Forester v. Van Auken

• Decision Date: 01 July 1903
• Docket Number: 6731
• Citation: 96 N.W. 301,12 N.D. 175
• Parties: FORESTER v. VAN AUKEN
• Court: North Dakota Supreme Court

96 N.W. 301

12 N.D. 175

FORESTER v. VAN AUKEN

No. 6731

Supreme Court of North Dakota

July 1, 1903

Appeal from District Court, Barnes County; S. L. Glaspell, J.

Action by Jennie A. Forester against Belle R. Van Auken. Judgment for defendant, and plaintiff appeals.

Affirmed.

C. L Harris and Lockerby & White (E. H. Wright, of counsel), for appellant.

A deed absolute on its face but intended as a trust deed, may be reformed to express the relation and intention of the parties. Rev. Codes 1899, section 4703. Pugh v Davis, 96 U.S. 333, 24 L.Ed. 775; Farmer v Grose, 42 Cal. 169; Hickman v. Cantrell, 9 Yerg. 171; Teal v. Walker, 111 U.S. 242, 28 L.Ed 415; Rodgers v. Sanders, 16 Me. 92; Patterson v. Blumer, 35 Conn. 57; Walden v. Skinner, 101 U.S. 577, 25 L.Ed. 963; Gunter v. Janes, 9 Cal. 643; Mullard v. Hathaway, 27 Cal. 191; Roach v. Carrafa, 85 Cal. 436, 25 P. 22; Tapia v. Demartina, 77 Cal. 383, 19 P. 641; Lockwood v. Canfield, 20 Cal. 126, 2 Devlin on Deeds, 1136. There can be no difference between a trust deed and a mortgage security, where the writing is silent, as we have it in this case. 26 Am. & Eng. Enc. of Law 860; Boone on Mortgages 96, 226; Lookwood v. Canfield, 20 Cal. 126. If a deed can be reformed and declared a mortgage by resort to parol evidence, then deed, absolute on its face, can be shown to be a trust deed, and parol evidence resorted to for that purpose. Gunter v. Janes, 9 Cal. 643; Mullard v. Hathaway, 27 Cal. 191; Hayne v. Hermann, 97 Cal. 259, 32 P. 177. A written instrument, executed under the misapprehension that it embodies an agreement, whereby the mistake of the draughtsman as to law or fact it fails of its purpose, equity will reform in accordance with the contract. Truesdale v. Lehman, 47 N.J.Eq. 218, 20 A. 319; Keister v. Meyers, 17 N.E. 161; Adams v. Wheeler, 122 Ind. 257, 23 N.E. 760; Knight v. Glasscock, 51 Ark. 390, 11 S.W. 580; Andrew v. Andrew, 81 Me. 339, 17 A. 166.

While oral evidence is not admissible to vary a written instrument, such evidence is admissible to show that, by reason of fraud, mistake or accident, the instrument fails to show the true intent of the writing; and when mistake, fraud or accident clearly appears, equity will rectify. Rogers v. Sanders, 16 Me. 92; Patterson v. Bloomer, 35 Conn. 57; Waldron v. Skinner, 101 U.S. 577, 25 L.Ed. 963; Gunter v. Janes, 9 Cal. 643; Andrews v. Gillespie, 47 N.Y. 491. Courts of equity reform contracts, courts of law act on them as they find them. Nance v. Metcalf, 1 West Rep. 443, 19 Mo.App. 183; Loss v. Orby, 22 N.J.Eq. 55. Equity will reform when the mistake occurs from either ignorance, forgetfulness, unconsciousness, or belief in a thing which does not exist. 2 Pom. Eq. Jur. 299; Briggs v. Vanderbilt, 19 Barb. 222; Durgan v. Cranston, 7 Johns. 442; McDaniels v. Bank of Rutland, 29 Vt. 248; Ewell v. Chamberlain, 4 Bosw. 320; Rhell v. Hick, 25 N.Y. 289; Ketchum v. Bank of Commerce, 19 N.Y. 502; Belknap v. Sealey, 14 N.Y. 143; Martin v. McCormick, 8 N.Y. 335; Gardner v. Troy, 26 Barb. 423; Kip v. Monroe, 29 Barb. 579; Wedon v. Olds, 20 Wend. 174.

Winterer & Winterer, for respondent.

Mistake must be mutual. Life Ins. Co. v. McMarter, 87 F. 63; Stewart v. Gordon, 53 N.E. 797; Bispham Eq. section 469.

All declarations of trust in land should be proven by some writing signed by the declarant, or be void; but resulting trusts, or trusts created by operation of law need not be in writing, and may be proved by parol. Williams v. Williams, 180 Ill. 361, 54 N.E. 229; Cameron v. Nelson, 77 N.W. 771; Arnold v. Ellis, 48 S.W. 883; Rogers v. Rogers, 39 A. 755; Fitzgerald v. Fitzgerald, 47 N.E. 431; Hamilton v. Hall's Estate, 69 N.W. 484; Meyers v. Meyers, 47 N.E. 309; Klamp v. Klamp, 70 N.W. 525; Luce v. Reed, 65 N.W. 91; Thomas v. Thomas, 67 N.W. 182; Goelz v. Goelz, 41 N.E. 756; Sherman v. Sandell, 39 P. 797; McCahill v. McCahill, 25 N.Y.S. 219; Patterson v. Boswell, 36 N.E. 845; Beavers v. McKinley, 33 P. 359; Renz v. Stoll, 54 N.W. 276; Smith v. Mason, 55 P. 143.

OPINION

MORGAN, J.

This action is brought to recover the possession of certain real estate situated in Valley City, N.D., and to reform the terms of a deed of such property executed and delivered to the defendant by the plaintiff on August 21, 1893. The complaint alleges that it was mutually agreed between the parties that plaintiff should execute to defendant a trust deed of said real estate; that the ownership of the same should be vested in the plaintiff, but that the defendant was to have full possession and control thereof, lease it, collect rents, pay taxes, and keep buildings insured and in good repair; that out of the money coming into defendant's hands from rents collected, the defendant was to pay such taxes, insurance, expenses of repairs, and to pay a mortgage of $ 2,000, then in force upon one lot and the brick building situated thereon, and out of such money collected was also to pay herself a certain note given to her by plaintiff and her husband in 1891 for $ 800; that upon the payment of such debts according to such agreement possession of such premises should be restored to plaintiff, and the same reconveyed to her by a warranty deed. These are substantially the allegations of paragraph 3 of the complaint. The complaint further states: "That in pursuance of said agreement this plaintiff conveyed to the said defendant, by a deed of warranty, in writing, the premises hereinbefore described; * * * that through the inadvertance and mistake of this plaintiff and the defendant the conditions mentioned and specified in paragraph 3 of this complaint were not inserted in said deed, but said deed was intended by plaintiff and defendant as a trust deed or mortgage security, under which said defendant might carry out the conditions and covenants mentioned and described in said paragraph 3 of this complaint, but said deed does not express the true and real intention of this plaintiff and said defendant by reason of said omission." The prayer of the complaint is for an accounting and a reconveyance, and for such other and general relief as may be necessary and proper under the evidence. The complaint states many other facts bearing on this cause of action, but the substance of the cause of action is as stated. The answer alleges that the said property was sold to the defendant for a valuable consideration, and conveyed to her by said warranty deed; that such sale was an absolute sale, and contained no contemporaneous, prior, or subsequent stipulations or agreements for a reconveyance, and contained no agreement that the transfer was made in trust or for security purposes. The trial court made findings of fact and conclusions of law in favor of the defendant. Judgment was entered pursuant thereto. This appeal is taken from such judgment. A trial de novo is demanded in this court pursuant to section 5630, Rev. Codes 1899.

The evidence in the case is voluminous, covering nearly 400 pages of the printed abstract. The facts pertinent to a determination of the issues may be summarized as follows: The plaintiff is the daughter of the defendant. In 1889 the plaintiff's husband, Alex. McConnell, died, leaving to her and to her daughter, Georgia McConnell, individually considerable real and personal property. In 1891 the plaintiff married one George W. Forester, who engaged in business in Montana, and carried on such business with the plaintiff's money partly, and lost considerable of her money in that way. For the purpose of providing him with money, the plaintiff sold some of her property, and borrowed $ 2,000, and secured its payment by a mortgage on lot 13, in Valley City, on which lot there was a brick building, which is a part of the property in dispute in this action. This mortgage did not mature until about four years from August 21, 1893, the day on which the warranty deed was given by plaintiff to defendant. The plaintiff had signed notes jointly with her husband for goods purchased in his business, amounting to several hundred dollars, and some of these notes were about to become due in August, 1893. The plaintiff and her husband also owed the defendant $ 800 and two years' accrued interest at eight per cent per annum. The defendant had written Forester, asking him to pay this sum. He and his wife were then living in Montana. She came east to Valley City, where the defendant resided, to make some arrangement in regard to this indebtedness. At the making of the contract in relation to the disposition of the property herein involved, the plaintiff and defendant were the only persons present. As to what was said there in coming to the agreement, their testimony is in conflict, and cannot be reconciled on the theory that both are endeavoring to tell the truth. The plaintiff testifies that there was no sale or agreement to sell; that the conveyance was executed to secure the defendant on her $ 800 note. She says: "My understanding, and we talked it, I was to give her a trust deed of the property. She was to look after it, and, after paying the mortgage, she to hold it long enough to collect the rent and pay the taxes, so she could pay the mortgage of $ 2,000 and her note of $ 800 and taxes, keep the property insured, and at the end of that time I was to have the property back." She further testifies that she did not know when she signed the deed that it did not express their agreement and her intention in regard to the disposition of the property, and that, had she known that it did not express their intention, agreement and understanding, she would not have signed it. The defendant denies that there was ever any talk, suggestion or intimation whatever as to deeding the property back, or that anything was said by them that contemplated anything but an absolute...