Opinion
December 3, 1956 —
January 7, 1957.
APPEAL from a judgment of the circuit court for Richland county: RICHARD W. ORTON, Circuit Judge. Affirmed.
For the appellant there was a brief and oral argument by Lorin L. Kay of Richland Center.
For the respondent there was a brief and oral argument by William L. McCusker of Madison.
Action commenced March 31, 1954, by Bernard H. Stadele against Dorothy Resnick, executrix of the estate of Sarah Eskin, deceased, and Ervin E. Morris, to reform a deed. The defendant, Ervin E. Morris, having participated in the negotiations, had been made a party, but, after filing an answer and cross complaint, asked to have his answer, the cross complaint, and the action against him dismissed. The circuit court ruled: "The motion is granted, and the complaint is considered amended so it makes no claims against the defendant Morris." The controversy in the case is between plaintiff, B.H. Stadele, and the defendant, executrix of the estate of Sarah Eskin, deceased.
Preceding the execution of the deed, an agreement in writing, setting forth the terms on which the deed was to be given over, was signed. The plaintiff alleges that the terms agreed upon by plaintiff and defendant's deceased "by reason of mutual mistake of the plaintiff and the decedent, Sarah Eskin," were omitted from the deed. Those provisions were specifically set forth as follows:
"When the premises above described cease to be used for the purposes of a drive-in theater, the title is to revert in whole to the said Bernard H. Stadele [the plaintiff herein] or his heirs and assigns.
"The said Bernard H. Stadele [plaintiff herein] is also to have the right to farm and remove the crops therefrom on all portions of said above-described real estate not used and occupied by the said Sarah Eskin and Ervin E. Morris for the purposes above specified; they, however, to have the right to occupy additional portions of said described real estate for the purposes of operating the said drive-in theater as the operations of their business may require."
Plaintiff also claims damages arising from a refusal to permit him to exercise the privilege of cropping the land.
The defendant denies knowledge or information "sufficient to form a belief as to whether the plaintiff relied upon any belief, information, presumption, or representation that said option had been followed in the execution of said deed."
It will help to understand the situation out of which the mistake arose by referring to competent testimony of plaintiff, corroborated by circumstances, and the further testimony of other witnesses. The plaintiff testified that Mrs. Eskin did not interfere with his acting upon the belief that the rights set tip in the written option were protected by the terms of the deed. He testified, in effect, that he believed the rights were included in the deed. He stated that he did not intend to sell the land to her unless, as he said, "I was sure what would be at my front door." When the deed was executed, he said: "I did not appear in his office before the 24th. When I got there, Mrs. Eskin was present, Mr. Morris was not. The deed had not then been drafted. I handed Mr. Black my option and said, 'Here is our agreement'. . . . I did not confer with Mr. Black when Mrs. Eskin was not present; I wasn't in the office all that time. . . . Then Mr. Black said we would have to have some stamps for the deed and I volunteered to go get them, about 11:30 or a little later. I got to the post office. . . . I got back to the Black office close to 12 o'clock. Mr. Black had been working on the deed when I left. He did not read the deed to me. I saw the deed when I signed it. I didn't read it in full; I just glanced at it and signed it. . . . I didn't notice it wasn't in the deed; I first discovered its absence in a letter Mr. Kay wrote me in the middle of the summer of 1953. . . . Mrs. Eskin did not interfere with my cropping in her lifetime; Mrs. Resnick first interfered or protested March 15, 1954."
A witness, Mrs. Collins, an employee of Mrs. Eskin, testified that Mrs. Eskin said that "All the land that she didn't use for the theater she had given Mr. Stadele the right to crop and remove the crops from that land."
The option agreement was signed August 28, 1951. The deed was executed September 24, 1951. The letter demanding the surrender of the land claimed as cropping rights is as follows:
"Dear Sir:
"This will advise you that I demand your immediate surrender of possession of all lands belonging to Sarah Eskin and her estate. Further use of the lands by you will be regarded as a trespass.
"Yours truly, "Dorothy Resnick, Executrix Sarah Eskin, Estate." The cause was tried to the court, and the pertinent findings are:"4. On August 28, 195 1, the plaintiff, Bernard H. Stadele, entered into an option contract with Sarah Eskin, who was then alive, and Ervin E. Morris, wherein and whereby plaintiff gave to decedent, Sarah Eskin, and Ervin E. Morris an option to purchase property described as
"The South one half (S-1/2) of the Southwest quarter (SW-1/4) of the Northwest quarter (NW-1/4) of Section Twenty-Six (26), Township Ten (10) North, Range One (1) East, Richland county, Wisconsin, for the sum of Fifteen Thousand Dollars; that said option contained, among other things, the following provisions:
"`Upon the payment of the said purchase price of fifteen thousand dollars ($15,000), the said Bernard H. Stadele agrees to give said Sarah Eskin and Ervin E. Morris a good and sufficient deed to the above-described premises for the following uses and purposes, to wit: The said Sarah Eskin and Ervin E. Morris to have the right to use said premises, or any part thereof, for a drive-in theater, including at all times sufficient parking space for the purposes of said drive-in theater and a house or dwelling and a yard adjacent thereto for the manager of the said drive-in theater, the said Sarah Eskin and Ervin E. Morris to have the right to retain the use and possession of said premises for the purpose of conducting a drive-in theater thereon as long as the premises are so used. When the premises above described cease to be used for the purposes of a drive-in theater, the title is to revert in whole to the said Bernard H. Stadele or his heirs and assigns. The said Bernard H. Stadele is also to have the right to farm and remove the crops therefrom on all portions of said above-described real estate not used and occupied by the said Sarah Eskin and Ervin E. Morris for the purposes above specified; they, however, to have the right to occupy additional portions of the said described real estate for the purposes of operating the said drive-in theater as the operations of their business may require.'
"5. The cropping-and-farming-rights provision of the option as stated in the preceding finding of fact were a part of the consideration for the deed referred to in the following finding of fact.
"6. On September 24, 1951, a deed was drafted by Sarah Eskin's attorney, O.D. Black, of Richland Center, Wisconsin, for execution by plaintiff to grantee, Sarah Eskin, covering the property as described in the option agreement and heretofore set forth, in which deed the consideration was stated as `One dollar and other valuable consideration,' and wherein the clauses of the option agreement as to reversionary rights in plaintiff and the reservation of mineral rights by plaintiff were incorporated. The said deed did not include or incorporate the provision of the option agreement."
The following are the conclusions of law:
"1. By reason of a mutual mistake of fact between plaintiff and Sarah Eskin, deceased, the deed dated September 24, 1951, recorded on the same date in vol. 99 Deeds, page 520, document No. 112038, register of deeds for Richland county, Wisconsin, in which Bernard H. Stadele was grantor and Sarah Eskin was grantee, did not contain the following cropping-and-farming-rights clause of the antecedent option entered into between the parties:
"`The said Bernard H. Stadele is also to have the right to farm and remove the crops therefrom on all the portions of the said above-described real estate not used and occupied by the said Sarah Eskin and Ervin E. Morris for the purposes (drive-in theater) above specified; they, however, to have the right to occupy additional portions of said described real estate for the purposes of operating the said drive-in theater as the operations of their business may require.'
"2. Plaintiff is not barred by laches from equitable relief in the form of reformation of the deed in question and from receiving damages for deprivation of the use of 10 acres of land during 1955, which 10 acres was not then being used for drive-in theater purposes.
"3. The cropping-and-farming-rights provision of the option as more particularly set forth in the findings of fact herein and in foregoing conclusion of law number 3 did not merge in the deed in question so as to become ineffectual, the court finding as a fact herein that the said cropping-and-farming-rights provision of the option was a part of the consideration for the conveyance by plaintiff to Sarah Eskin of the land in question.
"4. Plaintiff is entitled to judgment herein reforming and correcting the deed in question by inserting therein a clause as follows:
"`The said Bernard H. Stadele is also to have the right to farm and remove the crops therefrom on all portions of the said above-described real estate not used and occupied by the said Sarah Eskin and Ervin E. Morris for the purposes (drive-in theater) above specified; they, however, to have the right to occupy additional portions of said described real estate for the purposes of operating the said drive-in theater as the operations of their business may require.'
"5. Plaintiff is entitled to damages in the sum of three hundred dollars ($300) as damages for being deprived of the use of 10 acres of land during 1955, which 10 acres were not being used for drive-in theater purposes.
"6. Plaintiff is entitled to $75 costs as determined by the court pursuant to 271.02, Stats., and, in addition, disbursements herein as allowed by law.
"7. The counterclaim of defendant, Dorothy Resnick, shall be dismissed by judgment herein."
Judgment granting the relief prayed for was entered, and defendant appeals.
Where the circumstances are such that a party fails to read an instrument after he has called the attention of the drafter to written terms to be included, he may be excused for signing without reading and not be precluded from seeking reformation of the instrument. Negotiations preceding, as well as conduct and negotiations subsequent to the signing, are relevant, and if, upon the whole case, it appears that the mistake was mutual at the time the deed was executed, such evidence then is controlling and sustains findings and conclusions based thereon requiring reformation. 12 Am. Jur., Contracts, p. 630, sec. 137; Silbar v. Ryder, 63 Wis. 106, 23 N.W. 106; Butt v. Smith, 121 Wis. 566, 569, 99 N.W. 328; Rosandich v. Chicago, N.S. M.R.R. 185 Wis. 184, 191, 201 N.W. 391.
The continued recognition of rights based upon the omitted terms acknowledged by the interested parties is generally sufficient to account for a delay in instituting suit to enforce the reformation. "Delay will thus be excused . . . by defendant's silence or other conduct indicating acquiescence in plaintiff's right." 21 C.J., Equity, pp. 243, 244, sec. 241 b. The strong testimony, as indicated in the statement of facts, necessarily has a bearing on the question of reformation as well as upon the defense of laches referred to later.
At the conclusion of the trial, the learned trial judge decided that a reversionary clause existed, and directed reformation of the deed with respect to the cropping rights stipulated in the written option, as claimed by the plaintiff.
As to damages suffered by the plaintiff's being deprived of cropping rights during the year 1955, the court set them at $300. There is no dispute as to that item. The counterclaim of the defendant was dismissed.
The trial judge, in announcing his decision, said:
"The burden on the plaintiff in this case is, of course, to establish his case by a clear, satisfactory, and convincing preponderance of the evidence to a reasonable certainty. I believe our court has even used the term `beyond reasonable controversy.'"
It was stated further that:
"In fact the case seems entirely one-sided to me. It is undisputed that these parties met and agreed on certain terms of sale and purchase; those terms of sale and purchase are specifically set forth in the option agreement. There is no question but what it was within the minds of both parties and within the contemplation of both parties that one of the conditions or reservations of this transaction, of this ultimate deed, was to be a reservation of cropping rights in this plaintiff as to all portions of the 20-acre tract which wasn't used by Mrs. Eskin or her successors or which might not be thereafter so used. It was within the minds and contemplation of the parties that this reservation or right was limited, however, to the restriction that if at any time Mrs. Eskin or her successors in title should . . . at any time occupy additional portions of this real estate for the purpose of operating a drive-in theater at any time that the operations of that business of operating such a theater might require that then the cropping rights of the plaintiff Stadele would accede to the right of Mrs. Eskin and her successors to so use this land."
This statement, which is a summary of the findings recited in the statement of facts, was based upon the negotiations which concluded in the written option and the deed. The findings of fact and conclusions of law are based upon negotiations occurring at the time the option was entered into, together with the acts of the parties occurring at the time the deed was drawn and executed in the office of the lawyer for Mrs. Eskin, and also, of course, upon subsequent actions of the contracting and interested parties, which are consistent with the terms set forth in the written option. The mistake was a mutual mistake, the minds of the parties having actually met upon terms as claimed by plaintiff. The testimony referred to shows the purpose and the plan of the respective parties and, under the rules in law and equity, permits a determination of reformation of the instrument. The mistake was reciprocal. It clearly was common to both parties. Each alike labored under the misconception with respect to the omission of the agreement on which the minds met. The acts of the parties show an interpretation and understanding consistent only with that conclusion. The findings of the trial court are amply sustained. The cropping rights were a part of a consideration of the deed, and the terms of the option were those of the agreement and properly to be considered in reforming the deed.
As to the defense of laches, the trial court gave due consideration, not only to the manner of executing the deed from which the terms of the reservation set forth in the option were omitted, but also to the fact that Mrs. Eskin not only did not interfere with plaintiff's cropping rights but freely and frankly recognized that they existed. There was interference only after the death of Mrs. Eskin and the appointment of the executrix. This action followed upon the interference of the executrix. No question of fraud or bad faith or inequitable conduct on plaintiff's part exists, and the defendant has suffered no damage. Both parties, under the evidence bearing upon the question, understood the matter, and the court properly held that plaintiff was not barred by laches.
By the Court. — Judgment affirmed.