Opinion
No. 33281.
November 14, 1938.
1. CANCELLATION OF INSTRUMENTS.
Tender of consideration after filing of bill to cancel deed was too late.
2. ESCROWS.
Where a deed is given to a third person to be delivered as operative only upon the performance of specified acts by the grantee, there is no "delivery" that will pass title until the specified acts have been performed as specified.
3. EVIDENCE.
Where a deed is given to a third person to be delivered as operative only upon the performance of specified acts by the grantee, the acts so specified may be shown by parol.
4. ESCROW.
Where a deed is given to a third person to be delivered as operative only upon the performance of specified acts by the grantee, the grantee may not take possession of it and claim an unconditional delivery on the ground that the third person was not authorized to make for the grantee any agreement with the grantor concerning performance of specified acts as a condition of the delivery.
5. ESCROWS.
Where agent of highway commission was without authority to accept delivery of deed as written, but commission took possession of deed and claimed an unconditional delivery, deed was properly canceled, since there had never been any operative delivery of it.
APPEAL from the chancery court of Lauderdale county; HON. A.B. AMIS, SR., Chancellor.
Russell Wright, Assistant Attorney-General, for appellant.
The power of avoidance for fraud or misrepresentation is lost if the injured party, after acquiring knowledge of the fraud or misrepresentation manifests to the other party to the transaction an intention to affirm it.
Restatement, Law of Contracts, par. 484, page 924; Pintard v. Martin, S. M. Chancery 126; Edwards v. Roberts, 7 S. M. 544; Johnson v. Jones, 13 S. M. 580; Hanson v. Fields, 41 Miss. 712; Ga. Pac. R.R. Co. v. Brooks, 66 Miss. 583, 6 So. 467.
Where rescission of a contract is sought on the ground of defendant's non-performance, it will not generally be granted, unless the plaintiff has done, or shown himself ready to do, all that he stipulated to do under the contract.
9 C.J. 1206; Hester v. Hooker, 7 S. M. 768.
Where a party with knowledge entitling him to a rescission of a contract or conveyance, afterward, without fraud or duress, ratifies the same, he has no claim to the relief of cancellation.
9 C.J., page 1198; 20 C.J., pages 6 and 21; Hall v. Thompson, 1 S. M. 443; Ayres v. Mitchell, 3 S. M. 683.
Members of the Highway Commission could not authorize agents to bind the commission unless an order therefor was entered upon its minutes authorizing the giving of such authority, or unless the order constituting a contract recited the making thereof and its approval by the Highway Commission.
Miss. State Highway Dept. v. Duckworth, 178 Miss. 35, 172 So. 146.
Although a delivery is not authorized or intended by the grantor, yet he may by subsequent conduct or acts ratify the same, but, as in all cases of ratification, the grantor must act with knowledge of the facts.
18 C.J. 146; Whitney v. Dewey, 10 Idaho 663, 80 P. 1117, 69 L.R.A. 572; McAllister v. Mitchner, 68 Miss. 672, 9 So. 829; Jones v. Hammett, 2 Miss. Dec. 265, 3 Wn. Real Property 268.
After learning of the fraud, appellee had certain rights. When he became possessed of the knowledge of all of the facts he was faced with the necessity of an election between his future courses of action. As we said in the case of Grimes v. Sanders, 93 U.S. 55, 23 L.Ed. 798: "Where a party desires to rescind upon the ground of mistake or fraud, he must, upon discovery of the facts, at once announce his purpose and adhere to it. If he be silent and continue to treat the property as his own, he will be held to have waived all objection and will be conclusively bound by the contract as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsisted."
20 C.J. 6.
It necessarily must be an election to pursue one of two courses. He may repudiate the fraudulently obtained contract. Upon such repudiation he has elected not to be bound, and, therefore, he has a right to have the contract cancelled. Or, he may ratify such contract. Upon such ratification, he has elected to be bound and, therefore, he may enforce the contract and he is bound thereby. There is no third course.
Restatement, Law of Contracts, chapter 15, par. 485, page 927.
The law does not permit an election to ratify to be qualified by conditions. The repudiation of a contract prevents its subsequent ratification, and the ratification of a contract prevents its subsequent repudiation.
20 C.J. 21.
Graham Graham, of Meridian, for appellee.
Par. 484, Restatement of the Law of Contracts, page 926, section 8, cited by counsel, could only apply where there was an unconditional demand for performance, otherwise, it would be out of line with the law in Mississippi. The case here was where the appellee wrote a letter agreeing to compromise on condition that the money was paid immediately in order to save court cost and trouble and was not the unconditional agreement made in the beginning and was a new offer made in the nature of a compromise and not an act of affirmance and was not a demand for performance, as provided in the authorities cited, but a compromise based on the conditions, to which there was no response by appellant.
9 C.J. page 1206, par. 90 (b), page 1198, par. 77 (b) and 78.
Acquiescence and waiver resulting in election, affirmance or ratification are always questions of fact, and, where set up to defeat rescission, the burden is upon the defendant to prove affirmance or ratification.
Josly v. Cadillac Auto Co., 101 U.S. 77; Pence v. Langdon, 99 U.S. 578; Mudsill v. Trous, 22 U.S. App. 12; Griffith Chancery Practice, par. 47; 3 Black on Rescission and Cancellation, page 1481, par. 615; Galliher v. Cadwell, 145 U.S. 368; Lake v. Perry, 95 Miss. 550; Bonner v. Bynum, 72 Miss. 442; 9 C.J. 1201; 2 Black on Rescission and Cancellation (2 Ed.), page 1348, par. 546; 3 Williston on Contracts, page 2816, par. 1595; 53 A. 314; 52 S.E. 247; 20 C.J. 6, pages 26, 36 and 37; 26 C.J. 35, par. 28 A and 1142; 91 Va. 183.
The case of Mississippi State Highway Department v. Duckworth, 178 Miss. 35, cited by counsel, has no application whatever because it entirely ignores the question of fraud in the procurement of the instrument in this case.
The well settled law is that the minds of the parties have to meet on every condition of the contract before any valid and binding contract can be executed.
Y. M.V.R.R. Co. v. Jones, 114 Miss. 787; Brooks v. Brooks, 145 Miss. 845.
Where fraud is alleged, parol evidence is always admissible to show fraud, even though it varies the terms of the fraudulent instrument.
Stamp v. Bracy, 1 How. (2 Miss.), 312.
The Chancellor was the trier of the facts as well as the judge of the law and his finding of fact is of the same effect as if the facts were found by a jury and the Chancellor had the advantage of observing the witnesses on the stand, as well as their demeanor and conduct on the stand as witnesses, and the facts are ample to justify the Chancellor's decree and this court will not disturb the finding of fact by the Chancellor where the facts are sufficient to justify the decree. The facts show a flagrant disregard of appellee's rights by the appellant and an utter failure on the part of the appellant to do anything whatever that the appellee expected of appellant.
Argued orally by Russell Wright, for apellant, and by H.M. Graham, for appellee.
ON SUGGESTION OF ERROR.
The decree in this case was affirmed on a former day without a written opinion. It has been suggested that because of similar pending controversies a written opinion should be delivered.
An agent of appellant Highway Commission, this agent having a limited authority, had been endeavoring for some days next before the date hereinafter mentioned to procure a right of way over the homestead lands of appellee, including the obligation on the part of appellee to remove certain houses and fences therefrom. The agent was authorized to pay only $400, and so stated to appellee; but appellee would not agree to the conveyance and to the attendant obligation aforesaid for less than $600, payment to be cash on delivery of deed.
On September 11, 1936, according to the testimony of appellee and his wife, which the chancellor found to be true, the said special agent appeared at appellee's home and requested or suggested that appellee and his wife execute a written offer or option of or for the conveyance at $600 cash, this offer or option to be forwarded to the Commission for acceptance or rejection within two weeks of which acceptance or rejection appellee was to have notice within said two weeks, and, if accepted, he and his wife would thereupon execute a formal deed, the purchase money to be paid as the same time. And if no notice of acceptance was communicated to appellee within two weeks, the agreement was to be considered as rejected and abandoned.
But instead of a written offer or option being presented to appellee for his signature, and that of his wife, a formal warranty deed, reciting a consideration of $600 cash in hand paid, was presented, which was signed by appellee and his wife without reading it, on the assurance by the agent that it was no more than an offer and would be of no effect until accepted by the Commission as aforesaid, and until thereupon within said period of two weeks the money should be actually paid and a deed then executed. Appellee and his wife testified that the agent claimed to be in a great hurry, because of an urgent engagement with other parties, and that for that reason he did not have time to go over the document, or to have it read or discussed. And they said that they were moved to accept the statement of the agent because no officer was present to take an acknowledgment, as they supposed would be necessary if a deed were being executed.
Appellees heard nothing about the matter either from the agent or the Commission within the two weeks, nor for about two months thereafter — in fact, heard nothing more about it until workmen appeared on the ground and began to cut shade trees and remove fences, when being challenged by what right, appellee was for the first time informed that he had executed a deed and that this deed had been recorded; as to which latter, it appears that the agent had gone to a neighbor of appellee, who was acquainted with the signatures of appellee and his wife, and had procured this neighbor to sign as a witness, although he was not present. In the meantime, appellee, supposing that the proposition had been rejected, had gathered his crops and had stored them in the buildings on the prospective right of way.
When appellee learned what had transpired, and particularly when he went and looked upon the records of deeds and saw the record of the said instrument, he wrote to the Highway Commission on November 27, 1936, reciting the facts as he had understood them, as has in effect been above stated, but offered to recognize the deed as valid and operative, provided the cash consideration were paid to him on or before December 7, 1936. To this letter or offer appellee received no response; but in some way, either through said agent or some other person, an offer was afterwards made to appellee to pay the money, when, but not until, he had removed the houses and fences. This was not the contract as contained in the offered deed or elsewhere — the deed, which remained as only an offer, recited cash in hand paid, as has already been mentioned. The money still had not been paid when suit was filed, although thereafter tendered in court, which was, of course, too late.
Appellee filed his bill to cancel the deed and its record, and the court sustained the bill and its prayer. Nothing beyond the said statement of facts, as found by the chancellor, would seem necessary to disclose the correctness of the decree, even if appellee is to be held as if he had read the deed and understood its contents. Appellant starts out in its course of reasoning in its argument for a reversal with the proposition that the delivery of a deed to the grantee is absolute and cannot be shown to have been in escrow or on condition. Appellant forgets that it is not denied that the special agent was not authorized to accept delivery of the deed as written, wherefore as to a delivery of it he was no more than a third person; and when a deed is given to a third person to be delivered as operative only upon the performance of specified acts by the grantee, there is no delivery which will pass title until the specified acts have been performed as specified. 18 C.J. p. 206. And the proposed terms upon which delivery, such as aforesaid, is to be made may be shown by parol, else they could not become the subject of inquiry at all. 18 C.J. pp. 438, 439. And when a deed has been thus delivered to a third person, the grantee may not take possession of it and claim an unconditional delivery on the ground that the said third person was not authorized to make for the grantee any agreement with the grantor as to the performance of specified acts as a condition of the delivery, for so to hold would be to say that any delivery to a third person is an unconditional delivery to the grantee.
There was no operative delivery, the deed never became effective, and the decree is not based upon rescission, as contended by appellant in its suggestion of error, but upon cancellation, as the decree expressly recites.
Suggestion of error overruled.