Court Opinion

ID: 7994321
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:35:02.797154+00
Date Added: 2024-06-11T16:35:29.328176
License: Public Domain

Anderson, J.
(dissenting.) I am constrained to dissent from the majority opinion.
In 1900, when the board of supervisors leased the half section of land in question to Walker, as well as in 1902, when Moores bought Walker’s lease at its foreclosure sale (Walker and Moores being predecessors in title to appellant), said land was of little value, if any, except for the pine timber thereon. It had no value for agricultural purposes, nor as pasturage land, for it was surrounded by hundreds of thousands of acres of free pasturage lands.
At that time chapter 40, Laws of 1898, as well as chapter 41, Laws of 1898, was in force. The former authorized, through the joint action of the township heads of families, their trustees, and the board of supervisors, the leasing of the sixteenth section lands, while the latter statute authorized, through the action of the board of supervisors alone, the sale of the merchantable timber standing oh such lands. On the 8th day of May, 1900, this half section *384of sixteentli section lands was leased to said Walker for a term of 15 years, for an aggregate rental of one thousand six hundred sixty-six dollars and six cents, payable in 15 equal installments. In making this lease it was the admitted purpose of the board of supervisors (through whom under the statute the lease was consummated) to convey to Walker, the lessee, the right to cut and remove from said land the merchantable timber thereon. The minimum price fixed by the authorities representing the sixteenth section lands, for the sale of this lease was based alone on the value of the merchantable timber standing on the land. No regard whatever was had for the value of the land, for it had no sale value. And it was the purpose of said lessee by his said lease to purchase alone the merchantable timber on said land. He knew that without that right this lease would be of little, if any, value. Both parties to the contract thought under the law the lessee got such right. At that time Warren County v. Gans, 80 Miss. 76, 31 So. 539, in which the court held that the lessee of sixteenth section lands had no right to cut and remove therefrom the merchantable timber, had not been decided. The minds of the parties met; there is no doubt from the record in this case about that. For the sum of one thousand six hundred sixty-six dollars and six cents to be paid by the lessee, Walker, the lessor, the county, sold said Walker the standing merchantable timber on this land. There was no misunderstanding between the parties about that. The mistake they made was they chose'the'wrong means to express their intention. The form of the transaction should have been a sale and conveyance under said chapter 41, Laws of 1898. Probably they did not know of the existence of that statute, for it was new, such a statute having been passed for the first time in 1898, while the leasing statute Avas doubtless very familiar to the parties, for there had been such a statute in force and sixteenth section lands leased thereunder for more than 50 years.
The Walker lease was foreclosed through the chancery . court in 1902 to enforce payment of the purchase money *385therefor. It was bought at the foreclosure sale by said Moores, who paid therefor two thousand eight hundred and sixty dollars. But, before paying his bid, and before the confirmation of said .sale by the chancery court, Moores was doubtless informed of the decision of this court in Warren County v. Gans, supra, which was decided only a few months before (March term, 1902), in which it was held in this state for the first time that a lease of sixteenth section lands did not carry with it a right in the lessee to cut and remove therefrom the merchantable timber; for the board of supervisors made an order reciting that it was the purpose of the parties in making the said lease to Walker to give the lessee the right to cut and remove the merchantable timber from said land, and, a doubt having arisen as to whether such right was conveyed, etc., and then proceeded to authorize the president of the board, in consideration of the purchase money paid for said lease, to convey to said Moores, finder said chapter 41, Laws 1898, the merchantable timber on said land, which was accordingly done. The Walker lease was sold at foreclosure on the 10th of March, 1902; said order of the board of supervisors authorizing its president to make Moores a deed, under chapter 41, Laws 1898, to the merchantable timber on said land, was entered at its June, 1902, meeting; the commissioner’s report of said of said lease to Moores was confirmed by the chancery court August 1, 1902; and the commissioner’s deed, to Moores conveying the lease was made August- 26,1902; and the deed from the board of supervisors to Moores, executed in pursuance of said order of the June term, 1902, conveying the latter the merchantable timber on said land, was made by the president of the board November 3, 1902,
Appellant by mesne conveyances succeeded to the rights of Walker and Moores under said lease and conveyance of the merchantable timber on said land, and in 1915 cut and removed same therefrom, of the value of four thousand five hundred dollars, for which appellee got a decree in the court beloAV.
*386It should be borne in mind that the state proceeds in this cause by a bill in equity and that it seeks to repudiate said deed from the county to Moores made in 1902, and recover from appellant the value of the merchantable timber cut by it from said land in 1915, which ivas shown to be four thousand five hundred dollars and at the same time retain the two thousand eight hundred and sixty dollars paid by Moores for such timber in 1902, which was its then value. If this were a cause between individuals — if the state were not a party — could there be any doubt that the party occupying the position of the state in this case would be estopped by his deed? It seems that the question ansAvers itself. Appellant contends that in a cause of this kind the state is bound by the same rules of law as would govern an individual similarly situated, and in support of that view cites Bruce v. Jones, 117 Miss. 207, 78 So. 9, in which Justice SteveNS said: “The state . . . should be bound by the same high standards of morals and equity asfihe state exacts of its citizens generally in their dealings one with the other.”
I have seen fit to pursue the subject further than did counsel for appellant. I find from the authorities that in determining the question the controlling consideration is whether in the given case the state was acting in its private capacity or in its governmental capacity, and, if the former, the state stands before the courts just like an individual, while, if the latter, it is in many respects a favored suitor. In leasing, or conveying the sixteenth section lands the state or the county, which is but a subdivision of the state, acts not in its governmental capacity, but as a private land proprietor. The state, in the absence of constitutional or statutory restrictions, may dispose of its property like any other owner when acting in its proprietary capacity, and in its capacity as private owner of lands it is bound by the same rules as its citizens; it is bound by the recitals in its deed to the same extent that a citizen would be; it is presumed to have full knowledge of the facts recited in such deed; and such a convey-*387anee cannot he attacked collaterally, but only in a direct proceeding in a court of equity for that purpose, provided, of course, the grant is not void on its face. 25 R. C. L. section 23, pp. 390, 391. The principal is stated thus in 21 C. J. section 190, pp. 1186, 1187:
“There is ample authority for the general rule that the rights of the public may be measured and adjudicated by the doctrine of estoppel and other principles and rules of law and equity applicable to the like rights of individuals under similar circumstances, or, as sometimes stated, that an equitable estoppel may be invoked against the United States, a state, a municipal corporation, or other governmental agency or instrumentality in respect of acts done in its so-called proprietary or private capacity, as distinguished from its so-called governmental or public capacity in the strict scope of which it cannot be estopped; and a failure to observe this distinction .or to recognize and point out the absence of one or more of the essential elements of a perfect estoppel may be the reason for decisions and dicta which apparently deny this applicability of the doctrine of equitable estoppel.”
And in a note to the above reference to Corpus Juris it is said:
“ ‘The great weight of authority, the stronger reasons and the settled rule upon this subject in the courts of the United States, is that, . . . when a sovereignty submits itself to the j urisdiction of a court of equity and prays for its aid, its claims and rights are judicable by every other principle and rule of equity applicable to the claims and rights of private parties under similar circumstances.’ Iowa v. Carr, 191 Fed. 257, 266, 112 C. C. A. 477. ‘It is difficult to find a reason why the state, though sovereign, should not submit her pretensions to those rules which have been established, as necessary and proper to determine and secure-the rights of her citizens. The rule is founded upon the most pare morality; its authority is universally acknowledged.’ Com. v. Smith, 4 Pa. L. J. 121, 124, 125. ‘The government may not in conscience ask a *388court of equity to set on foot an inquiry that, under the circumstances of the case, would be an unfair or inequitable inquiry. The substantial considerations underlying the doctrine of estoppel apply to government as well as to individuals.’ U. S. v. Stinson, 125 Fed. 907, 910, 60 C. C. A. 615, (affirmed 197 U. S. 200, 25 S. Ct. 426, 49 L. Ed. 724). To do otherwise would be inequitable. Utah Power Co. v. U. S., 230 Fed. 328, 144 C. C. A. 470; U. S. v. Williamette Valley, etc., Wagon Road Co., 54 Fed. 807.
“Resolute good faith should characterize the conduct of the public in dealings with individuals, and there is no good reason in morals or in law that will exempt it from the doctrine of equitable estoppel. State v. Milk, 11 Fed. 389, 11 Biss. 197.”
And these principles apply not alone to the federal and state governments, hut with equal force to municipal corporations, counties, townships, and other quasi-municipal corporations. 21 C. J. section 192, pp. 1189, 1190. In such transactions the state is subject to the doctrine of estop-pel by deed to the same extent that an individual would be under similar circumstances. In 21 C. J. section 102, p. 1106, in discussing this question, the author states that the courts generally hold that the doctrine of estoppel by deed applies to the state, and also to municipal corporations, neither of which can assert anything in derogation of its grant, but in that connection.states that the principal has no application to tax sales by the state, because in making such sale the state acts in its governmental capacity, and not as a private landowner. In 15 C. J. section 225, ]). 539, in discussing the question of the conveyance of property by a county, it is said :
“Indeed, where no limitation, by statute or otherwise, is placed on the county board or court in the exercise of its judgment as to the consideration for a disposition of county property, nothing short of fraud,,or such gross inadequacy as will be equivalent to fraud, is sufficient to invalidate the order of the county board or court directing *389a conveyance; Mere inadequacy of consideration is not sufficient to establish fraud.”
In Caruth v. Gillespie, 109 Miss. 679, 68 So. 927, it was held that the state as a private landowner ivas subject to the doctrine of laches; and the authorities elsewhere to that effect are numerous. See State v. N. P. R. R. Co., 157 Wis. 73, 147 N. W. 219; State v. Livingston, 164 Iowa, 31, 145 N. W. 91; Pittsburg Ry. Co. v. Garrick, 259 Pa. 333, 103 Atl. 106; In re Bailey’s Estate, 241 Pa. 230, 88 Atl. 428. It necessarily follows from the authorities above referred to that the sovereign, as to all transactions with its citizens in its private, nongovernmental capacity, is subject to the same principles of law and equity which it prescribes for its citizens in like dealings with each other. This, of course, includes among other principles the doctrine of estoppel by deed, equitable estoppel, laches, that he who seeks equity must do equity, the reformation and cancellation of instruments.
Applying these principles to the present case, why is not the county estopped by its deed to Moores to the merchantable timber in question? There was a valuable consideration for, the deed. The county had two thousand eight hundred and sixty dollars of Moores’ money for which he had received nothing of value. Moores and appellant of course succeeded to the rights of Walker; the latter had the right through a court of equity to reform his lease contract on the ground of mutual mistake, and have made out of it a conveyance of the timber, as intended; and for the same reason he had the right, if he so chose, to have said contract canceled and set aside, and, if sued by the county on the lease notes, he could have successfully defended on the ground that under the law the consideration therefor never passed. The power of courts of equity to so deal with contracts as to make them carry out the intention of the parties is almost unlimited.
When the legal effect of the terms of the contract agreed upon, through a misapprehension or ignorance of their import, results in a contract different from that really *390entered into by the parties, a court of equity will reform such contract. Orr v. Echols, 119 Ala. 340, 24 So. 357; Moore v. Tate, 114 Ala. 582, 21 So. 820; Conlin v. Masecar, 80 Mich. 139, 45 N. W. 67; Everett v. Jones, 14 N. Y. Supp. 395. The rule of equity that relief will not be granted to correct mistakes of law has no application to mistakes in the language of the contract, or the choice of the form of an instrument whereby it has an effect different from the intention of the parties. Stafford v. Fetters, 55 Iowa, 484, 8 N. W. 322. Where a written instrument fails to express the intention of the parties, a court of equity will grant relief either affirmatively, by reforming or canceling the contract, or by way of defense to its enforcement; and under this rule relief will be granted by a court of equity from a mutual mistake as to the legal effect of an instrument, as well as from a mistake of fact. Zieschang v. Helmke (Tex. Civ. App.), 84 S. W. 436; Lucas, 30 Ga. 191, 76 Am. Dec. 642; Adair v. McDonald, 42 Ga. 506; Allen v. Elder, 76 Ga. 674, 2 Am. St. Rep., 63; Hopwood v. McCausland, 120 Iowa, 218, 94 N. W. 469; Welch v. Welch, 13 Ky. Law Rep. 639; Kennard v. George, 44 N. H. 440; Evants v. Stode, 11 Ohio, 480, 38 Am. Dec. 744; Globe Ins. Co. v. Boyle, 21 Ohio St. 127.
In the case of Hall v. Lafayette County, 69 Miss. 529, 13 So. 38, Hall had given a general bond as county treasurer, but had failed to give a special bond as required by the statute for the school fund. Neither he nor Ms sureties knew that a special bond for the school fund was required by law; but the minds of the parties met on the proposition that a bond was being executed to cover all funds which might come into nail’s hands as county treasurer. He defaulted as to the school funds, and perhaps other moneys, and suit was brought on the general bond by which it was sought to reform the same so as to make it cover the school funds as well as other funds coming into the hands of said treasurer. The defense was made by the sureties that a court of equity would not reform a con*391tract resulting from a mutual mistake of law. The court said:
“It is incontrovertible that Hall and his sureties intended to give a bond sufficient in its penalty and its.terms to cover all moneys that should be in his hands from every source. They contracted for that, and designed in good faith to carry out the contract, and thought they had done so, and it was an afterthought to escape liability because only one bond was given. True, there was no formal and express agreement between the obligors in the bond and the officials as to its terms, but it was as plainly implied from what occurred as if it had been expressed. Such was clearly the intention of all concerned, and it should not fail of execution by reason of ignorance or mistake, whether of fact or law, in expressing that intention in the instrument used. . . . But where parties contract for a particular result, and intend to effect it, and fail to accomplish it, even through ignorance or mistake of law, equity will effectuate the intent of the parties.”
In Canning Co. v. Ott, 88 Miss. 771, 41 So. 378, the court cited with approval 2 Pomeroy on Equity Jurisprudence, section 845, as follows:
“If an agreement is what it was intended to be, equity would not interfere with it because the parties had mistaken its legal import and effect. If, on the other hand, after making an agreement, in the process of reducing it to a written form, the instrument, by means of a mistake of law, fails to express the contract which the parties actually entered into, equity will interfere with the appropriate relief, either by way of defense to its enforcement, or by cancellation, or by reformation, to the same extent as if the failure of the writing to express the real contract was caused by a mistake of fact. In this instance there is no mistake as to the legal import of the contract actually, made, but the mistake of law prevents the real contract from being embodied in the written instrument. In short, if a written instrument fails to express the intention which the parties had in making the contract which it *392purports to contain, equity will grant its relief, affirmative or defensive, although the failure may have resulted from a mistake as to the legal meaning and operation of the terms or language employed in the writing.”
In Miles v. Miles, 84 Miss. 624, 37 So. 112, the court said among other things:
“To hold that a court of equity could not interpose to correct mistakes for the reason alone that the parties used the terms they actually intended to use would be to curtail its powers to a hitherto unheard of extent. Most mistakes of fa.ct in conveyancing, except those caused by clerical misprision, arise in cases when descriptive terms are intentionally employed under the mistaken impression that they apply to the property sought to be conveyed.”
And justice Sharkey, in Simmons v. North, 3 Smedes & M. 67, said:
“When a mistake is admitted, then it is said there is no difficulty; then there is an equity dehors the deed or instrument, and the power to relieve is said to be quite as clear when the mistake is shown by proof either written or parol.”
In 9 C. J. section 22, p. 1169, the author, in discussing the question of the cancellation of instruments on the ground of mutual mistake of law by the parties thereto used this language:
“It has been held very generally that the rule is confined to mistake of the general rules of law, and that it has no application to the mistakes of persons as to their own private legal rights and interests. So it has been held that an honest mistake of law as to the effect of an instrument on the part of both contracting parties, when such mistake operates as a gross injustice to one and gives an unconscionable advantage to the other, may be relieved in equity.”
If the lessee was at the time of the making of said deed to the merchantable timber on said land entitled to invoke against the county the grantor therein, any one or more of the equitable principles above referred to, then it *393seems to me to be idle to ask the question whether there was any valid binding consideration for said deed — if it needed any other consideration than the two 'thousand eight hundred and sixty dollars paid for right to the timber Avhich did not pass under the lease.
Take this hypothetical case, which is substantially the case before the court, except the parties are individuals: A. owns a half section of timber land which has no sale value except for the merchantable timber thereon. B., a timber dealer, approaches A. to buy the timber on said land. They agree on a price of, say two thousand dollars, to be paid in 15 annual installments, with a 15-year period, in which to cut and remove the timber. Conceiving a lease for a term of 15 years will effectuate their purpose, the parties accordingly adopt that form of contract, which is duly executed. Later, when the lease notes begin to fall due, and before the timber is cut and removed by the lessee, B., the latter learns there is some doubt under the law as to whether his lease carries with it a right to-the merchantable timber on the land leased and so informs A., the lessor; thereupon A. says, “Well, that is what both of us thought you were getting in the negotiations leading up to the lease; that is Avhat you thought you Avere buying, and that is Avhat I intended to. sell you — the right to cut and remove the merchantable timber. Therefore we will just put at rest all trouble about that matter, and I will now execute you a deed conveying you the merchantable timber on said land, in consideration of said notes already executed in the form of lease notes, with the right to remove-said timber within 15 years from the date of said lease.” Accordingly this is clone: The deed is executed and delivered by A. to B., and the latter on the faith thereof proceeds to cut and remove the merchantable timber from said lands. And after he has done so A. goes into a court of equity claiming that his said deed is void, and seeks to repudiate it, and to recover the actual value of the timber so cut and removed by B., and at the same time retain the purchase price thereof, two thousand dollars, *394paid him by B. What sort of standing would A. have in a court of equity in a case of that kind? It looks to me like he would not get very far in a court of conscience. To succeed he would have to overturn some of the fundamental principles of equity jurisprudence, as it appears to me.
The majority opinion seems to lay stress on the fact (asserted in the opinion'to be a fact) that when Moores received a conveyance from the county to the timber he still held, onto his lease. It is true that there was no formal surrender and cancellation of the lease, nor any express agreement to that effect. But the whole transaction could mean nothing else. The deed was made in consideration of the fact that the lease was worthless. Having accepted the deed on that theory, it seems clear that thereafter Moores’ rights were measured by the deed, and not the lease. There was no necessity for a formal surrender and cancellation of the lease in view of the fact that.neither party treated it as of any value; and, furthermore, they expressly agreed that it did not embody the contract intended.
I am authorized to say that Sykes, J., joins me in this dissent.