In Martin v. Hartley, 208 Miss. 112, 43 So.2d 875, the Court refused to cancel a lease, alleged to have been deliberately altered by the lessee, on account of the fact that the lessors had stood by without protest for a year and a half and permitted the lessee to use the property, and to make a large investment thereon as though he had the legal right to do so.Summary of this case from Howie, et al. v. Baker
January 23, 1950.
1. Appeal — finding of fact by the chancellor.
A finding of fact by the chancellor will not be reversed where sustained by substantial evidence and is not manifestly wrong.
2. Alteration of instruments — alteration of lease by lessee — acquiescence by lessors — estoppel — cancellation, when not decreed.
When the lessee, in order to make the lease conform to his understanding of the agreement, altered the lease after its execution by the lessors so as to make a reserved lot smaller than that indicated in the executed lease, and the lessors, with full knowledge, or with sufficient notice or means of knowledge, of the alteration, permitted the lessee, also to lessors' knowledge, day by day for a year and a half, to occupy, use and make large improvements on the land as though he had the legal right to do so, and this without protest or question on lessors' part, the latter by their acquiescence were precluded and estopped from demanding a cancellation because of the alteration.
3. Estoppel — foundation of doctrine — silence or passive conduct.
The doctrine of estoppel is founded in morals, — it is based on equity and good conscience; and estoppel may arise from misleading silence or passive conduct joined with a duty to speak.
4. Reformation of instrument — vague and indefinite proof, insufficient.
Equity will not decree a reformation of a vague and indefinite description in a written lease when the proof itself is vague and indefinite.
5. Landlord and tenant — damage to leased property by lessee tenant.
When no authority is granted to lessee in a lease to damage or destroy property, the lessors are entitled to a monetary award against lessee for damaging the garden fence, etc.
Headnotes as approved by Lee, J.
APPEAL from the chancery court of Wayne County; THOS. Y. MINNIECE, Chancellor.
J.W. Backstrom, Ben H. Walley and Heidelberg Roberts, for appellant.
Some days after the oral agreement the appellant prepared, or had prepared, the written contract that is an exhibit and delivered it to the appellees for their execution and some days thereafter, and on October 21st, the appellees executed the contract before Mr. Briggs, a Notary Public, and returned it to the appellant. Some time thereafter the appellant entered into the possession of the premises, erected saw mills, planer mills, buildings and etc. The leased premises were a part of the lot or subdivision upon which the appellees resided at the time of the execution of the contract and they still reside there and in close proximity to the saw mill and operations of the appellant. The appellant operated the saw mill and had the full possession of the premises described in the contract from shortly after the date thereof until a very short time before January 20th, 1947, the date of filing of the original bill of complaint, without any objections or protests whatever from appellees. The erection of all buildings, and use and occupancy thereof, were all done at the full knowledge of appellees and without any protest or objections whatsoever until a few days before January 20th, 1947. The said J.K. Hartley was in and around the premises every day or two during the construction and operation thereof, all of which was in the plain view of the residence of the appellees. During this period of time the appellees used or made some use of the turpentine still that was located upon the premises until it was destroyed by fire and thereafter the appellees made no use of the still lot and did not rebuild the still. The turpentine still was destroyed by fire prior to any objections being raised by the appellees with reference to the contract or the use of the still lot or other property. The above are facts that are not controverted or denied by either party.
The alteration of the contract as alleged by the appellees is not such an alteration as would void the contract. An alteration that would void the contract must be a material alteration and an alteration that would destroy the identity of the instrument on the contract evidence thereby, or which so changed its terms as to give it a different legal effect from that which it originally had and thus work some change in the rights, obligations, interest or relations of the parties. It must be such an alteration that would be a benefit to one of the parties or an injury to the other. An immaterial alteration will not affect or invalidate a contract.
The insertion of the words "still lot reserved" is an indefinite description as to the size of the lot and the boundaries and even if this was erased and the words "100 ft. x 100 ft. still lot reserved" inserted it is not such an alteration as would void the contract. This alteration was as beneficial to the appellees as to the appellant and certainly is an alteration that would not work an injury to the appellees. The rule laid down in 2 Am. Jur. pp. 598, 599, Secs. 6 and 7 is decisive of this point.
There is no allegation in the amended bill of complaint that the exceptions were left out through any mistake and certainly there is no allegation of any mutual mistake and neither is there any allegation that these exceptions were fraudulently left out by the appellant and in the absence of such allegations the amended bill of complaint does not state a cause of action for a reformation.
In the case of Allison v. Allison, 33 So.2d 289, the court said,
"The Chancellor would have been well warranted in finding that no mistake at all was made but he certainly was amply justified in finding that there was no mutual mistake. To warrant a reformation of a deed on the ground of mutual mistake the evidence must be clear and convincing. Jones v. Jones, 88 Miss. 784, 41 So. 373, Lamar v. Lane, 170 Miss. 260, 154 So. 709, Semour v. Lamb, 185 Miss. 37, 185 So. 824. In the absence of fraud or inequitable conduct of the parties the mistake to justify a reformation of an instrument must be a mutual mistake, citing 45 Am. Jur. Section 46, page 606; Whitney Central National Bank v. First National Bank, 158 Miss. 93, 130 So. 99, Wall v. Wall, 177 Miss. 783, 171 So. 675."
It abundantly appears from an examination of the amended bill of complaint if there was any agreement between the parties hereto that any pecan orchard or garden spot was to be excepted or any access road to be kept open such agreement went on before the execution of the contract that is exhibited with the amended bill and such agreements, if had, were merged in the contract when it was executed and any evidence to establish these reservations, or exceptions, is inadmissible under the parole evidence rule.
We seriously submit to this court that the alleged alteration was an immaterial alteration and was not such an alteration as would void the contract. The allegations of the reservations are not such reservations that the court could grant any relief under the alternate prayer for a reformation and the general demurrer to the amended bill of complaint should have been sustained. W.M. Hutto and E.C. Fishel, for appellees and cross-appellants.
As the record of the evidence will show there was not only an apparent alteration by the erasure which still showed on the margin where the pencil reservation was written by Hartley, but the defendant Martin admitted the erasure and the writing of the 100 x 100 feet description with the typewriter. The defendant admitted the erasure before the witness Dobson and in the presence and hearing of Hartley and also on the witness stand Martin attempted, when confronted with the instrument and its erasures which were apparent and the lead pencil which had been erased could be defined on the margin, to explain the erasure which the court rejected.
Sun Oil Co. v. Allen et al., 195 Miss. 555, 16 So.2d 26, was a case in which there was involved an oil lease, which was alleged to have been altered by the insertion of figures or words to make it a primary lease for ten years and not for a primary term of five years and on a rather hotly contested case and contradictory evidence the chancellor cancelled the lease. The Supreme Court held that the evidence was sufficient and affirmed the case, thereby holding the lease void.
"Lease". A material alteration of a lease, after its execution by one of the parties without the consent of the other party renders it unenforceable against the nonconsenting party. Thus a lessor who has altered the lease destroys his right to recover under the executory clauses, or the rents reserved. So a lessee who materially alters a lease thereby loses all his subsequent rights under the lease, either to retain possession or to preclude the lessor from entering upon the premises. 2 C.J. 1187, (#26).
It is a well established rule that any material alteration of a written instrument, after the execution thereof, intentionally made or caused either directly or indirectly by the owner or holder thereof, or by one having a beneficial interest therein, without the consent of the party sought to be charged thereon, renders it void as between such nonconsenting party and the person responsible for the alteration, or those claiming under him. 2 Am. Jur. P. 601 #9.
"Description of Property as to Identity or Quantity." A change in the description of property conveyed, so as to give it an entirely different name and thus destroy the identity, or so as to make the instrument cover property different from that originally conveyed, whether or not operation to destroy that validity of the instrument as a conveyance of the property originally described, cannot, in any event, give to the instrument validity as a conveyance of that which is indicated by the changed or added description; in other words, such an act will constitute an alteration of instrument. So the addition of words increasing or diminishing the quantity of land or other property embraced in a deed or agreement of sale is a material alteration as is also a change, in the description of property in a chattel mortgage, by inserting property not originally embraced therein. 2 C.J. 1204 (#54).
From the foregoing authorities it will be observed that the alteration complained of in the bill of complaint, which reserved the still lot, and had reference to the site inspected by both complainant at the time the contract was entered into and before it was attempted to be written, which was 200 feet by 272 feet, and the writing in thereof "100 feet by 100 feet still lot reserved" and erasure of the first reservation, was a material alteration. It had the effect of increasing the amount of the leased premises from .232 acres to 1.25 acres, or from slightly less than one-fourth acre to one and one-fourth acres, and decreasing the amount of the reservation a corresponding proportion.
This as will be noted from the record was of tremendous importance to complainant Hartley. His still lot not only had thereon a turpentine still, but platforms, road ramps, and platforms for loading and unloading resin and turpentine and while he does not lay that to defendant, yet his turpentine still was destroyed by fire. He does not claim any damage by reason of this fire as he does not exactly know how it caught. But the fact that it is well known that a clear space around buildings decreases the fire hazards, yet by this change and alteration it is admitted in the record that part of defendant's machinery and log ramps are within 75 feet of the center of the 100 x 100 feet claimed by defendant and thus add to the fire exposure.
The importance of this to the defendant becomes apparent when he is building his large mill, after first operating for a long time with a smaller one, and in the location of the larger mill with reference to a gully or hollow in which he placed his boiler, and which was in close proximity with the mill.
Therefore under all the authorities we have cited it was a material alteration and when the court in its opinion found that the alteration was made, that is the writing in with the typewriter, at a different time, and further adopted the version of complainant, then there was but one thing for the court to do, however reluctant he may have been to do so, and that was to cancel the purported lease, which was not the lease contract the parties had entered into.
Appellees, J.K. Hartley and wife, Ellen Hartley, instituted this suit against appellant, J.C. Martin, Sr., to cancel a lease contract on certain land described in the bill, and to recover damages for the improper use thereof. Alternately they prayed also for reformation. The lower court declined to cancel the lease or to reform the same, but found that the "still lot" and the garden spot were excluded from the contract, and allowed damages in the sum of $50. Neither side was satisfied with the result. Hence, a direct appeal by the appellant, and a cross-appeal by the appellee.
A demurrer was sustained to the original bill. Thereupon it was amended, and an answer and other general and special demurrers were filed. These demurrers were overruled, and the court proceeded to a trial of the merits with the above stated results.
The issue was clear cut, and the substantial facts were as follows: During the month of October 1944, the appellees were property owners in the town of State Line. Appellant was in the sawmill business, and desired to lease from the appellees a site on which to locate a mill, yard, etc. Hartley and Martin went upon the land, viewed the same and agreed upon the terms. Subsequently, Martin prepared the lease contract himself, using, as he claimed, the description which was given him by Hartley, and mailed the instrument to Hartley for signature and acknowledgment by himself and wife. Thereafter the instrument, acknowledged December 11, 1944, was received by Martin. The sawmill was installed and full operations were commenced. There was no friction of any kind between the parties. A large portion of the property was used by the appellant in connection with the business for about a year and a half without objection or protest from the appellees — their residence was situated nearby, and they could see and observe what was going on. Finally appellant was about to move one of his employees into a house on this land, when Hartley went to him and protested that the employee was undesirable. Up to this point, there is no substantial dispute. Nothing had marred the apparent satisfactory relations between the parties.
During the conversation about the undesirable employee, Hartley charged that Martin had encroached on the "still lot", which was reserved; that he had expressly written this into the lease before signing, and asked to see the lease. Martin said he was unable to locate it — it was Saturday, a payday — but that he would find it and let him see it the next week. Thereupon Hartley procured counsel and instituted this proceeding. It might be stated, in passing, that the alleged undesirable employee did not move.
The evidence for the appellees tended to show that when the lease was received, there was no reservation of the "still lot" — a lot on which a turpentine still was located; that before acknowledging, Hartley wrote on the margin where the description began with pencil, "still lot reserved"; that the pencil writing was erased; that "100 feet x 100 feet still lot reserved" was written with typewriter in lieu thereof, without the knowledge or consent of appellees; that the "still lot" was actually 200 by 272 feet; that this type was heavier than that in the body of the description. In other words, the instrument had been deliberately altered after its execution.
The evidence for the appellant was to the effect that he had written the lease himself; that, after writing the description, he observed that he had left out the reservation of the "still lot", which was agreed between them to be 100 feet by 100 feet; that he then put the paper back into the typewriter, and made the change before sending it to Hartley; that when he received the acknowledged instrument, with "still lot reserved" in pencil, he saw Hartley on the street in Waynesboro, told him about it, and asked him to erase; that he sent the paper through the mail to Hartley for this purpose, and also, because it was in the wrong section, and in a week or two, it came back to him through the mail, with the pencil writing erased. In other words, appellant had made no alteration at all, and that the erasure of the pencil writing had been done by appellees.
On this issue of fact, the learned chancellor was warranted in finding that the appellant had altered the instrument. He heard the witnesses, observed their demeanor on the stand, and saw the original instrument itself. (Hn 1) It is elemental that this Court will not reverse a chancellor on a finding of fact, where such finding is sustained by substantial evidence. Certainly it cannot be stated that he was manifestly wrong.
The complaint of appellees, also cross-appellants, is that, since the court found that the appellant, also cross-appellee, had made a material alteration in the contract, the same should have been cancelled. To this end, they cite a number of cases, including Merchants' Farmers' Bank v. Dent et al., 102 Miss. 455, 59 So. 805; Bank of Lauderdale et al. v. Cole et al., 111 Miss. 39, 71 So. 260; J.R. Watkins Co. v. Fornea et al., 135 Miss. 690, 100 So. 185; and Sun Oil Co. v. Allen et. al., 195 Miss. 555, 16 So.2d 26.
In those cases, the aggrieved parties knew nothing of the alteration, as here, but, in addition, did nothing to evidence acquiescence in the result of the alteration. On the contrary, they acted timely. (Hn 2) In the case here, appellees stood by for a year and a half without objection or protest and permitted Martin to occupy, use, enjoy the benefits of this parcel of land, and make a large investment thereon, as though he had the legal right thereto. But for the friction over moving the alleged disagreeable employee, we are justified in believing that this contract would not have been questioned. They must, therefore, be held to have acquiesced, and thereby consented to such use of this land. To direct the cancellation of the contract, under such circumstances, would be in conflict with the well known principles of equitable estoppel. See 19 American Jurisprudence, 678, as follows:
". . . The rule is well recognized that where a party with full knowledge, or with sufficient notice or means of knowledge, of his rights and of all the material facts remains inactive for a considerable time or abstains from impeaching a contract or transaction, or freely does what amounts to a recognition thereof as existing, or acts in a manner inconsistent with its repudiation and so as to affect or interfere with the relation and situation of the parties, so that the other party is induced to suppose that it is recognized, this amounts to an acquiescence and the transaction, although originally impeachable, becomes unimpeachable."
(Hn 3) Compare Kelso v. Robinson, 172 Miss. 828, 161 So. 135, 137, where it is said: "Estoppel may arise from misleading silence or passive conduct joined with a duty to speak. The doctrine lies at the foundation of morals; it is based on equity and good conscience. . . ."
(Hn 4) Manifestly, the court was right in refusing to reform the lease. Appellees read the description, and had no objection to any part thereof, except the omission of the reservation of the "still lot". After attempting to exclude that lot, they signed the contract. They knew what they were doing. Besides, the description was ambiguous, and the proof was vague and indefinite. The court held that the proof was insufficient to decree the reformation, and we think he should be sustained thereon.
(Hn 5) Neither by contract nor otherwise was the appellant authorized to damage or destroy property; hence, no fault is found with that part of the decree allowing damages to the garden fence, etc.
It follows that the case should be, and is, affirmed on both direct and cross-appeals.
Affirmed on both direct and cross-appeals.