State Trust Co. v. Braznell
| Decision Date | 19 March 1947 |
| Docket Number | 162 |
| Citation | 41 S.E.2d 744,227 N.C. 211 |
| Parties | STATE TRUST CO. v. BRAZNELL et al. |
| Court | North Carolina Supreme Court |
Civil action to remove cloud from leasehold estate of plaintiff and to reform a deed from defendants Long to defendant Braznell.
In October 1945, W. B. Hodges and the estate of C. D. Weeks owned the fourstory building at the corner of Fourth Avenue and Main Street in Hendersonville, N. C., known as Commercial Building. The first floor thereof was constructed for use of a banking institution and the plaintiffs occupied the same under a 10-year lease from Hodges and Weeks. The executor of the will of C. D. Weeks was authorized to sell at private sale subject to confirmation by the court.
Hodges and Crowell, executor, agreed to sell said building to defendants Long provided the purchasers would agree to lease the banking room to plaintiff for a term of 15 years. Thereupon, on October 15, 1945, Long and wife executed an agreement to lease said premises to plaintiff for 15 years the agreement to become effective as a lease in the event and upon the day the Longs acquired title to the property. Thereafter, on October 29, 1945, Hodges and Crowell executor, separately executed and delivered to the Longs two deeds, each conveying a one-half interest in said building. These deeds contain the following: 'This conveyance is subject to lease with Southern Bell Telephone Company expiring May 1, 1948, and also lease with State Trust Company, dated October 16, 1945, for a term of fifteen years and is subject to any party wall agreements of record.'
On March 30, 1946 the Longs delivered to F. W. Ewbank option or contract to convey said building for $110,000. This option was never exercised. However there were negotiations between the Longs and Carl W. Braznell, agent of defendant Braznell, Ewbank acting as a go- between. These negotiations culminated in a deed from the Longs to defendant Braznell dated June 3, 1946, containing the following: 'It is understood and agreed that this conveyance is made subject to the leases of the several tenants; * * *'
During the negotiations the plaintiff's lease contract was discussed and it was understood that the Longs were selling subject to existing leases, particularly the lease of plaintiff, and that it was to be so stipulated in the deed. The lease contract was deliverde to Ewbank and later by him delivered to Braznell.
Braznell recorded his deed and then notified plaintiff he would not accept the monthly rental of $250 theretofore paid and would not recognize any alleged lease under which it claimed. Plaintiff then recorded its lease and instituted this action, alleging that defendant's demands and claims cast a cloud upon its leasehold estate. It also seeks to reform the deed from Long to Braznell for mutual mistake of the parties by including a provision adequately protecting its rental contract.
At the trial below issues on the allegations of mutual mistake of the parties were submitted to the jury and answered by them in favor of plaintiff. From judgment on the verdict defendant Braznell appealed.
Smathers and Meekins, of Asheville, for appellant Charles W. Braznell.
Jonathan Jackson, L. B. Prince and R. L. Whitmire, all of Hendersonville, for plaintiff-appellee.
Morgan & Ward, of Waynesville, for appellees Long.
The court below made no ruling in respect to the reservation contained in the deeds from Hodges and Crowell, executor, to Long and wife. Hence the question of its sufficiency to protect the leasehold rights of plaintiff is not presented for decision.
The defendant concedes that plaintiff 'stands in the shoes or sits in the seat' of the Longs under whom it claims, and it may maintain this action to reform the deed to make it express the true contract in respect to its leasehold interest. Sills v. Ford, 171 N.C. 733, 88 S.E. 636; Bank of Union v. Redwine, 171 N.C. 559, 88 S.E. 878; Hildebrand Machinery Co. v. Post, 204 N.C. 744, 169 S.E. 629; Roberts v. Massey, 185 N.C. 164, 116 S.E. 407.
There is evidence in the record tending to show that (1) the contract of purchase and sale was made subject to existing leases; (2) it was understood and agreed that the deed of conveyance should contain a provision fully protecting the leasehold rights of plaintiff and other tenants; and (3) this intent was inadequately expressed and a valid, enforceable provision was omitted by mutual mistake of the parties.
At the very inception of the somewhat extended negotiations Long discussed with Ewbank the outstanding leases and the rental income from the building. He advised Ewbank that he would not under any conditions sell unless these leases, particularly the lease to plaintiff, were fully protected. Ewbank advised Carl W. Braznell (agent of defendant in active charge of the negotiations) by letter that the bank had a 15-year lease. He fully discussed this and other leases with Braznell and advised him of the conditions under which the Longs would sell. Braznell was furnished with a statement of monthly income from the building showing that the State Trust Company rental was $250 per month. Provision was inserted in the original option, in the contract to convey and in the deed, attempting to protect the rights of plaintiff. Ewbank actually acquired possession of Long's copy of the leases, made them available to the defendant, and later delivered them to him. At the time the deed was delivered Braznell was informed that the leases were there in Ewbank's office for his inspection. Braznell had his attorney prepare the deed and his attorney, on his behalf, inserted in the deed a provision attempting to make the conveyance subject to outstanding leases. Thus the intent of the parties is apparent.
There is, to be sure, some evidence in the record tending to support the inference that Braznell knew the language used in the deed was not sufficient to protect the plaintiff's lease and that he had the deed prepared and tendered to plaintiff as a proper and full expression of the contract of the parties, intending at the time to take advantage of the insufficiency of the reservation so soon as the deed was delivered and recorded. But it is more charitable to assume that he was acting in good faith in an honest attempt to express the will of the parties than to conclude he made a deliberate and successful effort to mislead and deceive the Longs. In either event he cannot now complain.
But the defendant contends that the Longs used the language they intended to use, believing it adequately expressed the intent of the parties. Thus, he says, there was a mistake of law...
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