Wales-Riggs Plantations v. Banks

• Decision Date: 01 January 1912
• Citation: 142 S.W. 828,101 Ark. 461
• Parties: WALES-RIGGS PLANTATIONS v. BANKS
• Court: Arkansas Supreme Court

142 S.W. 828

101 Ark. 461

WALES-RIGGS PLANTATIONS v. BANKS

Supreme Court of Arkansas

January 1, 1912

Appeal from Cross Chancery Court; Edward D. Robertson, Chancellor affirmed.

Decree affirmed.

Chas E. Robinson, for appellant.

1. The court erred in entering a decree reforming the contract.

Mere preponderance of evidence is not sufficient for the reformation of a written contract, but the mistake must appear beyond reasonable controversy. 94 Ark. 206; 71 Ark 617; 85 Ark. 62.

Reformation will be denied where the evidence for and against it is evenly balanced. 75 Ark. 72; 79 Ark. 262.

Where a party has had opportunity to examine a contract submitted for his signature, he can not afterwards escape its obligations on the ground that he failed to do so. 84 Ark. 349.

Before reformation will be awarded, it must be shown that the mistake was mutual, and that the contract as executed does not express the understanding of either party 89 Ark. 309.

The acts and statements of an agent, to be binding upon the principal, must be shown to have been within the apparent scope of his authority. 48 Ark. 138; 41 Mo. 503; Clark on Contract, 734. The fact that Donohue was plaintiff's agent to rent out the land does not imply authority in him to modify the lease contract. 61 N.W. 857; 23 Am. & Eng. Enc. of L. 901; 104 Am. St. Rep. 980.

A party dealing with the agent of a corporation must at his peril ascertain what authority the agent possesses, and is not at liberty to charge the corporation by relying upon the agent's assumption of authority. 52 Mich. 87.

2. The state of facts shown by the testimony raises no estoppel against, and constitutes no waiver of any right of, plaintiff to declare a forfeiture of the lease and eject the tenant for either the failure to build and maintain the fence or to occupy and improve the premises as his home. Kirby's Digest, § 6108; 62 Ark. 37, 42; 27 Conn. 538; 40 How. Prac. 349; Clark on Corp. 481; 62 Ark. 37; 2 Enc. of Ev. 793; 72 Ark. 579; 68 Ark. 288; 6 Pet. 51, 8 L.Ed. 316; 146 U.S. 689, 36 L.Ed. 1135, 1141; Mechem on Agency, §§ 100, 282; 1 Greenleaf, Ev. § 22; 30 So. 528; 85 Ark. 187; 3 Cook on Corp. 2224, 2234; Id. 2230; Id. 2311; Id. 2316; 67 Ark. 550; 79 Ark. 45, 52; 69 Ark. 140; 124 Mass. 197; 128 Ala. 99; 109 S.W. 1057; 140 Cal 249; 109 Pa.St. 534; 31 Ind.App. 511; 1 Waterman on Corp. 448; 22 Wis. 199.

No presumption will be indulged in the absence of proof that the president and general manager of the corporation had authority to materially vary the terms of a deed of lease made by the company. 22 Wis. 194; 109 Pa.St. 534; 109 S.W. 1057; 140 Cal. 249. But, if he had such authority, the parol contract varying same as testified to by Banks and Bailes is without consideration and void. Clark on Cont. 608 and cases cited; 4 So. 635, 639; 22 Am. St. Rep. 565; 94 Am. St. Rep. 811; 9 Enc. of Ev. 358; 1 Greenleaf on Ev. (14 ed.), § 303; 140 Cal. 249. The covenants to erect and maintain lawful fences and to reside upon the premises and continue to fit it up for a home are "continuing" covenants. 18 Am. & Eng. Enc. of L. 388; 54 Ind. 544; 36 Minn. 80; 1 Tiffany on Land & Tenancy 1399. Mere periodical collection of rent in silence and forbearing to declare a lease forfeited will not waive such a covenant nor estop forfeiture because of its violation, it being "continuing" in its nature. 3 N.W. 187; 123 N.W. 443; 36 Am. St. Rep. 486.

Conditions in a lease of a continuing nature are waived by the acceptance of rent by the landlord as to past breaches only. He may declare forfeiture for continuation of breach in that kind of covenant, though he has waived the right to forfeit for past breaches. 47 Am. St. Rep. 199, note; 59 Ark. 405, 410-12; 30 N.W. 446; 3 N.W. 187; Taylor, Landlord & Ten. (7 ed.), § 500; 54 Ind. 544; 63 Mo. 446; 6 Q. B. 953; 9 Barn. & C. 376; 18 Am. & Eng. Enc. of L. 384. In the absence of waiver, forfeitures of the class in question here will be enforced. Pomeroy, Eq. Jur. (3 ed.) § 454. And, even where there has been a waiver such as to entitle the tenant to relief from the forfeiture, yet the relief will be denied where the breach was the result of gross, wilful or persistent negligence. 59 Ark. 410; Pomeroy, Eq. Jur. § 452; 86 Am. St. Rep. 45; 1 Vern. 449; 6 Duer 273.

3. The only way in which chancery acquired jurisdiction was upon the statement of facts in the answer calling for a reformation of the contract. If no ground for reformation was shown, the cause should be remanded with directions to transfer to the circuit court. 65 Ark. 503, 507; 56 Ark. 399; 3 Chand. 253.

Harry M. Woods, for appellee.

1. The court properly held that the clause, "Houses--How and When Built," in copy of the contract held by appellant should be treated as eliminated and stricken therefrom. The contract on its face shows that it was the intention of both parties to treat this section as eliminated, and it was left meaningless by appellant for that purpose. The evidence of the contract is in duplicate, and the copy held by appellant is equally as good evidence of the agreement as that held by appellee, and from the copy produced by appellant Riggs the court was warranted in finding that the clause was intended to be stricken out.

"Courts are entitled to place themselves in the same situation as the parties who made the contract, so as to view the circumstances as they view them." 90 Ark. 272.

2. Appellant waives its right to declare a forfeiture, both as to the fence and residence clauses, by its acquiescence in the course of appellee for eight years, and expressly by the acts and request of its authorized officer, Riggs. 91 Ark. 133-137; 59 Ark. 405-40; 1 Pomeroy, Eq. Jur. 452; 75 Ark. 410; 83 Ark. 524.

While the relation of the principal and the agent can not be proved by the declaration of the agent, it may be established by the testimony of the agent." 90 Ark. 104; 80 Ark. 288. See also 93 Ark. 521; 11 Ark. 189; Id. 378; 55 Ark. 112; 54 Ark. 216; 49 Ark. 320.

3. The answer having set up defenses cognizable only in equity, the case was properly transferred. Moreover, no objection was raised to its being transferred. 59 Ark. 405.

OPINION

HART, J.

On the 11th day of March, 1910, the Wales-Riggs Plantations, a corporation, brought this suit in the circuit court against W. L. Banks and John Horton to recover possession of a forty-acre tract of land, belonging to the plaintiff, and leased to the defendant W. L. Banks for the term beginning July 2, 1902, and ending November 1, 1911.

The complaint alleges that the lease contained certain covenants whereby the defendant Banks bound himself to reside on said land, and not to sublet it, and whereby he agreed to erect and maintain a lawful fence around the place; that said defendant has failed to keep or perform these covenants; and that the lease contains a clause providing for a forfeiture for a nonperformance of any of the covenants of the lease. The prayer is for a judgment forfeiting the lease, and for the possession of the demised premises.

The defendants filed an answer in which they denied a breach of any of the covenants of the lease. They set up matters which they allege constitute a waiver by the plaintiff of the forfeiture of the covenants of the lease and by way of cross complaint ask a reformation of the lease in respect to the building of houses on the land. They also asked that the cause be transferred to the chancery court, and that the complaint be dismissed for want of equity.

The circuit court made an order transferring the cause to the chancery court, and the cause proceeded in the chancery court without any objection on the part of the plaintiff. The chancellor found for the defendants on all the issues, and a decree was entered reforming the lease in the manner asked by the defendant Banks, and dismissing the complaint for want of equity.

At the time the contract between the plaintiff and the defendant Banks was executed one A. Carr was holding the land under a lease similar to the one in question. All the land had been cleared, and was in cultivation; and two houses had already been erected on the land. Banks sold to Carr a tract of land, and as a part of the consideration it was agreed that Banks should succeed to the rights of Carr under his lease from the plaintiff. Carr's lease from the plaintiff was cancelled, and the lease now under consideration was executed in lieu of it. The plaintiff was a foreign corporation, and C. W. Riggs was its president and general manager, and he alone had power to make contracts for the corporation. The plaintiff had printed forms for its leases, and Riggs used one of these printed forms in preparing the lease in question. The lease was executed in duplicate, one being held by the plaintiff and the other being given to the defendant Banks. The original lease held by the plaintiff contains the following clause:

"Houses--How and When Built. To build a good log house or a board house whichever said tenant prefers, the same to be not less than sixteen by eighteen (16x18) feet inside measurement, and the walls to be not less than nine (9) feet, with good floor and dry roof, also with good fire-place and brick or stick and dirt chimney. But said tenant may use a stove in place of chimney if preferred, in which case proper flues shall be put in by said tenant. Said house to be built on said leased premises when building site may be located by the landlord, provided he directs the place, otherwise the tenant may select site. Said house to be completed within from the date of this instrument, one house as above described and agreed upon shall be built for each twenty acres herein leased, and when more than one house is to be built the time for completing same is as follows:...