Coughran v. Bigelow

Eugene W. Coughran and Nathan H. Cottrell filed their amended complaint in the district court of the First judicial district of the territory of Utah on December 15, 1891, against Henry C. Bigelow and H. P. Henderson, showing that on April 26, 1890, E. A. Reed and H. H. Henderson, as principals, and the defendants as sureties, executed and delivered to the plaintiffs a bond conditioned for the performance of a contract on the part of the said principals to convey to the plaintiffs an interest in certain lands situate in Weber county, in the said territory; alleging that the said principals had failed to perform the contract, and seeking, on account of such alleged breach of the condition of the bond, to recover the amount of the penalty thereof from the defendants.

The bond was as follows:

'Know all men by these presents: That we, E. A. Reed and H. H. Henderson, principals, and H. Bigelow and H. P. Henderson, as sureties, all of the county of Weber, territory of Utah, are held and firmly bound unto Eugene W. Coughran and Nathan H. Cottrell, of Sioux Falls, South Dakota, in the sum of five thousand dollars, lawful money of the United States, to be paid to the said Eugene W. Coughran and Nathan W. Cottrell, their executors, administrators, or assigns, for which payment, well and truly to be made, we bind ourselves, we and each of ourselves, executors and administrators, jointly and severally, firmly by these presents.

'Sealed with our seals, and dated this 26th day of April, A. D. 1890.

'The condition of the above obligation is such that the above-bounden E. A. Reed and H. H. Henderson, on or before the 1st day of October next, or in case of their death before that time, if the heirs of the said E. A. Reed and H. H. Henderson, within three months after their decease, shall and do upon the reasonable request of the said Eugene W. Coughran and Nathan H. Cottrell, their heirs or assigns, make, execute, and deliver, or cause so to be made, a good and sufficient warranty deed, in fee simple, free from all incumbrance, and with the usual covenants of warranty, of the following described premises, to wit: An undivided one-tenth of section fifteen (15), in township six (6) north, of range one (1) west, Salt Lake meridian. Weber county, Utah Territory, except a part of the southwest quarter section of said section 15, described as follows: Beginning at the southeast corner of said southwest quarter section, and running thence west 20 rods, thence north 30 rods, thence west 20 rods, thence north 40 rods, thence east 40 rods, thence south 70 rods to the place of beginning: provided the said Eugene W. Coughran and Nathan H. Cottrell comply with their part of the contract this day made and delivered to them by the said E. A. Reed and H. H. Henderson, and a copy of which is hereto attached,-then the above obligation to be void; else to remain in full force and virtue.

H. H. Henderson.

'E. A. Reed.

'H. C. Bigelow.

'H. P. Henderson.

'Signed in presence of

'Geo. H. Burgitt.'

Attached to the bond was the instrument following:

'Ogden, April 26th, 1890.

'Received of Eugene W. Coughran and Nathan H. Cottrell thirty-three hundred and thirty-three dollars as part purchase price of an undivided one-tenth part of the following described lands, viz.: Section fifteen (15), in township six (6) north, of range one (1) west, Salt Lake meridian, Weber county, Utah Territory, except a part of the southwest quarter section of said section fifteen, described as follows: Beginning at the southeast corner of said southwest quarter section, and running thence west twenty rods, thence north thirty rods, thence west twenty rods, thence north forty rods, thence east forty rods, thence south seventy rods, to the place of beginning.

'The full purchase price being ten thousand dollars, to be paid as follows: $3,334 on October 1st, 1890, and $3,333 on April 1st, 1891, with interest at eight per cent. per annum on deferred payment from October 1st, 1890 But in case said land is sold before October 1st, 1890, then the last two payments are to bear interest from April 1st, 1890, to the date of sale. And in case any payments are not made as above provided, the amount paid herein is forfeited, and this receipt is from that time void and inoperative; and when the payment [sic] are made as above provided the land to be conveyed to said Eugene W. Coughran and Nathan H. Cottrell, or their assigns, with good title free from incumbrances.

'H. H. Henderson.

'E. A. Reed.

'Millie G. Reed.

'Signed in presence of

'Geo. H. Burgitt.'

The plaintiffs alleged that they made the first and second payments provided for in the contract in accordance with the terms thereof; that on or about November 1, 1890, upon the request of the plaintiffs, E. A. Reed and H. H. Henderson tendered them a deed for the said interest in the lands; that thereupon they examined the title to the property, found the same to be defective, and, because of the defects therein, refused to accept the deed; and that as to these transactions between the parties to the contract the defendants had due notice. It was alleged that Reed and H. H. Henderson had never been able, and were not able at the time the complaint was filed, to convey a fee simple and unincumbered title to the one-tenth interest in the lands described in the bond and contract; that for a long time prior to April 12, 1890, the property was owned in fee simple by the Union Pacific Railway Company, which company, by deed of that date, conveyed all of the E. 1/2 and the N. 1/2 of N. W. 1/4 of said section 15 to one James Taylor; that in and by that deed the company reserved to itself 'the exclusive right to prospect for coal and other minerals within and underlying said land, and mine and remove the same if found,' and also 'the right of way over and across said lands, and space necessary for the conduct of said business thereon, without charge or liability therefor'; that the title of Reed and H. H. Henderson to the said interest was obtained by deed to them from Taylor, dated October 17, 1890, which deed was made subject to the said mining rights reserved to the company; that the lands were situated in a mining district, and that the said reservation rendered the title to the lands doubtful and unmarketable, and greatly diminished their probable value; that, furthermore, the property was subject to a mortgage. The plaintiffs allege that they had performed all the conditions of the contract upon their part, except to pay the sum of $3,333 on April 1, 1891, and that neither Reed and H. H. Henderson nor the defendants had ever tendered to them any other or different title than the alleged defective one aforesaid, or had ever refunded to them the amount of the first two payments. They asked for judgment in the sum of $5,000.

The defendants, on January 8, 1892, filed separate answers, wherein they denied that the said second payment made by the plaintiffs was made in accordance with the provisions of the contract, or that the title to the property was defective, or that the refusal of the plaintiffs to accept the deed tendered to them by Reed and H. H. Henderson was on account of any defect in the title, or that the lands were mineral lands, or that a reservation of mineral rights therein would be an incumbrance upon the title thereto. Further answering, they alleged that shortly before the execution of the said bond the plaintiffs had entered into negotiations with Reed and H. H. Henderson for the purchase of the said interest in the lands; that at that time Reed and H. H. Henderson held the said interest under executory contracts for the conveyance thereof to them; that Reed and H. H. Henderson fully informed the plaintiffs of the character of their title; that the said contract was then entered into, and the plaintiffs, in receiving the same, required some guaranty that Reed and H. H. Henderson would perfect their rights under the said executory contracts by April 1, 1891,-that being the agreed time, as alleged, at which the plaintiffs would be entitled to a conveyance from Reed and H. H. Henderson; that thereupon it was agreed and understood that the defendants, as sureties, would execute a bond in the sum of $5,000, with Reed and H. H. Henderson as principals, guarantying that on or before April. 1, 1891, Reed and H. H. Henderson should execute and deliver a deed as stipulated in the contract, provided that the plaintiffs should perform all the conditions of the contract upon their part; that the bond was prepared and attached to the contract, and was signed by Reed and H. H. Henderson and by the defendants; that by inadvertence in the preparation of the bond the time therein stated for the delivery of the deed was October 1, 1890, instead of April 1, 1891; that, therefore, the bond was not in accordance with the agreement and understanding of the parties thereto.

The case came on for trial in the said court November 29, 1892, before the court and a jury. Thereupon the plaintiffs introduced evidence tending to show, amoung other things: That the said lands were, on November 1, 1890, subject to a mortgage for the sum of $9,000, recorded July 2, 1889. That on October 17, 1890, the defendants placed in the custody of the Ogden State Bank a deed bearing that date, whereby Reed and H. H. Henderson conveyed to the plaintiffs the said interest in the said lands, subject to one-tenth of the said mortgage; two notes, unsigned, dated October 17, 1890, payable to Reed and H. H. Henderson on April 1, 1890, for the aggregate amount of $2,433, being the amount of the last payment under the said contract, less $900, or one-tenth of the amount of the said mortgage; and an unexecuted mortgage of the interest in the lands described in the contract, in favor of Reed and H. H. Henderson. That the bank was instructed to deliver the deed to the plaintiffs when they should have executed the notes and the last-mentioned mortgage, and should have returned them to the bank to be delivered by it to Reed and H. H. Henderson. That subsequently to October 8, 1890, and not later than the 12th of that month, the bank received the sum of $3,334 from the plaintiffs, with instructions to pay the same to Reed and H. H. Henderson, and did pay the same to them some time within the month following. It was further shown that Reed and H. H. Henderson derived their title to the property from James Taylor, by deed dated October 17, 1890. That Taylor's title was obtained from the said railway company; and that the deed from the company to Taylor as well as the deed of Taylor to Reed and H. H. Henderson contained the reservation of mineral rights as set out in the complaint.

After all the evidence on behalf of the plaintiffs had been introduced, the defendants moved for a nonsuit. The motion was granted, and judgment was entered in favor of the defendants. The plaintiffs then appealed to the supreme court of the territory of Utah, where the judgment of the said district court was affirmed. Coughran v. Bigelow, 9 Utah, 260, 34 Pac. 51. Thereupon they sued out a writ of error from this court.

C. W. Bennett, for plaintiffs in error.

Arthur Brown, for defendants in error.

Mr. Justice SHIRAS, after stating the facts in the foregoing language, delivered the opinion of the court.