Quinton v. Neville

ADAMS, Circuit Judge, after stating the case as above, delivered the opinion of the court. The function of a bill of review is to obtain a reversal of a decree by the court which rendered it either for errpr of law apparent on the record or to secure a rehearing of the facts, on a showing of newly discovered evidence. 2 Daniell’s Ch. Pl. & Pr. (5th Ed.) p. 1576. When the bill is for the purpose first mentioned, consideration can be given to the record of the original cause only. The evidence at large cannot be examined or considered, and any facts averred in the bill of review inconsistent with the pleadings and decree in the main case can have no effect in determining its correctness. Whiting v. United States Bank, 13 Pet. 5, 10 L. Ed. 33; Buffington v. Harvey, 95 U. S. 99, 24 L. Ed. 381; Shelton v. Van Kleeck, 106 U. S. 532, 1 Sup. Ct. 491, 27 L. Ed. 269; Enochs v. Harrelson, 57 Miss. 465. In view of the foregoing rule we must indulge the conclusive presumption that the proof, which is not before us in this proceeding, sustained the issue tendered by the bill, did not sustain any affirmative defense pleaded in the answer and justified the decree as rendered if it was warranted by and not inconsistent with the pleadings. For the purposes of this case, therefore, .the title and beneficial ownership of the land in question were in the complainants. Inasmuch as we are chiefly concerned with the consideration of the original case wherein the appellants or complainants in the bill of review were the defendants and the appellees or defendants in the bill of review were the complainants, we shall, to avoid confusion, usually refer to them in this opinion as they were known and designated originally and notwithstanding-the fact that Quinton and Bergen the defendants in the original case have assigned their rights and interest under the contract of 1893 to the appellants herein, we shall for convenience frequently refer to Quinton and Bergen the original defendants as the owners of the right. It is first contended by defendants that complainants in the original bill could not maintain the action, that a union of possession and title were necessary, and that such a union is not found in either of the complainants. Without conceding that in this action to quiet title and redeem from an equitable lien both possession and title in the complainants were indispensable, it is sufficient to say that the record discloses a union of both of them in complainant Neville. He was administrator c. t. a. by lawful appointment in Nebraska, the domicile of the, testator. As such he was charged with the execution of the trusts conferred upon the executor named in the will. Sections 2983 and 2987, Comp. St. 1903 Neb. By the statutes of Kansas (section 3009, Gen. St. 1901) he was empowered as such foreign executor or administrator to sue and be sued ii^the latter state. By the provisions [883] of sections 7961. and 7966 (Gen. St. Kan. 1901) the recording of an authenticated copy of a foreign will relating to real estate in the probate court of any county where the real estate is situated operates to pass title to the real estate in 'like manner as is done by wills made conformably to the laws of the state. Inasmuch as it is averred in the original bill that complainant Neville had filed an authenticated copy of his appointment as administrator with the will annexed, in the probate court of Shawnee county, and had caused the same to be recorded therein, or if the averment is ambiguous as to whether the will itself as distinguished from the appointment was filed and recorded, inasmuch as the will might have been so recorded, the finding by the circuit court that the legal and equitable title were vested in the complainants as stated in the bill conclusively established the fact for the purpose of this case that such will was so recorded or that some other equally effective step was taken to confer legal title upon Neville, who only according to the pleadings could hold the legal title under the will of the testator. He was also in possession as admitted by the pleadings. From the foregoing we think it clearly appears that Neville as administrator c. t. a. not only had a legal right to sue in Kansas, but that, as owner of the legal title and in possession of the land in controversy, he also had a cause of action suable in Kansas to protect such title and possession. If the heir at law was not a necessary party his joinder was not prejudicial. No objection to the joinder was made below either by demurrer or answer and it was thereby waived. It appears that the holder and owner of the particular’ estate, who was a testamentary trustee in possession of the premises, and tile remainderman, both united in a bill to remove a cloud from their title (which was asserted to be an obstacle in the way of the execution of the trust imposed upon the former) and to redeem from an equitable lien or charge against the laud, which had been created by the testator in his lifetime in favor of Quinton and Bergen. Inasmuch as all the parties'who had any interest in or claim against the land were before the court there was no defect of parties. It cannot be claimed that the agreement of 1893 was in any technical sense a mortgage. It, in terms, conveyed no interest or estate to Quinton and Bergen. NevertheLss, it is claimed by complainants that as between the parties it created an equitable charge or lien against theland in favor of Quinton and Bergen to secure the payment of their attorney’s- fees, when fixed on the standard created by the agreement. Defendants aver in their answer that the clause prohibiting the sale of the land without their consent was intended as a protection to them for the payment of their fees. Accordingly, we might reasonably assume that the agreement should be treated as in the nature of a mortgage. But, as the case depends' upon a' proper interpretation and understanding of the agreement, it requires critical consideration. It first fixes a standard for determining the amount of compensation to be paid Quinton and Bergen for their services, by providing that, when the land should be sold, Keith should pay to them one-third of the net proceeds of the sale in excess of $60,000 as their fee. Here [884] was manifested a clear purpose that the lands should be sold for the preliminary purpose of fixing the fee and for the ultimate purpose of paying it. In the absence of any limitation of time, the usual rule would prevail that it should be sold within a reasonable time. Then follows the clause, “No sale or disposition of the property to be made without the consent of all parties to this agreement.” Here is found what defendants in their answer called their “protection,” and what was doubtless intended to effectually subject the land to the payment of their debt. The great and controlling purpose of the agreement was therefore to recognize and secure the payment of a debt. These are the substantial purposes of a mortgage, and they necessarily import the right to sell the security to accomplish the intended purpose. But, according to the terms as employed in their strict literal meaning, the agreement absolutely prevented Keith from making a sale of his property, from fixing the amount of his liability to Quinton and Bergen, from paying the same or clearing his title from a liability therefor without the consent of both Quinton and Bergen. It likewise prevented Quinton and Bergen from securing a liquidation of the amount of their claim against Keith or enforcement of the payment thereof by subjecting the. land to a sale, without the consent of Keith. So it appears that the literal meaning of the language of the clause in question is inconsistent with the controlling intent and purpose of the agreement. It subjects either party to the will of. the other, and, literally speaking, to the caprice or arbitrary disposition of the other. It prevents any disposition of the land as a matter of right, for the purpose of the agreement. Some recognized rules for construing contracts may properly be stated. Inconsistent clauses must be construed according to the subject-matter and the motive, and, when the intent is plain, it must prevail over the strictness of the letter. Bent v. Alexander, 15 Mo App. 181, 190. A rigid adherence to the letter often leads to erroneous results and misinterprets the meaning of the parties. Reed v. Ins. Co., 95 U. S. 23, 30, 21 L. Ed. 348. A clause or a word in a contract irreconcilable with its nature or general design of the parties should be rejected. Buck v. Burk, 18 N. Y. 337. “The letter killeth but the spirit giveth life.” If the letter of a clause in an agreement is .absolutely repugnant to the controlling and particular purpose of the agreement, it may, if necessary, be rejected. 3 Wash. on Real Property, 628; Cutler v. Tufts, 3 Pick. 272; Flagg v. Eames, 40 Vt. 16, 94 Am. Dec. 363; Canal Co. v. Hewitt, 55 Wis. 96, 12 N. W. 382, 42 Am. Rep. 701; Wilcoxson v. Sprague, 51 Cal. 640. Applying the foregoing principles, we might conclude our inquiry by subordinating the letter of the clause to its spirit, decreeing it to create an equitable charge against the land and conferring upon the complainants the right of redemption. Pinch v. Anthony, 8 Allen, 536; Chase v. Peck, 21 N. Y. 581; McQuie v. Peay, 58 Mo. 56; Blackburn v. Tweedie, 60 Mo. 505; Daggett v. Rankin, 31 Cal. 322. A.bill for the double purpose of declaring a deed absolute on its face to be a mortgage and to redeem therefrom is a well-recognized remedy in equity. Cline v. Robbins, 112 Cal. 581, 44 Pac. 1023; [885] Hollingsworth v. Campbell, 28 Minn. 18, 8 N. W. 873; Morrow v. Jones, 41 Neb. 867, 60 N. W. 369; Ency. Pl. & Pr. p. 964, and cases cited. In analogy with the principle just stated, we think a court of equity may properly decree on one bill that the agreement of 1893 created an equitable lien and that complainants were entitled to redeem from it. But we do not find it necessary under the'peculiar facts of this case to base our conclusion solely on any technical rules of construction of contracts. Neither is it necessary to reject any words of the agreement in question in order to arrive at what was the intention of the parties. The record discloses that the parties had not for a period of 10 years reached any agreement concerning a sale of the land; that in the meantime the owner had died leaving the land subject to the payment of his debts; that without any bad faith on the part of the owner or his legal representatives they and Quinton and Bergen had been unable to agree upon a price at which the land could be sold; that the defendants were asserting and publishing that no sale or disposition of it could be made for any purpose without their consent; that they had for the purpose of making their pretensions effectual caused the supposed prohibitive agreement to be recorded in the office of the land records of Shawnee county where the land was situated. We cannot admit the possibility that the parties to the agreement intended to tie up the sale of the land fore-ver. That would be sucii a restraint upon alienation as would render the agreement inoperative and void in that respect. We cannot presume, if there is any other reasonable ,,alternative, that the parties intended to make a void agreement or do a senseless or useless thing. A reasonable interpretation of the clause in question, one in harmony with the spirit and purpose of the contract, would seem to be that the parties intended that they should have a reasonable time only to reach a personal agreement, and that, if they failed to do so, the right of either to resort to the courts of the land for appropriate relief should not be abridged or interfered with. We think the facts disclosed by the record clearly demonstrate that a reasonable time for voluntary action had elapsed before the original action was instituted, and we arc of opinion that the recording of the agreement and the assertion of the right under it to effectually veto any sale or disposition of the land constituted a cloud on complainants’ title, a serious impediment to their right of redemption from the lien, and created such an embarrassment to their right of alienation and to their right of appropriating the proceeds of the sale in execution of the trusts created by the will as fully justified the institution of the suit by complainants without violating the fair and reasonable intendment of the agreement. We have carefully considered the earnest contention of defendants that, if the provision of the contract of 1893 requiring consent of all its parties to a sale of the land is to be ignored, the entire agreement, including the clause fixing defendants’ compensation at one-third of the net proceeds of the sale of the land over and above $60,00.0, should be declared null and void, the defendants, to be placed in statu quo, and restored to their rights of action on a quantum meruit to recover from Keith’s estate the reasonable value of the services rendered, and [886] not remain bound by the contract to take one-third of the net proceeds of the sale of the land less $60,000. This contention, we think, involves the erroneous assumption that the original bill either sought to rescind the agreement of 1893 or to set aside or annul any of its provisions. We regard the bill to be essentially one to redeem from an equitable lien, involving a preliminary construction of the agreement creating the lien, a declaration of its true character and the removal of a cloud from complainants’ title occasioned by the recording of the agreement and the pretensions of the defendants under it. The original bill was to affirm and enforce the agreement as made and as intended by the parties, and not to disaffirm or avoid it. Accordingly, there was no occasion for putting Quinton and Bergen in statu quo or for restoring to them any rights which they had contracted away by the agreement. By the agreement as fairly and reasonably interpreted in the decree ■ they are securing their full rights as intended by the parties. We are not able to perceive that the. decree was made on an erroneous theory, as claimed- by the defendants. It recognized the rights of complainants as owners of the land and the subjection of the land to an equitable charge in favor of the defendants as claimed by them. It recognized the embarrassment occasioned by the defendants recording the agreement and their conduct and claims under it, and necessarily found that ⅝11 these things stood in the way of the execution of the trust vested in Neville by the last will and testament of the owner, and stood in the way of complainants enjoying the usual incidents of. ownership of real estate. Such was the theory of the bill and the decree is in full harmony with it. Neither, in our opinion, was the decree, as made, unjust or oppressive to the defendants. They were held bound by the contract made by their assignors as reasonably interpreted. They were given four months and more in which to prepare to protect themselves by bidding at the sale or otherwise securing full value for the land and thereby enhancing the value of their interest. We think the decree as rendered safeguarded and protected the interests of all parties concerned to the full extent which the facts of the case and the remedy to which the complainants were entitled permitted. Some other propositions were asserted and argued by counsel and to all of them we have given diligent attention; but we find in them no reason for disturbing the conclusion already indicated. Finding no error apparent upon the record of the original case, the bill of review was properly dismissed by the trial court, and its action is accordingly affirmed.