Fotheringham v. Lockhart , 30 S.D. 394 ( 1912 )

McCOY, P. J.

This is an action in replevin instituted, by plaintiff to recover ’from defendant the possession of certain articles claimed by plaintiff to be personal property, consisting mostly of shelving, show cases, tables, etc., which were situated and had been used in a certain store building .owned by defendant at the time of the commencement of this action in April, 1911. The complaint is the ordinary- form used in replevin, or claim and delivery, alleging that plaintiff is the owner of the property described therein, and that defendant wrongfully took said possession from plaintiff and now wrongfully witholds the same from'plaintiff, and also alleging the value thereof and demanding judgment that plaintiff recover possession of said property from defendant, or the value thereof in case such delivery of possession could not be had, and for damages. To this complaint defendant originally made answer denying plaintiff’s ownership and right of possession to said propery, except as to a small portion thereof, denying that all said property was personal property, but alleging that a greater portion thereof was attached to the building in which the same was located as a part thereof, denying that he wrongfully took possession of said property, but alleging the fact to’ be that about October, 1910, he took peaceable possession thereof ancl ever since, to the commencement of this action, had been in the quiet and peaceable possession thereof; and defendant by way of answer further alleged that on October 20, 1910, plaintiff was the owner of certain lots in Armour, together with the property described in the complaint, and that at said time plaintiff and defendant exchanged properties, the defendant trading to plaintiff certain farm lands in Pennington county for the said real estate of plaintiff including all the property described in the complaint, excepting some small portion thereof, and that ever since said exchange of properties defendant has been the owner of said property described in the said complaint; that at the time of said exchange of properties one Ferguson was occupying the two-story brick building situated on said lots so traded by plaintiff to defendant in Armour, and in the possession, occupancy, and use of all said property mentioned in plaintiff’s complaint under a lease in writing between plaintiff and said Ferguson, and was paying by virtue thereof to plaintiff $150 per month as rent for said real estate and said property described in the said complaint, and that at the time of said exchange of properties the plaintiff sold, assigned, and transferred to defendant all his right, title, and interest in and to said lease, and that thereafter from October, 1910, to April, 1911, the expiration of said lease, said Ferguson paid, to defendant the said monthly rental -for said property. There was a special verdict and findings by 'the court by stipulation made in favor of defendant and judgment thereon rendered. Plaintiff appeals, alleging various errors.

[1] During the progress of the trial the -court ruled that any conversation or other matters which led up to and culminated in the written contract made by plaintiff and defendant in relation to their said exchange of properties would not be admitted, but that the written contract alone must determine, what property .passed by the agreement and the rights of -the parties. Defendant thereupon asked permission of the court to amend his answer by alleging that it was the agreement and understanding of both plaintiff and defendant at -the time said contract was made that the property described in the complaint was to be transferred to, and became the property .of, defendant as a part of the consideration for said exchange; and that defendant at the time said contract was drawn up and executed understood and believed that said property was included in the said contract and assignment of lease, and that at the time of the execution and delivery -thereof plaintiff acted in bad faith with full knowledge that the instrument did not express the contract between .plaintiff and defendant previous^’ agreed upon, and well knew that defendant understood and believed that by the terms of said contract and assignment he was to receive title to all the said property mentioned in the complaint, and prayed judgment that said contract be reformed to include all -said property described in plaintiff’s complaint. Defendant also moved the court for a postponement of the trial for the purpose of preparing said amended answer and procuring his evidence, and also for the purpose of making his showing by affidavit on which to base his application to amend his answer and continue the case to procure the evidence of one Buell, of Rapid City, who drew the contract between said parties. The court denied the motion to continue on the ground that there was no showing by affidavit, as required by the rules of the court, but granted to defendant sufficient time to make such presentation by affidavit. It was thereupon agreed between the parties in open court ths-t defendant might make his showing for continuance and right to-amend his answer by oral statement entered upon the record instead of by affidavit, in order'to save time. Defendant then, in substance, stated that he would be able to show by the evidence of defendant and one Dilgcr, upon an application to reform said contract, that at the time plaintiff showed him the property which defendant subsequently traded for, that plaintiff showed him, and told him he was the owner of, the building, all furniture and fixtures therein, and everything except the goods upon the shelves, which belonged to Ferguson who occupied the building and was ■then conducting a department store therein; and that it all went in the deal at a valuation of something like $35,000; and that it was all included in the trade, and that at the time the contract was made defendant believed and understood that the property he was getting included all the property in dispute. The defendant also stated that he expected to prove by one C. J. Buell in whose office the contract was drawn, and at which time the assignment of lease was made,- that he, Buell, stated to defendant, in the presence of plaintiff, -that a bill of sale for the property in dispute was not necessary, as the assignment of the lease was sufficient to carry with it title to the property involved in this action, they being fixtures in the store building. The plaintiff then objected to the amendment of said answer as indicated by said statement, for: the reason that the application to amend came too late; that defendant knew all said facts prior to the beginning of this suit; that there was no showing on-the part of defendant that there was any fraud on the part of plaintiff or any mutual mistake, between plaintiff and defendant; that part of the proposed proof is of facts which occurred after the contract was drawn; that there was no showing of diligence on the part of defendant, and the proposed facts do not entitle him to the relief asked, either by way of amendment or continuance. These objections were overruled, and exception duly taken thereto. Counsel for plaintiff then admitted for the purposes of the trial that said Buell, if present, would testify as stated, by defendant. Defendant was permitted to amend his answer as indicated' by said showing-, and the trial then proceeded without further objection as to the sufficiency of the amended answer as a pleading in the case. Plaintiff now urges as error the ruling of the court in permitting defendant to so amend his answer on the ground that the application came too late, and that the showing was insufficient to permit such an answer. We have been unable to find in the record any demurrer to said amended answer on the ground that the same did not contain a statement of facts sufficient to constitute a defense. We are of the opinion that the learned trial court did not abuse his discretion in permitting such amendment. SucE amendments, in the furtherance of justice, are permissible and within the discretion of the trial court. We are also of the opinion that the showing was sufficient to warrant such amendment.

[2] The jury found, and the court adopted the finding, that the plaintiff agreed to transfer and turn over said property described in the complaint, together with the said real estate, to defendant, in exchange for defendant’s said land. The plaintiff’ contends that the evidence was insufficient to justify such finding. We are of -the opinion that the evidence was -amply sufficient in such particular. It will serve no useful purpose to incorporate such testimony herein. The court also found that the written contract as actually made by said parties did not in fact express the intention and agreement of both parties thereto, in that it directly made no mention of -the property in question therein, that plaintiff acted in bad faith with full knowledge that the said contract did not express the intention of said parties as previously agreed upon, anti plaintiff well knew that defendant understood and believed that by the terms of said contract and the assignment of said lease he was to receive title to said property in question, described in the complaint; and the court further found as a conclusion of law that the said contract should be reformed so as to include therein the said property described in the complaint. It is urged that the evidence is insufficiént to justify such" findings, and that the same are contrary to the law. We are of the opinion that plaintiff’s contentions in this regard, are not well taken; that the evident justifies the findings of fact, and the law justifies the conclusion.

[3] It is the contention of appellant that the evidence fails to show that the mistake was mutual, that it was a unilateral mistake for which equity will not reform a contract; that, while defendant was mistaken, there was no mistake on the- part of plaintiff. There is testimony in the record to the effect that defendant was told and informed in the presence of plaintiff at the time the contract was drawn up that a bill of sale of the property mentioned in the complaint was not necessary, as -the same was covered by the contract, deed, and assignment of lease. If this were true, and for the purposes of this decision it must be taken as true, because the findings of the court and. jury settle whatever conflict there was in the evidence, then it constituted mistake on the part of defendant, and, if plaintiff then knew that said property mentioned in the complaint was not covered by said lease and contract, then it constituted fraud and bad faith on his part. If he did not know it, then it constituted a mistake on his part also. A contract is reformable when by the mistake of one party and the fraud of the other there is omitted therefrom property which it was agreed should 'be transferred thereby. McCormick v. Woulph, 11 S. D. 252, 76 N. W. 939; Cox v. Beard, 75 Kan. 369, 89 Pac. 671. In this last-cited case the Supreme Court of Kansas said: “It is contended that the deed is not reformable because the minds of the parties did not actually meet; that, while there was misapprehension apd mistake on the part of the grantee as to the extent of the land conveyed, the mistake was not mutual, as the grantors did not intend to convey more than the lots described in the deed, and they insist that a unilateral mistake is a ground for rescission, but not for reformation. The equitable remedy of reformation is not confined to cases of mutual mistakes. It is true that when mistakes, unmixed with fraud, are a basis of the relief asked it must be a mistake common to both parties; but it is well settled that the remedy is available where there is a mistake on one side accompanied by fraud or other inequitable conduct on the other. It is argued by the grantors that they at least did not intend to convey more than was described, and that, therefore, a reformation will effect what was not intended and will amount to the making of a new contract. According to the testimony, it was the intention of Mrs. Beard to buy and the express pui-poses of the Coxes to sell and convey the entire tract, and, having led the grantee to believe the deed would convey it, they' cannot well insist that equitable relief should be barred, because they did not mean what they said, and that their expressed intention was not their honest intention. They' knew the correct description of the land sold, and that the description employed in the deed did not cover or convey it. They also knew that the grantee understood that she was buying all the tract within the designated boundaries, and that it fronted on a street, as the walks and other improvements indicated. They led the grantee to. believe that the description in the deed conveyed -all that was purchased, and took advantage of the mistake into which she was led by inducing her to accept the deed for a less quantity than was agreed to be conveyed and for which a co'nsideration was paid. The case comes fairly within the well-established rule that a deed is reformable when, by the mistake of one party and the fraud of another, there is omitted from it land which it was stipulated should be conveyed.” Then follows a long citation of authorities, including McCormick v. Woulph, supra.' In principle this case is on “all fours” with the case at bar. The evidence shows that plaintiff expressly agreed and necessarily intended to transfer to defendant the property described in the complaint as a part of the trade and consideration for the exchange of properties; that when the contract, deed, and assignment of lease were, being drawn up defendant mentioned the fact that a bill-of sale should be made for the property which is the subject of this action, and that defendant was informed, in the presence of plaintiff, that a bill of sale was not necessary, as the deed and assignment would transfer such property to defendant without a bill of sale. If plaintiff then thought the contract, deed, and assignment of lease were not sufficient to transfer said property described in the complaint to defendant, it was his plain duty to speak out and say so. It was bad faith and fraudulent concealment on his part not to rightly inform defendant, or, at least, it was such inequitable conduct on his part that would render á reformation of said contract proper. The greater portion of the property described in the complaint was fixtures and passed by said deeds as a .part of the real estate, but it is questionable as to some portions of 'said property in dispute being fixtures, and under the evidence in this case it is immaterial whether the whole of said property were fixtures or not, as the same, under the evidence, and under the contract, as reformed, would pass to and become the property of. defendant.

Some of the assignments of error relate to the ruling of the-court in overruling and sustaining objections to testimony and to certain instructions to the jury, all oí which have been considered, and we ar.e of the opinion that no prejudicial error exists therein.

[4]- One of appellant’s assignments and specifications of error is “that the court’s finding of fact No. 5 is- wholly unsupported by the evidence, and is contrary thereto, in that the undisputed evidence shows that defendant was never in the possession of the proper in litigation prior to the commencement of this action, but that it was at all times in the possession of either plantiff or D. A. Ferguson.” If this statement were true, “that defendant was never in possession of said property in litigation .prior to the commencement of this action,” we are at a loss to1 understand why or how this action in replevin, or claim and delivery, might or could be sustained at all. It is one of the fundamental and elementary propositions that the action of replevin will not lie at all where the defendant was not in the actual or constructive possession of the property sought to be replevined at the time of the commencement of the action. Timp v. Dockham, 32 Wis. 146; Longerbeam v. Huston, 20 S. D. 254, 105 N. W. 743; 1 Wait’s Prac. 716. If we were to take plaintiff at his word, no matter "what the other evidence in the case might be, defendant would be entitled to judgment in any event, and which of itself wpuld necessarily require an affirmance of the judgment. Plaintiff evidently overlooked the complaint in this action, verified on plaintiff’s oath, to the effect that the defendant wrongfully took possession of said property and withholds the same from plaintiff, and that prior to the commencement of the action plaintiff demanded of defendant the possession of said property, but that defendant refused to deliver the same to plaintiff, and still witholds and- detains the •same. The only allegation of the complaint, aside from value, that was admitted by defendant, is that defendant was in possession. of the property in dispute at the commencement of the action. There was ample evidence that defendant was in actual possession and had been since October, 1910.

After careful consideration of each and every assignment of error, the judgment appealed from is affirmed.