Court Opinion

ID: 6814456
Source: CourtListenerOpinion
Date Created: 2022-07-23 18:58:53.304505+00
Date Added: 2024-06-11T16:03:47.976938
License: Public Domain

Sims, J.,
Concurring:
I concur in the result of the majority opinion, but cannot concur in the following conclusions, namely:
First: That “it may be well doubted whether the contract possesses that certainty and precision” (touching the question of whether it gave the appellant merely an option to buy, or was a binding contract of'purchase on his part) *542“which a court of equity demands before it will decree its specific performance;” and
Secondly: That parol evidence is inadmissible to restrict the ordinary meaning of the language used in the stipulation in the contract for covenants of title so as to confine the operation of the agreement to the subject matters to which alone, at the time the contract was executed, it was intended by the parties to apply.
1. As to the conclusion first mentioned:
The testimony of the appellant, as stated in the opinion of the learned judge who decided the case in the court below, “is contradicted in so many particulars by so many witnesses that we must * * * reach the conclusion that his memory as to the transaction under discussion is not good.” That is to say, when read in the light of the record before us, no weight can be given to appellant’s testimony in the consideration of the question of whether the contract was a binding contract of purchase on his part. I think it was clearly such by its express terms. But even if the contract were ambiguous, that is immaterial unless the appellant, the vendee, was misled by that ambiguity, and did in fact put a different meaning upon its terms than the appellee. 6 Pomeroy’s Eq. Jur. (3rd ed.) sec. 779. And the evidence, as I think, is clearly to the effect that at the time the contract was executed it was intended to be a binding contract of purchase upon appellant and was so understood by appellant as well as by the appellee, the vendor, and for some time after the contract was executed it was so mutually understood by both parties thereto. As I think, the evidence shows that it was not intended by either of the parties thereto at the time it was executed that the contract should give the appellant merely an option to purchase. That construction of the contract was contended for by appellant for the first time after this suit was instituted. Prior to the suit he assigned wholly *543different reasons for his refusal to perform the contract. The record shows, therefore, as I think, that the appellant did not in fact mistake the meaning of the contract in the particular under consideration, at the time the contract was executed. He did not, in fact, then regard it as giving him merely an option to purchase and as not binding him to do so. It seems plain to me, therefore, that it is a case in which a court of equity can and should enforce the specific performance of the contract as a binding contract of purchase on the part of appellant in accordance with his own intention and understanding of it, as well as that of the appellee, at the time it was executed — if it were otherwise enforceable.
2. As to the conclusion secondly mentioned:
The opinion is, on this subject, in accord with the-English, but not with the American rule, as established by the great weight of authority.
It may be conceded that the usual and ordinary meaning of the language used in the stipulation in the contract for the covenants of title is for all of the English covenants of title, which include a covenant against all encumbrances. But if the fact was that at the time of the execution of the contract neither party thereto contemplated or intended to contract for a covenant against all encumbrances; and in fact neither party contemplated or intended to contract for a covenant against any of the restrictions constituting the encumbrances in question in the case before us, there would have arisen a case of mutual mistake in the use of the language on that subject employed in the contract.
Moreover, if the further fact was that at the time of the contract the appellant knew that the encumbrances in question existed, and so existed that it was not in the power of the appellee, the vendor, to remove them, so that the appellant knew that if he were to stipulate that such encumbrances should be removed by the vendor, as a,_ con*544dition of the purchase, it would defeat the purchase, and yet went on with the negotiations for and entered into the contract of purchase with no actual objection to the encumbrances, and in fact with the mutual understanding of himself and the vendor, aforesaid that the encumbrances were to remain, I think it would be practically a fraud upon the vendor to allow the appellant afterwards to insist upon the ordinary and usual meaning of the words of the .contract so as to escape the specific performance of his actual contract. The appellant should not in equity be heard to say that he did not enter into the contract in good faith intending to execute it. Knowing the existence of the encumbrances, and knowing also that the vendor could not remove them if the appellant intended not to •purchase the property in that situation, good faith required of him not to enter into any contract of purchase of it at all. Having entered into the contract of purchase with full knowledge of the situation which he afterwards relies on to render the contract a nullity, he should not in equity be allowed to accomplish that result by giving a meaning to words inadvertently used in the contract, which it is true might under other circumstances be given such meaning, but which were not in fact used, and could not in good faith, with a view to an actual purchase of the property, have been used at the time of the contract with such nullifying meaning.
If such were the facts of this case, I think that, under the well settled doctrine that fraud or mistake furnishes an established exception to the rule against the admissibility of parol evidence to modify the terms of a written contract, parol evidence would be admissible to show the facts of the case. 2 Pomeroy’s Eq. Jur. (3rd ed.), secs. 953, 861, 862, 864, 865, 866 and 867.
However, the degree of proof required to entitle a plaintiff to modify the terms of a written instrument by parol *545evidence and then have a decree for specific performance of the agreement thus varied and corrected is very high. As said in 2 Pom. Eq. Jur. (3rd ed.), sec. 862: “As in suits for a reformation alone, the evidence must be of the clearest and most convincing nature; the burden of proof is on the plaintiff and he must prove his case * *. It is not sufficient merely to prove a mistake which might be ground for a rescission. The’ plaintiff must establish a mistake of such character as entitles him to a reformation *
Applying this well established rule to the evidence in the case before us, I am not satisfied that the evidence clearly shows that the appellant knew at the time the contract in question was executed that the real estate which is the subject of the contract would be encumbered when it passed from appellee to him by any restrictions.
• The evidence in the record on this subject does not go beyond showing the following facts, namely: That the Red-land Land Corporation, before it sold the real estate aforesaid to the appellee, informed the latter of the various restrictions which it had imposed on all lots sold and intended to impose on all lots it might thereafter sell of its other lands — which restrictions were in no way an encumbrance on, but were of benefit to and enhanced the value of, the real estate involved in this suit. That the Redland Corporation did not indicate any purpose to impose any of those restrictions on the real estate last mentioned. That, as per letter of the last named corporation to Mr. Shepherd, the president of the Albemarle Horse Show Association, of date March 13, 1916, of which appellant was informed on April 25, 1916, the only restrictions which such corporation then proposed to impose on such real estate were the following: “(2) The right to play golf across the land is reserved, and no unnecessary obstructions shall be placed so as to interfere with said *546right. (3) No structure of any kind shall be erected without first submitting plan of same and having the approval of this company. (4) No nuisance shall be maintained on said property.” These, so far as the evidence discloses, were to be personal covenants only. There is no evidence that the Redland Land Corporation then stipulated, or intended to stipulate, or that the appellant then or thereafter knew that it intended to stipulate that the covenants on these subjects should run with the land into the hands of any subsequent purchaser.
Therefore, while I think it is true that the evidence is overwhelming to- the effect that the appellant did, as a director of the Albemarle Horse Show Association, approve of the purchase of said real estate subject to the restrictions last mentioned and voted as a director in favor of such purchase; still the evidence wholly fails to show that he knew that such restrictions or any of them were to run with the land and encumber it in the hands of any subsequent purchaser of it.
And in fact the manner in which the restrictions in question in this case came to be inserted in the deed from the Redland Corporation to the Albemarle Horse Show Association and made to run with the land appears from the evidence to have been brought about as follows: Prior to the meetings of the board of directors and stockholders of the Albemarle Horse Show Association, which were held ■on April 25, 1916, some objection developed to the proposed reservation aforesaid of the right to play golf across the land, if it was to be a permanent right, but not on the part •of the appellant. There is no evidence that the latter ever regarded this as anything more than a proposed personal covenant. Mr. Shepherd, in talking over this subject with Mr. Cochran, also an officer of the Albemarle Horse Show Association, “suggested that possibly he might do something with Mr. Livers” (manager and part owner of the *547Redland Land Corporation) “to modify in part his views” on the subject. (Record, p. 175.) Mr. Shepherd testifies that, “I did succeed in getting some modification of this golf condition, as indicated in the deed whereby the right does not extend in the event the Horse Show Association ceases to occupy the property for horse show or racing purposes.” There is no evidence that the appellant was ever informed of such “modification,” being sought or being obtained, nor that such “modification” was ever reported to any board of directors, or stockholders’ meeting of the Albemarle Horse Show Association; nor was the form of the deed or the deed itself from the Redland Land Corporation to such association, which was in fact subsequently executed, ever submitted to or approved by any board of directors, or stockholders’ meeting of such association so far as the record shows. So far as appears from the record the purchase of the real estate involved in this suit by the Albermarle Horse Show Association of the Red-land Corporation was determined upon on April 25, 1916, by action of the board of directors, approved by resolutions of the stockholders’ meeting of the association the same day, and such purchase as then determined upon was of the real estate subject only to the restrictions stipulated for in said letter of March 13, 1916 — which, as aforesaid, may, in accordance with the evidence have been regarded by appellant as mere personal covenants which did not run with the land. The deed from the Redland Corporation to the said association bears date May 3, 1916, and contains the following “modification” of the said proposed reservation of the right to play golf, namely: “First.” * * * that such right is reserved “so long as said land is used by said association for horse show and racing purposes. Second. Should said association discontinue the use of this property for horse show and racing purposes, and sell said property or any part thereof to be used for *548other purposes, the reservation set out under the head, of First above, shall cease and the right of playing golf shall thereupon cease, no matter in whom it may be vested. But if said association does make sale of this property, it shall embody in the deed by which it conveys the same, the same restrictions that are now used by said corporation in its regular conveyances * * and which are- hereinafter set forth at length.” Then follows certain personal covenants of the grantee, one of which is in effect, that the latter will not erect any structure of any kind until the plans have been approved by the grantor in a certain way, or by arbitration as provided for, etc., and the provisions for the restrictions drawn in question in this case which are made covenants which it is provided are to be “made part of any deed by which the said association may convey this land or any part thereof.” There is evidence that Mr. Shepherd informed certain of the directors and stockholders in said association of said “modification” and of the covenants in the said deed thereby made to run with the land, but there is no evidence that he or anyone elsé ever informed the appellant of such “modification” of the terms of purchase aforesaid in accordance with which the association bought the property, or that the appellant or the association, indeed, in its corporate capacity, ever knew prior to this suit of such “jnodification.”
Witnesses for the appellee drew the inference from conversations with appellant on the subject of the advantages of covenants running with the lands, such as those in question in the case, to the whole section being developed, to the effect that at the .time of the contract he knew that such covenants were contained in the deed from the Red-land Land Corporation aforesaid; but it is not claimed that he ever saw the deed prior to the execution of the contract; and in view of the evidence in the case all the testimony for appellee on this subject may be true and be *549entirely consistent with the fact that appellant may have construed the references made in his ' presence to such covenants as made with respect to the covenants contained in other deeds of the Eedland Land Corporation, which were of benefit and not a burden to the land bought by appellant; and may have intended what he said at various times on the same subject to refer to such covenants only.
Witnesses for appellee also draw the inference that appellant knew of the covenants running with the land as provided for in said deed from the fact that he knew of the Eedland Land Corporation having the right of veto upon and of its action through Mr. Livers in approving the plans and location of certain structures placed on the property by the said association; but this inference is wholly unwarranted. The personal covenant in the deed on that subject, which is in accord with the proposed covenant on the subject mentioned in the letter aforesaid of March 16, 1916, of which appellant had notice, required such approval; and there is nothing in any action of Mr. Livers of which appellant had knowledge, which is shown in the record, which cannot be attributed merely to the execution of such personal covenant.
I am, therefore, of opinion that the evidence in the record falls short of showing with that degree of clearness and convincing force required, as aforesaid, that the appellant understood at the time he entered into the contract in question that there were any covenants which ran with the land and would be encumbrances upon it in his hands as a purchaser of it, and that he did not intend to contract against all encumbrances, as stipulated, in effect, as the contract. That is to say, I think the evidence fails to measure up to the requisite degree of proof of a mutual mistake in the draft of the contract on this subject, and on that ground I concur in the result of the opinion of the majority.
The case is a close one upon the question of whether the *550appellant, by his letter to Mr. Cochran of November 18, 1916, basing his refusal to carry out the contract upon the specific objection to the title of the existence of the mechanics’ liens, did not waive and estop himself from afterwards asserting objection to the title on the ground of the existence of the encumbrances aforesaid, under the doctrine of Cowdery v. Greenlee, 126 Ga. 786, 55 S. E. 918, 8 L. R. A. (N. S.) 137, 142; Curtis v. Aspinwall, 114 Mass. 187, 19 Am. Rep. 332, 337; and authorities cited in these cases. But the evidence in the record does not definitely and clearly show that the appellant knew of the existence of such encumbrances at the time he wrote the letter to Mr. Cochran of November 18, 1916. The evidence does disclose, however, that in appellant’s next communication with Mr. Cochran, which occurred a few days afterwards, when appellant was in Charlottesville, and together with his counsel had an interview with Mr. Cochran at the club, appellant made a refusal in general terms to perform the contract unless he was compelled to do so, specifying no particular grounds for such refusal.- This suit was instituted a very short time thereafter, to-wit, on December 7, 1916. In view of the well established doctrine on the subject of waiver and estoppel, requiring definite proof of full knowledge and understanding of his rights on the part of the party to be affected before that doctrine becomes applicable, I do not think that it can operate in this case to bar the appellant from relying on the terms of the contract aforesaid which in substance stipulate that appellant is entitled to a conveyance of title free of all encumbrances.