Opinion
January 6, 1953 —
February 3, 1953.
APPEAL from a judgment and order of the circuit court for Milwaukee county: GUSTAVE G. GEHRZ, Circuit judge. Reversed.
For the appellants there was a brief and oral argument by Arnold C. Otto of Milwaukee.
For the respondent there was a brief and oral argument by Bernard F. Mathiowetz of Milwaukee.
This is an action to reform an agreement for the exchange of real estate and for specific performance of said agreement as reformed.
On September 7, 1944, one Martin Jensen and Helen Jensen, his wife, had an interest as vendees under a land contract in certain real estate known as 3415-17 West Walnut street, Milwaukee, Wisconsin. On said date they conveyed their interest in said real estate to Donna Hoag by warranty deed. This real estate will be hereinafter referred to as the "Hoag property." The deed was duly recorded in the office of the register of deeds for Milwaukee county on October 31, 1944. Robert W. Hoag, the husband of Donna Hoag, was a licensed real-estate broker and he advertised said property for sale on behalf of his wife.
Mary Kovacs and her son, Frank Kovacs, as joint tenants, had an interest as vendees under a land contract in real estate known as 2473 West Walnut street in said city. This will hereinafter be referred to as the "Kovacs property."
After some negotiations and a mutual inspection of properties, Mary Kovacs and Frank Kovacs and Robert W. Hoag, acting for his undisclosed principal, agreed to exchange real estate. The Kovacs property was valued at $6,100 and the Hoag property at the sum of $8,500 for the exchange. Robert W. Hoag then drafted the exchange agreement which he signed as principal and which he had Mary Kovacs sign as a principal. He had Frank Kovacs sign as a witness. It was agreed that the Kovacs would raise the money necessary to complete the transaction by securing a real-estate loan on the Hoag property. Mr. Hoag contacted the United Federal Savings Loan Association and arranged for the loan. Thereafter, and on November 20, 1944, Mary Kovacs executed a mortgage to the Savings Loan Association. Hoag also had Mary Kovacs execute an undated deed to the Kovacs property to Robert W. Hoag and Donna Hoag, his wife. Donna Hoag has never executed a deed to the Hoag property, but on December 2, 1944, Hoag procured a deed from Martin Jensen and his wife to Mary Kovacs of the Hoag property, which he delivered to the Savings Loan Association. Later, and on or about the 6th day of February, 1945, Hoag learned that Frank Kovacs had an interest as joint tenant in the Kovacs property and he prepared a deed to himself and his wife to the Kovacs property which he had signed by Mary Kovacs and by Frank Kovacs and his wife. On or about November 23, 1944, Frank Kovacs and his family moved into the Hoag property and have occupied the same as their home since that time. Thereafter Frank Kovacs expended money for improvements on the Hoag property, paid the taxes and insurance thereon, and made regular payments of interest and principal to apply on the mortgage.
Mary Kovacs died intestate on July 21, 1946. Thereafter Frank Kovacs went to the office of the Savings Loan Association to inform them of the death of his mother and that, as surviving joint tenant, he would be the owner of the property. After checking its file the association informed Frank Kovacs that the property was in the name of his mother alone, and that his name did not appear upon the deed. Frank Kovacs then consulted an attorney. This attorney petitioned for administration of the estate of Mary Kovacs, and Frank Kovacs was appointed as administrator thereof. He filed an inventory in which he listed the Hoag property as an asset of the estate. The petition for administration listed Frank Kovacs as the only child and the sole heir at law of Mary Kovacs. John J. Weber appeared in the matter of the estate and claimed to be a son of Mary Kovacs. Thereupon Frank Kovacs resigned as administrator, petitioned for leave to strike the Hoag property from the inventory in the estate, and after he was discharged as administrator commenced this action. The Hoags appeared in the action but did not answer, and the only controversy is between Frank Kovacs and John J. Weber.
The case was tried to the court. Findings of fact and conclusions of law were signed and filed, and on December 28, 1951, a judgment was entered denying the relief sought by the plaintiff and adjudging that the plaintiff and John J. Weber are each entitled to a one-half interest in the Hoag property. On the same date, an order was entered directing partition of said real estate and that it be sold at sheriff's sale. The plaintiff appealed from said judgment and order.
It is elementary in Wisconsin that agreements may be reformed in a suit in equity where the true intent of the parties is not embodied in the agreement as reduced to writing because of some mutual mistake. La Rosa v. Hess, 258 Wis. 557, 46 N.W.2d 737; Langer v. Stegerwald Lumber Co. 262 Wis. 383, 55 N.W.2d 389; Lentz v. Dostal, 212 Wis. 81, 249 N.W. 174; Shearer v. Pringle, 203 Wis. 164, 233 N.W. 623.
Robert W. Hoag testified that he drafted the exchange agreement in the absence of the Kovacs but that it was the intention that the owners of the one property were to become the owners of the other and vice versa. Had he known that Frank Kovacs was a vendee of the Kovacs property his name would have been included. He was not instructed to leave Frank's name out of the agreement and subsequent papers, but did not know until later that Frank was a joint tenant.
Frank Kovacs testified that when he talked to Hoag he told him they would like to exchange properties. Hoag did not tell them who owned the Hoag property and he did not ask them who owned the Kovacs property. Frank did not read the agreement, but signed where Mr. Hoag requested him to sign. The agreement was not read to him nor was it explained to him. He did not know he was signing the agreement as a witness but believed he was signing as an owner of the property. He also signed the mortgage as a witness but testified that he did not know he was signing as a witness and thought he was signing as owner.
None of this testimony is denied. It is also uncontradicted that certain adjustments of taxes and insurance were to be made. No mention thereof was included in the exchange agreement. It is apparent, therefore, that the real intent of the parties was not truly represented in the written agreement. Any finding otherwise is contrary to the great weight and clear preponderance of the evidence. The agreement should have been reformed to conform to the intention of the parties. As reformed, the plaintiff is entitled to specific performance thereof. Donna Hoag at the time of the trial was the holder of the record title. The Jensens had divested themselves of their interest in the Hoag property by their deed of September 7, 1944.
This is another distressing example of the trouble in which people become involved when they attempt to conduct legal business without the benefit of a lawyer. Even a court of equity cannot make them whole, but it can partially relieve them from their mutual mistakes.
By the Court. — Judgment and order reversed and cause remanded for further proceedings consistent with this opinion.