Touchstone v. Peterson
| Citation | 443 So.2d 1219 |
| Parties | J.M. TOUCHSTONE and Ben Touchstone v. Rosa Lee PETERSON. 82-642. |
| Decision Date | 02 December 1983 |
| Court | Supreme Court of Alabama |
Marc E. Bradley, Fairhope, and Edward P. Turner, Jr., Chatom, for appellants.
S.J. Laurie, Chatom, for appellee.
This is an appeal by J.M. and Ben Touchstone, defendants-appellants, from an adverse judgment in an ejectment action brought by Rosa Lee Peterson, plaintiff-appellee. We reverse and remand.
In July 1953, appellant J.M. Touchstone purchased from Joe M. Pelham and his wife the ten-acre tract of land which is the subject of this dispute and went into possession of the ten acres at that time. Appellant Ben Touchstone began living with his brother, J.M., in August 1954, and both have continued in possession of the property since that time. On October 5, 1955, J.M. Touchstone sold by warranty deed these ten acres of land to Randolph and Uhbern Kirkland, intending to reserve for himself a life estate in the property. The deed, however, did not contain this reservation as, it was later discovered by the parties, such omission being the result of an error made by the scrivener who prepared the deed. Despite this fact, a correction deed was never executed, since J.M. Touchstone and the Kirklands had orally agreed and understood at the time of the sale that J.M. Touchstone had reserved the right for himself and Ben to live on the property for their lives. Accordingly, J.M. Touchstone, relying upon this oral understanding, failed to have the deed corrected.
On February 13, 1956, Randolph Kirkland married Rosa Lee Peterson, the plaintiff-appellee in this case. On March 13, 1969, Uhbern Kirkland and his wife conveyed all their interest in the disputed ten-acre tract by warranty deed to Randolph Kirkland. Although this deed again failed to mention J.M. Touchstone's life interest in the property, there was an oral reaffirmation of his rights between the Kirklands and J.M. Touchstone.
On January 10, 1977, Rosa Lee Peterson and Randolph Kirkland were divorced. Pursuant to the terms of the divorce decree, she was awarded the disputed ten-acre tract; however, it was not until May 2, 1979, that the register's deed conveying the property to Peterson was executed and delivered to her. Sometime in January 1977, after the divorce decree was entered, Rosa Lee Peterson visited the home of J.M. and Ben Touchstone, advised them she had been awarded the ten acres on which they resided, and requested that they move from the property. They refused to do so. Two and one-half years later, on May 2, 1979, Peterson gave J.M. Touchstone notice by registered letter to vacate the premises within ten days. When the Touchstones again failed to vacate, upon proper complaint filed by Peterson, the District Court of Washington County issued a writ of ejectment on June 12, 1979. A hearing was held on the ejectment complaint in the district court on October 23, 1979, after which judgment was entered against the Touchstones. Thereafter, the Touchstones appealed to the Circuit Court of Washington County wherein they filed a counterclaim against Peterson, seeking reformation of the deed given to Peterson's predecessor in title (her ex-husband Randolph Kirkland) by J.M. Touchstone, so as to reflect the life interest in the ten acres reserved by J.M. Touchstone, the original grantor. In Peterson's answer to this counterclaim, she set up the special defense of laches, among other things. She also amended her complaint to add a claim for unlawful detainer.
At trial, on February 24, 1982, evidence on the counterclaim for reformation was presented ore tenus to the circuit court. Thereafter, on March 11, 1982, the court entered an order denying reformation of the deed in question, finding such reformation barred by the doctrine of laches, and also under Code of 1975, § 35-4-153, that reformation would result in prejudice to rights acquired by a third person in good faith and for value. The ejectment and unlawful detainer claims were then tried to a jury on March 30, 1982, and, at the conclusion of trial, a verdict was returned in favor of Peterson. Prior to the time the circuit court entered judgment on the verdict the Touchstones filed motions for rehearing and for a new trial or, in the alternative, for judgment notwithstanding the verdict. Subsequently, on January 18, 1983, the court entered judgment on the verdict for Peterson, and on February 24, 1983, after the Touchstones refiled their motions for rehearing and for a new trial or, in the alternative, for judgment notwithstanding the verdict, these motions were denied by the circuit court. It is from the denial of these motions that the Touchstones appeal.
The controlling issue raised by the Touchstones on appeal is whether the circuit court erred in denying the Touchstones' counterclaim for reformation. The first question presented is whether the circuit court correctly found Rosa Lee Peterson to be a bona fide purchaser for value under § 35-4-153, i.e., that she was a purchaser of legal title without actual knowledge of the Touchstones' prior equity, or that she did not have knowledge of facts sufficient to put her on inquiry regarding the Touchstones' prior equity before or at the time she was granted the property by the divorce decree or when she later received the deed to the property.
Section 35-4-153 provides as follows:
"When, through fraud, or a mutual mistake of the parties, or a mistake of one party which the other at the time knew or suspected, a deed, mortgage or other conveyance does not truly express the intention of the parties, it may be revised by a court on the application of the party aggrieved so as to express that intention, insofar as this can be done without prejudice to rights acquired by third persons in good faith and for value." (Emphasis added.)
In order to reform the deed to express the intentions of the parties thereto, under § 35-4-153, the Touchstones have the burden of proving with clear, convincing, and satisfactory evidence that the intention they seek to substitute was that of both parties to the deed. Fidelity Service Ins. Co. v. A.B. Legg & Sons Burial Ins. Co., 274 Ala. 94, 145 So.2d 811 (1962); Taylor v. Burns, 250 Ala. 218, 34 So.2d 5 (1948); Hyatt v. Ogletree, 31 Ala.App. 8, 12 So.2d 397 (1942).
All the parties to both deeds in question (the 1955 deed from J.M. Touchstone to Uhbern and Randolph Kirkland, and the 1969 deed from Uhbern Kirkland to Randolph Kirkland) were properly joined and testified at trial. It is clear from their testimony, taken together, that all of the parties to both deeds orally agreed and understood that J.M. Touchstone retained a life interest in the ten-acre tract and have since acted upon this understanding. The testimony was uncontroverted as to this intention and it was uncontroverted that a defect in the deed existed due to the omission of the life estate. The only conflicting testimony had to do with when the defect in the original deed from J.M. Touchstone to Randolph and Uhbern Kirkland was discovered. Thus, the Touchstones have met their burden of proving that the intention they seek to substitute was that of all parties to the deeds in question. The only remaining issue, under the language of § 35-4-153, supra, is whether Peterson obtained bona fide purchaser status in acquiring her rights in the subject ten acres.
The portion of the statute italicized above codifies the rule of law long recognized in this state: a written instrument is not subject to reformation as against the rights of a bona fide purchaser, without notice, and for value. Reformation or correction of a written instrument will generally be granted, however, as against subsequent purchasers who obtain their title or lien with notice of the existing equitable right to reformation. Gilmore v. Sexton, 254 Ala. 560, 49 So.2d 157 (1950); Walling v. Moss, 240 Ala. 87, 197 So. 30 (1940); Copeland v. Warren, 214 Ala. 150, 107 So. 94 (1926). As explained by this Court in Lightsey v. Stone, 255 Ala. 541, 546, 52 So.2d 376, 381 (1951):
Accord, First National Bank of Birmingham v. Culberson, 342 So.2d 347 (Ala.1977); Murphree v. Henson, 289 Ala. 340, 267 So.2d 414 (1972).
The first element enumerated above is that the purchaser acquire the legal title to the property; this element, read together with the fourth element, would require the purchaser to obtain legal title to the property before he had actual knowledge of a prior equity, or learned of facts sufficient to put him on inquiry concerning the complainant's equity. Peterson testified at trial that it was not until January 1977, after the divorce decree was entered granting her the ten acres, that she learned of the Touchstones' claim to a life interest in the property. The following testimony by Peterson to this effect was elicited at trial by her attorney on direct examination:
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