Dennis v. American-First Title & Trust Co.

• Decision Date: 14 September 1965
• Docket Number: No. 40688,AMERICAN-FIRST,40688
• Parties: Leah DENNIS and E. V. Dennis, Plaintiffs in Error. v.TITLE AND TRUST COMPANY, a corporation, Melvin Hatley, individually and d/b/a Melvin Hatley Co., W. M. Hamilton, a/k/a Bill Hamilton, W. E. Hatley, and Ranchwood Hills Development Co., a corporation, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 993

405 P.2d 993

1965 OK 129

Leah DENNIS and E. V. Dennis, Plaintiffs in Error. v. AMERICAN-FIRST TITLE AND TRUST COMPANY, a corporation Melvin Hatley, individually and d/b/a Melvin Hatley Co., W M. Hamilton, a/k/a Bill Hamilton, W. E. Hatley, and Ranchwood Hills Development Co., a corporation, Defendants in Error.

No. 40688.

Supreme Court of Oklahoma.

Sept. 14, 1965.

Syllabus by the Court

1. Relief, by way of reformation of written instruments which may be had under proper circumstances in a court of equity is limited to making the writing speak the former agreement of the parties, and the court cannot make a new or different contract for the parties.

2. Where an agreement, as reduced to writing by a scrivener, omits or contains terms or stipulations contrary to the common intention of the parties, the instrument will be corrected, so as to make it conform to their real intent, to the end that the parties be placed as they would have stood, if the mistake had not occurred. But in such case the party alleging the mistake must show exactly in what it consists and the exact correction to be made; that the mistake was mutual or common to both parties (that is, it must appear that both have done what neither intended). On the point, and to justify a correction, the evidence must be full, clear, unequivocal, and convincing as to the mistake and its mutuality. Mere preponderance of evidence is not enough. The proof must establish the facts to a moral certainty and take the case out of the range of reasonable controversy; but it need not be so certain as to go beyond any possibility of controversy.

3. Record examined, and held that the judgment of the trial court was not clearly against the weight of the evidence.

Appeal from District Court of Oklahoma County; Clarence M. Mills, Judge.

Action by Leah Dennis and E. V. Dennis, as plaintiffs, against American-First Title and Trust Company, a corporation; Melvin Hatley, individually and d/b/a Melvin Hatley Co.; W. M. Hamilton, a/k/a Bill Hamilton; W. E. Hatley; and Ranchwood Hills Development Co., a corporation, as defendants, for reformation of a written contract of sale of real estate. From a judgment for defendants, plaintiff appeal. Affirmed.

Kerr, Davis, Roberts, Heimann, Burbage & Irvine, by W. Walter Hentz, Oklahoma City, for plaintiffs in error.

Caldwell & Warren, by Robert H. Warren, Oklahoma City, for defendants in error.

HALLEY, Chief Justice.

This is an appeal from a judgment of the District Court of Oklahoma County in favor of the defendants in error, denying plaintiffs in error relief in their equitable action for reformation of a written contract of sale of real estate. The parties occupy the same relative positions here as in the trial court, and will be referred to herein as they there appeared or by name.

Plaintiffs (E. V. Dennis and his wife, Leah Dennis), in their petition, alleged in substance that they were formerly the owners of a quarter section of land in Cleveland County; that on March 5, 1962, they entered into a written contract to sell the property to the defendants, Melvin Hatley and W. E. Hatley; and that at the time of closing the sale, Melvin Hatley and W. E. Hatley took title to the property in the name of the defendant, Ranchwood Hills Development Co. Plaintiffs further alleged that a copy of the contract was placed in escrow with the defendant, American-First Title and Trust Company, together with the purchasers' down payment of $15,000. That the down payment was to be delivered to plaintiffs at the time of closing the sale, but that Melvin Hatley and W. M. Hamilton entered a claim against plaintiffs at that time for a real estate commission of $12,000 and the escrow agent refused to deliver the down payment to plaintiffs. It was further alleged that the real and true agreement between the parties was that the buyers were to pay any real estate commission that might be due the defendants, Melvin Hatley Company or W. M. Hamilton, from the sale of the realty, but that through a scrivener's error the contract recited that the sellers were to pay the commission. That the contract as executed does not reflect the true intention and agreement of the parties and should be reformed.

Defendant's answers, in addition to general denials, alleged that the contract of sale as written expressed the true and correct intention and agreement of the parties and denied any mistake in connection therewith. The escrow agent alleged that it was simply a 'stakeholder' and awaited the order of the court as to disposition of the contract and proceeds thereunder.

The case was tried to the court, who at the close of all the testimony rendered judgment in favor of the defendants. From this judgment and the overruling of their motion for new trial, plaintiffs appeal. It is first contended by plaintiffs in their brief that 'The evidence clearly shows that the provision in the final contract, 'seller further agrees to pay any real estate commission that might be due Melvin Hatley Company or Bill Hamilton,' was contrary to the prior agreement of the parties and was a scrivener's error.' This proposition requires an analysis of the evidence.

The defendant, W. M. Hamilton, came to E. V. Dennis' office in the early part of 1962, and inquired if plaintiffs had any real estate for sale which would be suitable for development. E. V. Dennis furnished him with a list of properties in which he thought Hamilton might be interested, including therein that quarter section of land involved herein. Hamilton later returned to E. V. Dennis' office and submitted Melvin Hatley's written offer, dated February 20, 1962, to purchase the above described quarter section for $160,000. The offer was on a printed Uniform Purchase Contract of the Melvin Hatley Company and contained no provision for the payment of a real estate commission. A clause at the bottom of the printed form, which provided for payment of a real estate commission to the Melvin Hatley Company by the sellers, was deleted. E. V. Dennis rejected the offer, but advised Hamilton that he would sell the quarter section for $250,000.

Hamilton thereafter presented a second written offer, dated March 1, 1962, to E. V. Dennis to purchase the surface and one-half (1/2) of the minerals in the said quarter section for $240,000. It was on the same printed form as the first offer, but signed by Melvin Hatley's father, W. E. Hatley, as the purchaser. The clause at the bottom of the printed form, which was left intact, provided that 'The * * * owners of the above described property * * * agree to * * * pay the Melvin Hatley Co. the regular commission as recommended by the Oklahoma City Real Estate Board.' W. E. Hatley's offer was also rejected by E. V. Dennis. E. V. Dennis testified that he 'told Hamilton he would take $240,000 for the place if he would forget his commission.' That Hamilton then asked, "Who will take care of that if you don't." That E. V. Dennis then said, 'I imagine Hatleys will take care of it', and that Hamilton 'made no further comment, whatsoever.'

Hamilton submitted a third written offer to E. V. Dennis, dated March 2, 1962, to purchase the same interest in the quarter section as set out in the second offer. It was also on the same printed form as the first two offers, and was signed by W. E. Hatley, as the purchaser. It provided for a consideration of $240,000, $10,000 down (to be held in escrow until closing), $5,000 additional at closing, and the balance in ten equal installments with interest to start one year from possession at 3% per annum for the second year and 6% per annum thereafter until paid. Rent was to be adjusted and possession given on the date of closing. The clause at the bottom of the printed form, which provided for the payment of a real estate commission to Melvin Hatley Company by the sellers, was deleted. The offer contained no other provision for the payment of a real estate commission.

E. V. Dennis testified he first talked with W. E. Hatley in the early morning of March 5, 1962, when the defendants, W. M. Hamilton and W. E. Hatley came to his office to discuss W. E. Hatley's previous offer of March 2, 1962, and that 'I accepted the offer with a few minor changes.' It was admitted by E. V. Dennis on cross-examination that nothing was said at that time about the payment of a real estate commission, and that no mention was ever made of the same thereafter until the date of closing on April 4, 1962. He further testified on cross-examination as follows concerning W. E. Hatley's offer of March 2, 1962:

'Q. Then I asked you this, 'Did you accept their offer,' and here is your answer, 'It was the basis for an offer I made Bill Hamilton,' was that your answer?

'A. Yes, sir, it probably was.

'Q. You took this and then you made a new offer which you subsequently gave to Mr. Hamilton to give to the Hatleys?

'A. That is right.'

E. V. Dennis further testified that he gave W. E. Hatley's offer of March 2, 1962, to his attorney son, Frank...