Opinion
April 16, 1942. Rehearing Denied, June 3, 1942.
1. BOUNDARIES: Agreed Boundary Line: Common Ownership. When defendant conveyed the southeast quarter of Section 22 in satisfaction of a mortgage she was the owner of the adjoining land in Section 27. If a road north of the section line between Sections 22 and 27 had ever been an agreed boundary line, she had no knowledge thereof. There was no agreed boundary line as between the parties.
2. REFORMATION OF INSTRUMENTS: Mortgages: Agency: Secret Interest of Agent: No Equity to Reform. Defendant has no equity to reform a deed to the southeast quarter of Section 22 because the section line was south of a road which had been generally believed to be located on the section line. The deed was given in satisfaction of a mortgage, and was intended to include the land covered by the mortgage. And there would be no equity to reform the mortgage, as defendant claimed through her deceased husband who had acted as agent for the plaintiff mortgagee, and had a secret interest in the property which he did not disclose to his principal.
3. REFORMATION OF INSTRUMENTS: New Contract Cannot Be Substituted. A contract cannot be reformed for a mistake not in the contract itself or in the writing embodying it, but of an extrinsic fact which, if known, would probably have induced the parties to make a different contract. The court cannot supply an agreement that was never made.
4. MORTGAGES: Reformation of Instruments: Deed in Satisfaction of Mortgage Should Not Be Reformed. A deed given in satisfaction of a mortgage which contained the same description as the mortgage may not be reformed when there would be no proper basis to reform the mortgage.
Appeal from Dunklin Circuit Court. — Hon. James V. Billings, Judge.
AFFIRMED.
Langdon R. Jones for appellants.
(1) Where there is a dispute as to the true boundary line between adjoining landowners, or the line is uncertain and they are both ignorant as to its true location, if they fix and agree upon a permanent boundary line and take possession accordingly, the agreement is binding on them and those claiming under them. Engelbrecht v. Dulle, 92 S.W.2d 150; Journey v. Vikturck, 8 S.W.2d 975; LaHue v. Bungenstock, 249 S.W. 402; Lawson et al. v. McNeil, 102 S.W.2d 42; Anderson v. Oil Company, 83 S.W.2d 418; Ann. 63 A.L.R. 1433. (2) However, in any event, on the prayer for reformation contained in defendant's answer, the proof in this case is conclusive, that the prayer for reformation should have been granted, and the deed reformed in accordance with the answer of the defendant. And the trial court so found the facts. Fisher v. Dent, 259 Mo. 86; Dent v. Hobson Seay, 189 Mo. App. 140; Wage v. Boehm, 220 S.W. 952; Chandler v. Georgia Chemical Works, 105 A.L.R. 837; 44 A.L.R. 100; 26 A.L.R. 492.
Hal H. McHaney for respondents.
(1) Defendant Frances C. Thompson is not entitled to retain possession of and to acquire title to the lands lying south of the county road in the southeast quarter of Section 22, Twp. 17, N., R. 9, E., on the theory of a mutual mistake in the description in the deed given by her to plaintiff Illinois Federation Corporation, and the judgment and finding of the trial court in that regard is correct because: (a) There was no mistake in the description in the deed in question. It was the intention of the parties to convey thereby the same land formerly mortgaged by defendant's grantor, Earl C. Thompson, to plaintiff company, including that part of the southeast quarter of Section 22, Twp. 17, N., R. 9, E., lying south of the road, the same as that part lying north of the road. The defendant testified it was her intention to convey exactly the same lands upon which the company held the deed of trust. The deed of trust included the entire southeast quarter of Section 22, Twp. 17, N., R. 9, E. There was no evidence whatsoever of any mistake made on the part of the parties to said deed of trust. If there were any mistake it was as to the identity of the lands actually described in the deed of trust and conveyed by the deed from defendant to plaintiff, due to the erroneous belief on her part that the county roadway in question was located on the south line of the southeast quarter of Section 22, Twp. 17, N., R. 9, E., whereas said road actually lies north of the south line of the southeast quarter of Section 22, Twp. 17, N., R. 9, E. Such an erroneous belief in no way establishes a mutual mistake sufficient to warrant the reformation of the deed in question. General Refractories Co. v. Sebeck, 44 S.W.2d 60; Tesson v. Insurance Co., 40 Mo. 33; Steinberg v. Phoenix Ins. Co., 49 Mo. App. 264. (b) Inasmuch as the defendant at the time of the conveyance owned lands immediately south of the disputed lands, and inasmuch as the description contained in her deed described all the lands in the southeast quarter of Section 22, Twp. 17, N., R. 9, E., including that part thereof lying south of said road, her continued possession of the disputed lands after delivery of deed to plaintiff was that of tenant or trustee of the grantee, and her possession was strictly subservient to the plaintiff's title. She cannot rely upon such continued possession to establish presumption that plaintiff only intended to receive lands, possession of which was actually transferred to the plaintiff company. Ivy v. Yancey, 129 Mo. 501; DeBernardi v. McElroy, 110 Mo. 650; Brown v. Brown, 106 Mo. 661; Kellogg v. Mullin, 39 Mo. 174. (c) The burden of proof to establish mutual mistake of the parties in the contents of the deed in question was upon the defendant Frances C. Thompson. In this connection mere probability or a mere preponderance of the evidence is not sufficient but it is necessary that a certainty of error be established. Furthermore it is requisite that such error be not unilateral but must be shared in by both of the parties to the transaction. There is no such evidence in this case. Employers' Indemnity Corp. v. Garrett, 38 S.W.2d 1049. (2) Defendant Frances C. Thompson is not entitled to retain possession and to acquire title to the lands lying south of the road in the southeast quarter of Section 22, Twp. 17, N., R. 9, E., on the theory that the county road in question constituted an agreed boundary line between the lands owned by plaintiff and the lands owned by the defendant, and the judgment and finding of the trial court is correct because: (a) To permit such contention is to vary or contradict the terms of her written deed by parol testimony, and would, therefore, do violence to the parol evidence rule. Patton v. Smith, 171 Mo. 231, 71 S.W. 187; Crenshaw v. Crenshaw, 208 S.W. 253; Frisbee v. Scott, 201 S.W. 561. (b) Upon the execution and delivery of the deed by the defendant Frances C. Thompson to plaintiff company, her entire legal estate in the premises described in the deed became vested in the plaintiff company, and her continued possession was presumptively as tenant of the grantee, which, without an explicit disclaimer on her part, would not constitute adverse possession against her own grantee. 2 C.J., 143; Ivy v. Yancey, 129 Mo. 501, 31 S.W. 937; De Bernardi v. McElroy, 110 Mo. 650, 19 S.W. 626; Brown v. Brown, 106 Mo. 611; Kellogg v. Mullen, 39 Mo. 174; Patton v. Smith, 171 Mo. 231, 71 S.W. 187. (c) Under the testimony in the case it is clear that the road location in question was originally established because of a mutual mistake of the parties who laid out and established such road. Such parties believed said location was the true section line, and for such reason located the road thereon. Just as a mutual mistake is never binding on the parties and is sufficient cause to correct a deed, so an agreed boundary line based on a mutual mistake is never binding, and constitutes no basis for estoppel as against either of the parties thereto or their grantees. Ackerman v. Rider, 271 S.W. 743, 308 Mo. 9; Schad v. Sharp, 95 Mo. 573; Kincaid v. Downey, 51 Mo. 552; Lowenberg v. Bernd, 47 Mo. 297. (d) Where a grantor owns lands on both sides of a disputed boundary line such ownership destroys any prior agreement establishing the dividing line of two tracts of land, and the grantee of such a person receiving property by legal description is entitled to receive all property legally described, regardless of prior agreement between prior owners as to a different division line. Patton v. Smith, 171 Mo. 231, 71 S.W. 187; Brummell v. Harris, 162 Mo. 405. (e) A quitclaim deed is just as effective in this regard as a warranty deed. Weisenfels v. Cable, 106 S.W. 1028.
This is an action to quiet title to land in Section 22, Township 17, North, Range 9, East, in Dunklin County, with a second count in ejectment. Only the answer of defendant Frances C. Thompson (hereinafter called defendant) is in the record. Her answer denied plaintiff's title and right to possession. Her answer also contained a cross bill in equity seeking reformation of her deed conveying this and other land to plaintiff Illinois Federation Corporation (hereinafter called plaintiff, as the other plaintiff merely took title under tax sales for the Federation) on the ground that there was an agreed boundary line between the land conveyed and other land retained by defendant; and that there was a mutual mistake in the deed if it described land beyond such line. The court found against defendant on the cross bill and entered judgment for plaintiff on both counts. Defendant appealed from the court's decree.
The principal fact question was the location of the section line between Section 22 and Section 27. (The north line of Section 27 and the south line of Section 22.) Defendant claimed that this line was the county road running east from the Little River drainage ditches. Plaintiff claimed and the court found, that the line was south of this road, 470 feet at the west side of the Southeast Quarter of Section 22, and 540 feet wide at the east side of said tract, as located by its surveyor Mr. Spiker. Thus it was found that the county road did not run due east and west, and that about 30 acres of the Southeast Quarter of Section 22 lay south of the county road. This is the disputed tract.
The county road was authorized in 1918. It commenced at the Dunklin-Pemiscot County line in the township east of the one involved in this case. It was authorized to be laid out on the line between Sections across that township until it reached the Deering Ditch, which ran southwest out of that township into the township herein involved. The road there jogged to the north to get across this ditch, then came south again to the line between Sections 24 and 25 of the township herein involved (2 sections east of the sections where the disputed tract is located), and was to run "west along the section lines to intersect the Kennett-Hornersville road at Cotton Plant." These sections were originally surveyed by the United States Government in 1847. However, the township was not completely surveyed then because the "Swamp called Little River" covered all of what is now Section 27, most of what is now Section 22, and a considerable portion of the adjoining sections, being about two miles wide at this point. In 1878 the government surveyed Little River Swamp. In order to connect the sections previously surveyed on the higher land, it was necessary to make some of the sections in the swamp cover more than 640 acres and to make some of the lines so that they did not run due north and south or due east and west. This complete government survey was in evidence. Section 27 is a standard 640-acre section. However, Section 22 north of it contains much more than 640 acres, being one mile north and south but almost a mile and a half east and west. The south line of Section 22, taking in this extra half mile from the Northwest Corner of Section 27 to the Southwest Corner of Section 22 does not [242] run due east and west but bears to the northwest.
Therefore, it was not possible for the county road to run due east and west on these section lines all the way to Cotton Plant, located on the west side of the present Little River Drainage Ditches, which now run southwest through Section 22. All of the maps and plats in evidence indicate that the county road follows the direction of the south line of Section 22, in a southeasterly direction from Cotton Plant, and does not run east and west until after crossing the Little River Drainage Ditches, and that it then turns rather sharply to the north before it continues in an easterly direction across the rest of Section 22. However, whether or not it is ever on the south section line thereafter, or whether it then runs due east and west rather than bearing to the northeast, are disputed questions of fact in this case. As hereinabove stated, the court found that plaintiff's survey was correct in showing that this road was north of the section line and did bear to the North of East along the land in controversy.
It was shown that when this county road was laid out the land in Section 27 was owned by the Hemphill Lumber Company. The land was all in timber at that time and the road was cut out 30 feet wide through the timber on a blazed line. Hemphill's grantor, Mr. Vardell, testified that he and Mr. Langdon, who then owned the Southeast Quarter of Section 22, decided that the correct location of the Section Corner (Southeast Corner Section 22, Northeast Corner Section 27), was at a place marked by a pump pipe with a doorknob in it. Mr. Vardell said "it was established by Mr. Langdon and the St. Louis Union Trust Company;" that Mr. Langdon showed it to him; and that this corner, so marked, was where the county road was established. Apparently the line for the road was blazed from that point. The road was cut out to full 60 feet in width a year or two later. It does not appear just when the surrounding country was substantially cleared of timber.
There seems to be no doubt that the county road was very generally considered to be the section line through this part of the section. In May, 1925, the owner of Section 27, who derived his title through the Vardell-Hemphill chain, conveyed to School District No. 53 of Dunklin County two acres in the Northeast Corner of Section 27, and the School District took possession of a tract of land which was in Section 22, according to the later surveys. The school was built on this tract and was thereafter used by the School District and still is so used. However, in 1926 a survey was made by Mr. Randol, who was then County Surveyor, in which he found the section line to be a considerable distance south of the county road. A copy of the Randol survey was not produced, but Mr. Randol's recollection was that the section line was established about eight chains south of the road. Mr. Randol, testified that Earl Thompson (defendant's husband's grantor) knew about this survey. Mr. Randol also said that he marked the corners on the line he established and that he thought the Spiker plat was a fair representation of the way he ran it. It was also shown that the first house on the south side of the road, in Section 22 as found by the court, was built by a man who became the owner of Section 27 in 1920. This house was later moved, but other houses, barns and buildings were likewise built in Section 22 by subsequent owners of Section 27. Some of these were built by defendant's husband and some by defendant even after notice of the Spiker survey. The type of construction and character of these buildings was not shown.
In February, 1930, Earl Thompson obtained title to the Southeast Quarter of Section 22. At that time he borrowed $75,000 from plaintiff and gave a trust deed on this land to secure its payment. Defendant's husband, Hope Thompson, was plaintiff's attorney and general manager. Immediately after this trust deed was filed for record and on the same date Earl Thompson conveyed to Hope Thompson an undivided one-half interest in all of the land conveyed by the deed of trust subject to the lien thereon. In December, 1930, Earl Thompson made a quitclaim deed to Hope Thompson conveying to him all of his interest in the entire tract. In April, 1931, Hope Thompson conveyed all of this land to defendant. Hope Thompson died June 12, 1931, and this latter deed was put on record by defendant 10 days after his death. Hope Thompson also became the owner of Section 27 (which was not covered by plaintiff's trust deed) by deeds dated April 18, 1930, May 26, 1930, and October 4, 1930. He conveyed all of Section 27 to defendant by deed dated May 28, 1931. This deed was also recorded [243] after his death. Thereafter, plaintiff started foreclosure of its deed of trust. On February 12, 1932, plaintiff and defendant made a contract of settlement. This contract provided that defendant was to have all 1931 crops raised on the land, and proceeds of crops then in the hands of a receiver, and that plaintiff would purchase from defendant at a specified price certain stock in the Federation Corporation held by the defendant as executrix of the estate of Hope Thompson.
This contract further provided:
"Frances C. Thompson shall immediately proceed to obtain a release and quitclaim of all the right, title and interest of the said Earl C. Thompson and his wife, May E. Thompson, in the said premises, located in Dunklin County, Missouri, encumbered by said Corporation's Seventy-five Thousand Dollar ($75,000.00) mortgage, and when procured will convey or cause to be conveyed, all of Earl C. Thompson's and May E. Thompson's own right, title and interest, and all Frances C. Thompson's own right, title and interest in said premises, vesting a complete title thereto in the said Corporation, but subject to the lien of said mortgage and of all outstanding liens for general taxes or drainage tax assessments, but free of all liens or charges on the same against the said Earl C. Thompson, Hope Thompson, or Frances C. Thompson, subsequent to said mortgage."
Defendant testified concerning this settlement contract, as follows:
"Q. You know under this agreement you agreed in writing to convey to Illinois Federation Corporation all of the property described in that mortgage, didn't you? A. Everything Earl had conveyed to me. Q. And everything that was described in that mortgage. You didn't want to convey property not described in the mortgage did you? A. No. Q. And you did want to convey everything described in the mortgage, didn't you? A. Yes. You understood they could foreclose and take the property described in the mortgage by foreclosure, didn't you? A. Yes. Q. You likewise knew no part of Section 27 was described in the mortgage, didn't you? A. Yes. Q. You knew that all of the southeast quarter of Section 22, Twp. 17 N., R. 9 E. was described in the mortgage, didn't you? A. Yes. Q. You signed it, and when you came down and saw the property you thought that this county road was on the true section line dividing Sections 22 and 27, didn't you? A. I presume so. I thought it was the dividing line. I didn't think of it in sections. Q. You thought it was the section line, didn't you? A. Yes. Certainly. Q. And that is the reason why you thought you owned up to the road, isn't it? A. Yes. Q. You never had any intention of claiming land legally belonging to the Federation, did you? A. No. Q. You intended to convey to this company every acre they were entitled to under the mortgage, didn't you? A. Yes."
After defendant made this deed, in 1932, plaintiff took possession of the land north of the road, and defendant remained in possession of the land south of the road. In 1935 the State Highway Department made a survey, for a new road, which showed the old road to be located in Section 22 some distance north of the section line. Thereafter, plaintiff employed Mr. Spiker, an engineer, to survey its land and his survey showed that the line was south of the old road, 470 feet at the West side of the Southeast Quarter of Section 22 and 540 feet wide at the East side. Thereafter, defendant, who owned all of Section 27, bought the land owned by the General American Life Insurance Company, south of the old road in the Southwest Quarter of Section 22. It was also shown that the owner of the Southwest Quarter of Section 23, east of the tract herein involved, took possession of the land in that section south of the old road down to the section line as established by Mr. Spiker. Plaintiff also offered in evidence a United States Government aerial map made in accordance with findings of United States engineers engaged in floodway work, which showed that the old road was north of these section lines. This suit was commenced in March, 1936, but was not tried until August, 1940.
Since the case was converted to equity by defendant's cross bill, we are not bound by the trial court's findings of fact. However, the evidence seems to overwhelmingly show that the county road is north of the north line of Section 27 and [244] that the land in controversy is in the Southeast Quarter of Section 22. We, therefore, hold that the court was fully warranted in finding the line established by the Spiker survey to be correct. We defer to this finding and adopt it as ours.
The court also further found as follows:
"The Court finds and believes and is convinced that each of the parties mistakenly deemed the county road as true dividing line between Sections 22 and 27 at the time of defendant's deed to plaintiff and continued in such mistake of fact until the State Highway Survey was made. . . .
"The Court finds as between these parties that there was not any expressly agreed boundary line, and finds that the mutual mistake was not in the legal description contained in the deeds but was a mutual mistake of fact as to the extent of boundaries conveyed by the deeds to the actual boundary line. And the Court is of the opinion that on such state of facts the Court can grant no relief to defendant."
Defendant had never been in Dunklin County prior to the death of her husband, and had no knowledge of agreed boundary lines (if any) between former landowners. She then held and immediately recorded deeds to all the land from her husband, who held title to all of it. Thus, when she conveyed to plaintiff, she owned all of Section 27 and the Southeast Quarter of Section 22 north of it; the entire tract on both sides of the county road over this half mile. This court said, in Patton v. Smith, 171 Mo. 231, 71 S.W. 187, where there was a claim of an agreed line between former owners, "nevertheless, when Remelius (the common source of title of both parties) became the owner of both tracts of land, all such questions became immaterial." The court further held therein that, when a line was erroneously fixed in an attempt to locate the true line, it was not necessarily an agreed line even in an adverse possession case. [See also Tidwell v. Waldrup, 347 Mo. 1028, 151 S.W.2d 1092.] Here the evidence was at least conflicting as to whether the road was established by mistake or by agreement, and there was no issue of adverse possession involved. Certainly, under the circumstances shown in this case, the court was warranted in finding that, "between these parties, there was not any expressly agreed boundary line." We, therefore, defer to this finding and also adopt it as correct.
This leaves only the issue of reformation on the ground "that the inclusion of such lands (south of the road) was the result of mutual mistake and a mutual mistake of both parties to said deed as to the true location of said section line." Upon this issue of reformation, we do not think the equities favor defendant. [See 53 C.J. 923, sec. 29 et seq.; for a case where the equities did favor reformation see Phillips v. Cope (Mo.), 111 S.W.2d 81.] This was not a bargain and sale transaction, in which the parties negotiated for land within specifically understood boundaries at a certain price and the deed failed to comply with the contract actually made because of mutual mistake in describing the land agreed upon as sold. [Which was true in Fischer v. Dent, 259 Mo. 86, 167 S.W. 977, cited and relied upon by defendant.] Instead, defendant only conveyed what was already mortgaged to plaintiff, which was exactly what she agreed to convey; and also was exactly what plaintiff would have obtained under the foreclosure proceedings, already pending when defendant made the agreement to convey it. There was no evidence to show the value of the land, if any, above the debt. Moreover, defendant's husband, who was plaintiff's manager and agent, made this loan for plaintiff and made it on land in which he was to own a half interest, without plaintiff having any knowledge of that fact. Apparently, it was from the proceeds of the loan secured by this trust deed that he and Earl Thompson were able to acquire the land. Would a court of equity have reformed this trust deed for Hope Thompson against plaintiff? Defendant only succeeded to his interest subject to plaintiff's trust deed. (Earl Thompson had conveyed his title but apparently retained some interest because his consent to the conveyance to plaintiff was required.) This trust deed covered the entire Southeast Quarter of Section 22. It is true that defendant did not know where the south boundary line of Section 22 actually was; and was mistaken in her idea about the location of it. (As was true of plaintiff until surveys were made.) However, there was no intention on the part of defendant to convey less nor of plaintiff to receive less than all of the land covered by the trust deed, which was the entire Southeast Quarter of Section 22.
[245] Furthermore, the authorities do not support defendant's claim. This court ruled in General Refractories v. Sebek, 328 Mo. 1143, 44 S.W.2d 60, where reformation of a lease was sought to include a clay pit outside the description (which fixed the boundaries of land leased at 200 yards from any buildings), as follows:
"It may be true that both Toelke and Sebek intended that the particular clay pit just referred to should be included in the lease. But, even so, it does not follow that the lease as written does not correctly set forth the contract actually entered into by the parties. They may have assumed that the pit was not within 200 yards of any building, for at the time of making the lease neither knew its distance in feet from the buildings, and no measurements were made. And if the lease was written just as the parties intended it should be written, that is, correctly embodies the terms of the contract actually entered into, there is no ground for its reformation. `A contract cannot be reformed for a mistake not in the contract itself or in the writing embodying it, but of an extrinsic fact which, if known, would probably have induced the parties to make a different contract.' [23 R.C.L. 321; Webster v. Stark, 78 Tenn. (10 Lea), 406.] In other words, the court cannot supply an agreement that was never made. [Tesson v. Insurance Co., 40 Mo. 33, 93 Am. Dec. 293.]"
So here, what is sought is not reformation to substitute a contract actually made for one erroneously described, but instead, it is reformation to make a new contract in place of the one actually made and which is correctly stated. [53 C.J. 925, sec. 34; for statement of usual rule see Lauffer v. Smith, 337 Mo. 22, 85 S.W.2d 94.] Clearly the contract made was to convey the land described in the plaintiff's trust deed. Therefore, plaintiff should not now be held entitled to less under defendant's deed in settlement of the foreclosure than it had under its trust deed and would have had under its foreclosure. There is no evidence upon which a reformation of the trust deed could have been based, and no such claim was made. It is apparent that there was at least some doubt about the road being the section line from the time of the Randol survey in 1926. There is evidence that Earl Thompson knew about this before he executed the trust deed. Whether or not Hope Thompson had any information about the Randol survey does not appear. In either case, he did not execute the trust deed but took only subject to it as did defendant. We, therefore, hold that the trial court properly denied reformation.
The decree is affirmed. Bradley, C., not sitting; Dalton, C., concurs.
The foregoing opinion by HYDE, C., is adopted as the opinion of the court. All the judges concur.