Moreland v. Metz

Green, Judge: The demurrer to the bill in this cause is based on two grounds. One ground is that one of the plaintiffs, the Mor-gantown Bank, is a defunct corporation and cannot therefore sue; and that the Second National Bank ot Morgan-town, another eo-plaintiff, being a National bank cannot succeed to those rights of the Morgantown Bank, which savor of or pertain to the matter;' and the rights set up in the plaintiffs’ bill, which are averred to have passed from the Morgantown Bank to the Second National Bank of Morgan-town, are not of the character of rights which can be succeeded to under the law. There is nothing in this demurrer. Chapter 53, sec. 59 of the Code of West Virginia, p. 403, expressly provides, that suits may be brought after the dissolution of a corporation or after its expiration, so far as shall be necessary for prosecuting and protecting its rights, just as such suit might bo brought before the dissolution or expiration of the corporation. The other ground of demurrer is .equally without foundation. What the bill alleged had passed from the Morgantown Bank to the Second National Bank of Morgantown was this debt due from the defendant, Minerva -T. Metz, secured by the vendor’s lion on the Marsh farm. Upon the re-organization of the Morgantown Bank whereby it became a National bank under the name of the Second National Bank of Morgantown, under sec. 5154, title 62 of Revised Statutes of the United States, 2d Ed., 1878, — 130 — the National Bank of Morgantown unquestionably became entitled to this debt. When a State bank is re-organized and becomes a National bank, its identity is not thereby destroyed. It remains substantially the same institution under another name. The transition does not disturb the relation of either the stockholders or officers of the corporation; nor does it enlarge or diminish the assets of the instition. These all remain the same under the National as they were under the State organization. The bank neither loses any of its assets nor escapes any of its liabilities by the change. The change is a transition and not a new creation. Coffee v. The National Bank of the State of Missouri, 46 Mo. R. (5 Post) 140; also Grocers National Bank v. Clark, 48 Barb. 26, and Thorpe v. Wegefarth, 56 Pa. St. 82. The circuit court therefore properly overruled the demurrer to the bill of the plaintiffs by its decree of September 6, 1882. But it erred in this decree in referring the cause to a commissioner to ascertain the liens on this Marsh farm and their priorities after publication as provided by sec. 7 of ch. 126 of Acts of 1882, p. 369. This section appiles to a creditors’ bill brought by one or more judgment-creditors to enforce their liens against the debtor’s real estate. It has no application to a suit brought by a vendor against his vendee to enforce his vendor’s lien, which is still to be conducted as it always was, it being- unnecessary to make other lien-creditors parties to the suit either formally or informally, and of course unnecessary to have them convened before a commissioner, and their liens and priorities ascertained. Such proceeding is not only unnecessary, but improper. Cunningham v. Hedrick et al., 23 W. Va. 579. If such an order of reference or any other order of reference had been proper in this cause, it ought not to have been made in this decree of September 6, 1882, because by this decree the defendants demurrer to the plaintiffs’ bill had been overruled, and leave was given to the defendants to file their answer in thirty days: and till the expiration of this thirty days no decree of reference could properly be made. (Neely v. Jones, 16 W. Va. 626, point 7 of syl., also p. 649, and Peck v. Chambers, 8 W. Va. 210, 215.) But the appellants cannot complain in this Court — 131 — of this order of reference being improperly made. The commissioner reported that there were no liens on this Marsh farm except the plaintiffs’ vendor’s lien. The amount of it was undisputed, being admitted in the answer. So though this report was formally confirmed, it had no effect Avhatever in the cause. There was an unnecessary cost of a]few dollars incurred -by this reference to the commissioner but no delay, and from it no prejudice or benefit arose to either party. It must therefore be simply regarded as a useless proceeding. In the decree of December 21, 1882, a credit was given by the court on this acknowledged vendor’s lien of eighty-two dollars and three cents, the amount of taxes for the year 1880 which had been paid by- the purchaser or for her on this Marsh farm and the rent of the farm from March, 1880, to March, 1881, when the vendee obtained possession. The amount of taxes for 1880 so paid were exactly ascertained by the tax receipts referred to in this decree to be .thirty-two dollars and three cents; and fifty dollars was therefore the credit given for the rent. There can be no question that the credit of thirty-two dollars and three cents for the taxes for the year 1880 was properly chargeable to the trustee of the bank and not to Minerva J. Metz, as the sale of this farm and deed to her was not made till March 26, 1880; and it is equally clear, that the defendant had no claim to be credited with the taxes on this farm for 1881 paid by her or for her, as it is obvious, that she was properly chargeable with these taxes for 1881, and the bank was under no obligation to pay them. The only question of controversy is: Did the circuit court properly confirm the balance of the credit to the rent of the land for the year that Minerva J. Metz could not get possession of it after the deed was made, or should the court have gone further and allowed her the whole or any part of the damages beyond this rent, which she claimed to have suffered from her being unable to get possession ? As in the judgment oí some of the courts in the United States the decision of this question as to the true measure of damages in such a case would depend upon whether the veiidor had acted fraudulently in the sale and deceived and misled the — 132 — vendor, I propose before taking up and considering the proper measure of damages in this case to consider, whether it be true, as charged by the defendant, that the bank induced the appellants, the defendants below, to purchase this farm by false and fraudulent misrepresentations of facts which would naturally affect that estimation of its value and also by the false and fraudulent representation that they could get immediate possession as soon as the sale was completed, and that the purchase was made because of these false and fraudulent representations by the bank, they being relied upon by the appellants as true. In the first place, there can be no question but that this contract for the sale of the Marsh farm was made by Emrod Tennant, a director of the bank, with Elias Metz, the husband of Minerva J. Metz, to whom the deed was made at the request of her husband. It is true that Elias Metz represents that the contract was made by him and the cashier of the bank; but this is denied both by the cashier of the bank and by Emrod Tennant. And that they state the truth in this respect is clearly shown by the statement of the transaction on the record-books of the director}’ made at the time, of which the following is a copy : “At a special meeting of the directors of the bank — present, George W. John, W. B. Long, Emrod Tennant, Joseph Moreland and William 0. McGrew — Mr. Emrod Tennant reported that Elias Metz and Solomon II. Shriver were in town to arrange their affairs. “He further reported that he had arranged with Elias Metz for and in behalf of his wife, Minerva J. Metz, to sell her the Marsh farm of two hundred and ninety-five acres (belonging to the bank), lying on Cheat river, in Tucker county, West Virginia, for the sum'of two thousand throe hundred and forty-two dollars, provided he could arrange his affairs with Solomon II. Shriver regarding the farm now in his possession and occupied by him, Metz, but owned by said Shriver. “And it being further reported to this board that said — 133 — Sliriver and Metz liad arranged their difficulty, by which agreement said Sliriver agrees with said Metz to sell and convey to the said Second bíational Bank of Morgantown the farm of two hundred and forty-four acres now occupied by said Metz, lying in Battelle district, in Monongalia county, West Virginia, upon the payment by said bank of the sum of three thousand Jive hundred dollars to him, the said Sliriver and to allow the additional sum of one thousand six hundred and forty-two dollars in part payment for the said Marsh’farm, and the residue of the purchase money for said Marsh.farm, seven hundred dollars, to be paid in seven annual payments of one hundred dollars each, with interest from date, to secure the payments of which a vendor’s lien is to be retained in the deed, and with the further understanding that said Metz was to remove from and vacate the said farm of two hundred and forty-four acres which he now occupies by the 1st ot April next, and have all growing crops ot grain, &e., in consideration whereof, he, said Metz, was allowed one hundred and forty-two dollars in the above described contract, — on motion of W. 0. McGrew, the propositions as above set forth be and they are hereby accepted, and that the cashier of the bank be and he is hereby directed to pay to said Solomon II. Sliriver the said sum of three thousand five hundred dollars upon his delivering to this bank a deed for said land. “And on motion, it was further ordered that Joseph More-land prepare the necessary deed, to convey the said Marsh farm to said Minerva J. Metz upon the terms above named^ and therein provide for the lien as set forth above, and that the president and cashier of this bank join said Joseph Moreland, trustee for this bank, in 'the conveyance ot this said land. “And be it further resolved that Mr. Emrod Tennant be and lie is hereby requested to take charge of the'Metz (Sliriver) farm and manage it to the interest of this bank. “Geo. W. John, President. “J. H. Hoffman, Cashier. Tennant states, that as agent of the bank, he made this contract with Elias Metz as agent of his wife; and he states — 134 — what took place, when this contract was made or before it was entered into between him and Metz, both acting as agents. He says: “When Metz and I were talking about said exchange of lands, which Metz was urging on me, I told said MetzT had never seen the Marsh farm, and he had better go and see it before we traded. Metz said he would not go to see it; that he reckoned it would be worth seven hundred dollars any how, and he would rather the bank would have his Monongalia farm than Sol. Shriver. * * * * Metz, wanted to retain the wheat-crop growing on the Monongalia farm, but agreed to give it up to the bank.” Ilis report to the barde shows that the bank agreed to allow him one hundred and forty-two dollars for the wheat. Elias Metz in his deposition says: “The testimony of Emrod Ten-nant in regard to me telling him if the place was worth seven hundred dollars I would rather give my money to the Morgantown Bank than to Mr. S. H. Shriver is false. 1 did tell him if the place was was worth three thousand three hundred dollars, as the cashier represented, ' I would not lose much by the trade. The said trade was never made until the board of directors of said, bank was in session, and was not made with Mr. Tennant at all.” This is all he states about what took place between him and Emrod Tennant. It seems to me obvious, that there is much more probability, that the statement of Emrod Tennant is true than this version of the affair by Elias Metz. It strikes me that there is a good deal of prevarication in his statement. Of course, as ho says, said trade was never made until the board of directors of said bank was in sessiou. Of course this is literally true, for the trade was not completed and binding till the board of directors confirmed the contract; and some terms of the contract were then, I presume from the entry on the bank record-book, added that day. But as the report of Tennant acted on by the bank on that day on its face shows, that the price of the Marsh farm had been definitely agreed upon as two thousand three hundred and forty-two dollar's by Tennant on the part of the bank andjElias Metz, it looks much like a prevarication on the part of Elias Metz, when he says: “The trade was not made with Mr. Tennant at all.” The material question in the case, whether Elias Metz agreed to pay two thousand — 135 — three hundred and forty-two dollars, for the farm because of fraudulent misrepresentations made of its value by the agent of the bank, with whom he contracted so far as to agree upon this as the price of this farm, of course depends on what representations have been made by this agent. Although Elias Metz represents 'the cashier of the bank as the agent of the hank in this matter, it is obvious, that this is not the truth, and even Elias Metz does not pretend that the statement of Tennant, that he told him he had never seen the farm, and that he, Tennant, told Metz he had better go and see it before he traded, is untrue. Nor does he pretend, that, when this price of two thousand three hundred and forty-two dollars was agreed between them as the price of the Marsh farm, any statements whatever were made about its value by Tennant, who professed to have no knowledge of it. Nor does he pretend that there was any stipulation, when possession was to be delivered, or that he told* Tenant, that he wanted possession that spring. And while in the formal terms of the agreement, as it appears on the record-hook of the directors of the bank, it appears, that - express stipulation was made, that the Monongalia farm was to be put in possession of the bank by April 1, 1880, nothing was said about when Metz was to get possession of the Marsh farm. It is obvious from the testimony that Metz was indifferent about when he should get possession and remained thus indifferent for more than a month, he not then desiring or expecting to move to the Marsh farm dui-ing the year 1880. Metz says : “ The cashier represented to me, that the said Marsh farm was sold to one Jenkins for three thousand three hundred dollars, and that it was worth that money, that the dwelling-house and barn were the best in Tucker county, all of which I found to he untrue. lie represented to me the farm was free from all incumbrance and I could move on it at any time. Upon these representations I moved my family and property to said farm and found it occupied bj^ the tenant of the Morgantown Bank.” I have no doubt, that exaggerated statements of the value of this farm were made by the cashier of the bank; but they had no influence on the price Metz agreed to pay for it, for he had agreed to the — 136 — price before those statements were made. Nor is it true that lie moved his family to the farm under the belief that he could then get full possession of it, for it is distinctly proven that lie had been there and found it occupied by a tenant of the bank for another year. This was nearly a month before he moved liis family there and at a time when he did not wish to do so dnriug -the year 1880. I have no doubt lie was told by the cashier that he could get possession of the farm at any time, but I do not believe that this was told him till after the completion of this contract and the making of the deed to his wife. Prior to that he had made no inquiry on the subject, because he did not expect to occupy the farm during the year 1880. And when the cashier made this statement, he believed that the farm was vacant, and that Metz could take possession of it at any time not knowing it had been rented for another year. The cashier states that •lie had nothing to do in the preliminary matters of the trade, it having been made on the part of the bank by Tennant, one of the directors. Later, when it does not appear but most probably about the time the deed was made,' the cashier admits that he told Metz that Marsh had sold the farm to Jenkins for three thousand two hundred dollars or three thousand three hundred dollars, and he says he had so heard from the parties; but he referred Metz to Marsh, who then lived in Morgantown in Monongalia county, where Metz could see him any day. lie states that there was no understanding before the contract was made or when completed as to the time when Metz was to get possession. He states that Metz did not make up his mind definitely to move to the farm till more than a month after the deed was made to his wife, and the letters written at the time show that this is true, and also that the cashier, as he states, did not know that the farm had been rented out for a year till informed of it by Metz, who had been there not to take possession of it but merely to look at it. The statement of the price paid by Jenkins to Marsh for this farm (three thousand two hundred dollars) ivas a very natural mistake for the cashier of the bank to make, as it was the price stated on the face of the deed; but it seems that this included some six hundred and fifty dollars of personal property so that the real price — 137 — was only two thousand six hundred and fifty dollars. It is believed however for the reasons we have stated to have had no influence on Metz in agreeing to pay two thousand three hundred and forty-two dollars for the laud. There is no evidence tending to show, that it was not worth the full price he paid for it. One witness proves, that after the deed was made to Minerva J. Metz, the cashier of the bank sent word to Elias Metz, that he could take possession whenever he pleased. That is doubtless true; for the cashier for sometime after the making .of the deed so thought, as he proves, and as is shown by letters written at the time. My conclusion from the evidence is, that there were no fraudulent misrepresentations made by the bank or its agents to induce Metz or his wife to purchase or trade for this Marsh farm, and that when this trade was made, and the deed was delivered to her, neither she nor her husband expected to move to the farm during the year 1880, and that the getting the prompt possession of this farm constituted no part of the inducement to purchase and that there was no fraud or bad faith shown by the bank or its agents in any part of this transaction, though there were some mistakes-made by the cashier and especially with reference to the question as to the occupancy of .the farm at the time of the sale. But no mistake ever made by him influenced Metz in the purchase. The question of controversy in this case must be decided on the rights of the parties under the covenant of special warranty contained in the deed to Minerva J. Metz, and the fact, that she could not get possession of the farm which she had bought for a year or was influenced by any misconduct or fraud on the part of the vendor,'the bank. Stripped of the extraneous circumstances there is, I think, no difficulty in determining the true measure of damages resulting from the breach of a covenant of general or special warranty of title. The special warranty of title in this case was broken by. the renting of this land for a year-and the failure to place the vendee in possession, though nothing was said about the possession being delivered in the deed or in the contract on which it was based. If a covenant of warranty is broken in "Virginia or West Virginia, the measure of damages, when the land is entirely lost to the vendee, — 138 — is the purchase money with interest from the date of the actual eviction, the costs incurred in defending the title and such damages as the vendee may have paid or may he shown to be clearly liable to pay the person who evicted him. 'But if the actual value of the land at the time of the sale be proven to be greater than the purchase-money with interest, &e., perhaps this actual value might be recovered in lieu of the usual measure of recovery. (Stout v. Jackson, 2 Rand. 132; Threlkild’s Adm’r v. Fitzhugh’s Ex’r, 2 Leigh 451; Jackson v. Turner, 5 Leigh 119; Haffey’s Heirs v. Birchetts, 11 Leigh 83. The question of controversy in Virginia was formerly, whether the value of the land at the time of the sale or the value of the land at the time of eviction was the true basis for the measure of damages,, when there had been a breach of a covenant of warranty. Bnt it was finally settled in Virginia as in this State, that the basis of the measure of damages should be the value of the land at the time of the sale and not at the time of the eviction, because the covenant of warranty boina: a substitute for the old warrantia charke contained generally in feoffments, the measure of recovery should follow that of the old action of warrantia chariot, which was the value of the land at the time of the sale and not at the time of the eviction. Like views have been adopted in almost all the States of the Union aud in the Supreme Court of the United States. But in a few States a different view has been taken; and the covenant of warranty and other real covenants similar to it have been regarded very much like other personal covenants, and their courts have declined to adopt as a basis for the measure of damages for the breach of covenants of warranty and other like real covenants the rule laid down in the old action of warrantia charta’, but instead thereof have taken as the basis of the measure of damages for the breach of such covenants very much the measure of damages controlling in ordinary personal covenants, that is, instead of putting the vendee in the position, which he would have been in had he never entered into the contract, restoring to him his purchase-money, interest and costs of defending the title, they adopting the general rule put the vendee in the condition, in which he would have been, if the ven139 dee’s covenant bad never been broken. This is done by adopting as the basis of damages the value of the land including all improvements upon it at the time of the eviction of the vendee. These views have been taken by the courts of Connecticut, Vermont, Maine and Massachusetts and also by the courts of Louisiana which followed the civil law and of course would not be influenced by the rule in the old common-law action of warrantia charter. When the grantor .is turned out of possession or kept out of possession by a stranger having a right of possession for an unexpired term in the premises conveyed the covenant of warranty is broken, and the measure of damages in such case is the annual value of the land for the time the vendee is thus kept out of possession together with the costs recovered against the grantor, when he was ejected, and his costs and counsel’s fees in defending his possession against such stranger, if it were a case of eviction for a term of years, or some specific time. (Ricker v. Snyder, 9 Wend. 416.) If a grantor cannot give possession of an estate, which he has conveyed with covenants of general warranty and against in-cumbrances, because of a life-estate in the land conveyed being in a stranger, this is a breach of the warranty, and the measure of the damages is the value of the estate for the time during which the grantee has been or will be kept out of it. See Christey v. Lucy Ogle’s Ex’or, 33 Ill. R. 295.) These eases seem to have reached a conclusion, which is but a sequence of the doctrine laid down, as we have seen, in nearly all the States of the TJnion, that the measure of damages in case of a breach of a covenant of warranty is the value of the land at the time of the sale. If the eviction is but temporary, as for a number of years or for the life ol .some third party, the measure of damages should be the value of the land for the term of years or time that the vendee is evicted, that is, the rental value of the land for the time the vendee is deprived of the possession with of course the costs, which he had to pay, or which he incurred if he was evicted by suit. When however the rule for the measure of damages, which has been adopted in ease of permanent eviction, is different from the general rule prevailing in Virginia and nearly all — 140 — the other States, as for instance in Massachusetts, they have stated also a different rule, when the eviction is for years. The rule stated in Earle v. Kingsbury, 8 Cush. 206, is, that the vendee should recover a just compensation for the real injury resulting to him hy such eviction for a term of years. It is admitted that this is a very vague and uncertain rule and in its application it is admitted, that one of the modes, in which this just compensation might he ascertained, would ho hy giving the annual value; and it was suggested,' that this might he found to be the just ride in the case then before the court. In Mills v. Catlin, 22 Vt. 107, though the general rule for the measure of damages, when there is á total eviction of the grantee in Vormout, is the same as in Massachusetts, yet where the incumbrance was a life-estate, the measure of damages adopted in that case was the value of the life-estate; hut the court seemed to think it quite questionable, whether this was the correct measure of damages. As in Massachusetts this measure of damages in such a case does not seem consistent with their general rule, which puts the measure of damages in breaches of warranty and of other like real covenants on the same basis as ordinary, personal covenants. But even in these States, where the eviction is not in fee but for a time only, there is obviously a disposition to adopt the value of the estate for the time, for which the grantee is evicted, as the best because the most certain measure of damages. In Rhode Island although there is a disposition to adopt the Massachusetts rule for measuring damages in a breach of a covenant of warranty by an eviction in fee, yet in Porter v. Bradley et ux., 7 R. I. 538, the rule for the measure of damages, where the eviction was for the unexpired term of a lease, was the fair rental value of the land to the expiration of the lease. And in view of our law granting as the measure of damages, where there is a breach of a warranty by an eviction in fee of the whole land, nothing but the value of the land at the time of the sale and interest from time of eviction and costs and our refusal to allow as the measure of damages the value of the land at the time of the eviction or anything for improvements, which the grantee may have put on the land and lost, or anything for the loss of his bar — 141 — gain, if it wore a good one, or anything for any sort of inconvenience, to which he may have been subjected by being evicted from his home, it would seem clear, that, when the eviction is for a year, as in this case, the only damages, which can be allowed the vendee, is the rental value for such year. The rent actually paid for the year to the grantor or to any one else would ho prima facie, this fair rental value tor the year; but it might he proven that it was less than the fair rental value; and if this was shown, this fair rental value should he allowed and not the actual rent paid that year. (Bolling v. Lersner, 26 Gratt. 36.) In this case the court allowed to the grantee as damages for the breach oí the covenant of warranty fifty dollars, which was proven to he the actual rent paid for the land for the year during which the grantee did not have the possession of it, and there was no proof that it was not the fair rental value for that year. The court properly adopted it as such fair rental value and as the true measure of the vendee’s charges to be abated from the purchase-money unpaid. There was of course no necessity to make any order of reference to ascertain this damage for it was simply a year’s rent of the farm, which could readily he determined by the court without the aid of a commissioner’s report. If the fraud as is alleged by tlie vendor induced the vendee to purchase the farm with the assurance that she could get possession of it immediately, and if she purchased, because ■ she wanted a home, into which she could move with her family, and the grantor knew when ho sold the land to her that he could not give possession of it for a year, and fraudulently concealed this from her, though lie know that this was a very strong reason with her for purchasing this land, then in certain of the States a different measure of damages from this mere rental value of the land for a year would he adopted. But nowhere even under such circumstances, as I have imagined to exist, could she have had any such damages as she claims. To allow such claims for damages in any case would he to violate fundamental principles of law by giving remote and speculative damages, which could not he said properly to have been the result of the misconduct and fraud of the vendor had he been guilty of such conduct. But most of the — 142 — damages claimed by the defendant bad no connection as cause, and effect with the supposed misconduct and fraud of the vendor. The decree of the circuit court of December 21, 1882, must be affirmed, except so far as it directs a sale of the Marsh farm on the terms and credits prescribed in that decree, which have become improper by reason of the notes of the defendant Minerva J. Mete, which are liens on the lands, having become due and payable, since the said decree was rendered. And thus it has become necessary and proper to modify this portion of said decree, and for this purpose the cause must be remanded to the circuit court of Tucker county with instructions to enter a decree for the sale of this Marsh farm in such part thereof, as is necessary to pay the lien declared and established upon it by said decree of December 21, 1882, and naming a commissioner or commissioners to make such sale, fixing in the decree such terms and conditions of the sale, as to the said circuit court may seem just and proper, and otherwise to proceed with this cause according to the principles governing courts of equity; and the appellants must pay to the appellees their costs in this Court expended and thirty dollars damages. Affirmed in Pakt. Remanded.