Morris v. McDonald

245 S.W. 903, 196 Ky. 716, 1922 Ky. LEXIS 606

• Court: Court of Appeals of Kentucky
• Decided: December 8, 1922
• Status: Published

Opinion

Opinion op the Court by

Judge Moorman

— Affirming.

This equitable suit was instituted in March, 1920, to recover an alleged overpayment on a tract of land conveyed to appellee by appellants. Judgment was rendered in the lower court 'for $3,375.00, with interest thereon from September 1, 1916, the amount claimed, and this appeal is prosecuted to reverse that judgment.

In 1913 appellants traded a farm on the Qwenton turnpike, near Frankfort, supposed to contain 390 acres, to appellee for a farm he owned on the Versailles pike, consisting of 155 acres. There-were two tracts in the farm conveyed by appellants, the first known as the Robert Church land, described in the deed as containing 350 acres, 3 roods and 23 square poles, less three excluded 'tracts amounting to .about 10 acres, and the second containing 50 acres adjoining the first, which had formerly belonged to the father of appellee, and on which appellee himself had lived the greater part .of his life. Appellee took possession of the land when the deeds were exchanged. Between 1913 and 1920 he sold three small parts of it, and in 1920 be contracted to sell his remaining interest, but, on having a survey of it made, discovered that the Robert Church tract, instead of containing 340 acres as supposed by him and also .by appellants, contained only 296 acres, there being a shortage of about 45 acres. In the trade that was made, appellee agreed to pay appellants $5,600.00, 'and executed his promissory notes for $2,000.00 and $3,600.00, respectively, due on January 1, 1915. The note for $2,000.00 was paid when due, but the note for $3,600.00 was not paid until June 23, 1918. That note was held by the appellants until September 1, 1916, when it was assigned,, but appellee regularly paid the interest to "that date and paid the principal on the later date mentioned.

Appellants contend that the transaction was nothing-more than an exchange of farms, in which it was not contemplated that appellee was to receive any number of acres of land, but merely that he was to receive the boundary described in the deed, with which he was familiar, having- had the land undér lease for three years previous to the conveyance. Insisting- on this view-' of the trade, counsel call attention to the evidence showing that appellee had lived on the fifty acre tract adjoining the Robert Church land practically all his life, had frequently been over the Church land, as a boy and later as a man when he had it under lease, knew its boundaries, which were well defined,, and for a great many years had desired to own the farm. These undeniable facts are -said to indicate an intention on his part to risk the contingency of quantity, whatever it might be, or however much it might exceed -or fall short of that mentioned in the deed. His occupancy of the land for nearly seven years before instituting this suit or before discovering -or claiming that there was -any mistake in the acreage, his -apparent and expressed satisfaction with the trade, and the fact that he sold the land in different parcels for a sum aggregating nearly $40,000.00, although he asked for the farm that was traded only $21,-000.00, are al-1 referred to as supporting the contention.

For appellee it is said that the sale of the land at a , handsome profit was made possible by the tremendous increase in land values occurring shortly after the trade was made, -and that the farm on the Versailles pike could also have been sold when prices were high for .a large profit or for as much as $300.00 an acre. Appellee testified that the Robert Church farm, when he acquired it, was worth only $75.00 an acre, and on this point he was corroborated by a number of witnesses who lived in -that community. With respect to the negotiations with Richard Morris, he said: “I told him 1 would take $135.00 an acre for my -place and give him $75.00 for his original tract and $500.00 for my father’s piece of land.” Admittedly the trade was not rdlosed on that basis, but during the negotiations Morris, aeordimg to appellee, said that he had 400 acres in the two tracts and it could be sold for $75.00 an acre. M-orris denied making any statement as to the -acreage, but said that he just gave McDonald a deed that called for 350 acres, “I gave it to him just as I got it. ’ ’ When asked if he inquired into the acreage of the McDonald tract, he repied, “Yes, sir, and he said 155 acres, maybe a little over, and I believe he said he wanted $135.00 an acre for it.” The witness also said that he estimated, in dollars and cents, what that acreage would amount to.

The deed from appellants to appellee describes the Robert Church tract by metes and bounds-, and then recites that it contains- “350 acres, 3 roods and 23 -square poles,” excluding three small -tracts .am-oimting approximately to ten acres. The question is, -does this recitation in the deed, in the light of the negotiations leading to the transaction, bring the case within the rule that where a sale is in gross, and the deficit in acreage amounts to ten per cent -or more, there is a relievabie discrepancy? If the -sale is by the acre, compensation for any discrepancy, no matter how small, will be. allowed; but if it is in gross, the rule is that the deficit must be as much as ten per cent before the complaining party is entitled to relief. The latter rule, however, is subject to two well established'exceptions laid down.in Harrison v. Talbott, 2 Dana 258, and consistently followed by this court. The first is a sale, strictly and essentially by the tract, without reference in the negotiations or contract to any estimated or designated number of acres; and the second is, where a supposed quantity, by estimation, is mentioned or referred to in the contract, but the reference is only f-or the purpose of -description and in such circumstances or in su-ch manner as to sho-w that the parties intended to risk the contingency of quantity, whatever it might be. In neither -of these classes of cases will the contract be modified by the chancellor, if no fraud is shown to exist. Beckley v. Gilmore, 192 Ky. 744; Chilton v. Head, 193 Ky. 768.

Appellants attempt to place this case within one of the exceptions mentioned. But, eliminating the question of fraud which is not claimed by appellee, it is obvious that the case does not fall within- the first exception, since reference was made 'in the contract to a designated number of acres; and this- exception applies only where the sale is strictly and essentially by the tract, without any reference whatever in the negotiations -or contract to the acreage. Nor is the case, in our judgment, embraced within the second exception-, for, while it may be assumed that the guaranty in the deed does not apply to the exact 'acreage mentioned, the recited number of acres cannot be regarded as merely descriptive of the land. Considering the statement in the deed as to the number of acres in conjunction with appellee-’s testimony, and particularly that part of it dealing with the negotiations, wherein it appears that he indicated to Morris that he would trade on a basis of $75.00 an acre in value, and Morris said there were 400 acres, it seems to us that it cannot be said that the'supposed quantity was referred to only for the purpose of description, and not in such circumstances or manner as indicated that the parties intended to risk the contingency of quantity. That was the view of the trial court, and, in our opinion, it is abundantly sustained by the evidence.

It is earnestly insisted that a recovery should be denied on the ground of laches on the part of appellee. And a further insistence of similar effect is that the action is barred by limitation. The deed was made in 1913, and the correct acreage was not ascertained by appellee until January, 1920. This action was filed on March 2, 1920. It is admitted that all the parties believed that the Eobert Church tract contained approximately 340 acres of land. The error is not in the calls of the deed, but in the calculation based on those calls. The same error appears in the deed to appellants of 1889. In these circumstances it is argued that appellee should have discovered the error before placing himself in a situation where a rescission of the contract could not be had. The foundation of the argument is that a simple calculation of the calls described in the deed would have shown the shortage. This statement is correct, but to hold that the failure to discover the mistake before 1920 constitutes a bar would impose a measure of diligence that the facts in the case, as we understand their effect, do not justify. We have no hesitancy, therefore, in saying that this ground of the appeal is unsustainable.

As to whether the statute of limitation began to run when the trade was finally consummated, or only concurrently with the final payment, is the question presented by the plea of limitation. The deed was made in 1913, more than five years before the suit was filed, but the $3,600.00 note given by appellee at that time was not paid by him until 1918, and that note was’ held by appellants until September, 1916. Appellants-’ contention is based on Dye v. Holland, 4 Buish 635. On a casual reading of the opinion in that case there is a seeming conflict between it and later decisions of this court, but a careful examination of it will disclose that, oh the point of inquiry here, it announces n-o rule at variance with the general rule established in this jurisdiction. There the sale was made in 1854 and the plaintiff put in possession of the land. He was sued for the balance of the purchase money in 1856, and attempted to defend the action on the ground that the quantity of the land was deficient. In January, 1857, he accepted the deed, and in 1861 caused a survey to be made, and, -as he claimed, discovered the deficit. He did not bring suit until November-, 1862, and it was held that he ought to have discovered the error more than five years before the action was filed. In view of his defense to the note in 1856, it is not an unreasonable interpretation of his conduct to say that he was chargeable with knowledge of the deficit as of the date the defense was made. It does not appear, from that opinion, whether the final payment on the land was made m-ore than five years before the suit was filed; and the question of whether the statute started to run from the -date that he ought to have discovered the mistake, or from the date of his final payment on the land, was not raised or discussed in the case. Hence .the effect of deferred payments- on the running of the -statute was not determined.

Assuming that appellee should have discovered the shortage before 1920, still it could not, in our judgment, be held that he ought to have discovered it when the deeds were exchanged or before the overpayment was made; and the claim is not barred, unless the overpayment was made more than five years before the suit was filed. The right of action, in a case of this kind, i-s based on the contract which the law imp-lies to repay money paid by mistake, and as said in Biggs, etc. v. Lexington and Big Sandy R. R. Co., 79 Ky. 470, “payment and the discovery -of the mistake must concur before a recovery can be had.” In Nave v. Price, 108 Ky. 105, this court said: “This court in several cases has ruled that the right to relief for a deficit is based on an implied assumpsit to refund the money paid by .mistake. Crane v. Prather, 4 J. J. Marsh 75; Dye v. Holland, 4 Bush, 635; Young v. Craig, 2 Bibb 270; Harrison v. Talbott, 2 Dana 258. This being the principle announced by this court, the cause of action is not based upon a deed or contract of sale of the land, nor for fraudulent representations made in! the .deed nor to reform it, nor is the action for a rescission of the contract of sale, but it is based upon the implied contract to refund the money which was paid as a result of the mutual mistake.”

It was held in the Nave case that the statute of limitations begins to run from the moment of payment, for it is then only that the cause of action- accrues, since, until payment is made, a refund of the money paid cannot be had as no right -of recovery exists. In the- -case at bar, $3,600.00 of the money was not paid until 1918. Until that payment was made there had been no overpayment, -and necessarily co-uld be n'o implied promise to refund -money-paid by mistake. It results, therefore, that the action, having been brought within five years of that time, is not barred by limitation.

Nor can we sustain the contention that the statute began to run as to each payment as -of the date it was made, and that the recovery here must be limited to such part of the overpayment as the unbarred payment bears to the entire price. Appellee’s right to recover -accrued when an overpayment was made, and that did not occur until the $3,600.00 note was paid, which was within five years before he sued. Accordingly, his right -of'recovery extends to the full amount of the overpayment.

It is finally contended that the offer to rescind made by appellants in their amended answer constitutes a defense to the action, and that if a rescission cannot be decreed no recovery -should be allowed. It is utterly impossible for the court to decree a rescission, because the Robert Church land has now passed out of the hands -of appellee. Had he divested himself of the title- with knowledge of the mistake, there would be much force in the contention of -appellants, but when he discovered the mistake a considerable p-art of the land had been disposed of, and the conditions had so changed that it was not possible to effectuate a rescission of the contract. It is an established rule of equity that a rescission will ¡not be decreed for mistake when the parties cannot be placed in statu quo. Keltner v. Keltner, 6 B. Monroe 40; Ruffner, &c. v. Ridley, &c., 81 Ky. 165; Rust, et al. v. Carptenter, 158 Ky. 672; R. C. L. vol. 6, pp. 936-9.

Appellee’s claim cannot be 'defeated by an offer to rescind, which, is impossible of acceptance because of the changed conditions and the impracticability of restoring the parties to the situations existing at the time of the trade. It follows that this defense, too, must be denied.

The judgment is affirmed.