Case Name: Wellford & als. v. Chancellor
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1848-04
Citations: 5 Gratt. 39
Docket Number: 
Parties: Wellford & als. v. Chancellor.
Judges: 
Reporter: Virginia Reports
Volume: 46
Pages: 39–50

Head Matter:
Richmond.
Wellford & als. v. Chancellor.
1. An agent authorized to purchase land for his principals, purchases in his own name, and takes a conveyance to himself. He is bound to convey the land to his principals, upon their complying with the terms of his contract of pinchase, in the same plight and condition in which, the same was conveyed to him.
2. If the agent has disposed of a part of the land purchased, so that the principals cannot obtain that part, the agent will be held to account for the same at its true value at the time when it should have been conveyed to his principals; to be ascertained by a jury or a commissioner, as the parties may elect, or as the Court, on their failure to do so, may direct.
3. It is competent for a principal and agent to compromise a controversy between them; and such compromise, if fairly made with a full knowledge of all the facts, and where no undue influence is exerted, or improper advantage of the situation of the principal is taken, is binding on the principal, though he may by such compromise, yield a portion of his rights. But if the agent misrepresents a material fact, the compromise will be vacated; and this especially, where advantage is taken of the circumstances of the principal.
This was a bill by John S. Wellford, Edward H. Carmichael, William Crump and others, against Sanford Chancellor, to enjoin him from proceeding to enforce the payment of a bond for 1124 dollars 50 cents, executed by the plaintiffs to the defendant. The bill charged that the plaintiffs, in November 1836, purchased a tract of land in the county of Spottsylvania, for the purpose of engaging extensively in the manufacture of iron. That they were desirous to purchase other lands in the neighbourhood for the same purpose ; and among others, a large tract owned by Colin Auld of Alexandria. That they were about to send one of their number to Alexandria to purchase the land, when the defendant informed them that he would start the next day for the west, would pass through Alexandria, and would see Mr. Auld on business of his own, and would purchase the land for them. That the plaintiffs authorized him to purchase the land for them at 1 dollar 50 cents or 2 dollars per acre. That defendant wrote to one of the plaintiffs from Baltimore, that he had no doubt he had purchased Auld’s land at 1 dollar 50 cents per acre, though the contract was not then formally closed. That two of the plaintiffs being a short time afterwards in Alexandria, ascertained from Auld, that defendant had purchased the land; and the plaintiffs being then satisfied, proceeded with their arrangements, and fixed the site of their furnace on this land of Auld. That defendant returned home in January, and soon afterwards obtained from Auld a conveyance to himself of the land. That having obtained the conveyance, he refused to convey to the plaintiffs the whole of the tract of land ; but insisted on retaining a tract of two hundred and eight acres, called M’Whirl's lease, and lands adjoining, as his compensation for making the purchase, and also retaining one hundred acres of a tract of 378 acres, called the Handkerchief, which the plaintiffs alleged was especially valuable to them on account of the timber upon it; he conveying to them twenty-six acres, which he had entered as vacant land. That the plaintiffs remonstrated, but he refused to yield, and called upon them to accept at once his proposition, with the threat that unless it was accepted at once, he would not let them have any part of the land. That as it would have been ruinous to the plaintiffs to be kept out of possession of the land, they were obliged to yield to the claims of the defendant, and they accordingly paid him the sum of 1124 dollars 50 cents, and executed their bond for the other moiety of the purchase money, payable in one year; and received from him a conveyance of the land he purchased from Auld, minus the two tracts of 208 acres and 100 acres, and also a conveyance of the tract of 26 acres, which he had entered as vacant land. That one pretence on which he refused to give to the plaintiffs the benefit of the purchase from Auld, was that Auld had stated that he had promised to let William Lornian of Baltimore have a part of the tract, and that the defendant must purchase upon the condition of doing the same. This the bill charged was wholly unfounded. The prayer of the bill was for an injunction; that the compromise which the plaintiffs had been compelled to make might be set aside, and that all the land purchased by the defendant from Auld might be conveyed to the plaintiffs; or if the defendant had disabled himself from conveying any part, that they might be compensated therefor, and for general relief.
Chancellor answered the bill. He stated that he had been requested by the plaintiffs, and had undertaken to purchase Auld's land for them. He stated that he passed through Alexandria on his way to the west and saw Auld, who said that he would take 1 dollar SO cents per acre for all his land in Bpottsylvania, one half in cash, and the balance in twelve months. “ But that he was under a promise to give Mr. Borman the refusal of that part of his land which lies between the old road and the turnpike. In reply the defendant observed that he would pledge his word that in the event of his making the purchase, Mr. Borman should still have the refusal of that section;” and that he would inform him from Baltimore whether he would take the land ; which he did. That on his return from the west he passed through Alexandria and saw Auld, when it was agreed between them that Auld should send defendant a deed for the land, on the receipt of which the defendant was to forward one moiety of the purchase money, and his note for the other moiety. That shortly after his return home he received the deed, and paid one moiety of the purchase money, and gave his note for the other moiety. That some days after his return home defendant saw the plaintiff Wellford, and communicated to him the terms on which he had made the purchase from Auld, and the promise he had come under to Auld, by which Lorman retained the refusal of the land lying between the old road and the turnpike. On hearing of this reservation, Wellford said he would have nothing to do with the purchase ; that if he could not get all the land he did not want any of it. That a few days after this interview with Wellford, defendant met with the plaintiffs Carmichael and Crump in Fredericksburg, when he stated to them the terms of his contract with Auld and the stipulation in favour of Lorman ; and after adverting to the course pursued by Wellford in refusing to take the purchase, observed that unless they came to some understanding on the subject before he left town, he should not hold himself bound to let them have the land. That to end the matter the defendant would', upon his own responsibility, undertake to limit the reservation to one hundred acres nearest the tavern at Chancellorsville. That this as to quantity seemed to be satisfactory to Carmichael and Crump. They contended, however, that Lorman ought to pay more than 1 dollar 50 cents per acre. That this question was at the suggestion of the defendant, left to the arbitrament of two gentlemen then present, who fixed the price which Lorman was to pay at 1 dollar 50 cents per acre. That at this interview Carmichael asked the defendant what they should give him for his trouble, to which he answered he thought they ought to give him the lot called M ’ Whirl’s lease; but if they thought that too much, he would charge nothing; that in truth he made no charge, and they were welcome to his services. That Carmichael said they wished to compensate him for his services liberally, but as wood was their object in the purchase, they did not wish to part with land. That defendant then stated that there was not more than from twenty to thirty acres in wood of original growth on M’ Whirl’s lease, and that defendant would give them an entry of about twenty-six acres of wood land, which was more convenient to them. That Carmichael retired to consult with the plaintiff Wellford, and on his return expressed his entire satisfaction with the arrangement. That a memorandum of the agreement was then drawn up by Carmichael, and signed by the parties present ; a surveyor who was present was directed to lay off the one hundred acres for Lorman, according to certain metes and bounds then agreed upon; and a short time afterwards defendant conveyed the land to the plaintiffs according to the terms of the agreement.
The defendant further alleges that after he made the purchase, it was his intention and expectation to transfer the benefit of the purchase to the plaintiffs on the identical terms on which he had contracted with Avid. That with that view he communicated to Wellford the terms of the purchase, who repudiated it as before stated. That in defendant’s interview with Carmichael and Crump, he offered to''convey the lands to the plaintiffs on the same terms on which they were conveyed to him, leaving it with them to arrange with Lorman in regard to the reservation made for him of the option of taking the land between the two roads. He denies that he at any time claimed to retain any portion of the land for his services; and he avers that he was distinctly understood by Carmichael and Crump in the interview with them, as submitting the matter of compensation to the voluntary action of the plaintiffs.
It appeared from the evidence in the cause, that from a large portion of the land purchased of Auld, the original growth of wood had been cut, and the land was of little value: that part between the old road and the turnpike, which was called the Handkerchief, was well timbered. It ran up near to Chancellor’s tavern, which ■was owned by Lorman, whose niece the defendant had married. This land was estimated by some witnesses as low as 1 dollar 50 cents and 2 dollars per acre, and by others as high as six and ten dollars.
In relation to the reservation which the defendant alleged that Auld had made in favour of Lorman, Auld, who was examined as a witness, stated that he made no such condition ; that he might have mentioned to defendant that his brother George Chancellor deceased, was at one time anxious to purchase the land, though he had no recollection of mentioning it. That he was not, at the time of the sale to defendant, under any obligation, legal or moral, to give the refusal of that laud to any one. That he had never come under any promise to Lorman to give him the refusal of the land called the Handkerchief i but that he did make a verbal promise to George Chancellor to give him the refusal, and he would have complied with it if he had insisted on it, and had lived. Witness understood George Chancellor to want the land for himself, that it was suitable property to be attached to the tavern lot, and was in fact worth more to him than any other person; and he expected Lorman to aid him in paying for it. The promise was made to George Chancellor some five or six years before his death.
During the examination of Auld, two letters were shewn to him, which he identified. The first was from the defendant to Auld, dated the 23d February 1838, in which the writer asks Auld if he has not a distinct recollection that when he purchased the land, Auld stated to him that he had promised to give Lorman the refusal of that part of the land lying between the old road and the turnpike; and that at the same time the defendant gave his word that if he purchased, Lorman should still have the refusal of it. The second is Auld’s answer. He says: “ I have a distinct recollection of your brother mentioning to me that he wished to have the refusal of that part of the land lying between the old road and the turnpike. And I think he further gave me to understand that he wished it for Mr. Lorman. I have no doubt but I mentioned to you at the time of your pur chase those facts; but I cannot recollect what you said in reply; although Í have little doubt that it was sufficient to satisfy me, and absolve me from my verbal promise to your brother, to comply with his wishes on equal terms with others.”
When these letters were shewn to the witness, he said: I was surprised at Mr. Chancellor's letter, and in answering it, I endeavoured to soften down what I said, so as not to hurt his feelings. I did not understand the motive of the letter; nor had I any recollection of having spoken to him about Mr. Lorman. I did not wish to hurt his feelings, and wrote, under that wish, what, now that I examine that letter particularly, appears to me more unguarded than it should have been. I certainly do not recollect of having spoken to him about Mr. Lorman, when he made proposals for buying the land. His letter from Baltimore does not speak of it, nor does my letter to Louisville; (both of which were produced and filed with the deposition, and are as the witness reports them,) and at the time of writing the letter, I did not think I was under any obligation to give Mr. Lorman the refusal of any part of the land. Nor did I think it necessary that Mr. Chancellor should have said any thing at the time of bargaining, to absolve me from such an obligation. I knew too much of law to consider the verbal promise which I had given to George Chancellor deceased, obligatory in law. And 1 considered that George Chancellor dec’d, had wanted the land for himself, and that he expected aid from Mr. Lorman as his friend, in making the purchase, had he made it.
Lorman was examined as a witness by the defendant. He says, that he never had, himself, any correspondence with Mr. Auld. in relation to his purchase of the land between the old road and the turnpike. The correspondence was carried on between the late George Chancellor and Mr. Auld. Witness’ instructions to George Chancellor were, that when the said property was sold, to obtain, if he could, for witness, as much on the turnpike road as would protect the tavern. His object was not to buy a large quantity of land on account of the land itself, but merely as a protection to the tavern. But if it was necessary, and could not be done without, then to buy a large quantity. When witness went to Virginia, George Chancellor informed him that he had seen or written to Mr. Auld, and that he expected to know when the land would be sold, and that he would secure such a portion of it as witness wanted. That the defendant, as he passed through Baltimore in November 1836, informed witness that he was authorized by the owners of the furnace, Mr. Wellford and others, to purchase the tract of land near Chancellorsville, of Mr. Auld, when witness informed him that he had always understood that George Chancellor had secured the refusal for witness; and witness requested the defendant to secure as much land as would protect the tavern, pursuant to what witness always had in contemplation.
The statements of the answer in relation to the interview between the defendant and the plaintiffs Carmichael and Crump, were sustained by the evidence of the witnesses present; though that evidence, as well as the answer, shews that as to the compensation, the only alternatives offered to the appellants, were to allow Chancellor to retain the tract of 208 acres, called M' Whirl's lease, or to take the whole, subject to the reservation in favour of Lorman.
The terms of the compromise were, that Lorman should have the one hundred acres between the old road and the turnpike, at 1 dollar 50 cents per acre, and that Chancellor should retain the tract of 208 acres, called M' Whirl's lease, and should convey his 26 acre survey to the appellants: and the conveyances were made accordingly.
The cause came on to be heard in October 1841, when the Court below dissolved the injunction and dismissed the bill. And thereupon the plaintiffs applied to this Court for an appeal, which was allowed.
Steward and Morson, for the appellants.
Patton, for the appellee.

Opinion:
Allen, J.
delivered the opinion of the Court.
The Court is of opinion, that as it is admitted by the answer, and proved in the cause, that the appellee, in contracting with Colin Auld for the purchase of the lands described in the deed from said Auld to the appellee, dated the 10th of February 1837, contracted not for his own benefit, but as the agent of the appellants; the appellee, after the said land was conveyed to him by the said Auld, was bound to convey the same to the appellants, upon their complying with the terms of his contract with said Auld, in the same plight and condition in which the same was conveyed to him. The Court is further of opinion, that the appellee was not warranted in refusing to convey the whole of said land to the appellants in the condition the same had been conveyed to him by said Auld, on account of the alleged promise made by him to said Auld at the time of the said contract, to give to said Lorman the refusal of that parcel of the land which lies between the old road and the turnpike, as in the answer is averred ; because, without deciding how far it would have been competent for the appellee to set up and prove by parol testimony, that such promise and reservation were made, this Court is of opinion that the affirmative allegation of the answer in respect to this matter, treating the same as responsive to the bill, and giving the appellee the benefit of the answer as evidence in his behalf, is outweighed and disproved by the positive evidence of the said Auld, the representation made by the appellee to one of his principals, in his letter of the 10th November 1836, his silence in respect to any such reservation in his interview with said Lorman, shortly after such contract, as is to be inferred from his failure to prove any such communication by said Lorman, though he examined him as a witness, and from the other corroborating circumstances disclosed by the conduct of the appellee in regard to this matter, when an arrangement was entered into between the parties, at a subsequent period.
The Court is further of opinion, that although it is as competent for a principal and agent, as for other parties, to compromise a controversy between them, and such compromise, if fairly made with a full knowledge of all the facts, and where no undue influence is exerted, or improper advantage of the situation of the principal is taken, is binding on the principal, though he may by such compromise yield a portion of his rights, the evidence in this case shews that the parties here did not deal on equal terms. The principals entered into said compromise under the impression that such reservation in favour of said Lorman was in fact made, as asserted by the appellee, when from the evidence now in the record, it distinctly appears no such reservation was made. This mistake of the appellants in regard to this important fact, caused by the false representations of the appellee, is of itself sufficient to relieve the appellants from the obligation of the contract of compromise. And their claim to be so relieved is made stronger by the circumstances in which the parties stood with respect to each other and the subject of controversy; the appellants having made arrangements to commence an expensive manufactory in expectation of acquiring this property, an expectation founded upon the representations of the appellee, and the appellee holding the legal title and insisting upon his right to retain the property unless his terms were acceded to.
The Court is further of opinion, that it is proved by the testimony in the record that the reservation in the contract of compromise of the 208 acres, known as M'Whirl's lease, for the compensation of the appellee for his services, was not, as is alleged, made gratuitously by the appellants, but was exacted from them by the appellee, when ignorant of the facts as aforesaid; it being fully proved that the only alternatives offered the appellants, were to allow the appellee to retain said tract known as M'Whirl's lease, or to take the whole land, subject to the reservation falsely alleged to have been made in favour of said Lorman; and that the appellants, under this state of facts, consented that said land, known as M'Whirl's lease, might be retained by the appellee, on his agreeing to convey to them the entry which he owned, of 26 acres, and reducing the reservation in favour of Lorman to 100 acres.
The Court is therefore of opinion, that the appellants were entitled to a decree setting aside and cancelling said agreement of compromise; and upon their reconveying to said appellee the said 26 acres, to a decree against the appellee for said land described in the deed from the said appellee and wife to the appellants, of the 7th day of March 1837, as the lot lying on Mott's run, supposed to contain 208 acres or thereabouts, including the lease now occupied by M'Whirl, adjoining the lands of Philip Edge, Going More and others, together with the rents and profits thereof from the said 7th March 1837; and are bound to account for the rents and profits of the said 26 acres. And as it appears said 100 acres reserved for the said Lorman have been conveyed to him, and it is not alleged he was a purchaser with notice of the equity of the appellants, and he is no party to the suit, the appellants are entitled to recover from the appellee the difference between the 1 dollar 50 cents per acre, the price at which the appellee accounted for said 100 acres, by a credit given therefor, and the true value of said 100 acres at the date of said alleged compromise; that difference being the proper measure of compensation to the appellants for the loss of the 100 acres.
The Court is therefore of opinion, that the decree of said Circuit Court dismissing the bill was erroneous, and it is reversed with costs. And the cause is remanded, to make the heirs and representatives of any of the parties who have died, parties to the cause, and with instructions to enter a decree directing the appellants and the heirs of such as are dead, to convey to the appellee and his heirs the said 26 acre entry, with special warranty; and that the appellee shall convey to said appellants and their heirs the said lot lying on Mott's run, supposed to contain 208 acres or thereabouts, as described in the said deed of the 7th March 1837, and awarding proper process to place the parties in possession of said lands respectively. And that an account be directed to ascertain the rents and profits of said lands respectively, and that the relative value of the said 100 acres, as aforesaid, be ascertained by a jury or commissioners, as the parties may elect, or the Court, if they fail to do so, may direct; and that the sums so ascertained and fixed as the proper measure of compensation to the appellants for rents and profits, and the loss of said 100 acres, after deducting therefrom the rents and profits of said 26 acres, be set off against the bond in the proceedings mentioned; and for a final decree between the parties according to the principles of this opinion and decree.
Baldwin, J. dissented.