Great Western Mfg. Co. v. Adams

• Decision Date: 23 February 1910
• Docket Number: 3,095.
• Parties: GREAT WESTERN MFG. CO. v. ADAMS.
• Court: U.S. Court of Appeals — Eighth Circuit

176 F. 325

GREAT WESTERN MFG. CO. v. ADAMS.

No. 3,095.

United States Court of Appeals, Eighth Circuit.

February 23, 1910

James A. Reed (W. W. Hooper and John H. Atwood, on the brief), for appellant.

H. C Mechen, for appellee.

Before SANBORN and ADAMS, Circuit Judges, and McPHERSON, District judge.

ADAMS Circuit Judge.

This was a bill to enjoin an action at law and reform a deed. Relief was denied in the Circuit Court, and complainant appealed. The facts are these: On April 30, 1898, the complainant, the Great Western Manufacturing Company executed a deed conveying to defendant Adams a leasehold term in and to a lot of ground in the town of Ozark, Ark. Before the execution of that deed the lot had been leased by the town, its owner, to the Ozark Canning Company for the term of 99 years. That company subsequently reconveyed it to its owner, and the town again leased it for practically the unexpired term of the Canning Company lease to W. S. Schultz and J. T. Jones, from whom the Manufacturing Company deraigns title.

The last-mentioned lease contained a condition subsequent that the lessees should maintain upon the demised premises during the entire term of the lease a roller flouring mill of a specified capacity, and, as security for the performance of that condition, a provision for a reverter to the town in case of its breach was inserted.

The lease having been first made to the Canning Company was, even after the second lease had been given to Schultz and Jones colloquially referred to as the 'Canning Company lease.' In the conveyance to Adams made by the Manufacturing Company there was a general warranty of title with a saving clause as follows:

'Saving and excepting only the right of reversion after the expiration of said lease of ninety-nine years and the vendor's lien herein reserved.'

The 'said lease' there referred to was in the fore part of the deed described as the 99-year lease under which the Canning Company had occupied the premises. Adams, who held by mesne conveyances through the Manufacturing Company, under the Schultz and Jones lease, was ousted by the town for breach of the condition requiring the maintenance of the flouring mill and sued his grantor, the Manufacturing Company, on its covenant of warranty for damages. In the trial of that action the defendant was confronted with the fact that the saving clause in its covenant of warranty did not except the right of reversion reserved in the Schultz and Jones lease. Thereupon this suit was instituted by it to stay further prosecution of the action at law and reform the deed so as to make it except from the warranty the right of reversion contained in the last-mentioned lease, on the alleged ground that the language of the saving clause was a mistake and did not express the intention of the parties.

No right of reversion was reserved in the Canning Company lease and the exception of that supposed right from the operation of the warranty in the Adams deed was meaningless. There was no right of reversion except that specified in the Schultz and Jones lease to which the saving clause could by any possibility apply. The parties to the Adams deed, therefore must have intended to except from the covenant of warranty the right of reversion reserved in the last-mentioned lease. The failure of the scrivener to accurately express the true intent of the parties undoubtedly arose from the commonly accepted colloquial name given to the lot which was the subject of the conveyance. We reformed a contract in the case of Assman v. Travelers' Ins. Co., 94 C.C.A. 58, 168 F. 694, upon a similar state of facts and should not hesitate to do so in this case were it not for certain facts which, in our opinion, deprive the Manufacturing Company of the right to equitable...