Strouhal v. Allied Development Co., 4959.

• Decision Date: 17 March 1955
• Docket Number: No. 4959.,4959.
• Citation: 220 F.2d 541
• Parties: Richard A. STROUHAL and Opal Strouhal, Appellants, v. ALLIED DEVELOPMENT CO., a Delaware corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

220 F.2d 541 (1955)

Richard A. STROUHAL and Opal Strouhal, Appellants, v. ALLIED DEVELOPMENT CO., a Delaware corporation, Appellee.

No. 4959.

United States Court of Appeals, Tenth Circuit.

March 17, 1955.

Albert D. Lynn, Oklahoma City, Okl. (John Connolly, Oklahoma City, Okl., on the brief), for appellants.

H. L. Douglass, Oklahoma City, Okl. (Sylvanus G. Felix and John J. Griffin, Oklahoma City, Okl., on the brief), for appellee.

Before PHILLIPS, Chief Judge, BRATTON, Circuit Judge, and SAVAGE, District Judge.

BRATTON, Circuit Judge.

Richard A. Strouhal and Opal Strouhal, husband and wife, instituted this action against Allied Development Company to reform a warranty deed conveying a small tract of land in Midwest City, Oklahoma. At the conclusion of the evidence adduced by plaintiffs, the court sustained a motion of the defendant for judgment in its favor upon the ground that the evidence failed to show that plaintiffs were entitled to reformation. Judgment was entered accordingly; plaintiffs appealed; and for convenience, continued reference will be made to the parties as plaintiffs and defendant, respectively.

These facts were developed at the trial. Defendant owned the surface of the property and a one thirty-second interest in the mineral rights therein. Thirty-one thirty-seconds of the mineral rights had been reserved by a previous owner. The property was listed with the Russell Showalter Company for sale. Following negotiations between plaintiffs and the Showalter Company, the latter mailed to the former four copies of a purchase contract. Plaintiff Richard A. Strouhal executed three copies of the contract and returned them by mail to the Showalter Company. By express provision in the contract, a strip 33 feet in width along the south side of the property was reserved for highway purposes, one-half of the mineral rights were reserved, and the contract was subject to the purchaser being able to secure a so-called GI loan covering the amount of the purchase price. Plaintiffs made application to Home Mortgage and Investment Company for a loan. The mortgage company prepared a note and mortgage covering the property. The mortgage company mailed to the Veterans Administration a copy of the purchase agreement signed by plaintiff Richard A. Strouhal together with other papers for its consideration in connection with the guaranteeing of the loan. The Veterans Administration issued and delivered to the mortgage company its conventional certificate in which it guaranteed the loan to the extent of fifty per cent thereof. Defendant executed and delivered to the mortgage company a warranty deed conveying the property to plaintiffs. The deed was to be delivered to plaintiffs if and when the transaction was completed. By express provision contained in the deed, a strip fifty-feet in width along the south side of the property was reserved for highway and public utility purposes and a strip ten feet in width along the east, north, and west sides, was reserved for public utility purposes; thirty-one thirty-seconds of the mineral rights were excepted; and the use of the premises was limited to single-family occupancy. The mortgage company caused the deed and the mortgage to be placed of record, disbursed the proceeds of the loan, and mailed the recorded deed to plaintiffs. The record fails to disclose any direct communication or correspondence between plaintiffs and defendant, or between plaintiffs and the Veterans Administration.

The gravamen of the action is reformation of the deed to conform to the so-called purchase contract in respect to the reservation for highway and utility purposes, the exception or exclusion of the mineral interest, and the absence of any restriction or limitation upon the use to which the property may be devoted. And in support of their asserted right to such equitable relief, plaintiffs seek to bring themselves within the rule that where there is a sufficient showing of mutual mistake, or mistake on one side and fraud or inequitable conduct on the other, whereby the estate or interest intended to be conveyed is enlarged, curtailed, or vested in a different manner from what the parties intended, the deed will be corrected. That general rule was enunciated in Oklahoma City Federal Savings & Loan Association v. Clifton, 183 Okl. 74, 80 P.2d 283. But it is limited in application to instances where the parties enter into a binding contract and the deed does not conform to it.

The transaction between these parties involved the sale of real estate. Plaintiff Richard A. Strouhal signed the so-called purchase contract. The contract was in the form of an offer to purchase. Immediately below the signature of plaintiff Richard A. Strouhal was a printed receipt to be signed by the realtor or realtors who made the sale indicating the amount paid on the purchase price. That receipt was signed by the Showalter Company. But it was not filled out. It was left blank in respect...