Case Name: PILE vs. SHANNON, MERIWETHER and DANIEL
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1806-05-22
Citations: 1 Hard. 53
Docket Number: 
Parties: PILE vs. SHANNON, MERIWETHER and DANIEL.
Judges: 
Reporter: Kentucky Reports
Volume: 3
Pages: 53–58

Head Matter:
PILE vs. SHANNON, MERIWETHER and DANIEL.
May 22nd.
bond,” with * bli8er day of confiderati™ of the a%n-himofinequ?-then un-wh.icl> íle„had-.¡gamft ami fee Mirrifmvs Clay fcji.
The vendees of land agreed to rife the title: this conftrued to mean, again]! conpa'mg ¡¡ties only, and that the vendor was ar.fvverable for a defect occafioned hv a lafentequity to part t._ /--u ' J; * • r
ON the 16th day of August 1796, Daniel sold 1000 acres of land to Pile and Reuben and John M’Andree for IS 500, to be paid in horses, It was agreed that if in two years any “prior or better claim” to the land should be discovered, that Daniel should re-pay the consideration. If none was discovered in that time, the purchasers were to risk the title,
On the 20th of March 1798, Daniel and wife conveyed the land by deed with special warranty-to the chasers. On the same day they executed to Daniel their release on said deed, as follo ws : “ We hereby acknowledge ourselves fully s-atisned and contented with the title and claim that the within named Thomas Dani el has conveyed to us for the lands mentioned in the whhin conveyance ; have only purchased his right thereto, and accordingly by these presents do exonerate the said Thomas Daniei and his heirs, from and after the 16th day of August next, from all claim and demand, actions and causes of action that may accrue between us and our heirs, in case the said land, or any part thereof, shall be recovered from us, our heirs or assigns, by any person or persons having a better title to the same than what the said Thomas Daniel has conveyed to us by the, within instrument.”
Daniel having received a part of the horses called for in the bond of Pile and the M’Andrees, transfered the balance to Meriwether. At Meriwether’s request that bond was, in 1798, taken in by Pile, and a bond given by Pile to Meriwether for a negro of a certain description, in lieu of the balance.
Meriwether assigned this latter bond to Shannon; and it not being complied with, Shannon commenced suit and recovered judgment thereon.
Subsequent to the giving this bond, Lynch setup a claim to half of the land, by contract under John May, the locator. In consequence of which Pile filed his bill against Daniel, Meriwether and Shannon, for and injunction, and for general relief.
Daniel in his answer relied upon the release. Meri-wether and Shannon further insisted that if there was any equity against Daniel, it could not extend to them. There was no charge of intentional fraud, relative to any part of the transaction, made by either of the parties. The general court dismissed the bill with costs.
Pile brought his writ of error ; and at the spring term 1805, the following opinion and decree was delivered :— From the exhibits and proofs in this cause, it appears that Charles Lynch claims one half of the land sold by the defendant, Thomas Daniel, to the complainant and John and Reuben M’Andree ; and should that claim be sustained, that they will lose so much of the land. This claim set up by Lynch, is for the locator’s proportion of that land, and not an original adverse right derived under the land laws of Virginia. It is not pretended by the defendant, Daniel, that before or at the time of making the contract, any information was given to the complainant and his partners, that the land was subject to * claim of this kind ; and therefore the release filed and relied on by him, cannot avail him in his defencs ; for it is rationally to be inferred that the intention of that release, notwithstanding the general wording thereof, was to relinquish all claim, demand, actions, or causes of action, in case the land should be taken or recovered by any person having a better adverse claim, originating under the land laws of V irginia. And if Daniel, at the time of the sale, knew of the locator’s claim, and did not disclose it, he was guilty of a fraud, against which, the complainant ought to be relieved. And if it was not then known, there has been a misrepresentation ; and although it may have arisen from the want of knowledge, the injury to the complainant may be as great as if it had arisen from fraud. If then, the bond which is the* foundation of this controversy, had remained in Daniel’s hands, there is no doubt he could not in equity and justice, have enforced the payment. What difference will the assignment and exchange of the bond make in this equity. If the bond given by Pile to Daniel, and assigned to Meriwether, had been sued on, from the repeated and established decisions in courts of equity, the assignee is subjected to all the equity which was attached to the assignor. And the exchange or removal of the bond to Meriwether, which was done at his request, can make no difference ; for otherwise, it would be countenancing a mere shift and contrivance to evade the equity to which Pile was entitled.
June 4⅛.
The decree of the general court, in dissolving the injunction and dismissing the complainant’s bill, is, for the foregoing reasons, deemed erroneous, and must be reversed with costs. The cause to be remanded to the general court, with directions to reinstate the suit and continue the injunction, until the claim of Lynch can be investigated upon a bill of interpleader, which the said court shall direct to he filed by the proper parties, or direct such other mode of proceeding as may be deemed proper to ascertain and determine the said Lynch’s right.
A re-hearing was granted, and the cause again argued, and the following opinion delivered this term
Same point decided in the cafe of Bibb Prather and Smiley and More-tead, fpringterm jSoa, Pr. Dec. 158, See alfo Waters vs. Mattingly, ante 5, in a nose, and M'Forrin vs. Taylor, 3 Cranch, 270.

Opinion:
By the Court.
In the re-hearing in this cause, it is_alleged that the former decision of this court is in part founded on a privity between Meriwether, Shafts non and Daniel, when no privity exists — that sas no pri-vity exists, any appearance .of equity against Daniel, ought not to extend to Meriwether or his assignee, unless coupled with fraud, ¡and no fraud is alleged or proved against M eriwether — that if the obligation assigned •by Daniel to Meriwether had continued to exist, and the ©bligor had. given any new assurances to Meriwether* they would have been obligatory; and that the cancelling ihe old, and giving a new obligation to a new .person* payable at a different time, and for a different subject, is ntronger than assumpsit or assurance, and is binding both ⅛ law and equity, unless fraud had been used in its procurement, and that none was alleged or proved.
1st. As to the privity — The act of assembly concerning the assignment of bonds and other writings, provides* that they shall carry with them into the hands of assignees, all the equity to which they were subject in the hands .of the obligees. The provisions of this act are not more extensive than the principles established in. courts of chancery in England, and Virginia, and in this court. Nor can it be discovered that the former decision of this court in this case, is predicated upon any privity between the parties, other than this act, and those principles have been recognized as arising from the assignment ; for none other is expressed or fairly to be implied.
2ndly. That the equity against Daniel ought not to extend to Meriwether or his assignee, unless coupled with fraud. The act and principles above alluded to* in express words extend this equity to Meriwether, as the assignee of Daniel, also to Shannon, as the assignee of Meriwether. This would not be controverted if the old bond had been assigned and not cancelled, and the new one had never been given. This leads to the consideration whether,
3dly. " if the obligation assigned by Daniel to Meri-wether had continued to exist, and the obligor had given any new assurances to Meriwether, they would .have been obligatory, and the cancelling the old* and giving a new obligation to a new person, payable at a different time, and for a new subject, is stronger than assumpsit or assurance, and is binding, both in law and equity, un* less fraud had been used in its procurements"
If the obligor hkd induced Meriwether to take an as-aignmentof the obligation, by assuring him of its justness, and promising to pay it, he would have been bound by Ids assurances and promises, notwithstanding any equity which might have been attached to it, and then it would come within the case decided by this court, Short vs. Jackson, Young, and others — also withirt. the princi-pies of the cases Buckner & al. vs. Smith & al. — and Holmes vs. Smock, 1 Wash. 299, 389. As no such assurances or promises exist in this case, it does not come within those principles;
But it is contended that the cancelling the old, and giving the new bond, &c. is stronger than if. the obligor had made assurances and given promises of payment ; that it is a new contract, with a new person, payable at a different time, and for a new subject;
How can this be considered as a new contract ? There has been no new consideration : the obligor, at the request of the assignee, takes up the old, and gives a new bond, Upon the same and no other consideration than what induced him to give the old; The new grew out of the old. If the first was tainted in the hands of Meri-wether, sd must be the second, it being bottomed on the first; for no subsequent ratification can make a contract valid Avhich was bottomed in fraud, the party being ignorant of the fraud, 2 Vez. 283-4.
Nor can Meriwether be considered as a new party; for by the assignment he stood in the shoes of Daniel, and subject to all the equity to which Daniel was subject; Suppose the new hond had beert given to Daniel, and the old one cancelled, would it have been a new contract and with a new party ? Would the obligor's equity have been lost ? Certainly not; The law considers Meriwether as Daniel. If the doctrine contended for in this case should be admitted as correct, it would open a door to devices, shifts, arid contrivances, to evade the provisions of the act of assembly, and overturn well settled and established principles in equity; An insolvent obligee who had practised a fraud upon an obligor, by assigning the obligation collusivelv, the assignee, by specious pretences of giving longer day for payment, and if, for money, changing- the subject for property, or charig-ing the species of property, where property was payable^ might avail himself of his fraud, however gross;
The case of Duncan vs. Snell ( ), has béen relied t>ft in this case. Never were too cases more unlike. Snell had lost a sum of money at gaining with Saunders*— drew an order for the amount in goods, on Duncan, who was a merchant, which was paid — Snell refused to pay Duncan for the goods delivered on this order — he was sued, and a judgment at law was obtained by Duncan, Without any defence being made by Snell; who filed his bill, stating that the order was given for a gaming consideration, without alleging that Duncan was a party to the gaming; and obtained an injunction, which was made perpetual by the inferior court. This court reversed the decree, as it did not appear from the allegations or proofs that Duncan was a party or privy to the gaming ; or that the money was lent or advanced for that purpose : the proofs were to the contrary.
Upon this review of the case, the former decree of this court is to remain unaltered and confirmed.
Pr. Dec. 224.
(a) Pr. Dec. 375.
Seethe comments on this decifioain íheSafe of Morrifon vs. Clay, poft.