Kropp v. Kropp

MaRshall, J. If, as alleged in the pleadings by respondent and found by the court, respondent sold real estate belonging to him to another and received from such other, in part payment therefor, purchase-money notes and mortgage and some corporation stock, and it was agreed between such other and respondent and his wife that the notes and mortgage and the transfer of the stock and new certificate therefor should be so made. as to vest the title thereto in the husband and wife jointly, and in the survivor of them, without any expense for probate proceedings, and thereafter, by mistake of fact on the part of all the parties named, and of — 142 — tbe person or persons who drew the papers, they were made to show Mrs. Kropp to be the sole owner of the property, then, unless respondent be barred from obtaining relief by laches, his right thereto in equity, by a decree reforming the notes, mortgage, and certificate to accord with the facts, is too clear for serious discussion. Within one of the well-recognized and firmly-established branches of equity jurisprudence is the power' of courts of equity to grant relief from mutual mistake of fact, or mistake of one party and fraud of another, which results in a written instrument being made between the parties contrary to their agreement and the intention of the person or persons making such mistake. Neff v. Rains, 33 Wis. 689; Grossbach v. Brown, 72 Wis. 458; Green Bay & M. Canal Co. v. Hewitt, 62 Wis. 316; Sullivan v. Bruhling, 66 Wis. 472; Pomeroy, Eq. Jur. §§ 110, 845, 847, 871. It follows from the foregoing that though many questions are discussed in appellants’ brief, all of which have been carefully considered that have any bearing on this appeal, the only questions which require any special treatment in this opinion are presented by exceptions to the findings of fact above referred to. In considering such questions we must apply the rule which governs in this class of cases, that the facts requisite to a recovery must appear by clear and satisfactory evidence, or, as is usually said, the proof of the facts must be entirely plain and convincing. Pomeroy, Eq.' Jur. § 859; Blake Opera House Co. v. Home Ins. Co. 73 Wis. 667; Meiswinkel v. St. Paul F. & M. Ins. Co. 75 Wis. 147. We first consider whether the notes and mortgage were, by mistake, made contrary to the agreement. The evidence is practically all one way — to the effect that the consideration for such notes and mortgage was individual property of the plaintiff. That circumstance is strongly persuasive that plaintiff did not knowingly place such property wholly beyond his control, so that in the event of his wife’s death — 143 — during his lifetime it would go to her children and he be dependent upon their bounty. Plaintiff was not allowed to testify to -the agreement, but did testify that when the papers were completed they were delivered to him; that he caused the mortgage to be recorded and had always retained all the papers and received all payments made upon the notes without objection for years. The only other living witness to the transaction was Veidi, who executed the notes and mortgage. He testified that the papers, when drawn, were signed by him in the presence of plaintiff and his wife without the same being read by him or in his presence. In regard to what was said by plaintiff and his wife and himself, there is some slight conflict between his direct and cross examination, yet, on the whole, it plainly and unmistakably is to the effect that the agreement was that the papers should be made out so that if plaintiff died before his wife she would be the sole owner of the property, and if she died first he would be such sole owner, without any expense of probating the estate in either case; and that the person who drew the papers was -instructed to make them in that way. Such person was plaintiff’s son. He died shortly after the transaction occurred. The foregoing is substantially all the evidence bearing on the question of the alleged agreement and mistake so far as relates to the notes and mortgage. The circumstance that plaintiff retained the papers and made no complaint till over four years elapsed, in view of the other circumstances appearing by the evidence, rather strengthens than weakens his case. The person interested adverse to plaintiff during the lifetime of Mrs. Kropp was herself. She did not question the husband’s title. During that time he had complete control over and enjoyment of the property. After her death the persons interested adverse to plaintiff were his sons. It is not unreasonable that he did not act more promptly to protect himself against adverse claims coming from his own family, — 144 — inasmuch as bis rights do not appear to have ever been questioned by anybody till about the time the action was commenced. It was not till over two year’s elapsed after the death of Mrs. Kropp that an administrator was appointed for her estate, and a claim made adverse to plaintiff. He then promptly commenced his action. It is considered that the evidence and circumstances established thereby, referred to, fairly satisfy the rule requiring the facts to be established by entirely clear and convincing evidence, and that the finding of the circuit court as to the notes and mortgage, and the judgment based thereon, cannot be disturbed. The finding that a mistake was made in transferring the stock and issuing a new certificate therefor in the name of Mrs. Kropp does not appear to be sustained by any evidence in the case or by any circumstance other than the mere probability that, inasmuch as it was a part of the transaction in which the notes and mortgage were made, the agreement as to one was intended to cover the other. But there is the positive direct evidence to the contrary by the witness Veidt, who testified that he was directed by plaintiff to assign the stock to Mrs. Kropp and assigned it accordingly. Also the evidence of the officer of the company who made the transfer on the books of the corporation and issued the new certificate, that such transfer and certificate were made according to plaintiff’s directions. In view of such evidence and the rule of clear and convincing proof before referred to, the exception to the' court’s finding on this branch of the case must be sustained. But it is insisted by defendants that if the facts are as plaintiff claims, and as found by the court, the plaintiff should be held to have lost his remedy by laches in that he waited four years before bringing his action, including over two years after Mrs. Kropp’s death. The law unquestionably is that a party must assert his right to a reformation of a contract, not made according to the intention of the parties — 145 — thereto, without unreasonable delay; but what constitutes ■such delay must be determined by the facts of each case on .principles of equity. Sullivan v. P. & K. R. Co. 94 U. S. 806. There is a difference between delay evidencing acquiescence or tending to show that no mistake was made, ■and delay accompanied by circumstances constituting an ■equitable estoppel. Mere delay is not a bar in equity, ordinarily, where it would not be a bar at law, and obviously it is not a bar where there is a statutory period covering the identical subject, short of such period. Angelí, Limitations, :§ 25; Godden v. Kimmell, 99 U. S. 201. To constitute a bar when the statute has not run, there must be delay together with facts and circumstances occurring during such delay to the prejudice of innocent parties. There is no plea here of the statute of limitations. The statutable period in such a case is covered by subd. 4, sec. 4221, E. S. Parker v. Kane, 4 Wis. 1. That had not elapsed when this action was commenced.. No circumstance appears to create an equitable estoppel so as to warrant the court, in the exercise of its equitable powers, in applying a shorter period as a bar to plaintiff’s recovery. The persons now claiming the property have not parted with anything by reason of the •delay. They are in no wise, in respect to establishing the facts, in a worse situation by reason of the delay, or prejudiced thereby in any way that we can perceive. True, Mrs. Kropp’s death made it impossible to obtain her version of the matter, but the same circumstance closed the mouth of plaintiff, and the only other person who had personal knowledge of the transaction, and did not testify, died soon after such transaction occurred. So it is considered that there is no legitimate ground for holding plaintiff guilty of laches sufficient to operate as a bar to a reformation of the notes and mortgage in accordance with the truth. In Hartstein v. Hartstein, 74 Wis. 1, the evidence and circumstances cor--roborative thereof were not as strong as here'. The delay — 146 — was about ten years, yet a reformation was decreed by tbe lower court and sustained on appeal. Hartstein and wife deeded their property to their son to secure their support during life. It was agreed that in case of a sale of the property during their lifetime they should be paid $1,500, and in case of the son’s death during such time they should be paid a like sum. Payment of the $1,500 and performance of the agreement for support were to be secured by a mortgage on the property. By mistake the agreement for support and mortgage failed to provide for the payment of the $1,500 in case of the death of the son during the lifetime of his parents. The papers were delivered to the parents, and the presumption that they read or heard them read before delivery was not rebutted in any way. No claim was made that the papers did not correctly state the agreement, till ten years had elapsed, and the son, the person who drew the papers, and the witnesses thereto were all dead. The father and mother were allowed to testify, and on the testimony of such interested parties, and that of one witness who testified that the son admitted to him an indebtedness of $1,500 to his parents, and the probability, under the circumstances, that the contract was as claimed, the reformation was granted. Much of the reasoning of Mr. Justice Taylob, who delivered the opinion of the court, applies to this case. Plaintiff and his wife, by the transaction in question, would naturally have made just such a contract as plaintiff claims was made, and not an agreement which would entirely deprive him of his property in case of the death of the wife during his lifetime. The situation of the parties and the'probabilities respecting what would natn-rally be done by persons circumstanced as plaintiff and his wife were, all corroborate the claim of plaintiff. As before said, there is a strong probability that the agreement included the corporation stock as well as the notes and mortgage, but in view of the evidence to the contrary we cannot — 147 — sustain the judgment of the circuit court on that branch of the case. That part of the judgment appealed from relating to the corporation stock must be reversed, and in all other respects it must be affirmed, and the cause remanded with directions to grant appellants the relief prayed for by them as to such stock. No costs are allowed to appellants on this appeal, except disbursements, including printing. The clerk’s costs are to be paid by the appellants. By the Court.— So ordered.