Bank of Union v. Redwine

AlleN, J.

It is well to consider, first, the exceptions taken by the defendant upon the trial of the issues submitted to the jury, as the verdict has an important bearing on the construction and legal effect of the deed of trust under which the defendant claims the certificate of stock in controversy, and the following are the material questions raised by these exceptions:

1. Are the issues sufficient to sustain the judgment correcting the deed of trust?

2. Was there sufficient evidence of mistake to justify submitting the question to the jury?

3. Was the maker of the deed of trust guilty of such negligence in failing to read the deed that equity will deny him, and the plaintiff claiming under him, the right to correct the deed?

4. Will a court of equity correct a deed upon the ground of mistake except as between the original parties?

The issue as to mistake was tendered by the defendant, and if in any reasonable view it contains the material facts, the defendant ought not to be heard to complain.

*564The criticism of the issue is that it does not embrace the agreement of the parties; but while the agreement does not appear in the issue in express terms, it is necessarily involved, because there could be no mistake of the draftsman unless there was a previous agreement which he failed to insert in the deed.

Nor do we think there was such negligence on the part of the maker of the deed as will deprive him of the benefit of the equity for correction.

The general rule is as contended by the defendant, that equity helps those who are diligent and not those who are negligent, Capehart v. Mhoon, 58 N. C., 178; and ordinarily one who is able to read, who signs an instrument without reading, will not be aided, Dillenger v. Gillespie, 118 N. C., 737; but the rule is not of universal application, and is subject to exceptions.

Mr. Pomeroy says in his work on Equity Jurisprudence, vol. 2, sec. 856: “It has sometimes been said in very general terms that a mistake resulting from the complaining party’s own negligence will never be relieved. This proposition is not sustained by the authorities. It would be more accurate to say that where the mstake is wholly caused by want of that care and diligence in the transaction which should be used by every person of reasonable prudence, and the absence of which' would be a violation of legal duty, a court of equity will not interpose its relief; but even with this more guarded mode of statement, each instance of negligence must depend to a great extent upon its own circumstances. It is not every negligence that will stay the hand of the court. The conclusion from the best authorities seems to be that the neglect must amount to the violation of a positive legal duty. The highest possible care is not demanded. Even a clearly established negligence may not of itself be a sufficient ground for refusing relief, if it appears that the other party had not been prejudiced thereby. In addition to the two foregoing requisites, it has been said that equity would never give any relief from a mistake if the party could by reasonable diligence have ascertained the real facts; nor where the means of information are open to both parties and no confidence is reposed; nor unless the other party was under some obligation to disclose the facts known to himself, and concealed them. A moment’s reflection will clearly show that these rules cannot possibly apply to all instances of mistake, and furnish the prerequisite for all species of relief. Their operation is, indeed, quite narrow.”

A large number of authorities are collected in the notes to Vallentyne Land Co. v. Immigration Co., 5 A. and E. Anno. Cases, 215, and Grieve v. Grieve, 11 A. and E. Anno. Cases, 1164, supporting the position that, in the absence of fraud, the true test is whether the party *565seeking correction acted as one of ordinary prudence under tbe circumstances.

"We have also said: “Tbe law does not require a prudent man to deal with every one as a rascal. There must be a reasonable reliance upon tbe integrity of men, or tbe transaction of business, trade, and commerce could not be conducted with tbat facility and confidence wbicb are essential to successful enterprise and tbe advancement of individual and National wealth and prosperity. Tbe rules of law are founded on natural reason and justice, and are shaped by tbe wisdom of human experience, and upon subjects like tbe one which we are considering they are well defined and settled.” Walsh v. Hall, 66 N. C., 238, approved in Leonard v. Power Co., 155 N. C., 14.

Applying these principles to tbe evidence, we cannot say tbat tbe maker of tbe deed is barred of bis equity because of bis negligence in failing to read tbe deed.

He testified, in substance, tbat be bad agreed to execute a deed of trust for tbe benefit of Redwine; tbat Redwine prepared tbe deed; tbat tbe deed was read in tbe office of Redwine, and when be, tbe maker, discovered tbe certificate of stock was in tbe deed, be refused to sign, stating tbat be bad already assigned tbe stock to tbe Bank of Union; tbat Redwine then said it would not hurt to make it subject to tbe paper of tbe Bank of Union; tbat -it was agreed tbat tbe deed should be changed so tbat it would be made subject to tbe paper of tbe bank; tbat Redwine said be would make it subject to tbe paper of tbe bank, and turned to bis desk and interlined tbe deed, and tbat be then signed tbe deed, relying upon tbe promise of Redwine to make it subject to tbe paper of tbe bank.

One of ordinary prudence, knowing th§ high character and intelligence of Mr. Redwine, might under these circumstances reasonably sign tbe deed without reading it.

Nor do we think tbat tbe equity of correction is confined to the original parties to tbe deed. It has been held otherwise at this term in Sills v. Ford, in wbicb the authorities are collected and discussed in an elaborate opinion by Associate Justice Walicer, and tbat case substantially covers all tbe exceptions arising on tbe trial of tbe issues.

Tbe remaining question is whether there was evidence of mistake, and this must be answered against tbe defendant.

Tbe equity to correct an instrument when by tbe mistake of tbe draftsman it is not drawn according to tbe prior agreement of' tbe parties has been recognized from tbe earliest times, and we will only refer to a few of tbe later authorities.

Tbe Court says, in King v. Hobbs, 139 N. C., 172: “Tbe plaintiff and tbe defendant then went to a justice of tbe peace to have their contract put in writing, and tbe justice, evidently by inadvertence or mistake *566(whether of himself or the parties makes no difference), omitted a material stipulation. In such case all the authorities are agreed that the instrument will be reformed so as to express’ the true intent and meaning of the parties.

“This is not an instance of an essential mistake or misunderstanding in the agreement itself, nor where the written instrument is supposed to embody the first and only contract of the parties, but is a case of an error of expression where the parties have come to a definite agreement beforehand, and, in the endeavor to put this agreement in writing, a mistake is made, so that the instrument as drawn does not, in some material point, express the contract it was intended to evidence. In 20 A. and E. Enc. (2 Ed.), p. 823, it is said: ‘That in mistakes of this kind the only inquiry is, Does the instrument contain what the parties intended that it should, and understood that it did? Is it their agreement? And it is wholly immaterial whether the defect is a statutory or common-law requisite, or whether the parties failed to make the instrument in the form they intended, or misapprehended its legal effect.’ The authorities are numerous and fully bear out this statement of the doctrine. . . . ‘Nor will the fact that the defendant denies that there is a mistake, and testifies that the deed was drawn according to the intention of the parties, prevent the court from granting the relief if it is satisfied that the deed is not in accordance with the agreement,, but ought to be so.’ ” In Arthur v. McClure, 166 N. C., 144: “It is said in 34 Cyc., 908, to be settled by a host of authorities that where because of mistake an instrument does not express the real intention of the parties, equity will correct the mistake, unless the rights of third parties, having prior and better equities, have intervened. This is done, not for the purpose of relieving against a hard or even oppressive bargain or to give either party a better one, but simply to enforce the agreement as it was made and to prevent the injustice which would ensue if this is not done. . . . "Whenever an instrument is drawn with the intention of carrying into execution an agreement previously made, and by mistake of the draftsman or scrivener it fails to do so, the mistake will be corrected and the original contract enforced according to the real intention of the parties”; and in Shook v. Love, 170 N. C., 99, a mistake will be corrected “when it is the mistake of the draftsman who is intrusted to prepare the instrument.”

The deed bears evidence of mistake on its face, because in the absence of mistake there could be no reason for inserting the name of Blakeney in the deed, when he held no securities of the .maker of the deed, Williams, and to whom he was not indebted.

There is also the direct evidence of the maker of the deed, before recited, that the defendant Redwine agreed to interline the deed and make it subject to the claim of the Bank of Union, and that instead of doing so he wrote it subject to the claim of Blakeney.

*567Tbis can be explained only on tbe ground of fraud or mistake, and the plaintiffs do not charge fraud.

When the high character of the parties is considered, the reasonable conclusion is that the mistake occurred because Mr. Blakeney was president of the Bank of Union and had charge of its affairs, and one or the other of the parties spoke of him, when referring to the bank.

We, therefore, conclude that no error has been committed in the trial before the jury.

If the findings upon the first and second issues are supported by evidence, and are not disturbed, it becomes necessary to determine the meaning of the language in the deed to Sikes, trustee, as follows: “This certificate subject, however, to any conveyances heretofore made of said certificate of stock to J. R. English or the English Drug Company, and also subject to any existing conveyance of said certificate of stock to W. S. Blakeney, and this only in event the security, including personal he now holds, when exhausted will not pay off and discharge his existing debt against Williams.”

It is the latter part of this stipulation, “and this only in event the security, including personal he now holds, when exhausted will not pay off and discharge his existing debt against Williams,” that is in dispute.

There are three possible constructions of this clause. The first is that Blakeney is required to exhaust other securities before resorting to the stock to discharge his existing debt. This must be rejected, because Williams was not indebted to Blakeney, and Blakeney held no securities, personal or otherwise, and the jury has found that his name was inserted in the deed by mistake.

We must, then, adopt one of the other two constructions, the plaintiff contending.the duty of exhausting other securities is imposed on the defendant, and the defendant that it is imposed on the plaintiff bank.

The deed of trust was drawn by the defendant Redwine, and the bank was not a party to it, and was not represented when it was prepared.

We may, then, well apply the rule apparently well settled, “that words will be construed most strongly against the party who uses them” (9 Cyc., 590), or, as stated in 6 R. O. L., 854, “A written contract should, in case of doubt, be interpreted against the party who has drawn the contract.”

This rule is not conclusive or controlling, but is accepted as an aid in determining the meaning of the parties.

It is also “a fundamental rule of construction that the courts may look not only to the language employed, but to the subject-matter and' surrounding circumstances, and may avail themselves of the same light which the parties possessed when the contract was made.” Merriam v. U. S.. 107 U. S., 441; R. R. v. R. R., 147 N. C., 382.

*568“To ascertain tbe intention regard must be bad to tbe nature of tbe instrument itself, tbe condition of tbe parties executing it, and tbe objects they bad in view.” Bank v. Furniture Co., 169 N. C., 180.

Let us, then, look at tbe surrounding circumstances, tbe condition of tbe parties, tbe subject-matter, and tbe object tbe parties bad in view.

When tbe finding upon tbe first issue is read in connection witb tbe evidence, we find that on tbe same day tbe deed was executed to Sikes, trustee, but prior thereto, tbe debtor, Williams executed a written transfer or assignment of tbe stock to tbe plaintiff bank as a security for debt, and tbat there is no requirement in tbat instrument tbat tbe bank must exhaust other securities before resorting to tbe stock.

Is it not reasonable to conclude, as tbe two papers were executed to different parties on tbe same day, dealing witb tbe same subject-matter, if tbe restriction appearing in tbe deed to Sikes, trustee, was intended to refer to tbe bank, it would have been inserted in the assignment to which it was a party; and if it refers to tbe defendant Redwine, do we not find it where it would naturally appear?

Tbe debtor Williams bad already assigned tbe stock to the bank, and it is not to be believed tbat, in a subsequent deed, which be intended to make subject to this assignment, be attempted to impair its effect without tbe consent of tbe bank.

Again, tbe clause in tbe deed of trust must be read in connection witb tbe verdict, which finds tbat tbe words “W. S. Blakeney” were inserted by mistake in lieu of tbe words “tbe Bank of Union,” and, in legal effect, tbat it was tbe intention of tbe parties for tbe clause to, read as follows: “Tbe certificate subject, however, to any conveyances heretofore made of said certificate of stock to J. R. English or tbe English Drug Company, and also subject to any existing conveyance to tbe Bank of Union, and this only in tbe event tbe security, including personal he now bolds, when exhausted will not pay off and discharge his existing debt against Williams.”

Tbe maxim, “Mala grammatica non vitiai cha/rtwm, is applied when it appears tbat tbe instrument has been prepared by one unskilled in tbe use of language, and when tbe grammatical construction is at variance witb tbe intent of the parties as indicated by tbe whole instrument; but if it appears tbat it is tbe work of tbe educated, intelligent draftsman, grammatical construction and arrangement will be considered, and here tbe pronouns “be” and “bis” used instead of “it” and “its” naturally refer to tbe defendant, and not to tbe bank.

Neither party has seemed to attach any significance to tbe use of tbe word “personal,” presumably because both tbe bank and tbe defendant Redwine bad personal security, and it appears from the evidence of tbe latter tbat be bad indorsements on some of bis debts.

We are, therefore, of opinion tbat tbe true interpretation of tbe clause *569in the deed now before ns is that the certificate of stock was assigned as a security for the debt due the defendant Redwine, subject to the prior assignment to the plaintiff, with the restriction that he (Red-wine) could not resort to the stock until he had exhausted his other securities; and thus understood, when considered in connection with the verdict finding that the words “W. S. Blakeney” were inserted in lieu of “the Bank of Union,” and that the deed was executed after the assignment to the plaintiff, it is not necessary to consider the other interesting questions, argued with much learning and ability, as to whether the defendant’s interest in the stock is that of pledgee or mortgagee, whether the probate of the defendant’s deed is defective on account of the witness by whom the execution was proved being sworn with uplifted hand, before a woman, who purported to take the probate as deputy clerk, or whether parol evidence is admissible to attack the probate; because if a pledge of a mortgage duly probated and registered, and if the probate cannot be attacked, it is on its face and by its terms, under the construction we have placed on it, subject to the assignment to the plaintiff. Hinton v. Leigh, 102 N. C., 28; Bank v. Vass, 130 N. C., 593.

In the last case the words in the-mortgage following the description of the land, “said 239% acres subject to a mortgage or deed of trust for about $1,900, balance of purchase money on the same,” were held sufficient to establish a trust in favor of the holder of the first mortgage, although registered after the second mortgage.

In declining to pass on the other question raised we must not be' understood as entertaining any doubt as to the right of a woman to hold the office of deputy clerk of the Superior Court, and we mention it lest citizens might be misled by our silence to jeopardize their titles. That the position is, by statute, an important public office is clear from the duties to be performed; that deputies are required to take and subscribe the oaths required of clerks (Rev., sec. 898); that the clerk is required to make a record of the appointment of the deputy in his own office and to require it to be registered in the office of the register of deeds (Rev., sec. 899); that the clerk is required to make a record of the removal of the deputy from "Ms office” (Rev., sec. 899); that the deputies are subject in all respects to the laws applicable to clerks (Rev., sec. 900); and that they may administer oaths only if they are “sworn officers” (Rev., sec. 2350); and if it is a public office, a woman cannot hold it until the Constitution is changed. S. v. Knight, 169 N. C., 333.

It is unnecessary to repeat the reasons given for the decision .of the Court in the Knight case, but none of them were based on the inferiority of women or their unfitness for office. The propriety and wisdom of female suffrage, and of the eligibility of women to hold office are political questions, which must be settled by the people, and which we cannot discuss or consider in the determination of legal questions.

*570We simply declare tbe law as we find it, without usurping the power to change the Constitution, a power- which the people have reserved to themselves.

The question is also raised as to the right of the defendant Redwine to plead usury in the debt between the defendant Williams and the plaintiff; but as we understood it to be admitted on the argument, and the admission seems to be borne out by the record, that this plea, if sustained, would not afford any relief to the defendant if the claim of the plaintiff to priority was upheld, which we have done, we do not consider it.

The motion to dismiss the action because it appears that some usurious interest has been charged cannot be allowed.

The statute prescribes the penalties for usury and does not declare that no action may be maintained upon contracts tainted with illegal interest, and numerous precedents for such actions in law and equity may be found.

The facts found by the referee and the judge, when reviewing the report, seem to be fully supported by the evidence.

No error.