183 P. 776 | Or. | 1919
Lead Opinion
It is not surprising that Welch did not ask for an abstract or that the Vreelands did not read or notice the assumption provision in the deed signed by them because in the language of George Vreeland “it was a family agreement.” If, as the trial court expressly found, the assumption clause was inserted in the paper “by and through a mistake or oversight of'the scrivener, and without the knowledge or consent of either the grantor or grantee,” Welch is entitled to a reformation of the deed and Johnson cannot avail himself of the assumption clause: Bradshaw v. Provident Trust Co., 81 Or. 55, 62 (158 Pac. 274); Lloyd v. Lowe (Colo.), 165 Pac. 609 (L. R. A. 1918A, 999); Parchen v. Chessman, 53 Mont. 430 (164 Pac. 531).
“It would be more accurate to say that where the mistake is wholly caused by the want of that care and diligence in the transaction which should be used by every person of reasonable prudence, and the absence of which would be a violation of legal duty, a court of equity will not interpose its relief; but even with this more guarded mode of statement, each instance of negligence must depend to a great extent upon its own circumstances. It is not every negligence that will*601 stay the hand of the court. The conclusion from the best authorities seems to be, that the neglect must amount to the violation of a positive legal duty. The highest possible care is not demanded. Even a clearly established negligence may not of itself be a sufficient ground for refusing relief, if it appears that the other party has not been prejudiced thereby. In addition to the two foregoing requisites, it has been said that equity would never give any relief from a mistake, if the party could by reasonable diligence have ascertained the real facts; nor where the means of information are open to both parties and no confidence is reposed; nor unless the other party was under some obligation to disclose the facts known to himself, and concealed them. A moment’s reflection will clearly show that these rules cannot possibly apply to all instances of mistake, and furnish the prerequisites for ■all species of relief. Their operation is, indeed, quite narrow; it is confined to the single relief of cancellation, and even then it is restricted to certain special kinds of agreements”: 2 Pom. Eq. Juris. (3 ed.), § 856.
The principle discussed by Professor Pomeroy was recognized and approved in Howard v. Tettelbaum, 61 Or. 144, 149 (120 Pac. 373), where it is said:
“Negligence, in order to bar equitable relief, in case of mutual mistake, clearly established, must be so gross and inexcusable as to amount to a positive violation of a legal duty on the part of the complaining party.”
See, also: 34 Cyc. 949.
But, repeating the language of Professor Pomeroy, “each instance of negligence must depend to a great extent upon its own circumstances.” To the same effect are: Powell v. Heisler, 16 Or. 412, 416 (19 Pac. 109); Farwell v. Home Ins. Co., 136 Fed. 93, 98 (68 C. C. A. 557); Shields v. Mongollon Exploration Co., 137 Fed. 539, 550 (70 C. C. A. 123). Nor is the failure of a complainant to read an instrument conclusive evi
The record does not present any element of estoppel as between Johnson and Welch. If instead of being the mortgagee Johnson were an assignee of the mortgagee, and had purchased the mortgage after the delivery of the deed to Welch on the faith of the added security afforded by the assumption clause, or, if Johnson had changed his position to his disadvantage by reason of the assumption provision in the deed to Welch, quite a different case would confront us: International Mortgage Bank v. Matthews, 92 Wash. 180 (158 Pac. 991). Johnson paid nothing on account of the assumption clause; he neither did nor omitted to do any act on account of it; and, so far as he is concerned and for all practical purposes, any advantages reaped from it by him are gratuitous. We conclude from the circumstances disclosed by the record, and especially in view of the fact that the grantors and grantee named in the deed agree that there was a mistake as alleged by the complainant and in view of the further fact that there is no element of estoppel available to Johnson, that Welch was not guilty of such negligence as will prevent a reformation of the deed: Stone v. Moody, 41 Wash. 680 (84 Pac. 617, 85 Pac. 346, 5 L. R. A. (N. S.) 799).
The Vreeland's were necessary parties and ought to have been served with, summons and complaint so that any decree which might be rendered would bind them as well as Johnson and Welch. All the parties to a deed who are affected immediately or consequentially by a mistake should be made parties as they are entitled to be heard upon any matter that might affect their rights under the decree: Center Creek Water & Irr. Co. v. Lindsay, 21 Utah, 192 (60 Pac. 559); First National Bank v. Fessler, 84 N. J. Eq. 166 (92 Atl. 914); Taylor v. Holmes (C. C.), 14 Fed. 498, 514; Cole v. Fickett, 95 Me. 265, 269 (49 Atl. 1066); Hellman v. Schneider, 75 Ill. 422, 425; De Groot v. Wright, 9 N. J. Eq. 55, 58; Oliver v. Clifton, 59 Ark. 187, 190 (26 S. W. 817); Bonvillain v. Bodenheimer, 117 La. 794, 815 (42 South. 273).
The facts here are unlike the facts in Beasley v. Shively, 20 Or. 508 (26 Pac. 846), and hence we would not be justified here in dismissing the suit as was done there. Nor need we remand the cause with general directions or with special directions like those given in Mangin v. Kellogg, 22 Ida. 137 (124 Pac. 651, 653). Katherine Vreeland and George Vreeland appeared as witnesses for Welch and as such witnesses testified that Welch did not agree to assume the note and mortgage and that the assumption provision was inserted in the deed to Welch through a mistake. This testimony, given by the Vreelands, estops them from denying Welch’s right to a reformation of the deed and dispenses with the necessity of remanding the cause: Vial v. Norwich Fire Ins. Society, 172 Ill. App. 134, 140;
The decree appealed from is affirmed.
Affirmed.
Rehearing
Rehearing denied October 7, 1919.
Petition for Rehearing.
(184 Pac. 280.)
In his petition for a rehearing the defendant urges upon us the consideration of three several features of the testimony here set down:
“1. That the respondent Welch, through his attorney Charles A. Johns, on December 29, 1916, at a time when his attention was directed to the clause in question and he was informed, that the appellant would make the claim that he has made and does make in this suit, stated that ‘there is no contention over the terms and conditions in the conveyance. ’
“2. That the same attorney, Charles A. Johns, in April, 1916, in a written statement to this court in behalf of Welch corporation, the Pacific Land Company, said that Welch assumed and agreed to pay the mortgage in and by the terms of the deed.
*605 “3. That the respondent, the plaintiff at the trial, produced evidence showing that the deed in question was prepared in the office of Charles A. Johns, attorney for Welch, at the time the deed was prepared.”
It will he recalled that the object of this suit was to correct an alleged mistake in a deed from the defendants Yreeland to the plaintiff Welch by striking out of the same the clause whereby Welch assumed and agreed to pay the note and mortgage held by Johnson as a lien upon the land conveyed, on the ground that it was inserted in the conveyance by the mutual mistake of the parties thereto. The testimony involved in the first specification of the petition is substantially as follows: Having foreclosed his mortgage, the attorney for the defendant Johnson, who was plaintiff in that proceeding, addressed a letter to the present plaintiff Welch at Portland, Oregon, directing his attention to the decree of foreclosure, notifying him that under the conveyance mentioned Welch was responsible for the payment of the debt evidenced by the note and secured by the mortgage, and calling upon him to pay it in full. This letter, dated December 28, 1916, was introduced in evidence. The defendant Johnson also read in evidence here a letter from Charles A. Johns, under date of December 29, 1916, addressed to the attorney for Johnson, which reads thus:
“Mr. Welch has handed me your letter to him of December 28, in which I note you claim he assumed and agreed to pay the Johnson note and mortgage, and that you are directed by Mr. Johnson to take such steps as may be necessary to collect his claim.
“There is no contention over the terms and conditions in the conveyance to Mr. Welch, but for many and different reasons he disclaims any personal liability to Johnson. Among other things, as I understand*606 the facts, the note and mortgage from Eicord to Johnson was a purchase money note and mortgage. At all events, there is no disposition on the part of Mr. Welch to pay this claim or any part of it, and I think after a careful investigation you will find he is not personally liable.”
“Authority to compromise the claim, as mentioned in the exceptions noted, will be implied only in the regular course of pending suits and actions, when an attorney has neither time nor opportunity to consult with his client, whose interest would be imperiled by delay. [Citing authorities.] The weight of authority in this country supports the rule that an attorney, by virtue of a mere retainer, has no implied power to bind his client by a compromise of his claim.” [Citing still other precedents.]
If an attorney in advance of litigation cannot compromise his client’s case, much less can he admit away the client’s whole case.
There is nothing in the evidence for the defendant relating to the extent of the authority given to Johns to bind the plaintiff Welch by the letter in question.
“That letter was written without a consultation with Mr. Welch or any knowledge of the facts concerning the execution of these deeds.”
In the absence of any pending litigation in which Johns was appearing as the attorney of record for Welch, no more importance can be attached to the letter than to the declaration of anyone else who assumes to speak for another. The case is not affected by the fact that the writer was a member of the Bar. He might as well have been the plaintiff’s grocer or laundryman. It would be necessary to show that the declarations in the letter were authorized by the plaintiff and within the scope of the authority conferred upon the writer, before the writing could bind the plaintiff. How far an attorney may bind his client in compromise or renunciation of his claim, is discussed in Pomery v. Prescott, 106 Me. 401 (76 Atl. 898, 138 Am. St. Rep. 347, 21 Ann. Cas. 574, and note).
Much the same is the case of Patty v. Salem Flouring Mills Co., 53 Or. 350 (96 Pac. 1106, 98 Pac. 521, 100 Pac. 298). One question there involved was the custom of the defendant in dealing with farmers when it received wheat from them and issued receipts therefor. In the Patty case the trial court, admitted evidence of the testimony of a witness in the previous case of Savage against the same defendant respecting such a custom. The court in an exhaustive opinion by Mr. Justice Mooee held that this was error. That case is controlling upon the second specification in the defendant’s petition here.
Summing up the whole matter of the evidence, we have the consensus* of statement of the parties to the conveyance that it was a mistake to include such a clause and that it was not part of the agreement out of which the deed arose. All that is opposed to this positive statement are the inferences to be drawn from the correspondence alluded to and the possible fact that the deed was drawn in the office of a member of the Bar. As a matter of law, the letter mentioned was not binding upon the plaintiff here and the inferences to be drawn from the circumstances under which the conveyance was written are not of sufficient weight to overcome the direct, uncontradicted and explicit narrative of the parties.
The petition for rehearing is denied.
AFFIRMED. REHEARING DENIED.