Lane v. Mathews

• Decision Date: 17 July 1952
• Docket Number: No. 5488,5488
• Parties: LANE et ux. v. MATHEWS.
• Court: Arizona Supreme Court

Page 1025

245 P.2d 1025

74 Ariz. 201

LANE et ux. v. MATHEWS.

No. 5488.

Supreme Court of Arizona.

July 17, 1952.

Nasib Karam, of Nogales, for appellants.

Norman Herring, of Tucson, for appellee.

STANFORD, Justice.

The original opinion in this case was handed down on March 31, 1952 and reported in 73 Ariz. 435, 242 P.2d 557. Appellee timely filed a motion for rehearing which raised doubt as to the correctness of the original decision. After consideration of appellee's motion, the motion for rehearing was granted thereby nullifying the original opinion. In order to better understand the principles involved in this case, we again relate some of the necessary facts.

This action arose out of the alleged breach of the conditions and undertakings of a farm lease. E. C. Lane and Millie Lane, appellants and defendants below, hereinafter styled lessors, own a farm near McNeal, Arizona. Sometime during the month of February, 1948, Bob Mathews, appellee and plaintiff below, hereinafter styled lessee, entered into negotiations with lessors to lease the farm on a percentage basis of the crop grown. The terms to be later incorporated in a written lease were discussed by the parties at the farm in the presence of J. M. Jessen, lessos' attorney, who resides and practices law in California. Jessen made a written memorandum of the terms agreed upon and on his return to California drew up a lease and mailed three copies to lessors, two of which were to be signed by the respective parties. Lessors read the lease and then, without signing it, delivered the lease to lessee for his signature. Lessee, who can neither read nor write, had the agreement read to him. Not being satisfied with the terms thereof, lessee took the agreement to Alfred Putts, his financial backer, for inspection. Putts and lessee took the lease to Lloyd Helm, a Douglas attorney, and had the last page changed to embody the terms and conditions which they contend had been agreed upon by the parties. Helm's secretary removed the original last page, number seven, and substituted the new page seven embodying the changes. The secretary also copied the secreterial marks on the new page as they appeared on the original six pages of the lease, i. e., JMJ:MSJ and the date 3/16/48, which was also on the original seven pages. Lessee then signed the lease and returned it to lessors without mentioning the changes which had been made on the last page. Lessor E. C. Lane testified that he did not reread the lease before signing it but stated that he checked the pages noting the identifying marks on the bottom of each page. After so inspecting the lease, lessors signed it before a notary public in their attorney's office in Calfornia.

Lessee brought this action for damages to the cotton crop as a result of lessors' refusal to keep the water pumps and engines in good repair, as they were required to do under the terms of the signed written lease. Due to lack of irrigation, approximately 200 acres of cotton were damaged. Lessors answered and counterclaimed, praying for reformation of the agreement to exclude the provisions in the written lease which were added by lessee on the last page and for damages to their farm machinery. Their defense was fraud or mutual mistake. The trial was before a jury in two phases, the first, on the issues of fraud or mutual mistake, and the second on the question of the breach of the lease. At the close of the first phase of the trial the court instructed the jury to return a verdict in favor of lessee on the issue of mutual mistake and submitted the following interrogatories on the issue of fraud:

'Did E. C. Lane and Millie Lane know that the last page of the farm lease had been changed before they signed it?'

Answer--'No.'

'If your answer to the above interrogatory numbered one (1) is no, then: did E. C. Lane and Millie Lane act as reasonably prudent persons in failing to read the last page of the Farm Lease?'

Answer--'Yes.'

'Under the instructions of the court, did E. C. Lane and Millie Lane sign and execute the farm lease as the result of fraud on the part of Bob Mathews?'

Answer--'No.'

At this point in the trial the lessors moved for judgment on the answers to the interrogatories, claiming the answers established mistake on their part and fraud or inequitable conduct on the part of the lessee. The court denied the motion and ordered the trial to proceed on the question of the breach of the signed agreement. The jury rendered a verdict in favor of lessee in the sum of $11,500 and further found in favor of lessee and against lessors on lessors' counterclaim. Lessors now prosecute this appeal.

Lessors present several assignments of error, the first two of which deal with the court's action in instructing the jury to return a verdict in favor of lessee on the issue of mutual mistake. Although lessee's testimony is somewhat contradictory on the question of his knowledge of the changes in the lease, we believe the lower court correctly decided that reasonable men could not differ in the conclusion that lessee well knew the lease had been changed to embody the terms which he contends had originally been agreed upon by the parties. We therefore find no merit in the first two assignments of error.

Lessors' third assignment of error sets forth six interrogatories to the jury which lessors contend the court erred in refusing to submit. Four of the requested interrogatories deal with mutual mistake and therefore need not be discussed in the light of our decision on that issue. The other two interrogatories, however, raise issues necessary for our determination. Briefly stated, the remaining two requested interrogatories raise the issue of whether the written agreement, as signed by the parties, is in fact the true agreement which the parties had originally intended. Lessors rely on the case of Haynie v. Taylor, 69 Ariz. 339, 213 P.2d 684, 689, in which the court said:

'* * * we hold that in the trial of equity cases where a jury has been demanded, the court may not withdraw the determination of controverted facts from the jury and that the case may only be withdrawn from their consideration where there is no controverted issue of fact, in other words, only in cases where if it were an action at law the court would be required to direct an instructed verdict.'

We do not believe the court withdrew any controverted issues of fact from the jury. The issue for determination under the pleadings was whether lessors had established grounds for reformation of the written agreement. That issue was submitted to the jury on proper interrogatories. Admittedly the answers to the interrogatories submitted were not altogether consistent. However the court was not bound by these answers and proceeded to find and adjudge that the agreement as signed by the parties under all the evidence should be enforced. It will be further noted that the Haynie case, supra, was a case in which the lower court completely withdrew all controverted issues of fact from the jury. In the instant case the lower court submitted all necessary questions of fact to the jury and we therefore hold the assignment is without merit.

Lessors' fourth assignment of error contends that the court erred in denying their motion for judgment on the answers to the interrogatories for the reasons that the answers established mistake on their part, a mistake which reasonably prudent persons would make; that they were not negligent in failing to reread the lease before signing it; and inequitable conduct on the part of lessee in not notifying lessors of the changes which had been made. It must be remembered that in equity cases the jury's verdict is advisory only and may be disregarded by the court. Holman v. Roberts, 35 Ariz. 110, 274 P. 775. The court in effect found, when it ordered the trial to proceed on the question of the breach of the written agreement, either that (1) lessors were inexcusably negligent in failing to reread the lease before signing it; (2) that there was no inequitable conduct on the part of the lessee in not advising lessors of the changes, or (3) that there was negligence on the part of lessors and inequitable conduct on the part of lessee; but applying the rule as enunciated in In re McDonnell's Estate, 65 Ariz. 248, 179 P.2d 238, that where there is a clear showing of fraud on the one hand and gross negligence upon the other, and the rights of third parties are not involved, the negligence and not the fraud will be punished. Or the court could have found that the true agreement was the agreement as signed by the parties. It is elementary that if there is any reasonable evidence to support the judgment of the lower court it must be affirmed on appeal. Kenton v. Wood, 56 Ariz. 325, 107 P.2d 380. We do not know the exact theory upon which the lower court based its judgment; therefore we shall examine the several possible theories advanced. Lessee strongly urges that lessors were grossly negligent in failing to reread the lease before signing it. Lessee stresses lessors' ages, experience in business affairs and the fact that they were represented by competent counsel. Lessee also points out that the paper and the typing on the substituted page seven were of somewhat different quality and type and that the lease and copies were in the possession of lessors and their attorney for several days before lessors signed them. We are of the opinion that there is reasonable evidence upon which the lower court could have found lessors grossly negligent. In determining the sufficiency of evidence to support the judgment, the supreme court will not consider the fact that it would have reached a different conclusion, but only whether the judgment is reasonably supported by any substantial evidence. Rouillier v. A. & B. Schuster Co., 18 Ariz. 175, 157 P. 976. In reviewing the issue of lessee's alleged inequitable conduct, it must be remembered that the parties were dealing at...