Taylor v. Godfrey
| Decision Date | 19 November 1907 |
| Citation | 59 S.E. 631,62 W.Va. 677 |
| Parties | TAYLOR v. GODFREY et al. |
| Court | West Virginia Supreme Court |
Submitted September 11, 1907.
Syllabus by the Court.
Whether a particular transaction amounts to a release of a lien is a question of intention on the part of the releasor.
[Ed Note.-For cases in point, see Cent. Dig. vol. 35, Mortgages §§ 904-911.]
The cancellation of a mortgage on the record is only prima facie evidence of its discharge. The owner may prove that the cancellation was done by fraud, accident, or mistake, and, if he does so, his rights under the mortgage will not be affected by such cancellation.
[Ed Note.-For cases in point, see Cent. Dig. vol. 35, Mortgages §§ 904-911, 953.]
Where an instrument is drawn and executed which professes or is intended to carry into execution an agreement previously entered into, but which by mistake of the draftsman either as to fact or to law does not accomplish the purpose intended or violates it, equity will relieve from such mistake.
[Ed Note.-For cases in point, see Cent. Dig. vol. 8, Cancellation of Instruments, §§ 1-6.]
Negligence may not of itself be sufficient to bar relief in equity on the ground of mistake, if the other party has not been prejudiced thereby.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 8, Cancellation of Instruments, §§ 1-6; vol. 19, Equity, §§ 14-20.]
Mere neglect or omission to read or know the contents of a written instrument before execution is not necessarily a bar to cancellation thereof. Relief in such case is proper if the instrument, through mistake, fails to accomplish the purpose intended.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 8, Cancellation of Instruments, §§ 1-6.]
Equity will grant relief on the ground of mistake, not only when the mistake is expressly proved, but also when it is implied from the nature of the transaction.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 8, Cancellation of Instruments, §§ 1-6; vol. 19, Equity, §§ 14-20.]
Appeal from Circuit Court, Mingo County.
Bill by R. N. Taylor against A. I. Godfrey and others. Decree for plaintiff. Defendants appeal. Reversed and remanded.
Stokes & Bronson, for appellants.
Douglas W. Brown, for appellee.
MILLER, P.
The material facts are few and not controverted. September 21, 1904, R. N. Taylor borrowed from H. M. Meyers $3,000, executing his 12-month note therefor. At the same time, as security, he executed to Meyers a paper entitled a "deed of conditional assignment" of certain royalty interests reserved in coal leases then being operated by the Chattaroy Colliery Company. Although a copy thereof was delivered to Meyers, and also to said colliery company for its information in paying to Meyers the royalties accruing to Taylor under said leases, Meyers, on account of its character, became dissatisfied with the assignment; and at his request Taylor on January 27, 1905, executed to A. I. Godfrey, trustee, a formal deed of trust, describing said note and reciting his desire to "more effectually secure the same," binding himself to pay it when due, and conveying to said trustee the said royalty interests (being one cent on each ton of coal mined and shipped by virtue of the above leases), in trust to receive and apply to the note said royalties as they accrued; providing that, in default of payment of sufficient royalties to pay said note at maturity, and the further default of said Taylor to pay the same at maturity, the trustee should, on request of the cestui que trust, proceed to sell said royalty interests, and from the proceeds discharge said note. This deed of trust was recorded January 28, 1905; and, on receiving it, Meyers surrendered to Taylor the "deed of conditional assignment." The money so loaned to Taylor had been borrowed by Meyers from a bank, on his note indorsed by his father, Israel Meyers; he pledging to his father as security for such indorsement certain stocks. And, his father afterwards demanding additional security, he assigned the deed of trust and note also to him February 3, 1905, reciting his desire to more effectually secure him in said indorsement, which assignment was recorded four days later. November 28, 1905, the following release, acknowledged November 25th, was admitted to record in Mingo county:
This paper is the only subject of controversy in this suit. Taylor was no party to it, and knew nothing about it until his attention was afterwards called to it by H. M. Meyers and the mistake in its execution and recordation explained to him; and, as he admits, he then agreed to join in a paper to be recorded which would show the mistake, or to execute another deed of trust, but which promise he afterwards refused to make good-excusing himself by saying his promise was made on the spur of the moment, without proper consideration of the satisfaction by Meyers of his liabilities to other creditors, to secure preference of his father over whom Taylor claims was the purpose in substituting the deed of trust for the conditional assignment, and not, as Meyers claims, and the deed of trust itself recites, "to more effectually secure" the note of Taylor. November 29, 1905, Taylor having declined to fulfill his promise, Israel Meyers executed and placed on record a release to H. M. Meyers of the assignment of the deed of trust and note of February 3, 1905, in which release he also declared his mistake in executing the above release of November 25th, that Taylor had not satisfied the trust, and that he thereby nullified said release as having been executed through mistake and without consideration. It will be noticed that the release describes the trust as dated "the 1st day of January in the year 1905," while it appears to be dated January 27th. As no question is raised as to this, we assume the discrepancy is a clerical error in the transcript of the record. Default being made in payment of sufficient royalties, and by Taylor, to discharge the note, Godfrey, trustee, pursuant to the trust, on October 18, 1906, gave notice of sale of the property on November 24, 1906, to restrain which the present suit was brought. The bill was filed November 14, 1906, and the temporary injunction awarded was, upon final hearing January 15, 1907, on bill, cross-answers, and proofs filed, by final decree made perpetual.
The relief sought is based mainly on the claim that Israel Meyers was absolute owner of the deed of trust and note by assignment, with full power to release the lien; that his release thereof so made and recorded constituted a complete discharge, and a reinvestment of the title to the property in the plaintiff; and that, though executed in mistake and without consideration, yet, because of gross negligence of Israel Meyers and his son in the execution thereof, equity will afford them no relief. Some reliance is also placed on the charge of the bill, flatly denied in the answers, that the real purpose of the deed of trust, contrary to its recitals and terms, was to enable H. M. Meyers to secure his father in preference to other creditors and that, as these creditors had been paid, no legal or moral obligation rested on Taylor to restore the effect of the released security. In our opinion, however, the facts and circumstances shown do not support this charge. The conditional assignment was not such a paper as a good business man would accept as security for such a loan. It provided no time when, in default of royalty payments or default in payment of the note at maturity, the property assigned might be sold to pay the note. It limited the benefits thereof solely to the rather uncertain and indefinite amount of royalties to accrue, and lengthened out the time of possible payment far beyond the date of maturity of the note; the royalties collected little more than keeping pace with the interest. And it is most natural that Meyers should have wanted these deficiencies cured, as they were, by deed of trust. The facts on which Taylor founded his excuse for nonfulfillment of his promise to correct the mistake were as well known to him at the time as afterwards. ...
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