Court Opinion

ID: 3253957
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:24:08.868981+00
Date Added: 2024-06-11T13:59:28.307370
License: Public Domain

Taking the averments of the bill as true, the case is this:
Complainants owned a lot or parcel of land, approximately one-half acre, described in its muniments of title as its remaining acreage bordering on a half section line. Complainants built a house supposedly on that parcel. By mistake in the location of the half section line, the house was built on the adjoining property owned by a third person.
Complainants then sold the house and lot to respondent, made a deed describing the property as per its muniments of title. Respondent went into possession and still holds the house and the land on which it stands.
He executed a purchase-money mortgage, describing the property as in the deed received by him. Complainants now seek a foreclosure of this mortgage.
Meantime, respondent, learning his house was on the land of a third person, purchased a lot, somewhat more than half an acre, from such third person, thus perfecting his title.
What are the equities of the respective parties growing out of this situation?
The first and basic fact is that complainants sold and respondent purchased the house and the land on which it stands. Neither had in mind a house at one place and land at another. The house, the visible valuable portion of the property bought, fixed the location of the land intended to be conveyed.
The meeting of the minds was on that house and lot. The mistake was in thinking that house and lot were covered by the description in the deed and mortgage.
Clearly, complainants cannot compel the removal of this house, and then foreclose. This would be to reform the property to conform to the description, instead of reforming the description to fit the property actually sold.
Neither is it equitable to sell the house off the lot on which it stands. This would greatly reduce its value. Respondent having purchased the property, the house and lot on which it stands as a unit, is entitled to *Page 527 
have it sold as a unit to pay the mortgage debt, if sold at all. To sell a vacant lot which he never intended to buy, and sell his house from a lot he has acquired to perfect his title, is manifestly inequitable. Besides, it appears he has given a mortgage, now outstanding, for part of the purchase money due the third party from whom it was purchased. This mortgagee has rights in the house as well as the lot. Such mortgagee would be a necessary party to a suit to remove this house or to sell it with right of removal. Equity takes note of a want of necessary parties apparent on the face of a bill, and refuses to proceed until such party is brought in.
But while the respondent has these equities as against the complainants, respondent is subject to certain equities in favor of complainants.
Having received possession of the house and the land on which it stands under his purchase, and still having the possession, use, and enjoyment thereof, respondent cannot set up an outstanding title, now acquired by him, to defeat the claims of his vendor. The measure of his right is to be made whole on his reasonable outlays in perfecting his title.
It was the duty and the right of the vendors, these complainants, to perfect the title to the house and lot actually sold. Respondent having elected to do so himself cannot thereby cut off complainants from so doing. This, complainants can now do by crediting the mortgage with such outlay.
It follows the bill is subject to demurrer in seeking a foreclosure on property not covered by its terms.
The entire matter can readily be worked out on a bill for reformation and foreclosure with offer to do equity.
The mortgage should be first reformed to cover the land on which the house stands, the land actually sold. The description in the reformed documents should conform to the lines pointed out to respondent at the time of his purchase, if they were pointed out. If not, then a lot of like area and dimensions with that described in the conveyance but so laid out on the ground as to include the dwelling. If the parties do not agree, then the court should cause it to be laid off, having regard also to the lot purchased by respondent in perfecting his title.
If it be said a court of equity will not reform a conveyance so as to cover property owned by a third person, the answer is such rule does not apply if complainant is in position to acquire or make good the title.
If it be said a court of equity will not make a contract for the parties by laying off a new lot whose boundaries were not in the mind of the parties, the answer is a court of equity has full power to condition any relief upon the willingness to do equity. Where both parties are subject to equities, as in this case, the court has full power to prescribe the conditions to be complied with by either or both.
A foreclosure after reformation should have regard to the entire situation.
If respondent pays up the installments in default after equities are adjusted, the meeting of later maturing installments according to contract should be so decreed as to do equity in view of the entire case.
In short, equity should do for these parties just what they should have done on discovery of their mistake. In so doing, a court of equity has full authority. It is not bound by hard and fast forms; it recognizes no leading strings save justice and equity.
Reversed and remanded.
GARDNER, THOMAS, and FOSTER, JJ., concur.
ANDERSON, C. J., and SAYRE, J., hold that the demurrers to the bill should have been sustained, but do not concur in either opinion.