Opinion
05-20-1824
Moore and M'Clung v. Fitzwater.[*]
Wickham, for the appellants. Nicholas, for the appellee.
This was an appeal from the Greenbrier Chancery Court.
The controversy related to a body of land on Gauley river, which Moore and M'Clung had located. Fitzwater located land on the north-western side of the same river, supposing that Moore and M'Clung's patent only extended to the south side of the river; and supposing himself to be lawfully entitled to the land on the northwestern side, sold one hundred acres of it. Moore and M'Clung afterwards claimed the said land on the north-western side, as being included in their patent; and made a proposition of compromise to Fitzwater; and the latter agreed to purchase the 400 acres in question, at a dollar per acre. Accordingly, he executed penal bills, for $ 400; $ 300 of which, he afterwards paid; and the remaining $ 100 were recovered by judgment.
The bill was filed by Fitzwater to enjoin the $ 100, last mentioned, and to recover back the $ 300 that he had actually paid; alledging, that Moore and M'Clung had no title to the lands on the north side of Gauley river: that his ignorance was imposed upon by Moore, to induce him to make the compromise: that he was at a considerable distance from any counsel whom he could consult; and that the compromise was obtained by fraud and imposition.
The injunction was granted.
Moore answered, stating, that the land in question was included within his grant: that he sold 400 acres, as above alledged, to the complainant; and paid one-fourth of the money received to M'Clung, who was entitled to that proportion for locating and directing the survey. He denies any unfair dealing, or attempt to deceive the complainant, or any other person; and affirms that he sold the land for less than half its value.
M'Clung answered to the same effect.
Depositions were taken; and, at the hearing, the Chancellor decreed, that the injunction should be made perpetual: that the contract entered into between the parties should be cancelled; and that Moore should pay to the complainant $ 300, with interest, & c.
The defendants appealed.
Wickham, for the appellants.
Nicholas, for the appellee.
OPINION
Cabell, Judge [*]
The Chancellor seems, from his written opinion in the record, to have thought this case distinguishable from the case of a doubtful title. But, we see no ground for such an opinion. The contract between the parties is not to be considered less a compromise, because it terminated in an agreement, that one party should convey the land with warranty, in consideration of money to be paid by the other; for, that frequently occurs in compromises of contests about the title to lands. Moore and M'Clung claimed the land by patent, bearing date in 1795, and Fitzwater claimed it by patent, dated in 1800. He had sold a part thereof, as his own, for valuable consideration; and was in actual adverse possession of the residue, at the time of the contract. Although it is alledged by Fitzwater, that he was induced to enter into the contract by fraudulent misrepresentations on the part of Moore and M'Clung, and by an ignorance of his own rights, yet, the allegation as to the fraud is denied by the answer, and unsupported by testimony; and it is apparent, that every important fact, necessary to the formation of a correct opinion as to the title, was known to both parties, at the time of entering into the contract; and Fitzwater, with this full knowledge, agreed to purchase the land from Moore and M'Clung, at a price far less than its value. He subsequently expressed to several persons, his satisfaction at the bargain he had made; and, about two years afterwards, he paid to Moore three-fourths of the purchase money, without objection. Whether the title, at the time of the contract, really was in the appellants or the appellee, we do not deem it material to enquire. It is sufficient that the parties themselves have settled the question; and as there was no fraud, or undue advantage, we would not now disturb it, even if assured that Moore and M'Clung had no title. In the case of Penn v. Lord Baltimore, 1 Ves. 444, Lord Hardwicke said: " The settlement of boundaries, and peace and quiet, is a mutual consideration on each side, and in all cases, make a good consideration to support a suit in this Court, for settling boundaries." In Cann v. Cann, 1 P. Wms. 727, Lord Macclesfield said: " Where two parties are contending before this Court, and one releases his pretensions to the other, there can be no color to set aside this compromise, because the man that made it had a right; for, by the same reason, there can be no such thing as compromising a suit, nor room for any accommodation; every release supposes the party making it to have a right, but this can be no reason for its being set aside; for, then every release might be avoided." In Stapleton v. Stapleton, 1 Atk. 10, Lord Hardwicke said: " An agreement entered into, upon the supposition of a right, or of a doubtful right, though it after comes out that the right was on the other side, shall be binding, and the right shall not prevail against the agreement of the parties; for, the right must always be on one side or the other; and, therefore, the compromise of a doubtful right is a sufficient foundation for an agreement." That the question of the right in this case was doubtful, the Chancellor himself has declared; and we think with him, that it is also a difficult one.
The decree is to be reversed, and the cause remanded to the Court of Chancery, where the injunction is to be dissolved, so soon as a deed for the land shall be made, pursuant to the contract between the appellants and the appellee.
COMPROMISE.
I. Who May Make.
A. General Rule.
B. Rule Applied.
II. Requisites.
A. The Consideration.
B. Sufficiency of Consideration.
1. General Rule.
2. Rule Applied.
III. Construction.
IV. Effect of the Agreement.
A. Conclusiveness.
1. Rule.
2. Rule Illustrated.
a. In Particular Cases.
(1) As Estoppel.
V. Impeachment.
VI. The Pleading.
VII. The Evidence.
VIII. The Trial.
IX. Compounding Offenses.
Cross References to Monographic Notes.
Assignments for the Benefit of Creditors, appended to French v. Townes, 10 Gratt. 513.
Consideration, appended to Jones v. Obenchain, 10 Gratt. 259.
I. WHO MAY MAKE.
A. GENERAL RULE. --The law presumes that every one is capable to contract, and exemption from liability for want of such capacity must be strictly established. Mere weakness of mind, lack of skill, or immaturity of judgment in one who has attained full age, are not of themselves sufficient to invalidate a contract, though taken in connection with other evidence, showing a lack of consent and an intention of the other party to overreach, they may have that effect. C. & O. Ry. Co. v. Mosby, 93 Va. 93, 24 S.E. 916; Mason v. Williams, 3 Munf. 126.
B. RULE APPLIED. --A party who is improvident in making bargains, addicted to drink, and weak in understanding, may make a compromise, and such compromise will be upheld in the absence of fraud. Mason v. Williams, 3 Munf. 126.
A widow, having certain rights under the will of her deceased husband, of which she had knowledge, may enter into a compromise with reference thereto. Daniel v. Maclins, 6 Munf. 61.
II. REQUISITES.
A. THE CONSIDERATION.
Claim Must Be in Existence.--It is entirely competent for parties to compromise controversies, which appear to them to have a bona fide existence, and thus avoid the trouble and expense of a lawsuit. Mason v. Williams, 3 Munf. 126. See Billingsley v. Clelland, 41 W.Va. 234, 23 S.E. 812; Zane v. Zane, 6 Munf. 406; Moore v. Fitzwater442.
Consideration for Release of Debtor.--A creditor's agreement to release debtors on payment of less than his just demand is not binding if without consideration, particularly where debtors are not parties to the agreement and do not promise to pay the less sum for the entire demand then due and payable. Smith v. Chilton, 84 Va. 840, 6 S.E. 142. See Seymour v. Goodrich, 80 Va. 303. Code 1887, § 2858.
Accepting Sum Smaller than Debt.--While it is true that an agreement to accept a smaller sum in lieu of the liquidated and ascertained debt, made between the debtor and creditor, is nudum pactum, and not binding on the creditor, this rule does not apply where any new element enters into the agreement of compromise, such as the fixing of an earlier day for payment, or a different place is selected therefor, or where the payment is made in some other thing than that originally agreed on, or a promise by a new party to pay. Seymour v. Goodrich, 80 Va. 303.
B. SUFFICIENCY OF CONSIDERATION.
1. General Rule. --The prevention of litigation is not only a sufficient but a highly favored consideration, and no investigation into the character of the different claims surrendered will be entered into, it being sufficient if the parties at the time thought there was a doubtful question between them Jarrett v. Ludington, 9 W.Va. 333. See Zane v. Zane, 6 Munf. 406; Moore v. Fitzwater442.
2. Rule Applied.
Disputed Title. --The compromise of a disputed title is not only valuable, but a favored, consideration. Moore v. Fitzwater442. See Williams v. Lewis, 5 Leigh 686; Zane v. Zane, 6 Munf. 406.
Dismissal of Suit.--And a party litigant in a court of justice may yield everything to his adversary, upon the consideration that he put an end to the lawsuit, which is a sufficient consideration Mosby v. Leeds, 3 Call 439. So, a note given a woman in compromise of a bastardy proceeding is binding and valid, and on a sufficient consideration. Billingsley v. Clelland, 41 W.Va. 234, 23 S.E. 812.
Extending Time on Execution.--Plaintiff and defendant in an execution may enter into a valid compromise respecting it; and if, in such case, the plaintiff receives a part of the debt from defendant, for which he agrees to an extension of time to the debtor, the consideration is sufficient. Baird v. Rice, 1 Call 18.
III. CONSTRUCTION.
Compromises are favored by the law, and are construed liberally, as adjusting all matters between the parties growing out of the transaction to which it relates, and not as leaving unsettled a fraction to constitute a bone of further strife and contention, unless it be clearly shown that such fraction was not included in the adjustment. Caperton v. Caperton, 36 W.Va. 635, 15 S.E. 149; Tait v. Tait, 6 Leigh 154; Epes v. Williams, 89 Va. 794, 17 S.E. 235; C. & O. R. Co. v. Mosby, 93 Va. 93, 24 S.E. 916.
IV. EFFECT OF THE AGREEMENT.
A. CONCLUSIVENESS.
1. Rule. --Where matters have been finally settled by compromise, and the controversy closed thereby, they cannot be reopened. Pollard v. Patterson, 3 Hen. & M. 67. See Hook v. Ross, 1 Hen. & M. 310.
And so, where a compromise of a doubtful right is fairly made between parties, it is binding, and cannot be affected by any subsequent investigation or result, and this is so whether it is a compromise of a doubtful question of law or fact. Korne v. Korne, 30 W.Va. 1, 3 S.E. 17. See Calwell v. Caperton, 27 W.Va. 397; Jarrett v. Ludington, 9 W.Va. 333.
2. Rule Illustrated.
Note Given on Settlement.--Where parties compromise matters between themselves, and a note is given for the balance found due from one to the other, such note is conclusive of the correctness of the settlement, in the absence of accident, mistake or fraud in making the settlement. Mahnke v. Neale, 23 W.Va. 57; Parkersburg Nat. Bank v. Als, 5 W.Va. 50; Calwell v. Caperton, 27 W.Va. 397. See also, Meyer v. Marshall, 34 W.Va. 42, 11 S.E. 730.
When Bonds a Bar.--So, where an obligor in a bond snatched it from obligee's hands, tearing it, for which act a suit was threatened, and thereupon the obligor gave two bonds, in compromise of the trespass and for the debt in the torn bond, it was held that the last named bonds were a bar to any claim the obligee might have had under the original bond, and were valid and obligatory, though there was a mistake in the consideration upon which such original bond was based. Betts v. Cralle, 1 Munf. 238.
As Affecting Surety.--While a creditor, in order to preserve his rights against a surety, is not bound to active diligence, but may remain passive, if, however, he does not remain passive and attempts to collect the debt and compromise the same, and by such compromise puts it out of the power of the surety, against whom he subsequently proceeds, to be subrogated to the rights of the creditor and reimburse himself, if he paid the debt, the right of the creditor against the surety is destroyed. Renick v. Ludington, 14 W.Va. 367. See Baird v. Rice, 1 Call 18.
And so, A. being the judgment creditor of B, and C, his surety, issues execution thereon, which was levied on the goods of B, and A, on receiving part payment, gave B, without the assent of C, further time on the balance, and the goods were restored to B, the effect of the compromise was to discharge the judgment and the surety also. Baird v. Rice, 1 Call 18. See Renick v. Ludington, 14 W.Va. 367.
Scaling Debt.--Within six months after the act for scaling debts was passed, S recovered a judgment by default against P, and P being about to move the court to scale the debt, the parties agreed that the debts should be scaled as of the value at the date of the bond, which was one for three, and this is entered of record upon the judgment. Then P files his bill to have the debt scaled as of the date the bond fell due. It was held that the agreement between the parties was conclusive and the debt should not be further scaled. Smith v. Penn, 22 Gratt. 402.
a. In Particular Cases.
Accepting Part for Whole--General Doctrine.--The general doctrine is that an agreement to accept a part for the whole debt is nudum pactum, yet, if there enter into the agreement of compromise a new element, such as a promise to pay at an earlier day, or at a different place, or in another thing than originally stipulated for, or a promise by a new party to pay, the entire debt is satisfied. Seymour v. Goodrich, 80 Va. 303. See Smith v. Phillips, 77 Va. 548.
Contrary to Public Policy.--A note given in compromise of a bastardy proceeding is valid and cannot be avoided on the ground that the compromise of such proceeding is contrary to public policy or against public morals. Billingsley v. Clelland, 41 W.Va. 234, 23 S.E. 812
Relations of Parties.--Mere inequality in the wealth, power and influence of parties to contracts cannot affect the validity of contracts of compromise. And, where a compromise of a disputed liability for personal injuries has been deliberately entered into between the parties, it should not be set aside except upon the most satisfactory proof. C. & O. R. Co. v. Mosby, 93 Va. 93, 24 S.E. 916.
Compromise by Widow.--And where a widow was entitled, under her deceased husband's will, to make a crop on the home plantation, and to receive certain articles for her support, an agreement by her to give up her right to the crop for " as much corn and provision the ensuing winter as she and a friend should judge sufficient to settle her on a plantation directed to be purchased for her," which was given her, was a binding compromise of her rights in the crop. Daniel v. Maclins, 6 Munf. 61.
Claims Growing Out of Lands.--Articles of agreement for the sale of land are several times made between the same parties for the same tract of land, and the vendee, in possession, claims interest on all sums paid by him before a title was made to him, which claim is compromised. It is such a compromise that ought not be disturbed unless upon allegations and proof of fraud, imposition or mistake. Shugart v. Thompson, 10 Leigh 434. See also, Gold v. Marshall, 76 Va. 668.
And, where two parties claim title to land, and they compromise the dispute by one party paying a sum of money and the other conveying the land with warranty, such agreement will be binding, if there be no fraud or imposition in obtaining the agreement. Moore v. Fitzwater442. See Zane v. Zane, 6 Munf. 406; Davisson v. Ford, 23 W.Va. 617.
Effect of Note on Firm Assets.--Where, in settlement of the debts of an insolvent firm, a creditor accepts the individual note of the partner appointed to wind up its affairs, and the firm debts are secured by a trust deed to him of the assets, there is not a novation so as to release the firm assets from the debt evidenced by the note. Karn v. Blackford, 1 Va. Dec. 841.
Note Affected by Deed of Trust.--And where, after the acceptance of a note, the payee, in a composition of the creditors of the maker, agrees that the note shall be paid according to the terms of a trust deed, one who acquires the note after maturity holds the same subject to the provisions of the trust deed, though the deed was not recorded when the note was acquired. Karn v. Blackford, 1 Va. Dec. 841.
Family Agreements.--Arrangements made between members of a family to carry into effect the wills of their parents and to prevent unseemly dissensions about property between near relations, ought, on principles of public policy, to receive greater consideration from a court of equity than if the agreement sought to be enforced were between mere strangers. Lucketts v. Lucketts, 10 Leigh 50.
In Aid of Fraud.--But, while it is true that compromises are favored by the law, yet equity will not enforce a compromise to aid a fraud, even though such compromise were valid. Smith v. Chilton, 84 Va. 840, 6 S.E. 142.
(1) As Estoppel.--Though one of the contracting parties to a compromise be weak in understanding, improvident, and addicted to intoxicants, which might entitle him to the favorable consideration of a court of equity, yet, if no fraud was committed in procuring his deliberate and voluntary assent to such compromise, his various acts of confirmation and acknowledgment of it will disentitle him to any equitable relief he may otherwise have had. Mason v. Williams, 3 Munf. 126. See C. & O. R. Co. v. Mosby, 93 Va. 93, 24 S.E. 916.
And where a creditor agrees to accept less than the amount due from his debtor in satisfaction of his debt, and then assigns the entire debt, of which assignment the debtor had notice, such debtor is estopped from falling back upon the compromise and release. Smith v. Chilton. 84 Va. 840, 6 S.E. 142.
V. IMPEACHMENT.
What Must Be Proved.--A party to a settlement, who seeks to impeach it on the ground of accident, mistake or fraud, must allege and prove the particular facts wherein such accident, mistake or fraud consists. Mahnke v. Neale, 23 W.Va. 57. See Currey v. Lawler, 29 W.Va. 111, 11 S.E. 897; Calwell v. Caperton, 27 W.Va. 397; Parkersburg Nat. Bank v. Als, 5 W.Va. 50.
Question of Conclusiveness Proper for Jury.--And, in a controversy to impeach the validity and effect of a settlement, where there is evidence to prove that it was made under mistake and coercion, it is proper to allow the jury to pass upon the question whether or not such settlement is conclusive between the parties as to the matters included therein. Meyer v. Marshall, 34 W.Va. 42, 11 S.E. 730.
Effect of Ignorance.--But a party who enters into a compromise in ignorance of important facts connected therewith will not be bound by it. Ross v. M'Lauchlan, 7 Gratt. 86. See Epes v. Williams, 89 Va. 794, 17 S.E. 235.
Effect of Mutual Mistake.--And a consent decree, entered to make effectual a compromise between parties, will be set aside on a showing that there was mutual mistake as to the subject of compromise. Epes v. Williams, 89 Va. 794, 17 S.E. 235. See Ross v. M'Lauchlan, 7 Gratt. 86; Francis v. Cline, 96 Va. 201, 31 S.E. 10.
Effect of Laches.--And such decree will be set aside for mutual mistake in the compromise agreement upon which it is based, though eleven years shall have passed since the compromise. Epes v. Williams, 89 Va. 794, 17 S.E. 235.
Effect of Fraud.--And where there has been a suit instituted, which is dismissed by agreement, the order of dismissal is without effect if the agreement to dismiss was procured by fraud. Francis v. Cline, 96 Va. 201, 31 S.E. 10.
VI. THE PLEADING.
How Fraud or Mistake Alleged.--Where parties have made a settlement of their transactions and struck a balance, which has been adjusted by cash or note, it is incumbent on the party complaining of fraud or mistake, by suit in equity, to allege it specially in his bill, and establish it by proof. Currey v. Lawler, 29 W.Va. 111, 11 S.E. 897. See Meyer v. Marshall, 34 W.Va. 42, 11 S.E. 730; Calwell v. Caperton, 27 W.Va. 397.
Alleging Facts Consisting of Fraud or Mistake.--Where one seeks to reopen a compromise matter for accident, mistake or fraud, he must distinctly allege the particular facts wherein such accident, mistake or fraud consists. Calwell v. Caperton, 27 W.Va. 397. See Mahnke v. Neale, 23 W.Va. 57.
VII. THE EVIDENCE.
Character of Evidence.--The law favors the compromise and settlement of disputed claims. It is to the interest of all that there should be an end of litigation, and a settlement deliberately sought ought not to be set aside except upon the most satisfactory evidence. C. & O. R. Co. v. Mosby, 93 Va. 93, 24 S.E. 916. See Caperton v. Caperton, 36 W.Va. 635, 15 S.E. 149.
Must Be Clear and Convincing.--So, one who seeks to reopen a compromised matter, on the ground of accident, mistake or fraud, must by clear and convincing evidence prove the particular facts wherein such accident, mistake or fraud consists. Calwell v. Caperton, 27 W.Va. 397. See Mahnke v. Neale, 23 W.Va. 57.
Compromise to Prove Justice of Claim.--And a compromise made or offered is not evidence of the justness of the claim agreed or offered to be compromised. Billingsley v. Clelland, 41 W.Va. 234, 23 S.E. 812.
Admissions.--Nor are admissions of a party, in an offer to compromise which was not accepted, proper evidence. Williams v. Price, 5 Munf. 507.
VIII. THE TRIAL.
On a trial of the validity and effect of a settlement, if there is evidence tending to prove that it was made under mistake and coercion, the question of the conclusiveness of such agreement between the parties is properly left to the jury. Meyer v. Marshall, 34 W.Va. 42, 11 S.E. 730. See Parkersburg Nat. Bank v. Als, 5 W.Va. 50.
IX. COMPOUNDING OFFENSES.
Cancellation of Agreements.--Equity will not entertain a bill to cancel instruments of indebtedness given under an agreement to compound a felony or stifle its prosecution, as the parties are in pari delicto. Rock v. Mathews, 35 W.Va. 531, 14 S.E. 137.
Effect on Criminal Prosecution.--Nor will a compromise between the seducer and the seduced have the effect of barring a prosecution for the offense. Barker v. Com., 90 Va. 820, 20 S.E. 776.
[*]For monographic note on Compromise, see end of case.
[*]Judge Coalter, absent.