Opinion ID: 2280225
Heading Depth: 1
Heading Rank: 3

Heading: Spruce Enterprises' Rights Under Bernice Dumais' Warranty Deed

Text: When Bernice Dumais conveyed the tract to Spruce Enterprises, she did so by a general warranty deed. Spruce argues that after the deed from Bernice Dumais to the Gagnons was reformed, Spruce was divested of its title to what is now the Gagnons' lot. Consequently, Spruce contends, Bernice Dumais is liable under her general warranty to reimburse Spruce Enterprises for the value of the Gagnons' property. We disagree. The earliest possible time that Bernice Dumais could have broken any of the covenants in her deed to Spruce Enterprises was when she executed that deed. By force of the judicial reformation of her deed to the Gagnons, her deed to Spruce Enterprises was rendered correct since it expressly excepted the lot conveyed by the Dumais-Gagnon deed. Where, as here, reformation will not impair the rights of innocent purchasers for value or other reliance interests requiring protection, the judgment decreeing reformation relates back in time to the execution of the reformed instrument. In such a case, regarding as done that which ought to be done, equity treats the reformed deed as corrected ab initio against a party to the deed who had imputed knowledge of the initial mistake in the integration of the instrument. E. g., Beason v. Duke, 246 Ala. 387, 20 So.2d 717 (1945); Mason v. Jarrett, 218 Ark. 147, 234 S.W.2d 771 (1950); Eastern Kentucky Production Credit Ass'n v. Scott, 247 S.W.2d 983 (Ky.App.1952). Therefore, after the presiding justice ordered reformation of the deed from Bernice Dumais to the Gagnons, there remained no ground for Spruce Enterprises to hold Dumais liable on the covenants in her deed to Spruce. See Dent v. Hobson, 189 Mo.App. 140, 175 S.W. 289 (1915). The same result is reached by an alternative analysis: the net effect of upholding reformation of the Dumais-Gagnon deed is that Bernice Dumais has an equitable defense to Spruce Enterprises' claim against her for breach of her covenants. Although no change in the language of the Dumais-Spruce deed is necessary after reformation of the Dumais-Gagnon deed because the Gagnon lot is explicitly excepted in the deed to Spruce, the meaning of the exception is different after reformation of Dumais' deed to Gagnon. No intervening reliance interests being involved, Bernice Dumais has an equitable defense against the warranty claim by Spruce, which took with imputed knowledge of the mistake in the Dumais-Gagnon deed. On either theory, the presiding justice properly dismissed Spruce Enterprises' counterclaim against Bernice Dumais. The entry is: Appeal denied. Judgment affirmed. All concurring.