Malcolm v. Talley

109 S.E. 613, 89 W. Va. 531, 1921 W. Va. LEXIS 208

Opinion

Poffenbarger, Judge:

By way of reformation of a deed conveying a city lot, upon the theory of a mutual mistake in the execution thereof, the appellants were required by the decree now under review, to reconvey to the grantors a strip of land one and one-half feet wide and 200 feet long, and they complain of it.

The facts as alleged in the bill and found by the court are substantially as follows: Por and in consideration of $7,-200.00 paid in cash, the plaintiffs conveyed to the defendant a city lot on which there was a brick dwelling house, describing it as being- Lot No. 20 of- Block No. 14 and the westerly two and one-half feet of Lot No. 19 of Block No. 14, fronting together 32% feet, on Fifth Avenue of the City of Huntington. What the parties had actually agreed upon was a sale and conveyance of the lot in accordance with monuments which made the frontage only 31 feet. The determining monument was the center of a concrete walk between the house sold and another retained by the grantors, to be used by both owners for access to the basements and back yards of their houses. Under the impression that the contractors, in constructing the two houses, had so placed them that a line drawn along the center of the walk would put two and one-half feet of Lot No. 19 into Lot No. 20, the vendors informed the. vendee that the ground they were selling would be limited and bounded on the East by a line drawn along the center of the walk and extended to the avenue and the alley in the rear, and that, as so sold, the property would include Lot No. 20 and two and a half feet of Lot No. 19. The deed was executed and delivered in exchange for the purchase money, upon that theory and with that understanding. It was soon discovered, however, that the contractor had not located the buildings as directed, that the line agreed upon would take only one foot out of Lot No. 19, and that the deed had passed all of the walk between the two houses and carried land right up to the wall of the house on Lot No. 19 and under the eaves thereof and portions of the chimneys built partly on the outside of the wall. Refusal on the part of the grantee, to reconvey the portion of Lot No. 19, not sold nor intended to be conveyed, was followed by this suit for reformation of the deed.

There was no actual fraud on the part of the vendors, in the transaction, but, on well settled principles, their false representation, if prejudicial to the vendee, amounted to a fraud in law, for they could not rightfully make it without knowledge as to its correctness, and having so made it, the vendee is entitled to compensation for the injury occasioned thereby, if it was of such character as entitled her to rely upon it as an inducement to the purchase and she did so. Crislip v. Cain, 19 W. Va., 438. Hence, it constitutes no obstacle to right in the vendors to have reformation of the deed so as to correct the mistake in it, even though, treated as a false representation as to the area of the land, it may constitute the basis of a cause of action on the part of the vendee.

The evidence is highly conflicting as to whether the center of the walk was agreed upon as the line, but we are of the opinion that neither the vendors nor the vendee could have intended the consequences resulting from the deed as executed and delivered. The vendee, her husband and her daughter all inspected the property before tile contract was made or the deed delivered. It is highly improbable that they thought they were buying the projection and chimneys of the adjoining house and cutting off access to its basement and back yard. Mrs. Malcolm testified that she had taken them to the walk and pointed it out as the limit of their purchase. While they deny this strenuously, they saw the relation and arrangement of the two houses, and it cannot well be supposed or even imagined that they thought, in dealing for one house, they were seriously impairing another and actually buying part of it. •

The evidence of Mrs. Malcoln, upon which this finding is based, is objected to as being testimony to a personal transaction between her and a deceased person, the husband of Mrs. Talley, who took the contract of purchase, paid the purchase money and caused the deed to be made to his wife and is now dead. This objection is obviously untenable, because neither of the parties to this controversy claims title under the deceased husband. Mrs. Talley claims under her deed and by purchase from Mrs. Malcolm. The husband’s payment of the purchase money was a gift of money to her, which is in no way involved. ,

Our conclusion as to what was actually sold and intended to be conveyed, and the existence of a mistake in the deed, would affirm the decree, but for the suggestion that reformation cannot be had except upon condition of payment by the plaintiffs, of compensation for the foot and a half of ground falsely represented as being included in tbe land actually sold. That cause of action, if it exists, bas not been asserted in tbis suit by any pleading of any bind. Tbe' only issues made by any of tbe pleadings pertain to tbe existence of tbe mistake and mutuality thereof. Some of tbé evidence adduced goes beyond tbem and tends to prove right of compensation in tbe vendee, but she bas not asked it nor sought it in any way. As it and tbe cause of action set up in tbe bill grew out of tbe same transaction, no doubt it could have been set up by way of a demand for cross-relief.

But it is not such an equity as bars relief to tbe plaintiffs, conditionally, under tbe well known maxim invoked, which does not extend to every case in which a defendant may have relief by a cross-bill. Its applicability depends upon tbe character of tbe defendant’s equity or legal right which must in some form amount to a charge upon, or equity against, tbe particular demand set up in tbe bill, or a covenant or condition limiting it. If a mortgagor wants to redeem, or to cancel tbe mortgage, be must pay tbe mortgage debt, tbe right to which is embodied right in tbe instrument from which he seeks to be relieved. A taxpayer seeking to enjoin a tax, part of which is valid and part invalid, must pay tbe valid part. A creditor seeking reformation of a deed of trust or mortgage to secure bis debt, by inclusion of property inadvertently omitted, must pay back or credit on tbe debt usurious interest be bas received, because the right to such payment or credit is inevitably involved in tbe ascertainment of tbe amount of tbe debt sought to be made a lien on tbe omitted property by reformation. An owner of land seeking cancellation of a void tax deed must offer to reimburse the purchaser for tbe purchase money and taxes paid by him, because tbe statute governing tbe subject makes such offer a condition of tbe relief sought. A plaintiff seeking an accounting in equity must allow all mutual credits shown to be due tbe defendant. Tn a bill by which tbe plaintiff seeks an interest in property the legal title or possession of which is held by tbe defendant, on tbe theory of a trust in bis favor, must pay all proper charges against tbe interest be seeks to obtain. In all of these instances of the application of tbe maxim and every other in which it has been properly applied, the defendant’s right, whether legal or equitable, is part and parcel of the specific cause of action asserted by the plaintiff or necessarily involved in it. Upon analysis, they are all found to be inseparable or reciprocal rights embodied in the same cause of action, not rights involved in separate or clearly separable causes of action.

Defining this rule, Vice-Chancellor Wigram said in Hanson v. Keating, 4 Hare. 1, “It decides in the abstract that'the Court giving the Plaintiff the relief to which he is entitled will do so only upon the terms of his submitting to give the Defendant such corresponding rights (if any) as he also may be entitled to in respect of the subject matter of the suit.” Illustrating it, he observed: “If, for example, a Plaintiff seeks an account against the Defendant, the Court will require the Plaintiff to do equity by submitting himself to account in the same matter in which he asks an account; the reason of which is that the Court does not take accounts partially, and perhaps ineffectually, but requires that the whole subject be, once for all, settled between the parties. It is only (I may observe as a general rule) to the one matter which is the subject of a given suit that the rule applies, and not to distinct matters pending between the same parties.” Later in his opinion, he cites Agabeg v. Hartwell and Colvin v. Hartwell, 5 Cl. & Fin. 484, (House of Lords), as holding that relief cannot be denied the plaintiff, because it appears that the defendant is entitled to a set-off which he may recover in another action. This is his clear and concise analysis of that easel “The Vice-Chancellor of England and Lord Brougham, on appeal upon the general ground that he who would have equity must do equity, required the Plaintiff in the latter cause to submit to an account of certain monies he had in his hands, in which the Defendants claimed an interest, as the price of a decree for an account against the defendants; there being no necessary connection between the two accounts. This decree, therefore, went to the House of Lords under every circumstance of disadvantage. The House of Lords investigated the case with a view to the question whether the defendants- were entitled to have the two ac •counts blended; and being of the opinion that the defendants had no such equity, the decree was reversed.” The rule was interpreted in accordance with the view above expressed and here asserted, in Gibson v. Goldsmid, 5 DeG. M. & G. 757, holding, as stated in the headnotes, that “The rule that he who seeks equity must do equity, is restricted to an equity in respect of the subject matter of the suit. Where therefore in a deed of dissolution of partnership, one partner assigned certain foreign shares (which were recited to be transferable, as it was believed, by delivery), and covenanted for further assurance; and the other partner covenanted to indemnify the former against certain liabilities; and it after-wards appeared that the shares were not transferable by delivery, but required a formal act to complete the assignment: Held, in a specific performance suit instituted by the as-signee of the shares, that he was entitled to have the assignment complete, although there might in the meantime have been on his part a failure to perform the covenant of indemnity. ’ ’

Nothing inconsistent with this interpretation of the rule has been found in any of the hundreds of American decisions involving the principle. The following text from Corpus Juris, p. 174, based upon a great many of them, is well expressed and perfectly harmonizes with it: “The maxim reqrures that any' person seeking the aid of equity shall have accorded, shall offer to accord, or will be required to' accord, to the other party all the equitable rights to which the other is entitled in respect to the subject matter. Relief inconsistent with the equities of the adverse party will be denied, and where the granting of relief raises equitable rights in favor of .the defendant, the according of such rights will be imposed as a condition of granting the relief. ’ ’ Mark the limitation of the reciprocal equities so protected, to “the subject matter.” That means the cause of action set up in the bill, not every cause of action arising out of the transaction or circumstances giving birth to it. The protected equities of the defendant must be embodied in that cause of action, or grow out of it, in some form. Merely collateral relationship to it, of another distinct cause of action arising out of the same transaction, does not suffice, as precedents above referred to clearly disclose.

The cause of action set up in the bill in this cause is right to reformation of the deed so as to exclude part of the land conveyed by it, but not sold nor intended to be sold. If the defendant has a cause of action against the plaintiff, it is for compensation for injury by wrongful inducement to pay more money for what she did buy, than it was worth or than she otherwise would have paid. This she could recover in an independent suit, either at law or in equity, the cause of action being one of concurrent jurisdiction. These two causes are in no way dependent upon one another. If the deed had been correctly drawn and the false representation made, the defendant would have the same cause of action she now has, if any. That supposed unliquidated liability in her favor is not a lien on the strip she never bought and which the decree excludes from the deed. In no sense, has she a contractual hold upon it, and, ip my opinion, the maxim invoked does not give it. If she had spent money in improving the strip in ignorance of the mistake in the deed and in reliance upon its terms, she might have an equity in the subject matter of the bill. If this were a suit for the purchase money, the compensation she is entitled to, if any, would be an equity against the demand set up, the subject matter of the bill, for it would reduce the amount to be recovered. It would be a mutual credit upon the money demand and, so, be necessarily included in that particular cause of action.

Under this interpretation of the maxim, which is manifestly correct, the plaintiffs are not required to pay the defendant compensation for the injury occasioned by the false, representation, as a condition precedent to right to have correction of the mistake in the deed, even if we could see that they are liable for it. Hence, it is immaterial whether the defendant’s supposed right appears on the face of the bill or has been revealed in the evidence. Being an independent cause of action, but related because it grew out of the transaction giving rise to the other, it probably could have been set up in this cause, and, not having been asserted, it may be prosecuted in another action, bnt it constitutes no ground for withholding the relief to which the plaintiffs are entitled.

The cases illustrating the application of the maxim show that the denial of relief under it is necessary to the protection of the defendant. 'In all of them, unconditional award or relief to the plaintiff would forever bar right in the defendant to the equity due him. That is not true of separable and distinct causes of action, which may or may not be set up by cross-bill, at the will and pleasure of the defendant. If the principle is not limited to the defendant’s equity involved in the plaintiff’s cause of action, much confusion and even hardship may be result from its application. To broaden the scope of litigation and make one clear case of relief await determination of a lot of collateral controversies, not even raised by any pleadings, would be decidedly inequitable.

Upon these principles and conclusions, tlqe decree complained of will be affirmed.

Affirmed.