Town of Essex v. Day

• Decision Date: 30 September 1885
• Citation: 1 A. 620,52 Conn. 483
• Court: Connecticut Supreme Court
• Parties: TOWN OF ESSEX v. DAY.

1 A. 620

52 Conn. 483

TOWN OF ESSEX

v. DAY.

SUPREME COURT OF CONNECTICUT.

Filed September, 1885.

George G. Sill, for appellant, Robert E. Day.

M. E. Culver, for appellee, Town of Essex.

LOOMIS, J. It is not necessary for us to consider in this case whether the bonds issued by the town are to be regarded as negotiable, and therefore protected, in the hands of a bona fide holder, against the correction which the plaintiffs seek to procure. We may assume, for the purposes of this case, that, in the absence of notice on the part of the defendant of the error claimed by the plaintiffs to have intervened in the printing of the bonds, the corrections could not be made. Starting with this assumption, the questions which present themselves for consideration are the following: (1) Have the plaintiffs, through their agents, been guilty of such negligence, either in the original execution and issuing of the bonds or in the seeking of a correction of the error when discovered, as precludes them from the equitable relief which they seek? (2) Did the first purchaser of the bonds, and afterwards the purchaser from him, and finally the defendant at the time of his purchase, have such knowledge of the error in the bonds, either actual or to be imputed, as gives the plaintiffs a right, as against them, to the equitable relief which they seek? (3) Was the error one of such a character that it can be corrected by a court of equity? (4) Supposing the plaintiffs not to be precluded by their own negligence from the relief sought, and the defendant not to be protected by want of notice, has the town so far exercised its claimed right of option to call in the bonds at the end of 10 years as to stand in a position to assert the equitable rights which it claims? These are the principal questions in the case, each covering some minor questions that do not need to be stated separately; besides which, there are some questions made with regard to the decree which lie wholly outside of these principal ones, and which, though not of great importance, will need some notice.

1. Have the plaintiffs been guilty of a fatal negligence? They had made a reasonable provision for the printing of the bonds and for the printing of them as 10-20 bonds. It is found that the town agent gave to Mr. Walkley, who procured the printing of the bonds for all the towns, a written memorandum of the bonds to be printed for the plaintiffs "which called for ten-twenty bonds only," and that Mr. Walkley delivered this memorandum to the printing company. The plaintiffs so far, therefore, had used reasonable care. It is only in the execution and issuing of the bonds that the negligence exists. It is found that none of the agents of the town who subscribed the bonds,—namely, the first selectman, the treasurer, and the special agent,—observed the mistake, and that they were, in fact, all ignorant of it until several years later, when the Chelsea Savings Bank called their attention to it. It is specially found that the treasurer, who was charged more especially with the duty of vigilance in everything affecting the finances of the town, signed the bonds without reading them, supposing that they were payable at the option of the town in 10 years, and it may be assumed that none of the signers read them, or read them with proper attention. There is here, unquestionably, a reprehensible carelessness, a lack of intelligent attention to the matter, that must be regarded as not only unreasonable, but culpable. We have no disposition to defend, or even to excuse, such conduct. The question, however, as we conceive, is not so much whether a culpable negligence existed, as it is whether such negligence should operate to bar the plaintiffs from relief against this defendant. This negligence is not of that extremest kind which the courts sometimes characterize as the equivalent of fraud. It was not recklessness; it was mere want of care. There was no indifference to the effect; it was simply an honest assumption that all was right. It is to be classed only with those incautious and unbusiness-like acts which are constantly presenting themselves and would not have been noticed but for some mischief that they have wrought. Thus a man carelessly signs a note for $1,000 which he supposed to be for $100. Through a mistake of the scrivener it is thus written, when he had directed that it be written a hundred, and he signs it without reading it. This is certainly gross carelessness; but should it debar him from all remedy against a party who receives the note knowing of the mistake? Would not a court of equity enjoin the holder, who took it with full knowledge, against its collection? Would it be good in his hands, in any court admitting of equitable defenses, for more than $100. We think, therefore, that the negligence of the plaintiffs in the execution and issuing of the bonds was not of such a character as to preclude all equitable relief against the present defendant.

But it is claimed by the defendant that if this be so, yet the plaintiffs have been guilty of such negligence in the assertion of their equitable rights as to preclude them from relief. It is a well-settled rule that a party who discovers some fact against which he needs equitable protection, like an error in a deed, or a judgment rendered against him without notice, must use diligence in seeking equitable aid. But this is required for the purpose, mainly, of protecting other persons against loss by reason of the unasserted right. If the records show a title in a third person, that third person, even after notice, may convey to an innocent purchaser. In all these cases delay is likely to add to the complication and make the equitable adjustment of rights more difficult. In the present case the plaintiffs, with every day's delay, ran the risk of a transfer of the bonds by the parties who held them as bona fide purchasers. This was, however, their risk, and not that of the public; certainly not upon our assumption that the error could not be corrected against a holder who had no notice of the mistake. In this case, the defendant purchased the bonds in question, not only of a holder who had notice of the mistake, but with personal knowledge of it, and after the town had voted to call in all the bonds at the end of the 10 years, and had given notice by publication in various newspapers that the bonds would be then paid, and that interest upon them would cease from that time. Whatever delay the plaintiffs made after that time could not, therefore, injuriously affect the defendant. They, of course, ran the risk of a sale by him of the bonds to an innocent purchaser, but that was wholly their risk; it involved no risk to him. The public notice given by the plaintiffs of the payment of the bonds at the end of 10 years was given on the twenty-fifth of February, 1880. The 10 years expired April 1, 1880. The defendant purchased the bonds in question on the twentieth of April, 1880. The present suit was brought in May, 1882, two years later. We cannot say that the delay was, in the circumstances, fatal to the plaintiffs' right to equitable relief. It was not, we think, unreasonable for the plaintiffs to expect that, after the notice given, the holders of the bonds would accept payment without contesting the matter, and that they should have been confirmed in that expectation, and so the more inclined to save the expense of a lawsuit, by the fact that 42 out of the 84 bonds were thus brought in and canceled.

2. Did the first purchaser of the bonds in question, and afterwards the purchaser from him, and finally the defendant at the time of his purchase, have such knowledge of the mistake, either actual or to be imputed, as gives the plaintiffs a right, as against them, to the equitable relief which they seek? The finding upon this point is as follows: "Before Tiffany [the first purchaser] purchased the bonds, the then town treasurer, E. W. Redfield, told him that the bonds were ten-twenty bonds, and at the option of the town could be called in and paid at the expiration' of ten years from their date, and that such was the vote of their town authorizing the issue of the bonds. Before Swan [the second purchaser] bought the bonds of Tiffany, he called upon the then town treasurer in relation to them, and to know what the action of the town would be, and the treasurer told him what the vote of the town was in authorizing the issue of the bonds, and that the town would call them in at the expiration of ten years from their date and pay them up, and that the town had already called them in, but by mistake they had been called in a year too soon. Swan sold the bonds to the defendant, April 20, 1880. The defendant, at the time of the purchase, had full knowledge of the vote of the town in relation to the issue of the bonds, and that the town had called them in for payment." It is difficult to see how this information can be regarded as anything less than information of the fact of the mistake. A knowledge of the vote of the town necessarily involved a knowledge that the bonds were not drawn in accordance with the vote. It is, of course, barely possible that the defendant may have supposed that the town relied upon its vote as giving it the power to call in the bonds in 10 years, without any provision to that effect in the bonds; thus making their mistake one not of fact, but as to the legal effect of their action. This, however, seems to us as a forced and unnatural construction. We think the only reasonable view of the matter is that the defendant knew, or had such information that the law would impute to him knowledge, that the bonds were by mistake issued as 20-year bonds instead of 10-20 bonds.

3. Was the mistake one of such a character that it can be corrected by a court of equity? It is claimed by the counsel for the defendant that the mistake, in such a case, must be mutual, and the cause of the agreement; and numerous...