Mills v. Schulba

• Decision Date: 12 January 1950
• Citation: 213 P.2d 408,95 Cal.App.2d 559
• Court: California Court of Appeals Court of Appeals
• Parties: MILLS et ux. v. SCHULBA et al. Civ. 13965.

Page 408

213 P.2d 408

95 Cal.App.2d 559

MILLS et ux. v. SCHULBA et al.

Civ. 13965.

District Court of Appeal, First District, Division 2, California.

Jan. 12, 1950.

Millington, Dell 'Ergo, Weeks & Morrissey, Redwood City, for appellants.

Bullock, Wagstaffe & Daba, Redwood City, for respondents.

GOODELL, Justice.

This appeal was taken from a judgment which decreed the reformation of a deed. The appellant Anthony Schulba died after the appeal was taken and his executrix was substituted.

Anthony and Grace Schulba owned two lots with a frontage of 73 feet 5 inches on Mission Street in Daly City. One, of irregular shape, with a frontage of 33 feet 5 inches, has a two-story building thereon, the lower part of which is a shop and the upper part a dwelling. The other adjoins, with a frontage of 40 feet and a depth of about 100 feet, and was unimproved except for a fence, shed and garage.

In March, 1944, respondents, acting through a broker, made a written offer to buy both lots for $10,000. Appellants rejected the offer but said they would sell for $10,500, which meant $10,000 net.

In July, 1944, the parties got together without a broker and orally agreed on $10,000 net. The down payment was made, a deed recorded, a mortgage given, and respondents went into possession of both lots about August 22, 1944.

Some 19 months later it was discovered that the deed described only the improved property (the 33 ft. 5 in. lot) and omitted all reference to the unimproved 40 foot lot. This suit was promptly brought.

The court found 'that both parties understood that both parcels were to be included in the transaction and were covered by the deed, and that they were not both included because of a mutual mistake of the parties.'

Appellants' for points are (1st) that the amended complaint does not state a cause of action; (2nd) that the evidence is insufficient to support the findings and judgment; (3rd) that plaintiffs' remedy, if any, is rescission, not reformation, and (4th) that plaintiffs are precluded from relief by their own negligence.

Appellants' attack on the amended complaint comes at a late date, for they did not demur. 'In the absence of a demurrer, great liberality has been indulged in order to sustain faulty complaints in actions to reform contracts', Auerbach v. Healy, 174 Cal. 60, 63, 161 P. 1157, 1158, and our only inquiry is whether the pleading is sufficient as against a general demurrer.

In the amended complaint it is alleged that defendants, owners of both lots, agreed to sell them to plaintiffs for $10,000; that the parties jointly employed an attorney (naming him) for the purpose of preparing the necessary deed and mortgage and of securing title searches and title insurance; that on or about August 22, 1944, defendants, delivered to plaintiffs a 'joint tenancy deed, a copy of which is attached to the original complaint * * * as exhibit A, and is incorporated herein as though repeated and repleaded in full'; that such deed did not convey the two lots 'and that the failure of said deed to convey the two said lots is the result of a mistake on the part of [the attorney] acting for and in behalf of all of the parties hereto and that it was the intention of the parties hereto that said deed should convey * * * title in fee simple in the two said lots * * * That both the plaintiffs and the defendants herein relied upon [the attorney] to so draw the deed as to convey title in fee simple * * *.'

Our courts have repeatedly held that the mistake of a draftsman is a good ground for the reformation of an instrument which does not truly express the intention of the parties. 22 Cal.Jur. p. 719 and cases cited; See, also, Merkle v. Merkle, 85 Cal.App. 87, 107-108, 258 P. 969. The complaint not only alleges such mistake but goes further and alleges that the draftsman was 'jointly employed', the theory being, apparently, that his mistake was the mutual mistake of the principals who placed reliance in him.

The mistake of an attorney chosen by both sides to effect a transfer of title is not unlike that of a surveyor chosen by both sides to run a line, who runs it in the wrong place resulting in an erroneous description in the deed. Such a case was Breen v. Donnelly, 74 Cal. 301, 15 P. 845, cited in Hart v. Walton, 9 Cal.App. 502, 508, 99 P. 719, where reformation was decreed.

In 45 Am.Jur. pp. 618-619 this is said: 'A mutual mistake of their agents is not necessarily a mistake of the parties. Undoubtedly, it would be * * * where the mistake was made by a scrivener who acted as common agent of both parties in drafting the instrument; * * *.' See, also, 26 A.L.R. 506; Meek v. Hurst, 1909, 223 Mo. 688, 122 S.W. 1022, 1024, 135 Am.St.Rep. 531, and Kobylinski v. Szeliga, 307 Mich. 306, 11 N.W.2d 899.

The amended complaint did not contain the deed but referred to the copy thereof annexed to the original complaint and thus incorporated it. Appellants cannot complain of this since they not only did not demur, but in their answer they referred to the same exhibit attached to the superseded pleading. Thus there was an aider, 21 Cal.Jur. p. 277, and both sides went to trial assuming that the deed was properly pleaded.

The amended complaint pleads a mutual mistake by alleging the error of the attorney 'jointly employed', and its allegations bring the case within section 3399, Civil Code. This conclusion is supported by Seegelken v. Corey, 93 Cal. 92, 95, 28 P. 849, and Robertson v. Melville, 60 Cal.App. 354, 358-359, 212 P. 273, as well as by cases already cited.

Appellants' second point is that the evidence is insufficient to support the findings and judgment.

There are but few conflicts in this record.

It was established by documentary evidence that in the first negotiations an offer was made by respondents to purchase both lots for $10,000. Those negotiations broke down on the difference in price between $10,000 gross and $10,000 net. The final negotiations which were oral, informal, and without the aid of a broker, eventuated in an agreement on $10,000 net, precisely the figure for which appellants had originally held out. These undisputed facts and the coincidence of figures were persuasive evidence that the property on which the parties came to terms in July was identical with that as to which they had negotiated in March namely, both lots.

After the attorney had agreed to represent respondents as well as appellants, Mills gave him, according to both respondents, the document containing the rejected offer, which referred to both lots, saying, 'This is the property I am buying.' The attorney denied this, testifying that he never saw that document until the trial. Respondents testified that on the same occasion the attorney replied that the document did not contain 'a complete description of the property, which I will get from Mr. Schulba and have a title search on this property.' It is undisputed that he obtained from Schulba an old deed but it described only the improved property. That description became the basis for the title search, the policy, the deed and the mortgage.

The following circumstances attending the transfer are persuasive evidence that both parties intended the unimproved lot to be included in the deed. (1) Possession of that lot was given to respondents in August, 1944, at the time the improved property was turned over, and remained unchallenged until March 18, 1946. (2) The key to the gate leading into it was handed by Schulba to the Mills' son with the statement 'It is not my key.' (3) For almost two years appellants had rented the garage on the unimproved lot to the Campbells and in August after the transfer, when they tendered the rent to Schulba, he told them, according to their testimony, to pay it to Mills as the lot had been sold to him. They did so thereafter. Indeed Schulba admitted that he told Campbell 'From now on * * * pay the rent to...