Crane v. Smith

• Decision Date: 24 July 1928
• Docket Number: No. 62,April Term.,62
• Citation: 220 N.W. 750,243 Mich. 447
• Parties: CRANE et al. v. SMITH et al.
• Court: Michigan Supreme Court

243 Mich. 447

220 N.W. 750

CRANE et al.

v.SMITH et al.

No. 62, April Term.

Supreme Court of Michigan.

July 24, 1928.

Appeal from Circuit Court, Clinton County, in Chancery; Edward J. Moinet and Kelly S. Searl, Judges.

Action by John D. Crane and another against Clarence A. Smith and another. Decree for plaintiffs, and defendants appeal. Decree set aside, and bill dismissed.

Argued before the Entire Bench.Brown, Kelley & Warner, of Lansing, for appellants.

Smith, Hunter & Spaulding, of St. Johns, for appellees.

FEAD, C. J.

On August 17, 1918, after some negotiations conducted through Hall, their mutual agent, the parties executed a written contract for an exchange of farms, with abstracts to be furnished and time allowed to have them examined by competent persons for merchantable title, the deeds to be executed within ten days. On August 28, 1918, the deeds were executed, from plaintiffs to defendants, and from Mrs. Smith to plaintiffs. Clarence A. Smith had no interest in his wife's farm, but acted as her agent in conducting the negotiations.

The contract provided for an exchange of the ‘respective equities' of the parties, each to assume the mortgage and land contract obligations on the premises received. The deed to plaintiff contained an exception in the warranty clause ‘as to the leases, options, and easements appearing of record in the office of the register of deeds of said Clinton county’ in certain libers of deeds and on pages named. The records so designated cover the conveyance in 1905 of perpetual right to flow 16.92 acres of land included in plaintiffs' deed. The right is in the Piatt Power & Heat Company, evidently a defunct corporation, and has never been exercised by use.

After acquiring the title, plaintiffs executed a contract for sale of part of the farm conveyed to them by Mrs. Smith, agreeing to convey unincumbered title, and, in a later action by the assignees of the contract, were required to pay damages of $1,700 on account of the flowage exception to the title. Defendants were not made parties to that suit. The plaintiffs brought this action in January, 1924, for reformation of the deed on the ground of mutual mistake and for reimbursement for the damages of $1,700, paid their contract purchaser, and expenses. The mutual mistake claimed was the belief of both parties that the flowage rights expired in 1920. Plaintiffs had decree of reformation striking the flowage easement clause from the deed and for money damages.

Defendants claimed, and plaintiffs denied, that plaintiff Crane was informed of the outstanding easement before the preliminary contract was executed. Crane testified that, before the deed was executed, Smith told him that Mr. Ray Latting had said the flowage rights would expire in 1920. Latting is an attorney, but Crane said he did not know him nor his occupation. Smith testified that he told Crane he understood the easement would expire in 1920 by limitation for nonuser, but asserted that he further told him the price of the farm would be the same, regardless of the easement. Crane denied the latter statement.

After the contract was executed, Crane, or Hall as his agent, or both, submitted the abstract to Mr. Dean Kelley, an attorney, who gave them a written opinion that the title was ‘subject to easement as to flowage and water power rights purported to be held by Piatt Power & Heat Company.’ Crane told Kelley what Smith had said about...