Anderson v. Juanita Coal & Coke Co.

• Court: Colorado Supreme Court
• Writing for the Court: WALKER, J.
• Citation: Anderson v. Juanita Coal & Coke Co., 83 Colo. 562, 267 P. 400 (Colo. 1928)
• Decision Date: 30 April 1928
• Docket Number: 11794.
• Parties: ANDERSON et al. v. JUANITA COAL & COKE CO.

267 P. 400

83 Colo. 562

ANDERSON et al. v. JUANITA COAL & COKE CO.

No. 11794.

Supreme Court of Colorado

April 30, 1928

Error to District Court, Delta County; Milton R. Welch, Judge.

Suit by the Juanita Coal & Coke Company against Hannah Anderson and others. Decree for plaintiff, and defendants bring error.

Reversed.

Millard Fairlamb and Charles N. Fairlamb, both of Delta, and Adair J. Hotchkiss, of Grand Junction, for plaintiffs in error.

Vincent & Bowie, of Grand Junction, for defendant in error.

WALKER J.

This action was brought by the Juanita Coal & Coke Company, a corporation, defendant in error, against plaintiffs in error and others, to obtain a reformation of a deed. The trial court granted the reformation, and to that decree this writ of error is prosecuted.

The deed involved was made by James M. Freeman, October 31, 1898 to the Fire Mountain Canal Company, a mutual ditch corporation, and was recorded November 17, 1898.

It is in the usual form of a warranty deed. The deed grants and conveys 'a right of way 50 feet in width across any portion' of a certain parcel of land in Delta county which is then described by metes and bounds, following which is this language:

'Containing 6.66 acres, and being a strip of land lying south of the Deer Trail ditch and north of a line 26 feet south of the center line of the Fire Mountain Canal as now surveyed, with the right to move or change the line of said ditch to and over any portion of the above described land.'

The reformation sought by the complaint, and granted by the decree, consisted only in striking from the deed the words 'a right of way 50 feet in width across any portion of.' The ground upon which this reformation was granted was that the contract between Freeman and his grantee, the canal company, was for the conveyance of the land itself, and not of a right of way, and that the insertion of the clause last quoted was a mistake of the draftsman of the deed. The defendant in error is grantee by quitclaim deed, in 1924, from the Fire Mountain Canal Company, of a portion of the tract included within the mete and bound description.

Plaintiffs in error are remote grantees by warranty deeds from James M. Freeman, and the descriptions in their deeds include the portion of the tract claimed by the defendant in error. The deed from Freeman to the first of the intermediate grantors of the plaintiffs in error, Charles Morgan, was made in 1899, and was expressly made subject to 'a certain right of way given to the Fire Mountain Canal Company' as described in the deed of Freeman, to the record of which reference is made in the deed. In deeds from Charles Morgan to Alpha Morgan, and from Alpha Morgan to Charles Morgan, the same reference is made to the right of way. In all subsequent conveyances in the chains of title of plaintiffs in error, no exception whatever is made either of the right of way or the tract here involved.

We are of the opinion that the decree of the trial court cannot stand. The evidence relied upon to support it does not, either in quantity or quality, meet the well-settled requirements prescribed in cases of reformation, and, if it did, the relief would not under the circumstances of this case be available against the plaintiffs in error.

1. In Merrick v. Morelock, 73 Colo. 245, 215 P. 133, this court said:

'To justify reformation of a contract, the proof must be clear, unequivocal, and indubitable.'

In 2 Pomeroy, Eq. Jurisprudence (3d Ed.) at page 1515, the author says:

'Courts of equity do not grant the high remedy of reformation upon a probability, nor even upon a mere preponderance of evidence, but only upon a certainty of the error.'

This language was quoted with approval in Wilson v. Morris, 4 Colo.App. 242, 36 P. 248; and again in Wells v. Crawford, 23 Colo.App. 103, 127 P. 914. Other Colorado decisions in which the rule has been announced in substantially the same language are Loukowski v. Pryor, 46 Colo. 584, 106 P. 7; Gibbs v. Wallace, 58 Colo. 364, 147 P. 686; Insurance Co. v. Smith, 10 Colo.App. 121, 51 P. 170. A host of authorities announcing and illustrating the rule will be found in the note to the case of Perkins v. Herring, reported in 19 Ann.Cas. at page 342, and in the note to Williams v. Hamilton, reported in 65 Am.St.Rep. 475.

The proposition which the plaintiffs were obliged to establish by the character and degree of evidence required by the above authorities was that James M. Freeman and the Fire Mountain Canal Company, prior to the execution of the deed, reached an agreement for the sale and conveyance of the land itself, and not for a right of way; that such agreement continued concurrently in the minds of both parties down to the time of the execution of the deed; and that the insertion of the clause reducing the estate to an easement was unknown to and unauthorized by both grantor and grantee. Coppes v. Keystone P. & F. Co., 36 Pa. Super. Ct. 38; Koen v. Kerns, 47 W.Va. 575, 35 S.E. 902; Whitney v. Smith, 33 Minn. 124, 22 N.W. 181; Crawford v. Willoughby, 192 N.C. 269, 134 S.E. 494; Allen v. Carter, 8 Mo.App. 585; Nebraska Loan & Trust Co. v. Ignowski, 54 Neb. 398, 74 N.W. 852; Carter v. McArtor, 28 Grat. (Va.) 356; Kerr on Fraud and Mistake (4th Ed.) p. 498.

The application of these tests to the evidence introduced in this case required that the reformation of the deed be denied. Freeman, the grantor, died several years before the suit was brought. Of the five persons constituting the board of directors of the grantee corporation at the time the deed was given, four are either dead or their whereabouts unknown. The scrivener who drew the deed was Charles L. Pike, who was at the time secretary of the canal company. He was a lawyer. He had also died before the trial. The deed was witnesses by Pike and one Amy E. Williams. The latter was not a witness at the trial, and there was no explanation of her absence.

The plaintiff below, to establish the mistake, relied chiefly upon the testimony of E. M. Duke, who was one of the directors of the canal company at the time of the transaction, and was its president in the year 1897. Plaintiff also relied upon proof of statements made by Freeman after the execution of the deed. Duke testified that he acted upon a committee of three appointed July 29, 1897, by the board of directors, to make arrangements for a right of way for the ditch of the canal company then about to be constructed across Freeman's land; that of the committee he only entered into the negotiations with Freeman, and that he carried them to a conclusion. He testified that no one was present at the time of the negotiations except himself, Freeman, and Freeman's wife. He was unable to tell the conversation, and said it was difficult to recall; it having occurred more than 25 years before. The following excepts will show the tenor of his testimony:

'I went up to look over the ditch right of way, to see what could be done with Mr. Freeman to secure a right of way through the place. Mr. Freeman contended that we damaged him on all of this land between the Fire Mountain Canal and the Deer Trail ditch. So we settled on that basis, that we would pay him $20 an acre for all of that land. * * * Why we were securing a right of way over Mr. Freeman's land for our ditch, that was our idea, and after looking over the ground we thought we were damaging this piece of ground above the Fire Mountain Canal, so we bought all of the land from Mr. Freeman. * * * Well that was about all there was to it, we just made a deal for that piece of land. * * * We did not buy a right of way 50 feet wide, we bought all of this land for a right of way. We would have made a deal for a right of way, but I couldn't get a right of way without paying for all of it, so I just took all of the land.'

Mrs. Belle Freeman, widow of James M., testified to the transaction between Freeman and Duke, as follows:

'Mr. Duke wanted to get this strip of land that lays between the two ditches. Mr. Freeman was willing he should have it. He said it would be no good to him, it was such a small strip of land. There was just an agreement between the two that they could have the land.'

It will be noted that, as to Duke's aim in the negotiations, there is a variance between his testimony and Mrs. Freeman's. Of Duke's testimony (and to a less extent, of Mrs. Freeman's) it is to be observed that it is in the form of conclusions. It is no doubt the best that the recollection of the witness could furnish after so long a lapse of time. But, since it does not undertake to state either the words or the substance of the negotiations, but merely the conclusion of the witness as to their result, it would hardly be competent to establish the terms of the contract, even in a suit where a less convincing degree of testimony is required than as the basis of a reformation. For adverse comment on this character of evidence in actions of reformation, see Underwood v. Cave, 176 Mo. 1, 75 S.W. 451; Nicoll v. Mason, 49 Ill. 358; Wyche v. Greene, 11 Ga. 159, 176.

However even if full effect should be given to this testimony, and if the court were convinced by it that there was a specific agreement made between Duke and Freeman for the purchase of the land itself, there would still be a controlling reason why a decree for reformation could not rest upon Duke's testimony. Duke testified that his negotiations with Freeman were carried on in the fall and winter of 1897-1898, and that he had nothing to do with the negotiations, if any there were, after the spring of 1898. His statement that other members of the two committees that were appointed by the board to negotiate with Freeman did not do so, is necessarily the result of hearsay, and is at variance with...