Title: Crompton v. Bruce

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Crompton v. Bruce1983 WY 98669 P.2d 930Case Number: 83-61Case Number: 83-61Decided: 09/23/1983Supreme Court of Wyoming
KELLY JAY CROMPTON AND 
CLARENCE DON CROMPTON, APPELLANTS (DEFENDANTS), WARREN M. ADAMSON AND LOUISE 
ADAMSON, (DEFENDANTS),

v.

ROBERT L. BRUCE AND KAROL 
BRUCE, APPELLEES (PLAINTIFFS).

Appeal from the 
DistrictCourtofUintaCounty, John D. Troughton, 
J.

Charles D. 
Phillips, Evanston, for appellants.

Timothy O. 
Beppler of Vehar, Lehman, Beppler & Jacobson, P.C., Evanston, for appellees.

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and 
CARDINE, JJ.

ROSE, 
Justice.

[¶1.]     The trial court granted 
the plaintiffs relief: reformation of the disputed quitclaim deed and quiet 
title to the mineral estate. We will affirm. 

FACTS

[¶2.]     The real estate 
transactions of concern here involve three families: Robert and Karol Bruce, 
husband and wife; Warren and Louise Adamson, husband and wife; and Clarence and 
Kelly Crompton, father and son. The Bruces, plaintiffs below and appellees here, 
are the sellers of the Wyoming property and 
buyers of the Idaho property. Appellants Adamsons are the 
Idaho sellers. 
Appellants Cromptons are the Wyoming buyers.

[¶3.]     In the course of their 
search for suitable property to farm, the Bruces learned of the ranch the 
Adamsons had for sale in Idaho. They saw the property and desired to 
purchase it, hoping to sell their Wyoming property to raise funds. They entered 
into a contract for the sale of their Wyoming land to the Cromptons. The contract, 
as well as the associated warranty deed placed in escrow, reserved all oil, gas 
and minerals to the Bruces. In turn, as part consideration for the Idaho property, the 
Bruces assigned the installment land-sale contract to the Adamsons. The Bruces 
also executed a quitclaim deed which was placed in escrow in order to give the 
Adamsons security against the Cromptons' default. This deed did not reserve the 
minerals.

[¶4.]     After the Adamsons 
became unhappy with the Bruces, Mrs. Adamson directed the bank holding the 
quitclaim deed executed by the Bruces to record the deed. Because the bank later 
thought the deed was missing, the Bruces were requested to execute and did 
execute an identical quitclaim deed. This was subsequently 
recorded.

[¶5.]     In the meantime, the 
Adamsons were eager to have the Cromptons accelerate payment on the installment 
contract which the Bruces had assigned to the Adamsons. There had been a drought 
and the Adamsons' potato crop had failed. The Cromptons agreed to do this and 
sought financing from a bank. That bank promised to lend the necessary funds to 
the Cromptons, and, as part of the bank's internal procedures, searched title on 
the Wyoming 
property. The title examiner discovered the recorded quitclaim deed from the 
Bruces to the Adamsons and informed the Cromptons, who became aware for the 
first time that the mineral rights were not reserved in the Bruce-Adamson deed. 
Subsequently, they asked the Adamsons to execute another quitclaim deed to them, 
which would contain the same provisions and description as the Bruce-Adamson 
quitclaim deed. The Adamsons complied, and the Cromptons recorded the 
Adamson-Crompton quitclaim deed. Thus, the Cromptons became the record owners of 
the mineral rights. The Cromptons did not discuss the status of the mineral 
rights with the Adamsons, nor did they pay to the Adamsons any more than was the 
Adamson's due under the original Crompton-Bruce contract which had been assigned 
to the Adamsons.

[¶6.]     The Bruces became aware 
of this state of affairs for the first time when they were negotiating oil and 
gas leases after the Adamson-Crompton transaction was completed. Upon this 
discovery, the Bruces asked the Adamsons and the Cromptons to deed the minerals 
back to them. Both refused.

[¶7.]     The instant suit 
followed. The Bruces sought reformation of the quitclaim deeds to conform to the 
parties' original understanding and quiet title to the minerals. The trial court 
found for the plaintiffs Bruces.

THE 
ISSUES

[¶8.]     The trial court found 
all the elements necessary for reformation and appellants Cromptons complain 
that there was not sufficient evidence to support its findings. Appellants also 
claim that their two defenses to reformation were improperly decided. They 
contend:

"It is inconceivable that 
a 32-year-old man, of obvious intelligence and good health, with substantial 
prior experience in real estate and other legal transactions, who had twice 
leased his own minerals for oil and gas and was aware of the value and potential 
and had been enlightened in quite a few areas of oil and gas, who just 47 days 
before he signed the first Quitclaim Deed had executed a contract and warranty 
deed to Cromptons expressly reserving minerals and received a warranty deed the 
same day from his mother not reserving minerals, who at the Wyoming closing 
wanted it understood from the beginning that he was reserving the mineral rights 
and they were heavy on his mind at that time, who placed little or no value on 
the Wyoming minerals either at the time of the Wyoming closing or the Idaho 
closing and had no idea that oil was in the area at all, who was very interested 
in buying the Idaho property and wanted it pretty bad, who might have let the 
minerals go to Cromptons with the property if they had insisted, who never asked 
anyone whether the minerals were being reserved in the Idaho sale, who had to 
come down to $50,000 for the Wyoming contract before Adamsons were even willing 
to negotiate, who could not sell the Wyoming contract to anyone else with the 
minerals for as much as he sold it for to Adamsons, he says without the 
minerals, and who usually reads legal documents and tries to understand them 
before he signs them, could have mistakenly signed two Quitclaim Deeds not 
reserving the minerals because, he says, he had specifically instructed 
[realtor] Wills and [attorney] Beeks to follow the original contract and because 
he was told by Wills that the Quitclaim Deeds were for security for Adamsons in 
case Cromptons defaulted on the Wyoming contract, especially if, as is likely, 
by refusing to sign the first Quitclaim Deed he would run a severe and perhaps 
fatal risk of losing the Idaho farm he wanted so badly."

APPELLATE 
REVIEW

[¶9.]     The standards for 
appellate review are well established. As early as 1977, we 
said:

"In matters of evidence 
on review, we apply the monotonously-repeated rule that an appellate court must 
assume evidence in favor of a successful party to be true, leave out of 
consideration the conflicting evidence of the unsuccessful party and give the 
evidence of the successful party every favorable inference which may be 
reasonably drawn from it. Oedekoven v. 
Oedekoven, Wyo. 1975, 538 P.2d 1292." Douglas Reservoirs Water Users Association 
v. Cross, Wyo., 569 P.2d 1280, 1283 
(1977).

Also see Foster Lumber Company, Inc. v. Hume, 
Wyo., 645 P.2d 1176 (1982); Robinson v. 
True Drilling Company, Wyo., 641 P.2d 195 (1982); Distad v. Cubin, Wyo., 633 P.2d 167 
(1981); Western National Bank of Lovell 
v. Moncur, Wyo., 624 P.2d 765 (1981).

[¶10.]  Appellants claim that some of their 
testimony was virtually uncontradicted and should be credited as unimpeached 
evidence.

"While the trier of fact 
should be accorded considerable freedom in evaluating the testimony of 
witnesses, uncontradicted and unimpeached testimony cannot arbitrarily be 
disregarded. * * * Beck v. Givens, 
1957, 77 Wyo. 176, 309 P.2d 715, reh. den., 77 Wyo. 176, 313 P.2d 977. * * Ward v. Yoder, Wyo. 1960, 355 P.2d 371, 
reh. den., 357 P.2d 180. See also Twing 
v. Schott, 1959, 80 Wyo. 100, 338 P.2d 839." Douglas Reservoirs Water Users Association v. 
Cross, supra, 569 P.2d  at 1284-1285.

The testimony of 
the Adamsons cannot be said to be uncontradicted and unimpeached because the 
Adamsons, in fact, impeached themselves. Questions of credibility are for the 
trial judge and it is the trial court's duty to weigh the evidence. His 
determination will not be upset by this court so long as it is rationally 
supported.

"* * * The trial court, 
not this court, is charged with the function of weighing conflicting testimony 
and evidence. The general rule is that so long as there is sufficient evidence 
upon which the trial court could rationally base its findings, such findings 
will not be adjusted in any way by the appellate court. Palmeno v. Cashen, Wyo., 627 P.2d 163 
(1981); Madrid v. Norton, Wyo., 596 P.2d 1108 (1979)." Thomasi v. Koch, 
Wyo., 660 P.2d 806, 811 (1983).

The testimony of 
the Bruces, and witnesses Beeks and Wills, and the documents in the record, 
support the trial court's determination that the Adamsons' story was not 
credible. In the case at bar, appellants Adamsons denied the facts asserted by 
appellees Bruces and witnesses Beeks and Wills. The trial court found this 
testimony not worthy of belief:

"The court carefully 
observed the demeanor and attitude of the Adamsons on the witness stand; * * * 
opportunistic and expedient * * * self-righteous * * * with little regard for 
any detriment their opponent might suffer. In short, the Court has looked the 
Adamsons in the eye and remains unconvinced that they are truthful or 
trustworthy; their testimony is not worthy of belief."

ELEMENTS REQUIRED FOR 
REFORMATION

[¶11.]  Reformation of a document requires three 
things: (1) a meeting of the minds - a mutual understanding between the parties 
- prior to the time a writing is entered into, (2) a written contract or 
agreement, (3) which does not conform to the understanding, by reason of mutual 
mistake. Rainbow Oil Company v. 
Christmann, Wyo., 656 P.2d 538, 544 (1982); Pfister v. Brown, Wyo., 498 P.2d 1243, 
1244 (1972); Russell v. Curran, 66 
Wyo. 173, 206 P.2d 1159, 1163 (1949); State Bank of Wheatland v. Bagley Bros., 
44 Wyo. 244, 11 P.2d 572, 589 (1932); Grieve v. Grieve, 15 Wyo. 358, 89 P. 569, 570 (1907); Stoll v. Nagle, 15 
Wyo. 86, 86 P. 26, 28 (1906).

[¶12.]  In a reformation suit, these three 
elements must be proved by clear and convincing evidence. Pfister v. Brown, supra, 498 P.2d  at 
1245. In Thomasi v. Koch, supra, 660 P.2d  at 811-812, we said:

"* * * This court 
previously has adopted language to this effect:

"`* * * When the evidence 
is such that the mind readily reaches a satisfactory conclusion as to the 
existence or nonexistence of a fact in dispute, then the evidence is, of 
necessity, clear and satisfactory.' Continental Sheep Co. v. Woodhouse, 71 
Wyo. 194, 202, 256 P.2d 97 (1953), quoting language found in Good Milking Mach. Co. v. Galloway, 168 
Iowa 550, 150 N.W. 710, 712 (1915).

"We further have said 
that clear and convincing evidence is `that kind of proof which would persuade a 
trier of fact that the truth of the contention is highly probable.' MacGuire v. Harriscope Broadcasting Co., 
Wyo., 612 P.2d 830, 839 (1980)."

[¶13.]  The trial court had before it clear and 
convincing evidence to support its finding that the original Bruce-Adamson 
understanding was that the mineral rights were to remain in the Bruces. 
Appellees Bruces testified that they never intended to transfer the mineral 
rights. The Bruces assigned to the Adamsons the Bruce-Crompton land-sale 
contract and this contract expressly reserved and excepted the minerals. Realtor 
Wills testified that he recalled having informed appellants Adamsons that the 
minerals were to remain in the Bruces.

[¶14.]  No one disputes the existence of the 
subsequent written documents, all of which appear in the 
record.

[¶15.]  It is clear on the face of the quitclaim 
deed that it did not reserve the mineral estate to the Bruces. Thus, the trial 
court had before it clear and convincing evidence that the quitclaim deed did 
not correspond to the parties' original agreement, in that it failed to except 
and reserve the oil, gas and minerals. The trial court found that this failure 
was due to the error of a scrivener. This evidence supports the trial court's 
finding that the failure to except and reserve the minerals was due to a 
mistaken and inadvertent omission.

[¶16.]  Clearly then, appellees Bruces made out 
their prima facie case for reformation.

DEFENSES

[¶17.]  The appellants advance two defenses to 
the reformation: (1) the claimants' inexcusable negligence will prevent 
reformation; (2) a bona fide purchaser will be protected against 
reformation.

[¶18.]  Appellants interpose the argument that 
"[i]t is negligence as a matter of law to not read a contract before signing." 
Laird v. Laird, Wyo., 597 P.2d 463, 
467 (1979). Apparently they would have this court decide that because Mr. Bruce 
admitted he did not read the second (replacement) quitclaim deed, identical in 
all respects save date to the first quitclaim deed, which he had read, he was 
negligent as a matter of law. This we decline to do. We agree that the trial 
court was correct in its determination that the mistake in the quitclaim deed 
was not due to negligence of the Bruces. The trial court had ample evidence 
before it to support its conclusion that the Bruces acted as reasonably prudent 
persons would in relying on the expertise of realtor Wills and attorney Beeks 
who drew the quitclaim deed.

[¶19.]  In addition, to defeat reformation the 
party seeking reformation must not only be negligent, he must be inexcusably 
negligent. We said in State Bank of 
Wheatland v. Bagley Bros., supra, 11 P.2d at 589:

"An examination of the 
cases generally establishes the rule that, where a party to a written instrument 
is inexcusably negligent in its execution, he is not entitled to have it 
reformed to relieve him from the consequences. 45 A.L.R. 701, 
note."

We will not 
upset the trial court's determination that the Bruces were not inexcusably 
negligent.

Appellants 
Cromptons would also have this court decide that they are bona fide purchasers 
of the [¶20.]            
mineral rights and reverse the judgment reforming the quitclaim deed. The 
elements required to establish a bona fide purchaser so as to defeat reformation 
are: (1) a purchaser in good faith, (2) for valuable consideration, not by gift, 
(3) with no actual, constructive, or inquiry notice, (4) who would be prejudiced 
by reformation. Soppe v. Breed, Wyo., 
504 P.2d 1077, 1088 (1973); North 
American Uranium, Inc. v. Johnston, 77 Wyo. 332, 316 P.2d 325, 328-329 
(1957); York v. James, 60 Wyo. 222, 
148 P.2d 596, 598 (1944).

[¶21.]  The trial court had ample evidence before 
it to find that the Cromptons were not bona fide purchasers. None of the factors 
were met. The trial court found that the Cromptons did not exercise good faith 
toward either the Adamsons or the Bruces. They did not pay valuable 
consideration for the mineral rights, but became the record owners by a 
windfall. The Cromptons had actual notice of the defect in the quitclaim deed 
because they were party to the contract with the Bruces; they had constructive 
notice because the assignment of that contract to the Adamsons was recorded; 
they had inquiry notice when they learned that the quitclaim on record to the 
Adamsons did not reserve the minerals. The Cromptons certainly cannot be 
prejudiced by giving up the windfall this series of events produced for them. 
Appellants simply have not made out their defense of bona fide 
purchaser.

[¶22.]  Affirmed.