Case Name: Myrtle Haugh, Appellee, v. Hattie Lanz et al., Appellants
Court: Iowa Supreme Court
Jurisdiction: Iowa
Decision Date: 1919-05-14
Citations: 187 Iowa 841
Docket Number: 
Parties: Myrtle Haugh, Appellee, v. Hattie Lanz et al., Appellants.
Judges: Weaver, Evans, and Stevens, JJ., concur.
Reporter: Iowa Reports
Volume: 187
Pages: 841–862

Head Matter:
Myrtle Haugh, Appellee, v. Hattie Lanz et al., Appellants.
REFORMATION OF INSTRUMENTS: Evidence — Weight and Suf1 ficiency. Evidence reviewed, and held not to be clear and convincing that a first mortgage was intended.
REFORMATION OF INSTRUMENTS: Grounds — Tender of Per-2 formance Before Suit. A vendor may not maintain a suit for reformation of a contract to provide for annual interest, where the purchaser has tendered notes providing for such payment.
REFORMATION OF INSTRUMENTS: Evidence — Weight and Suf3 ficiency. Evidence reviewed, in an action to reform a contract ■ of sale of land so as -to provide that the mortgage to be given as part of purchase price by the purchaser should be a first mortgage, and held not to make the necessary clear and satisfactory showing that a first mortgage was intended.
QUIETING TITLE: Oral Agreement to Sell — Husband’s Agreement 4 as to Wife’s Property — Estoppel—Specific Performance. Where a husband took part in the negotiations in which his wife alone signed a contract for the sale of real property, and he orally agreed to the sale, and, in reliance upon his conduct and promises, the purchasers made the contract and paid the first year’s interest due on mortgage to be given for purchase price, the purchasers are entitled to a decree in their favor against the wife and her husband, requiring them to specifically perform their contract, or that title to said land be quieted in the purchasers as against them.
Ladd, C. J., Preston and Salinger, JJ., dissent.
Appeal from Jasper District Gowrt.- — John F. Talbott, Judge.
May 14, 1919.
Rehearing Denied November 15, 1919.
Plaintiff’s action is to reform a certain written instrument. Defendants answer, denying plaintiff’s right to a reformation, and on cross-petition ask that the instrument be enforced specifically. Opinion states the facts.
This action was before this court at a former sitting, and an opinion filed. Upon petition, a rehearing was granted, the case was reargued, and again submitted to this court, for further consideration. The majority hold to the opinion as formerly written, Chief Justice Ladd and Justices Preston and Salinger now dissenting.
Reversed in part; affirmed in part.
Ross R. Motvry and E. M. S. MeLanghKn, for appellants.
Bray, Shifflett & Wilkie, for appellees.

Opinion:
Gaynor, J.
This action was begun by the plaintiff, Myrtle Haugh, to reform a certain written instrument, entered into between her and the defendants. The defendants appeared, and filed answer and cross-petition, making the husband of Myrtle Haugh a party. In their answer, defendants deny the right of plaintiff to a reformation of the written contract, and in a cross-petition, pray for the enforcement of the contract as made, against the plaintiff and her husband. The relationship of the parties is a material matter. The plaintiff is the daughter of one Herman Lanz. The defendant Hattie Lanz is his widow. Defendants Herman and Colen Lanz are his sons. His estate is valued at about $21,000. The defendants, Herman, Colen, and the widow, desire to purchase the interests of all the heirs. They have purchased the interest of all the others, and paid to each $3,100. They then entered into this written contract with Myrtle Haugh, to purchase her interest at the same figure. This is the contract which Myrtle Haugh, the plaintiff, asked to have reformed, and this is the contract which the defendants wish to have enforced. It provides that the plaintiff, Myrtle Haugh, shall take, in full settlement of her interest in her father's estate, and the defendants shall pay her therefor, the sum of $3,100, to be secured by a mortgage on the Clem Starrett 80, to be executed and delivered on the 1st day of March, 1914, said $3,100 to be payable on or before 5 years from that date, and to draw 5 per cent interest from March 1, 1914; that, upon the signing of this contract, plaintiff shall sign a deed conveying all her interest in the real and personal property of her father, Herman Lanz, to the defendants; and that, upon the execution of this instrument, it shall evidence an indebtedness of $3,100 from the defendants to the 'plaintiff.
Plaintiff prays to have this written contract reformed, so as to conform to what she claims to be the real contract entered into between her and the defendants, and she asks to have it reformed so as to make the interest payable annually, and to provide that the mortgage be a first mortgage upon the Starrett land. A decree was entered, dismissing plaintiff's petition and defendants' cross-petition. Both parties appeal. Defendants, having first appealed, are denominated appellants.
We will dispose of plaintiff's appeal first, and this may be thus disposed of:
The contract, having been reduced to writing, is presumed to contain the agreement of the parties, and if she would have it speak other than it does, she must satisfy the court, by clear and satisfactory evidence, that the writing does not contain the true contract entered into between the parties, r We are satisfied, from an examination of the record, that she has not done this. The contract was written as the parties had talked, prior to the writing. There was no mistake or fraud in its making. It expressed just what the parties then intendea it should express, no more and no less. They recorded in the instrument just what they intended the writing should say. The parties were all familiar with the situation. They knew and understood just what the contract was, that they had entered into, and what obligations they assumed in the contract. This is manifest from the interpretation which has been placed upon the contract by the parties themselves. It appears that she has tendered to the defendants a deed to her interest in her father's estate, in fulfillment of the contract, and the defendants have tendered her a mortgage, with interest payable annually, according to the tenor and effect of this promissory note, providing for the payment of interest annually. So it appears that defendants have undertaken to, and offered to, and desired to, execute their part of the agreement in accordance with the contention of the plaintiff, and have tendered performance to her by executing to her a note, with interest payable annually, and a mortgage to secure the same, according to. the terms of the contract, with interest as stipulated in the note.
Her claim that the contract should provide for a first mortgage is not only disproven by a preponderance of the oral testimony, but is negatived by the facts and circumstances disclosed in the record. She practically concedes that a second mortgage is ample security to her for the payment of the $3,100, and also that she knew, at the time the writing was executed, that there was already a mortgage upon the premises. This is a circumstance negativing her claim that the contract in this respect should read other than it does. She executed a quitclaim deed to the defendants, without demanding a reformation of the contract, and defendants have tendered to. her a note and mortgage, with provision for interest as urged by her.
It appears that defendants, before the commencement of this action, were ready, able, and willing to perform the contract on their part in accordance with the contention of the plaintiff, and have tendered her a note and mortgage, with interest payable annually. There is no occasion for the interposition of equity upon this contention of the plaintiff's. The note and mortgage were executed on the 1st day of March, 1914. The suit was not commenced until the 29th day of April, 1914. On the 6th dáy of March, 1915, defendants paid the plaintiff the first year's interest, $155, and this was accepted and retained by her as a payment made in part fulfillment of the contract which she seeks to reform.
As has been frequently said by this court, the evidence that justifies the reformation of a written contract must be clear and satisfactory. Written instruments entered into between parties are not to be lightly set aside or changed, and never should be unless the evidence is clear and convincing. It has been said by this court that a contract will not be reformed in equity where neither party intended that any different words should be used from those which were employed. To reform a writing on the ground of mistake, it must appear that there is a mistake in the writing, and the evidence to show this must be clear, satisfactory, and free from reasonable doubt. More than a mere preponderance of the evidence is required to sustain a decree for the reformation of a written instrument. It has further been said that a court will not disturb the provisions of a written agreement unless there is clear and convincing evidence that the instrument does not set forth the true intent of the parties, and that the failure to make it express such intent arose from oversight, or mistake in drafting. The general rule seems to be that the proof necessary must be almost sufficient to establish the right to a reformation beyond a reasonable doubt.
We think the court did not err in refusing to reform the contract, and in dismissing plaintiff's petition.
This brings us to a consideration of defendants' cross-petition. This presents more difficulty, and the disposition of the matter involves us in a difference of opinion. The controversy upon this issue centers upon the plaintiff's husband, Charlie Haugh. He did not sign the written contract in controversy. The defendants claim, however, that ,the husband, Charlie, was present, and assisted the plaintiff in all matters pertaining to the making of the contract, and encouraged the execution thereof, and, as an inducement to these defendants to enter into the contract with Myrtle, said, among other things:
"I will sign a quitclaim deed when the note and ifiortgage are executed and delivered to her."
The defendants pray in their cross-petition that he and plaintiff and each of them be forever barred and estopped from claiming any title, right, or interest in thé real estate covered by the contract. They further pray for a specific performance on the part of both plaintiff and her husband, and that defendants' title in said real estate be established and confirmed against the claims of each.
The rule contended for by defendants was applied in Lanz v. Schumann, 175 Iowa 542. The plaintiffs in that case are the defendants in this. One of the defendants in that case was the daughter of Herman Lanz, and the other, her husband. In that case, as in this, Mrs. Schumann, the daughter, undertook to convey to the mother and the two brothers her interest in her father's estate. Mrs. Schumann entered into a written agreement to do so, which was not signed by her husband. In that case, Mrs. Schumann and her husband were parties defendant. The relief prayed was that the title be quieted and confirmed in the plaintiffs, against both the husband and wife. Schumann refused to perform on his part. In that case, it was said:
"If he (Schumann) was present taking part in the negotiations for the purchase, and agreed to the sale at the stated price, and plaintiffs, relying upon his conduct and his promises, made the settlement and turned over the agreed consideration, he cannot escape specific performance simply because his name is not subscribed with the other grantors to the written instrument. To thus hold him does not, as counsel seem to think, involve any departure from the mile which makes incompetent proof of oral agreements to vary or alter a written contract. Mr. Schumann is not a party to the writing, and he cannot avail himself of its protection in this respect. It is only party to a writing who can use it as a screen to shut out oral evidence of the actual agreement."
In the Schumann case, as in this, it was claimed that the contract was partly oral and partly in writing.
In Meylink v. Rhea, 123 Iowa 310, the court dealt with a situation somewhat similar to that before us now. In that case, the defendant was the owner of a farm. It was claimed by the plaintiffs that he entered into an oral contract to sell the farm to the plaintiffs, and agreed to convey to the plaintiffs the land at $59 an acre; that, at the time of the agreement, plaintiffs paid the defendant, on the consideration, the sum of $10. Defendant's wife was made a party to an action to require the defendant to specifically perform his contract. The defendant denied the making of the contract, and pleaded other defenses, which are not material to be considered here. The wife appeared, and denied the agreement, denied all knowledge that any money had been paid to her husband on account of the agreement, and objected to any decree requiring her to specifically perform on her part, or to join in the execution. In that case, it appeared that the negotiations for the sale were made at the home; that both husband and wife took part in the .negotiations. This court said, in passing upon the case, that the trial court was warranted in finding that Mrs. Rhea, equally with the husband, was desirous of making the sale, the only question of difference being the price to be paid per acre; that she was fully advised of the offer made by the plaintiffs; that, in the presence of the plaintiffs, she told her husband to go ahead and make the sale on such terms as he thought best.
"Accepting such to be the facts, it cannot be important that she was not personally present when her husband finally consented to the sale, and received the money in part payment of the purchase price. Having authorized her husband to act in the premises, we think she should be bound by his agreement."
What does the record show here, touching Charlie Haugh?
The plaintiff, Myrtle Haugh, testifies:
"After I signed the contract, my husband and I talked the matter over [meaning the sale of her interest in her father's land to these defendants], and in the month of June he agreed to sign it. I was disposing of my interest in my father's estate for $3,100. The reason my husband would not sign the quitclaim deed was that my mother called bim a thief. I signed and acknowledged a quitclaim deed, just after the contract was signed. The contract was made in June. At the conversation in March, my husband was saying what he was going to do with the money; and my mother said it wasn't his money, it was my money; and my husband got mad. I knew, at the time, that my other sister and her husband had signed a quitclaim deed, and received $3,100. At the March meeting, when the matter was talked of, they offered to give me 20 acres off the Clem' Starrett place for a quitclaim deed from me to my interest in my father's estate. I agreed to that. My husband did not say much about it. Mr. McLaughlin, the lawyer, made out a contract for that. My husband did not stay very long after we came to the contract. My husband wanted the contract to show where the land should be. My mother insulted him, and he left. He was not in Mr. McLaughlin's office any more that day. He made out the contract for the 20 acres and gave it to me; told me to show it to my husband, and there was something said about signing it and sending it back. I did not sign that contract. This transaction was the second week in March. The contract in question was made in June, — .the contract in which I should receive the $3,100. One time, my brother and another came to see me in December. They stayed until night, and then saw my husband. We all talked the matter over. My husband then said that they would have to pay the money for the expenses if we signed it. My husband said he would not sign it, referring to a quitclaim deed. That was in December after the contract was made. The matter of signing the deed was discussed with my husband. I got the contract for the 20 acres after my husband and I had talked the matter over with my mother and brothers. After this paper was made out for the 20 a cíes, my husband and I agreed to release our interest in the estate, and they were to give us 20 acres of land. This was after the other girls had signed the deed."
Charlie Haugh testified:
"I was present at the conference in March. While I was there, I had a conversation with the defendants. We talked over the matters of the estate. They estimated the estate at $21,000, to be divided between seven. This would be about $3,100 to each one. They offered 20 acres of land, or $3,100 in the form of a mortgage. There was no mention of a deed whatever. I was doing business for my wife at that time, and was selling her interest for $3,100. I had no interest to sell. ' I never agreed to sign any papers. I said I had enough to look after my own things. I told my wife she could sign the agreement to take the $3,100 if she wanted to. I told the defendants that I would not sign the deed for her interest in the estate. This was in March. I was willing that she should sell her interest for $3,100, if they would do their part. I told them at the time that we would take 20 acres of land, or $3,100. I was willing to agree to that if she would take it, but I said I would not sign thp deed myself."
It is apparent from the testimony of the plaintiffs that Charlie was perfectly willing to sell his^wife's interest in the estate to these defendants for $3,100, and that he gave the defendants to understand that he consented to her doing so; and the only ground upon which he claims that he refused was that his mother-in-law insulted him by telling him that it was his wife's money, and not his, and that he had nothing to do with it. Giving to plaintiff's testimony the most favorable coloring, it shows that the husband recognized that $3,100 was the full value of his wife's interest in the land, and was willing and anxious that his wife should sell her interest in this estate for $3,100; that he gave these defendants to understand that he consented to anything that she might do in the way of disposing of her interest; that his refusal simply was to sign the papers, because of his hostility to his mother-in-law.
We have not attempted to set out all the plaintiff's testimony, but enough to show the mental attitude of the defendant Charlie towards the situation, towards the action his wife contemplated taking in the disposition of her interest in her father's estate, and what was contemplated by the defendants in the purchase of that' interest. We gather from this testimony that the value of Myrtle's interest in the estate did not exceed $3,100; that it was their purpose to convey to these defendants the interest of Myrtle, unembarrassed by any claim of her husband, for $3,100. The rupture between the husband and the mother-in-law grew out of some statements made by the husband touching the disposition by him of the proceeds of the sale when the sale was consummated. The defendant widow seemed to have been a kinder mother than she was a mother-in-law, and informed him, in perhaps not uncertain language, that the proceeds belonged to her daughter, and not to him. At this he took offense, and, though never objecting to the consummation of the deal between these defendants and the wife, —indeed, we may say, encouraging the wife to the consummation of the deal, — he, because of the words of his mother-in-law, spoken, perhaps, offensively, declared his purpose to have nothing to do with the sale, and, if we take the plaintiff's testimony as a basis for the thought, refused to join in any written evidence of the sale. If we turn, however, to the defendants' testimony, we find an entirely different state of facts; but, before going into this branch of the case, we might say that the contract entered into between Myrtle and the defendants bound the defendants to pay her $3,100 in five years from the 1st of March, 1914, and to secure the payment by mortgage upon certain land. At the end of the first year, the defendants recognized this obligation, paid Myrtle the first year's interest, $155, and prepared and tendered to her a mortgage, as required by the contract, and further than that, offered to pay her the full amount of $3,100, if she desired.
Without setting out the defendants' testimonyoin full, we may say that it shows that the husband said, in conversation, at some time during the negotiations, that he would sign a quitclaim deed for his dower interest in the property covered by the contract, and said that whatever Myrtle did in the way of disposing of her interest in her father's estate would be all right, so far as he was concerned. This conversation, however, we take it, was had at the March meeting, and at the time when the rupture befell between the mother-in-law and Charlie; but we find further that, at the time the contract was signed, Myrtle informed these defendants that her husband, Charlie, was busy, and could not be present with her at the time of the signing of the contract, but would come later and execute it. Of course, she denies that she said this; but we are persuaded, from all her conduct, that she was as well satisfied as these plaintiffs that her husband would join in the contract, for she says that, after she signed the contract on the 21st of June:
"I talked the matter oyer with my husband .[meaning the sale of her interest in her father's estate] in the month of June, and he agreed to sign the contract."
He was then informed by his wife that the contract had been signed by her, and he agreed to join with her in the contract; and this shows his mental attitude at that time. His subsequent contumacious refusal to do what he had agreed to do, and join in the contract, was simply suggested by Ms avarice, and desire to hold up these defendants for more than he had agreed should be paid as a consideration for her interest.
It is true that, in one place in his testimony, he says: "I always had an intention to claim an interest in my wife's property." If this be so, Ms whole conduct belied his intention, and his intention, so concealed, was a palpable fraud upon these defendants. But we are not dealing with his secrqt intentions. We are dealing with what was said and done. By this, the rights of the parties are to be judged.
We think the record justifies us in saying that Charlie was willing to take the 20 acres offered Myrtle at the March meeting or $3,100, but preferred the $3,100, because, as he says, he could invest that in Des Moines property, and receive good rentals. We think the fair inference from all the testimony is that he was willing at all times that his wife should convey her interest in her father's estate for $3,100, and so gave the defendants to understand; that the deal between Myrtle and the defendants was entered into and the contraci; made upon the theory that he would consent to all that she did in the way of disposing of her interest to these defendants; and that it was never his thought to claim, any dower interest in the land, when the sale was consummated by her; that he gave the defendants to so understand; that he gave the defendants to understand that whatever she did would bind whatever interest he had in the property, and that the consideration to "be paid would be in full of the interest, of both in the estate. The call made upon him in December, and the request there made to join in the deed, were only for the better evidencing of the rights of these defendants in the premises conveyed. He did not then refuse to join in the deed, but exacted $300 more than the contract called for, — more than he had agreed was the fair value of the property conveyed. We think the record discloses, with sufficient certainty to justify us in saying it is a fact, that Myrtle told these defendants, at the time she signed the contract, that her husband would sign a deed for his dower interest. Hattie Lanz testified : "She said he was busy now, but that he would come down,-as soon as he had time, and sign the deed." Myrtle testified that, when she returned home, after signing the deed, she and her husband discussed the fact, and he then said that he would sign the deed or the contract. The witness McLaughlin testified that, at the March meeting, both were present; that both said they would sign a deed conveying all their interest in the estate. Charlie said he would' convey his dower interest. They both understood that they would sell their interest for 20 acres or $3,100, and both said they would sign a deed. They did not then wish to determine which they would take. Charlie said he would rather have $3,100, because he contemplated build ing houses in Des Moines, and they would make more out of the rentals of the houses than they would out of the 20 acres.
To summarize: The consideration for the property was agreed upon. It was satisfactory to both Haugh and his wife. He never expressed any dissatisfaction with the consideration to be paid to his wife for the property, before the execution of the contract in June. After the execution of the contract in June, he agreed to join with her in the deed or contract. In the June contract, the defendants bound themselves by the contract, in express terms, to pay to Myrtle (the wife) $3,100 for her interest in the estate. It was stipulated in the contract that the contract itself evidenced'an indebtedness of $3,100 due from these defendants to Myrtle Haugh for this property. So far as she was concerned, the contract was an enforcible 'contract against her, and bound the defendants. They gave her a contract enforcible against them. There was, therefore, a consideration passing to her. It is true that, when she gave to them the deed in fulfillment of the contract, the deed was placed in the hands of another, awaiting the signature of the husband. His secret intent not to sign the deed was never revealed until long afterwards. The deed was delivered to the plaintiff's attorney, awaiting the promised signature of Charlie Haugh. The deal was not to be consummated until the 1st of March. On the 1st of March, the defendants paid to Myrtle, and she received and retained, the interest due upon the amount contracted to be paid. In the making of the June contract, defendants understood, and the contract was made in reliance upon an understanding, that the husband would join in the execution of the contract; and this understanding was brought about, fostered, and encouraged by the conduct of the husband. He had said to these defendants that what Myrtle did was all right with him. He had said to these defendants that he would join in any instru ment which she executed. The June contract was made in reliance upon these statements. His purpose and intent not to join were never manifested to these defendants or communicated to them in any way until after the contract was made. The contract bound the defendants and the wife, and was a good consideration, and bound the husband. He consented- to the consideration agreed upon between the wife and the defendants. If he consented and agreed to part with his interest in the land in consideration of their undertaking to pay the wife the money stipulated in the contract, then the fact that these defendants bound themselves to pay this money to the wife, relying upon his promise, works a consideration, and binds him, and he cannot contumaciously refuse. The defendants are entitled at least to a decree quieting title in them, as prayed, against any claim now urged or hereafter urged by Charlie Haugh or his wife.
. It will be noted that this action was begun by Myrtle Haugh to reform the contract in controversy. She and the defendants both recognized the contract as binding upon them, and we think Charlie Haugh, her husband, is now es-topped from asserting that it is not binding upon him, so far as he had any interest in the property covered by the contract.
However, without going into details, it is sufficient to say that this record discloses to our satisfaction that the defendants have performed their part óf the contract; that this case falls within the rule laid down-in the Meylink and Lanz cases, supra, in which the doctrine is announced that, if the husband is present, taking part in the negotiations for the purchase, and agrees to the sale at a stated price, and the grantees, relying upon his conduct and his promise, make the purchase, and turn over the agreed consideration, he cannot escape specific performance simply because his name is not subscribed with that of the other grantor to the written instrument; that, if he consents to this for a consideration to be paid to his wife, and the consideration is paid, or tendered to her, he is hound, and cannot contumaciously refuse to perform. The defendants, therefore, are entitled to the relief prayed, and a decree should have been entered in their favor against the plaintiff and her husband, requiring them to specifically perform their contract, or that the title in the land in question be quieted in these defendants as against the claims of either the plaintiff or her husband.
The case is, therefore, affirmed on plaintiff's appeal and reversed on defendants' appeal. — Reversed in fart; affirmed in part.
Weaver, Evans, and Stevens, JJ., concur.