Hasten v. The Citizens State Bank of Sterling

• Decision Date: 11 April 1931
• Docket Number: 29,809
• Parties: SAMUEL HASTEN, Appellant, v. THE CITIZENS STATE BANK OF STERLING, Appellee
• Court: Kansas Supreme Court

297 P. 1061

132 Kan. 767

SAMUEL HASTEN, Appellant, v. THE CITIZENS STATE BANK OF STERLING, Appellee

No. 29,809

Supreme Court of Kansas

April 11, 1931

Decided January, 1931.

Appeal from Reno district court; JOHN G. SOMERS, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. DEEDS -- Construing With Contemporaneous Instruments. In a transaction where plaintiff executed deeds for lands in payment of his indebtedness to the defendant with the provision therein that the plaintiff might at his option redeem the land within a fixed time, for which a bond for a deed was executed, the provisions of the several instruments are all to be considered together as constituting a single transaction and as evidence of the contract made between the parties.

2. SPECIFIC PERFORMANCE--Certainty and Definiteness of Contract--Meeting of Minds. Where one of the writings, the bond for a deed given by defendants, by mistake omitted material matters, and was not in accord with the other writings executed nor with the intention of the parties, the plaintiff was not entitled to specific performance in accordance with the terms of the incorrect bond.

3. SAME -- Discretion of Court -- Effect of Mistake. In an action for specific performance the granting of that relief rests largely in the sound judicial discretion of the court, and it will not enforce a contract where there is mistake, fraud unfairness, nor where under the facts and circumstances it would be unreasonable and inequitable to enforce the contract.

4. SAME--Relief Awarded--Incidental Relief Where Performance Denied. The court, having held that the plaintiff was not entitled to the specific performance asked and having before it all the interested parties and all the evidence pertinent to the transaction out of which the controversy arose, was warranted in proceeding to determine the rights of the parties and to administer equity between them.

5. EVIDENCE--Parol Evidence to Vary Writing. Where the issues are whether a written instrument is incorrect and false and not the real contract made by the parties, the rule that the terms of the written contract may not be varied or contradicted by parol proof does not apply.

C. M. Williams, D. C. Martindell and W. D. P. Carey, all of Hutchinson, for the appellant.

A. C. Malloy, Roy C. Davis, Warren H. White and E. T. Foote, all of Hutchinson, for the appellee.

Johnston C. J. Sloan, J., not participating.

OPINION

JOHNSTON, C. J.:

This was an action brought by Samuel Haston against the Citizens State Bank of Sterling, to specifically enforce a contract for the sale and conveyance of several tracts of land, and to accept as full compensation therefor the sum of $ 13,155.82, and also for damages against the defendant for $ 7,000. The trial court found that the minds of the contracting parties did not meet in parts of the contract as evidenced by a bond for a deed and other instruments constituting the contract, and refused specific performance, but did decree that upon payment by the plaintiff to the defendant of $ 13,155.82, together with such taxes and interest on mortgages as defendant had paid, the latter should convey the land to plaintiff subject to the mortgages existing on the real estate when a bond for a deed was signed. The plaintiff appeals.

The facts in the case appear from the following findings of fact made by the court, which include its conclusions of law:

"This matter was heard upon a motion to modify and set aside certain findings of fact heretofore made, and in compliance with such motion I have included certain of the original findings, modified certain others and included new findings so that these findings of fact will now be considered as the findings of fact in the case:

"1. The plaintiff, during 1925, was indebted to the defendant on certain promissory notes in the amount of $ 13,558.20, and as surety on an additional note of $ 1,070.86. He was a farmer and cattle raiser, had been dealing with the defendant a good many years, but was financially unable to pay the notes at the time, and the bank was insisting upon payment.

"2. The plaintiff, in 1925, was the owner of two eighty-acre tracts of farm land, and 280 acres of grass land in addition to his homestead of 160 acres, the homestead entering into this lawsuit incidentally only.

"3. On all of the above land there were blanket mortgages in November, 1925, aggregating in excess of $ 19,000.

"4. In order to effect a settlement on these notes, the plaintiff and defendant entered into an agreement providing, in substance, that the plaintiff turn over the 440 acres of land, not including his homestead, to the bank in exchange for the cancellation of the notes, providing that the bank would give him an opportunity to repurchase the land within three years, and provided further that the defendant would grant him a lease covering the land for such three-year period at a rental of $ 1,200 per year, cash rent. This agreement was reduced to writing in the usual banker method, in five separate and apparently unrelated instruments, copies of which are attached to the pleadings as follows:

"'The lease from the defendant to plaintiff as exhibit A of the petition; the so-called "bond for deed," running from the defendant to the plaintiff, as exhibit B of the petition; the warranty deed conveying the farm land from plaintiff to defendant as exhibit A of the answer, and the warranty deed covering the grass land from plaintiff to defendant as exhibit B of the answer, and the receipt for the notes given by the defendant to plaintiff as exhibit C of the answer. No one else, except possibly a real-estate dealer, could have thought of more instruments to have achieved the simple result intended.'

"5. The pertinent portion of the bond for deed, around which this suit turns, reads as follows:

"'That the Citizens State Bank of Sterling, Kansas, in the county of Rice, state of Kansas, party of the first part, is held and firmly bound unto Sam Haston, party of the second part, in the sum of thirteen thousand one hundred fifty-five and no/100 dollars.

"'The condition of this obligation is such, that said party of the first part has agreed to grant, sell and convey unto said party of the second part, the following-described real estate, situated in Reno county, and state of Kansas, to wit: (here follows a description of the real estate) for the sum of thirteen thousand one hundred fifty-five and 82/100 dollars, to be paid on or before March 1, 1929.

"'Now, if said party of the first part shall, on or before the 1st day of March, 1929, and upon full payment of said sum and sums of money, execute and deliver to said party of the second part a good and sufficient warranty deed, conveying an absolute and indefeasible estate, in fee simple, with the usual covenants, in and to said tract and parcel of land, then this obligation shall be void; otherwise to remain in full force and effect.'

"This bond for deed is properly executed.

"6. This land was conveyed to the defendant by the plaintiff subject to mortgage indebtedness, as follows:

E 1/2 of NE 1/4, 10-22-9

$ 3,380.00

W 1/2 of S 1/2 of 3-22-9

3,310.00

NE 1/4 of W 120 acres and NW 1/4 3-22-10

2,500.00

A total indebtedness of

$ 9,190.00

"7. The value of the land at the time of the conveyances to the bank is as follows: The two eighty-acre tracts, $ 10,000, and the grass land $ 2,500, or a total of $ 12,500, leaving an equity worth approximately $ 3,310. However, the president of the defendant bank, who handled all the preliminary negotiations between the bank and plaintiff, thought the value of the real estate was considerably higher and thought this equity was worth between $ 5,000 and $ 6,000 at the time of the transaction.

"8. For the purpose of the negotiations the president of the bank placed the value of the equity at approximately $ 8,000 and, in substance, was willing to deal with the plaintiff on the basis of trading the equity in the land for the notes. These equities, outside of his homestead and a ten-acre piece of farm land near Coffeyville, Kan., variously valued at from $ 300 to $ 1,500, was all the property the plaintiff had.

"To this trade the plaintiff agreed, but with the added proviso that he should be permitted to 'redeem' the land and be permitted the privilege of leasing the land for the three-year period in which his right to 'redeem' should run.

"The president of the bank also believed that he was making the best settlement possible for the bank, believing that had the bank brought suit on the notes, secured judgment, levied execution on the land and finally purchased the land at sheriff's sale, it would have secured no more than it did under the contract, which he finally entered into with the plaintiff, and in addition to other losses the bank would have had to pay the expenses on the suits.

"9. At a directors' meeting of the defendant bank on November 30, 1925, at which the plaintiff was present, negotiations looking to the cancellation and surrender of the plaintiff's notes, and the conveyance to defendant bank of the equities in the land were had. At this meeting, after considerable discussion, the following motion was adopted by the directors:

"'It was moved, seconded and carried that we accept a deal from Sam Haston to E 1/2 10-22-9 and SW 1/4 3-22-9, and 280 acres on N 1/2 sec. 3-22-10, surrendering to him notes as follows: $ 5,000, $ 5,000, $ 200, $ 100, $ 1,300, and $ 873.31, and accrued interest thereon, and give him a bond for deed, covering same amount on same land for a three-year period, he to pay $ 1,200 cash rental per year for the land, the bank to take care of the interest on mortgages on land in the amount of $ 9,066.67, and taxes.'

"It...