Terre Haute Cooperage v. Branscome

• Decision Date: 24 May 1948
• Docket Number: 36793.
• Citation: 35 So.2d 537,203 Miss. 493
• Court: Mississippi Supreme Court
• Parties: TERRE HAUTE COOPERAGE, Inc. v. BRANSCOME et al.

35 So.2d 537

203 Miss. 493

TERRE HAUTE COOPERAGE, Inc. v. BRANSCOME et al.

No. 36793.

Supreme Court of Mississippi

May 24, 1948

Jno. F. Frierson, of Columbus, and H. B. Aikman of Terre Haute, Ind., for appellant.

Ray, Spivey & Cain, of Canton, and V. D. Rowe Jr., and H. T. Holmes, both of Winona, for appellees.

L. A. SMITH, Sr., Justice.

This suit originated in the Chancery Court of Montgomery County where appellant filed its original bill seeking the cancellation of a timber deed to it from appellees, who are husband and wife. The negotiations for the conveyance started about two months before its culmination in the deed on February 1, 1947. The sale involved all white oak and post oak, twelve inches and up at the stump, and suitable for staves, on three hundred and sixty acres, of nine forty-acre subdivisions, in Montgomery County. The consideration was $10,000, $1,000 in cash, and the balance at the end of sixty days from the date of the execution of the deed.

For reasons hereinafter to be shown, appellant brought this suit praying the cancellation of this instrument because of its own unilateral mistake, offering 'any reasonable sum to be paid to the defendants as they have been caused to incur.' The original bill did not waive answer under oath. Its foundation was: 'because of a mistake in the indentity of such timber, or some other mistake not unknown to complainant, said representative of complainant thought and believed the timber being considered for purchase and for which a contract of purchase was executed aggregated 340,000 to 350,000 feet; whereas, in truth and in fact, there was and is about 117,000 feet.' As stated, the error was admittedly that of appellants, if error it were, and no part thereof was due to appellees. It is to be noted that the bill makes no claim that the instrument should have been an option, so intended by appellant; or that its agent exceeded his authority, or that there was a mutual mistake.

Appellant grounds his right to relief on this rule from Section 33, 9 Am. Jur., Cancellation of Instruments: 'Generally it may be said that equitable relief by way of rescission will be given from a unilateral mistake relating to a material feature of the contract of such grave consequence that enforcement of the contract would be unconscionable, if the party making the mistake was in the exercise of ordinary diligence, and relief can be given without serious prejudice to the other party, aside from the loss of his bargain.'

Section 34, ibidem, provides that 'Negligence on part of the complainant, contributing to the mistake, will also prevent the securing of relief, the cases are practically unanimous in holding that mistake which results from failure to exercise that degree of care and diligence which would be exercised by persons of reasonable prudence under the same circumstances will not be relieved against. * * * However, it is not every negligence which will preclude equitable relief; it has been held that relief by way of cancellation will be granted for a unilateral mistake of fact, even though it was due to the negligence of the complainant, if his lack of care did not amount to the breach of a legal duty, or a duty to another, which alone, some courts hold, constitutes culpable negligence, or goes not prejudice the other party to the transaction.'

For the purpose of discussion of the above authorities with relation thereto, we will further examine the facts. This deal one way or another had been on the minds and in the conversations of the parties, more or less, from December 11, 1946, to February 8, 1947, during which time the situation had been viewed by the appellant's manager at Columbus, and its timber cruiser, who was the father of the manager, and who sometimes conducted negotiations for purchase of timber on behalf of appellant. This timber estimator, or cruiser, was W. C. Karns, who reported to his son there were 340,000 feet of timber on the lands involved. His son, manager of appellant's mill at Columbus, called Mr. Richards, Vice President, at the Home Office in Terre Haute, who gave instructions: 'to have a contract drawn up between Terre Haute Cooperage, Inc. and Mr. Branscome to pay a thousand dollars by draft--sight draft, and the balance to be paid within sixty days, the other nine thousand.' However, this witness, appellant's manager, further testified, 'I misunderstood Mr. Richards and in so doing I had a timber deed made.'

Mr. Richards testified that the manager's action was in line with the usual procedure. The deed was executed and enclosed in an envelope, with the draft printed on the back of the envelope, and placed for collection. Upon notice of its arrival at Terre Haute, without opening this container for examination of the instrument, Mr. Richards telephoned appellant's attorney in Columbus, who had prepared the deed, in order to ascertain its nature, and was informed it was a deed. His attorney in Terre Haute advised against payment of the draft, and it was not paid. Mr. Richards, as he stated, being under the impression that it was a different type of contract than it was, immediately sent timber cruisers from the home office to make another cruise. The original cruise, it must be borne in mind had also been made for appellant by its Mississippi cruiser, W. C. Karns, on whose estimate the trade was consummated.

The home office cruisers reported that a tree by tree estimate showed only 117,000 feet of post oak and white oak, as described in the deed. Thereupon, at once Mr. Richards sought rescission, the result of which was failure, culminating in this suit. During the progress of the trial, appellant was granted leave to, and did, amend its original bill so as to ask for general relief; was denied its request that the amount of the timber be referred to a master; and obtained an agreement for some extended time to remove the timber in the event it finally lost the lawsuit. The appellees, in connection with their sworn answer, filed a cross-bill demanding payment of the $10,000 consideration as due and unpaid for the timber deed. The chancery court dismissed the original bill, and gave cross-complainants, appellees here, a decree for the $10,000. No attempt was made to prove any fraud, misrepresentation or concealment against appellees, or either of them. In his testimony, Mr. Branscome said he told the representatives of appellant that he sold this timber in bulk, and guaranteed nothing but the title and the boundary lines.

Appellees argue here that the burden of proof of mistake was on appellant, which he failed to sustain. But, also say, that even if such mistake as charged had been proven, the appellant had relied upon and acted on its own inspection and examination of the timber in determining its value; that appellees neither contributed to, nor induced the mistake, if any, nor had any knowledge that appellant was laboring under any mistake; and that the mistake of appellant, if any, could have been avoided by reasonable diligence.

In this connection Pomeroy's Equity Jurisprudence, 4th Ed Vol. 2, Section 856, p. 1751, declares that 'it has...