#### Armstead v. Hundley.

April Term, 1850,

Richmond.

(Absent Daniel,* J.)

Equity Practice—Sale of Land by Agent—Suit to Set Aside—Laches†—Measure of Relief—Case at Bar.—A and others owning lands jointly, in the State of M-i, employ an agent with power to sell and convey them. A sells to H a certain number of acres of these lands, equal to his interest therein, hut does not make a conveyance. H goes to M-i, and on his return, informs A that the agent had sold all the lands; and thereupon they rescind their contract, and make another, by which A assigns to H his interest in the proceeds of the sales, for the purpose of paying H what h e owed him, and for the damages which H claimed for his failure to get the land; and he gives H an order on the agent for the amount. And to enable H to settle up the business, A executes to him a deed for his interest in the land. When H goes again to M-i, he learns that the contract which the agent had made for the sale of a part of the lands had failed; and he conceals this fact from A, whilst he conceals from the agent, the rescission of his first contract with A, and the making of the second; and he receives from the agent, A’s proportion of the proceeds of the land sold; and he purchases all the lands remaining unsold, and settles with the agent, receiving credit for the price of the quantity of land sold to him by A by their first contract; that being considerably more than he was to have given A for it. Some years after this, A files a bill against H to set aside the conveyance by the agent to H, as to the quantity of land to which A was entitled. Held: A is entitled to have relief. But *as the agent had power to sell and convey, and the lands were sold at their value; and as the lands of all the parties were sold together, and had been conveyed to H, and had been improved by him; and as A had been guilty of *laches*in failing to make enquiries, and in the prompt assertion of his claim; and the lands lay in another state, the proper measure of relief is compensation for the injury, instead of a rescission of the contract.

By an act of the Congress of the United States, the heirs of General Joseph Martin, of Virginia, were authorized to locate five thousand acres of land in the states of Alabama or Mississippi, of land which had been offered for sale but had not been sold, and in tracts not less than one hundred and thirty acres. These heirs, of whom there were seventeen, employed Col. William Martin, of Tennessee, one of their number, as their agent to locate the lands; and they also gave him authority to sell them after they were located. The locations seem to have been made about the year 1826, in the state of Mississippi.

Among the heirs of General Martin was Sarah, the wife of Samuel Armstead, of the countj' of Campbell, who died in the lifetime of her husband, leaving three sons, her heirs at law. In 1828 Samuel Armstead had become possessed of an interest in the lands aforesaid equal to three hundred acres; and he then sold this interest to Thomas Hundley; and having afterwards acquired another interest, equal to four hundred and fifty acres, he, in 1831, sold this interest to Hundley; the price of the whole seven hundred and fifty acres amounting to 1412 dollars 62 cents. At this time Armstead had not himself obtained a conveyance of these interests, and he executed to Hundley a bond to secure the conveyance to him.

In 1832 Hundley went to the state of Mississippi ; and on his return to Virginia in 1833, he informed Armstead that all the lands had been sold by Col. .Martin to Elias P. Kent, so that Hundley .could not obtain *his seven hundred and fifty acres. He stated further, that the lands were then worth more than he had given Armstead for them, and insisted that Armstead should make up to him the difference. Armstead seems to have acquiesced in this demand; and on the 25th of September 1833 they had a settlement, and entered into an agreement under seal. To this agreement Armstead’s sons were parties. It appears from the statement of the account between Hundley and Armstead, that Arm-stead was indebted to Hundley on other transactions to the amount of . . $ 693 54 There was to this added supposed cost on 1400 acres of land, . . 250 00 Due me for land traded some time ago........... 2000 00

2943 54

By order on William Martin for proceeds of 1400 acres of land, . 2800 00

143 54

Cash paid in full in presence of Dr. Ro. Smith,...... 143 54

Immediately following this statement was the agreement, by which the Armsteads, in consideration of the sum of 2800 dollars, as above stated, relinquished to Hundley the proceeds of fourteen hundred acres, (that being the amount of the interest of Arm-stead and his sons in said lands, including *33the seven hundred and fifty acres before mentioned,) it being part of the five thousand acres aforesaid, “lately sold by Col. William Martin or his agent. ’ ’ The agreement then proceeds to state from whom the A.rmsteads acquired the fourteen hundred acres, and that they had given Hundley an order on Col. William Martin, the agent, when the proceeds should fall into his hands. The agreement further provided, that the lands had been or should be legally : ■ : . . : ^'relinquished; and that for so much of the sum of 2800 dollars as Colonel . Martin should pay or accept to pay out of the interests of the Armsteads in the said lands, they were to be released; and so much thereof as might not be due to them out of the said claims, they were to pay to Hundley, after it was ascertained how much Col. Martin owed them. And if there should be due to the Armsteads more than 2800 dollars, Hundley was to pay it to them; and he was to settle with Col. Martin for the cost attending the location, sale, &c., of said land, before he settled finally with the Armsteads; and the title bond before that time executed to Hundley by Samuel Armstead was declared to be null and void. And it was lastlj’’ provided, that if Hundley failed to collect the sum of 2800 dollars from Col. Martin, or the person who had lately purchased the lands, after legal recourse on them, then that the Armsteads were bound to Hundley to pay him so much as he failed to collect.

In pursuance of this agreement, the Arm-steads, on the same day, addressed a letter to Col. William Martin, in which they say: “We are informed that you or your agent has sold the Mississippi land belonging to the estate of Gen. Joseph Martin, deceased, for a little upwards of two dollars per acre, at one and two years. We have purchased the interest of,” &c., which “will probably amount to fourteen hundred acres or upwards ; and have sold the same to Capt. Thomas Hundley. You will be pleased to pay him the net proceeds of the same, when collected, with interest from the time it becomes due. We presume it will amount to 2550 dollars, after expenses are paid. Should these interests amount to more, pay or accept to pay it to Captain Thomas Hundley. Should it amount to less, accept to pay for what may be due us, when we exhibit our title as conveyed from these legatees as before stated.” ■ ■ i l • ■ • ■

* Although it was true, that when Hundley was in Mississippi in 1832, : Col. Martin was negotiating with Kent for the sale of the lands belonging to Gen. Joseph Martin, and it is probable both parties thought that the' sale was made, yet in fact the negotiation failed. As early as August 1833, Martin seems to have considered the contract ended, though it was not until July 1834 that it was finally broken off. In the meantime Hundley returned to Mississippi in the fall of 1833. On the 21st of November 1833, he wrote to Armstead as follows: ■ ■ i i • : . i : .

‘ ‘According to promise, I now drop you a few lines on the subject of the land that I . ! purchased of you. I have seen Mr. Kent and M’Craven; I find that M’Craven has become a partner with Kent in the purchase, and they have executed their notes for the money. The purchase appears to have been made the 29th of March last, at which time the payment will fall due in two annual payments. I have purchased Kent’s interest giving him 800 dollars on his interest in the purchase, telling him that I had an interest of fourteen hundred acres, and that I should contend for the land, and was not willing to receive the proceeds of sale as made by Col. Martin. He says that Col. Martin made the sale without reserve, and that he shewed him sixteen powers of attorney; but that is neither here nor there about the matter,as I have purchasedKent’s interest. ”

“I hope you have not written to Martin that I am to take the proceeds of the sale; and don’t do so, as I shall arrange every thing with Col. Martin so soon as you can forward me the title legally made. You will onl3T say to Col. Martin in your letters to him, that I am entitled to fourteen hundred acres of the land, or so many interests, and I will settle with him without incommoding him in respect to the sale of the land. I wish you to write to me immediately on the receipt of *'this. I want the titles; and I want you to write a different letter to the one you have given me to Col. Martin; that is, don’t shew in it to him that I am in any way bound to take the proceeds of sale. You know I told you I would give you 50 dollars in case I could become interested in the purchase. I shall do so; therefore write to Col. Martin in the manner that I have informed you.”

On the 9th of March 1834, Hundley wrote to Col. William Martin from Clinton in Hind’s county, Mississippi, and stated to him that he had purchased of Samuel Armstead fourteen hundred acres of the land belonging to the estate of Gen. Joseph Martin; and that since that purchase he had purchased of Kent sixteen hundred acres of the thirty-two hundred sold to him. He said further, that he had written to Col. Martin from Louisville, Kentucky, some six weeks before, by a Mr. Hancock, and had sent by him Mr. Armstead’s letter to Colonel Martin, amounting to an order on him for the land; and telling him that he (Hundley) would settle with him all expenses; and that having heard that Hancock was sick in Kentucky, he feared that Hancock would not see Col. Martin before Kent did. And he said his object in writing was to propose to set off the amount due from Kent for the sixteen hundred acres, by his own interest in the land, as far as it would go, say fourteen hundred acres ; and also to give to Col. Martin any security he might ask for the delivery and the correctness of the titles from Armstead and the legatees from whom he purchased; and that he would call on Col. Martin the next fall with the titles.

This letter Col. Martin answered on the 5th of April following; and after acknowledging the receipt of Hundley’s letter, he *34proceeded to state to him how much of th° land had been sold to meet the expenses of locating and selling, what amount of the proceeds of *the sales of other lands was on hand for distribution among the parties interested; and that there remained unsold about three thousand acres. He also stated to Hundley the circumstances in relation to the contract with Kent. That he had from the 31st of the previous December considered the contract at an end; but that Kent had been to see him a few days before the time he was then writing, and insisted that the agent of Col. Martin had misunderstood M’ Craven when he understood him to decline the purchase; and claiming to have the contract executed. That Colonel Martin had agreed to wait for four months; and if in that time he was satisfied that his agent had been mistaken he would carry out the contract; otherwise he should consider it, as he then did, void.

In December 1834, Brice A. Martin and Buey C. his wife, from whom Samuel Armstead had purchased some of the interests in these lands, executed a deed, whereby they conveyed to Thomas Hundley the entire interest that the said Brice A. Martin and Buey C. his wife, were entitled to in the lands aforesaid; and the children of Samuel Armstead executed at the same time to Hundley a similar deed.

On the 27th of January 1835, Hundley applied to Col. Martin for a settlement, and then, as it seems, for the first time, presented to Colonel Martin the letter of the 25th of September 1833, from Samuel Armstead and his sons, hereinbefore given, and the conveyances aforesaid; and upon the authority of these papers, Col. Martin paid to him the proportion of the proceeds of the previous sales of the lands to which, according to them, he was entitled. He at the same time sold to Hundley all the lands then remaining unsold, amounting to three thousand and sixty-nine acres, at three dollars per acre, after deducting eight hundred and twelve and a quarter acres, which was the proportion of the three thousand and sixty-nine acres to which he *was entitled under the conveyances to him from Brice A. Martin and the Arm-steads. After this sale Kent returned to Hundley the amount he had received under their contract.

In 1838, Samuel Armstead instituted a suit against Thomas Hundley on the chancery side of the Circuit court of Campbell county. In his bill he stated the title to the land in the heirs of Gen. Joseph Martin, the location thereof by Col. Martin, and his authority to sell; the first sale of three hundred acres by Armstead to Hundley; the second sale of four hundred and fifty acres; the visit of Hundley to Mississippi, and his return with the information that all the land was sold, so that he could not obtain his seven hundred and fifty acres; that he alleged the land was worth much more than he had given for it to Armstead, and that he would hold Armstead accountable to him for the difference. That the complainant, supposing this information to be correct, and being unwilling to engage in a law suit with Hundley, was induced to enter into another agreement, whereby, among other things, all the former contracts between them in relation to the sale and purchase of these lands were rescinded, and the complainant agreed to pay him 575 dollars, for the supposed injuries sustained by him in not getting the land. The bill sets out the agreement of the 25th of September 1833, and states that the 250 dollars appearing in the statement which preceded the agreement, was the supposed cost of locating, &c. 1400 acres of land; and that the charge of 2000 dollars appearing in that statement, included the 575 dollars before mentioned, agreed to be paid by Armstead to Hundley upon the '-ancelment of the former contracts.

The bill further stated, that immediately after the execution of this agreement Hundley went again to Mississippi, when complainant gave him a letter to Col. Martin, explanatory of his object in giving the "'order upon him, and the nature and character of the several rights and transfers held by himself and his sons; which letter was suppressed by Hundley. That Hundley, after remaining some time in Mississippi upon this visit, again returned, and informed the complainant that Col. Martin declined paying the said order, or any part thereof, until the relinquishments which, by the last agree•ment, Armstéad had bound himself to obtain, were procured, and that he then became quite clamorous on the subject, and urged, with much apparent earnestness, the propriety of immediately procuring them; giving, however, no other reason for his solicitude on the subject, than that they were essential to enable him to collect the proceeds of the sales, and that Col. Martin would not pay the order without them. That the complainant, having the utmost confidence in Hundley, and believing that what he stated was true, immediately procured the relinquishments to be made. And it being suggested that it would probably be more convenient to all concerned that Hundley, who was going to Mississippi, should have the legal title, it was agreed that conveyances should be made directly to him; and for the purpose of enabling Hundley to collect the proceeds of the land in the hands of Col. Martin or in the hands of the purchasers from him, and for no other whatsoever, the conveyances were, by the directions of the complainant, made directly to Hundley. These conveyances, duly authenticated, were delivered by the complainant to Hundley, and with these conveyances in his possession he went to Mississippi and returned again in 1835.

The bill further stated, that upon Hundley’s return on this occasion, he pretended that he had been successful in obtaining from Colonel Martin the proceeds of said land, in pursuance of the order of the 25th of September 1833; but insisted that com*35plainant should pay interest upon the order from its date until the time *of his settlement with Colonel Martin, which the complainant, in order to avoid a law suit, agreed to do, and did pay him the sum of 200 dollars at different times, on account thereof.

The bill charged, that from the commencement to the conclusion of his transactions aforesaid with Hundley, the complainant was entirely ignorant of the true character of his rights, or the real condition of the land aforesaid. He knew he was interested in several shares therein, but as to its value, or whether it had been sold, he was wholly uninformed, except as he had received information from Hundley, who he supposed . was familiar with it. That thinking the demand of interest as aforesaid unreasonable, and believing from some circumstances that had come to his knowledge that there was some mistake about the matter, he wrote to Colonel Martin for information on the subject, whose letter in reply gave him the first information that but a small portion of said land had been really sold.

The bill further charges that Hundley had made an improper use of the conveyances made to him; that when he received said conveyances he knew that the whole of the land had not been sold. That by suppressing complainant’s letter to Col. Martin he had deceived him; and had thus obtained from him, not only the proportion of money in Martin’s hands due to complainant, but also 857 acres of land, as Armstead’s proportion of the land which remained unsold.

The prayer of the bill was, that Hundley might be compelled to reconvey to the complainant the 857 acres of land, and deliver him possession thereof, or that the value thereof might be ascertained and the same decreed to him; and for general relief.

Hundley answered the bill. The points on which the parties were at issue were, that Hundley insisted that by the contract of September 1833, it was the intention *of the parties that there should be an absolute sale of the whole of Armstead’s interest in the land; and that the form of the contract was adopted because, as Hundley had actually purchased of Kent sixteen hundred acres of land, and had given for the purchase money (except 800 dollars,) his bonds, at one and two years, the order of Armstead on Colonel Martin would enable Hundley to pay pro tanto the purchase money; and that being paid, he would receive a deed from Kent, his grantor, Kent receiving a deed from Col. Martin. That the precise interest of Armstead could not then be ascertained, because the cost of location, &c., was uncertain, and the intentions of the several legatees were unknown; and therefore the agreement was, that a deficiency under 2800 dollars, or an excess over that sum, should be the subject of an after settlement.

Hundley further stated, that on his return to Virginia in the fall of 1834, he called on Armstead, and shewed him Col. Martin’s letter of the 5th of April 1834, and informed him, that before leaving Mississippi he had seen M’Craven, who would not take,the land; and that the probability was, that Kent’s contract, spoken of in Col. Martin’s, letter, would not be confirmed; and that in that event he, Hundley, would, on his next visit to Mississippi, buy all the remaining lands from Col. Martin. And that he then disclosed to Armstead the real condition of said land, so far as he knew it himself.

He further stated, that it then being pretty well ascertained that Kent and M’Craven would not take the lands, so that Kent could not convey to him the sixteen hundred acres for which he had contracted, he requested Armstead to carry out the true meaning and intent of the contract of the 25th of September 1833, by causing deeds in fee simple to be made to him for the fourteen hundred acres of land; to which Armstead *readily consented, and procured the conveyances to " be made.

He further stated, that he settled with Col. Martin, and received the money and land to which he was entitled under his contract with Armstead. That he then made a statement of his transactions with complainant, charging him according to the principles of the statement of the 25th of September 1833, on which account there was a balance in his favour of about 275 dollars, of which complainant had paid at different times about 200 dollars.

He denied that it was his purpose to surrender his rights under the contracts made in 1828 and 1831, for the seven hundred and fifty acres of land as such; but said that these contracts became part of the large contract for fourteen hundred acres of the 25th of September 1833; but were in no otherwise rescinded or intended to be rescinded. He denied that the deeds were made for the sole purpose of enabling him to collect more readily the proceeds of the land from Col. Martin or the purchasers, or for any other such purpose, but that they were made for the sole purpose of giving to him a fee simple absolute title to the land. And he said that the imputation that he had suppressed any letter delivered to him bv the complainant for Col. Martin, was a wilful and malicious slander.

Evidence was introduced by the defendant to prove repeated declarations of Arm-stead that he had sold his Mississippi lands to Hundley. Armstead also introduced a witness, who stated that he was present when the contract of the 25th of September 1833 was made; that a compromise of the previous contracts between Armstead and Hundley was made, by which Armstead bought back all the titles he had before sold to Hundley, for which he gave him upwards of 500 dollars profit; and that Hundley agreed to take an order on Col. Martin for the amount, or so much as would pay the claim Hundley had against Arm-stead.

*The witness further stated that he *36■understood from the parties, that the •deeds were to be made to Hundley to enable him to collect the purchase money from •Col. Martin.

There was no proof that Hundley had informed Armstead in the fall of 1834, that the sale to Kent would probably be rescinded; nor. was there any evidence that Armstead had any information as to the condition of the lands, or the settlement with or sale to Hundley by Martin, until he received it from Col. Martin, by a letter bearing date the 15th of March 1837, in reply- to one from Armstead written in the preceding January; and from that letter the probable inference is, that it gave to Armstead the first information he received on the subject.

In April 1842. the cause came on to be finally heard, when the Court below dismissed the bill, with costs. Whereupon Armstead applied to this Court for an appeal, which was allowed.

Garland, for the appellant.

Cooke, for the appellee.

*

He had been counsel in the Court below.

†

See monographic *note*on “Laches” appended to Peers v. Barnett, 12 Gratt. 410.

AGEEN; J.,

delivered the opinion of the Court.

The Court is of. opinion, that the contract between the parties dated the 25th of September 1833, and made an exhibit in the cause, was entered into under a mutual mistake, produced by the belief of the appellee that Col. William Martin, the agent of the legatees of Gen. Joseph Martin, had sold the lands in Mississippi to a certain Elias D. Kent, and therefore that it was not in the power of the appellant to comply' with the agreements previously made with the appellee to convey to him the 750 acres which had theretofore been sold to him.

That under the influence of said mistake, produced by the representations of the appellee, who then believed *the same to be true, the appellant was induced to enter into the arrangement of the 25th September 1833, whereby compensation was to be allowed for the supposed loss of the land previously sold; and the appellee was invested with the power to settle with and receive from said Col. William Martin the proceeds arising from the sale of so much of said land as the appellant was entitled to.

That in entering into said arrangement, it appears from the terms of the agreement and of the order in favour of the appellee upon the said Col. William Martin, the parties did not contemplate a sale of the land. They both then supposed the land had been disposed of; and there would have been no motive on the part of the appellant to enter into the arrangement whereby compensation was made for the loss of the land, if at the time he had been apprised of the fact that there remained unsold a sufficient quantity of the land to which he was entitled to satisfy his original contract of sale.

The deeds subsequently executed by the appellant and others at his instance, vesting the legal title to the land in the appellee, were made by the appellant and others at his instance, to enable the appellee more easily to settle with and receive the proceeds of the sale from the agent, and on the part of the appellant to carry out and fulfil the arrangement of the 25th September 1833.

The appellee, when he received information that the contract alleged to have been entered into between Elias D. Kent and the agent, for the purchase of all the lands, had not been consummated, and that there remained a sufficient quantity of land unsold to which the appellant was entitled to satisfy his original purchase, was bound in good faith to communicate the fact to the appellant; but the suppression of that fact, and his treating the contract of the 25th September *1833 as an absolute sale by the Armsteads to the appellee of their whole interest in the lands, was a fraud against which the appellant is entitled to be relieved.

The Court is further of opinion, that as the power of the agent at the time of the sale of the lands to the appellee was unrevoked, and his sale therefore valid; and as it furthermore appears that the lands were sold at their fair value and were purchased in connection with other lands of legatees, no partition having been made, and, as it is alleged, have been improved by the appellee ; and the contract having moreover been fully executed by absolute conveyances to the appellee; and the appellant himself having been guilty of laches in failing to make proper enquiries, and in the prompt assertion of his claim; and the lands being situated in another State, the proper measure of relief under the circumstances of this case, will be compensation for the injury instead of a rescission of the contract.

In ascertaining the amount of such compensation, the appellant should be debited with the original price of the 750 acres of land, 1412 dollars 62 cents, (with interest thereon from the times of his sales to the appellee up to the date of the settlement made by the appellee with the agent,) and also with 693 dollars 54 cents, the amount of the debts in the account, with interest on the principal to the same period.

And the appellee should be debited with the sum received of the agent, Col. William Martin, on account of the lands previously sold; also with the price agreed upon between him and said agent for the proportion of the appellant in his own right, and in right of other legatees to which he was entitled, in the lands not previously sold by the agent, and then purchased of the agent by the appellee; also with 143 dollars 54 cents cash, paid on the 25th September 1833, the balance then ascertained, with interest to the date of the settlement with the agent, and also with the sum of 200 *dollars, alleged, in the bill and admitted in the answer to have been paid to the appellee by the appellant, for interest on the amount of the order upon the agent, from the date thereof to' the time of settlement with the agent, and deducting the amount so debited to the appellant from *37the amount so debited to the appellee, the balance so ascertained to be due from the appellee will be the sum for which, with interest, the appellant should have a decree. And leave should be reserved to the appellant to apply to the Court for a rescission of the contract, and a decree for the reconveyance of the land conveyed to the appellee, over and above the 750 acres, in the event of the personal decree for the balance, ascertained as aforesaid, proving unavailing.

The Court is therefore of opinion that the decree dismissing the bill is erroneous; and the same is reversed with costs; and the cause is remanded, to be proceeded in according to the principles of this opinion, in order to a final decree.