair and positive denials of the facts on which the equity of the bill rests, — Bartley v. abatimos, 96 Ala. 224; L. & N. R. E. Co. 'V. Philyato, 94 Ala. 463. This general rule obtains in all cases, unless there is some peculiar phase of the case disclosed by the pleadings, showing that dissolution of the injunction will result in irreparable injury to complainant, and particularly 'when defendant will suffer no injury by continuing the injunction. From a careful reading of the bill and answer, the chancellor could not have reached any other conclusion than that the answer denies fully and fairly all the facts on which the equity of the bill rests.
   McCLELLAN, C. J.

On June 26, 1902, the appellee, the Lumber Co., sold and conveyed to the appellant, the Sidney Co., certain parcels of land aggregating more than 20,000 acres for $40,920. Of the purchase money $5,000 was paid at the time of sale, and for the balance the Sidney Co. executed three notes, one for $17,960 due January 1,1903, one for $8,980 due July 1, 1903, and one for $8,980 due January 1, 1904, each bearing interest'at the rate of 6 per cent. To secure the payment of these notes the Sidney Co., on the date of the sale and conveyance, executed a mortgage on said land to the Lumber Co., with power of sale upon default in the payment of any of them. Such default having occurred in respect of the first note, the Lumber Co., was proceeding to exercise its power of sale by advertising the same, etc., when this bill was filed by the mortgagor against the mortgagee company. Its main purpose is- to have the purchase money the complainant contracted to pay for the land abated to the extent of the value of certain parcels of the land of which, it is claimed, the respondent had no title, or not such title as the deed of conveyance warranted. To the effectuation of this purpose in the final decree prayed for, an interlocutory injunction of the sale under the power was prayed and granted. Upon the coming in of the answer the respondent moved to dissolve this injunction on the grounds, first, that the answer denies all the material allegations of the bill, and, second, that there is no equity in the bill. On the hearing of this motion, the chancellor dissolved the injunction, resting his decree on the first ground, the denials of the answer. From that decree the present appeal is prosecuted.

It is averred in the 5th paragraph of the bill that certain named parties were, at the time of the sale and conveyance by respondent to complainant, severally in possession of certain described parcels of said land claiming to own the same, and that they ever since have been and are now so in possession of said parcels, respectively. The value of each of these tracts is stated, and their areas, aggregating about $7,000 and about 700 acres. And it is further averred that respondent knew at the time of the sale that it had no title to any of these lands, and that with the purpose and intent to defraud complainant, respondent represented through its president and general manager that said lands belonged to the respondent, that it had a good and sufficient title thereto and a lawful right to sell; convey and put complainant in possession of the same. One of the parcels involved in these averments is a five acre lot which one Wright is alleged to OAvn and be in possession of. As to this lot the ansAver confesses the bill, but shows that this lot was embraced in the deed to complainant by an oversight, explains fully Iioav it came about, and offers to abate the purchase money to the extent of its Aralue, or rather valuation in the sale. If the ansAver in this respect may not be treated as eliminating this lot from the case on the motion to dissolve the injunction for that it is not in denial of the aA'erment of the bill, and if it is not eliminated sheerly by the application of the maxim cle minimis lex non curat (the lot in question standing to the Avhole'land involved in the ratio of five to twenty thousand, and its value to the whole amount involved in the proportion of ten to forty thousand dollars) yet surely a court of equity on a comparison of benefits and detriments Avould not enjoin the foreclosure under poAver of a mortgage on 20,000 acres of land to enforce the payment of $35,000 in order to conserve in this Avay complainant’s right to an abatement of ten dollars of the price for failure of title to five acres of the land, especially Avhen the mortgagee admits and offers to accord the right.. As to each of the other parcels of the land referred to in paragraph 5 of the bill, the ansAver is full, direct, circumstantial and positive in denial of the averments of a want of title therein made, and as to each the ansAver shows that the respondent had the title at the time of the sale and conveyance to complainant, and hoAV and when and through whom it acquired its title. So far as these lands are concerned, therefore, there can be no question that the case made by the bill Avas, for the purpose of the motion to dissolve the injunction; fully met and entirely overturned by the answer.

The other averments intended to make a case for abatement of purchase money on the theory that complainant did not get what it contracted for, are contained in paragraph 6 of the bill, which is as folloAVS: “Complainant would further show and allege that the title to the fol-1 owing described land, to-Avit:” setting out a great number of parcels by government calls,, aggregating four or five thousand acres — “and conveyed to complainant by respondent was not in respondent when it attempted to convey the same to complainant as aforesaid; that it did not have a sufficient title thereto, as is shown by the abstract of title complainant has caused to be made of said lands since said sale, as aforesaid, which is herein referred to and prayed to be made and considered a part of this bill and of this paragraph, number 0, with leave of reference thereto as often as may be necessary, and which is not hereto attached owing to its great bulk of more than 475 pages of record size. But the president and general manager of complainant corporation, placing reliance and confidence in the statements and representations of John J. Flowers, the president and general manager of the respondent corporation, as to the sufficiency of respondent’s titles to all of said lands conveyed or attempted to be conveyed, as aforesaid — representing among other things that he would personally guarantee the title to every acre of said land — bought the same and accepted the deed of respondent thereto, without giving that attention to the titles that he otherwise would have done, had it not been for the reliance and confidence placed by him in the statement of John J. Flowers, president and general manager, as aforesaid. And complainant avers that said Flowers grossly deceived and defrauded your complainant by reason of said false and fraudulent rejn'esentations and statements in reference to the sufficiency of the titles of respondent to said property, thereby securing from complainant said sum of $5,000 paid on said lands, aforesaid, and said three notes executed and made payable as aforesaid, in the aggregate sum of §35,920, besides the sum of about $5,003 expended by complainant in improvements and repairs on said property. And complainant further avers that notwithstanding a large lot of said lands, as aforesaid, worth several thousand dollars, is and was held adversely to respondent at the time of said sale and is so held to complainant, and the title to more than five thousand acres of said lands, as hereinabove set out in this paragraph, is defective and in danger of being entirely lost to complainant: and said Flowers, as president and general manager of said respondent corporation, as aforesaid, or individually, as lie liad agreed to do, refuses to perfect the'titles to said lands held adversely, to which the titles are defective, as above set out.” All the foregoing averments of fraud and deceit and misrepresentations, and as to personal undertakings and guaranties of the president and general manager of the respondent and of complainant’s reliance upon the same are positively and categorically denied by the answer. Beyond these the averments as made really amount to no more than this: that according to the abstract which complainant had made of the titles to the lands, the respondent did not own the parcels described, that some indefinite large part of the lands so described in and at the time of the sale was, held adversely to re-, spondent, and that the title to more than five thousand acres of the land described in this paragraph is defective. These averments are .in their last analysis, indeed, only that the respondent did not have title evidenced by muniments — paper title — to these lands, and so they are properly construed in the brief for appellant. They do not negative title in respondent by adverse possession; and on demurrer they should be held insufficient for that 1‘eason. ■ Bucli is the 6th paragraph of the bill. The answer to it, especially when reference is had to the particular character of its averments, we find to be sufficient, ly definite and positive in denial of the want of title to-the land described in this paragraph to support the decretal order dissolving the injunction so far as the writ was rested on said averments.

As we have said, the main purpose of the bill is to have an abatement of the purchase money agreed to be paid because of alleged want of title in the respondent to the lands described in paragraphs 5 and 6; but relief is also sought in respect of an alleged claim of the mortgagee for attorney's fees and in respect of the alleged failure of the respondent to furnish an abstract of titles to the lands sold by it to the complainant and complainant’s alleged expenditure to have such abstract made. Without going further into these matters, it will suffice to say that the answer adequately denies all the material averments of the bill in each of these connections, and we do not understand counsel for appellant to insist that .the interlocutory injunction should have been continued, on account of them.

Affirmed.