Cleveland v. Bateman

• Decision Date: 16 November 1915
• Docket Number: No. 1749.,1749.
• Citation: 158 P. 648,21 N.M. 675
• Parties: CLEVELAND ET AL.v.BATEMAN.
• Court: New Mexico Supreme Court

21 N.M. 675

158 P. 648

CLEVELAND ET AL.

v.BATEMAN.

No. 1749.

Supreme Court of New Mexico.

Nov. 16, 1915.On Rehearing, June 27, 1916.

Syllabus by the Court.

Objections made at the trial to the sufficiency of a pleading must definitely point out the alleged errors, and, when that is not done, the pleading will be liberally construed in order to uphold the judgment.

Equity has jurisdiction to reform written instruments in but two well-defined cases: (1) Where there is a mutual mistake, that is, where there has been a meeting of minds, an agreement actually entered into, but the instrument in its written form does not express what was really intended by the parties thereto; and (2) where there has been a mistake of one party, accompanied by fraud or other inequitable conduct of the remaining parties.

Where relief by way of reformation is incidental to the main purpose of a suit, it is not necessary to allege a demand to correct a mistake and a refusal thereof.

A court of equity will not reform a void instrument. Held, that the instrument which is sought to be reformed in this suit is not void.

In this jurisdiction, a mortgage on real estate is simply security for the payment of a debt, leaving the legal title to the mortgaged premises in the mortgagor.

(a) A mortgagee, in a mortgage deed which contains a power of sale on default, cannot become a purchaser at a sale which he, himself, makes under the power, either directly or through the agency of a third person, unless expressly permitted by the terms of the instrument.

(b) A mortgagee's purchase at his own foreclosure sale, when not authorized, is voidable only, giving to the mortgagor an election either to ratify and affirm the sale or to avoid it and have it set aside.

(c) The mortgagor's option must be exercised within a reasonable time and before the property has passed into the hands of an innocent purchaser for value and without notice.

(a) In a suit for reformation, the complaint must make it appear that complainant is pursuing his remedy in good time after discovery of the injury; otherwise, the same is demurrable.

(b) Where a complaint is silent as to the time of discovery of a mistake, it must be taken to have been known to all parties interested from the time the instrument was made.

(c) An objection to the introduction of any evidence, made at the beginning of the trial, on the ground that the complaint does not state a cause of action, is in the nature of a demurrer ore tenus.

(d) A complaint and reply are considered together in determining a demurrer ore tenus directed to the complaint, where the reply alleges matters omitted by, and which should have been stated in, the complaint, because the irregularity of pleading improper matters in the reply is waived by accepting it and in refusing to move to strike it out, or otherwise attacking it.

The tenor of the instrument which the parties seek to have decreed by the court, in substitution of the agreement as reduced to writing, must appear upon the face of the complaint.

A mortgagee in making a conveyance under a power in a mortgage should not execute the conveyance in his own name but in that of his principal, as the latter's attorney in fact.

(a) All the essential requisites of the power contained in a mortgage must be strictly complied with.

(b) Recitals, contained in a deed executed by virtue of a power of sale contained in a mortgage, that proper notice of sale was given are prima facie proof of such facts as against the parties and privies to the instrument containing the power, and the burden of overcoming such proof rests upon the party asserting the contrary.

In this jurisdiction, a power of sale contained in a real estate mortgage is coupled with an interest, hence the power is not revoked by the death of the mortgagor, notwithstanding the fact that such a mortgage merely gives the mortgagee a lien on the property or is a mere security for the debt.

Appeal from District Court, Chaves County; John T. McClure, Judge.

Action by George P. Cleveland, as next friend of Helen Monroe Doss, Henry W. Doss, Clevie Doss, and Kathleen Doss, minors, and others, against U. S. Bateman. From a judgment for plaintiffs, defendant appeals. Affirmed.

An objection to the introduction of any evidence, made at the beginning of the trial, on the ground that the complaint does not state a cause of action, is in the nature of a demurrer ore tenus.

U. S. Bateman, of Roswell, pro se.

Ed S. Gibbany, of Roswell, for appellees.

HANNA, J.

This is a suit in equity brought by plaintiffs against defendants to reform an instrument purporting to be a deed, and to quiet title to certain lots described therein. The complaint alleges that the plaintiffs are the owners and entitled to the possession of certain lots in the Ovard Addition to the city of Roswell, which were acquired by mesne conveyance from J. S. Williamson, their common grantor, who acquired title thereto by virtue of a sale made in pursuance of a power of sale contained in a mortgage deed executed on May 26, 1891, by George T. Ovard and D. A. Ovard, his wife, to the Pecos Valley Mercantile Company, a partnership composed of J. S. Williamson, J. J. Sanders, and Charles Wilson; that said Williamson, acting for himself and the members of said partnership, duly and legally complied with the conditions of said mortgage deed, and the property was sold and a conveyance thereof attempted by deed; that, by mistake of the scrivener, the said deed was so drawn that it conveyed only the right, title, and interest of J. S. Williamson, J. J. Sanders, and Charles Wilson, mortgagees, when, in truth and in fact, it was the intention of the members of said firm and their instruction to said scrivener, as well as the purpose and object of the advertisement and sale, to convey all the right, title, and interest of the mortgagors, George T. Ovard and D. A. Ovard, his wife, to said Williamson, who was the highest and best bidder at said sale; that plaintiffs purchased said lots without knowledge of said mistake in said deed; that plaintiffs are informed and believe that the defendants make some claim of title to said premises, adverse to the estate of plaintiffs. Plaintiffs pray for reformation of said deed and to quiet title to the lands therein mentioned.

The answer of defendants denied generally all of the allegations made in the complaint, and alleged, by way of new matter, that the cause of action of plaintiffs was discovered and known by plaintiffs more than four years before the filing of the original complaint herein; that on May 26, 1891, said Ovard and wife made, acknowledged, and delivered to and in favor of the Pecos Valley Mercantile Company, the mortgage, to secure the payment of $559.13, payable 18 months after date; that said mortgage deed not only fails to convey any real estate therein mentioned, but otherwise is fatally defective upon its face; that the validity of said mortgage deed was drawn in question in a certain cause, numbered 570, in the district court for Chaves county, which cause was between different parties than those mentioned in the case at bar, and was held ineffective as an instrument of conveyance; that the rights of plaintiffs are based entirely upon said mortgage; that the decision of said court in said cause was generally considered and discussed among real estate agents and brokers then engaged in business at Roswell, and was generally known to the public; that defendants are the owners of said estate and entitled to the possession thereof, deriving title thereto by virtue of conveyances made and executed by the heirs at law of said Ovard and wife; that such conveyances were executed in the years 1909 and 1911; that defendant, Bateman, was in the actual possession of said lands long before the institution of this action, and has placed valuable improvements on most of said lots; that he has paid the taxes assessed thereon and had no knowledge that plaintiffs claimed that a mistake existed in said deed, under which plaintiffs claim, until the institution of this suit; that the mistake in said deed appeared upon its face and was of record for more than 17 years prior to the institution of this suit, and until this time plaintiffs have taken no action with reference thereto; that 16 other lots were included in said mortgage deed, and are now, and have been for a long time previous to the institution of this suit, in the peaceable possession of persons other than the parties to this suit.

The reply alleged that all the property mentioned in the complaint was purchased by plaintiffs for valuable considerations, without knowledge of the mistake in the deed which is sought to be reformed, and pleads specific facts as to when each plaintiff obtained knowledge of said mistake; that the Doss children are minors, and that the allegations of laches on the part of the plaintiffs cannot apply to them for that reason; that the heirs of said Ovards have never been in possession of said lands, and that the interest of said Ovards in said premises was foreclosed as alleged in the complaint, and therefore the defendants acquired nothing by virtue of the deeds made by the heirs of the Ovards, executed subsequent to the foreclosure of said mortgage.

The case came on to be heard before the court, and the defendant, U. S. Bateman, objected to the introduction of any evidence on the ground that the complaint failed to state facts sufficient to constitute a cause of action. The objection was overruled by the court. Evidence on the part of the plaintiffs was then introduced, which tended to support the allegations of the complaint as well as to prove that the mortgagor, George T. Ovard, was present at the sale and acquiesced therein, and that J. S. Williamson was the sole owner of the note and mortgage at the time of the foreclosure proceedings. The defendant introduced evidence tending to prove title to the premises in himself, provided his...