Hubble v. Somerville

Grason, J., delivered the opinion of the Court. The petition in this case prays that a certain lease referred to therein “may be reformed and amended so as to effectuate the purpose and intention of all of the parties to the lease aforesaid.” It was answered by the several parties defendant, testimony taken in open court, and an opinion and decree of the chancellors filed. The decree dismissed the petition with costs, and the case comes here on appeal. The Moscow-Georges Creek Mining Company, a corporation, at the time of the filing of this petition, and for some time prior thereto, was in the hands of Eutelka S. Somerville and Samuel T. Walker, receivers appointed by the Circuit Court for Allegany County, in Equity.

This corporation owned a tract of coal land comprising about six hundred acres, most of which was located in Allegany County and a small part thereof projected into and was located in Garrett County. This tract of land was acquired by numerous deeds, some eighteen or twenty, and when the receivers were appointed the whole tract consisted of six hundred acres. At the time the receivers were appointed by the Court all of this land was leased to Carson Thomas for the purpose of mining coal by deep mining or strip-mining process. On June 19, 1944, the receivers, with the approval of the court, leased to the petitioner, Hubble, for strip-mining coal, approximately eighty acres, and in this lease Thomas joined for the purpose of waiving his right .to strip-mine coal on the property leased.

The ⁴²¹ lease provides: “Whereas the parties hereto desire to enter into an agreement under the terms of which the party of the second part (Hubble) shall have the right and privilege of strip-mining a part and portion of said Big Vein Coal, which operation, however, shall not interfere with the deep mining operations of the said Carson Thomas under said premises.” (Italics supplied) It further provides that: “Lessor does hereby lease and demise unto the said lessor (meaning lessee) for a period beginning July 1, 1944, and ending June 30, 1946, all the Big Vein or Pittsburgh Seam of Coal, together with the exclusive right to mine and excavate by uncovering therefrom the surface soil, commonly called ‘strip-mining’, and to remove and market the same in and upon a portion of said coal mining property; the said portion of the entire tract now leased containing approximately eighty (80) acres, more or less, and being outlined in red on the map hereto attached and made a part hereof.” It appears that a part of the Big Vein or Pittsburgh Seam of coal underlies about eight or ten acres, a part of the tract known as “Come By Chance,” which is located at the northwesternmost end of the whole tract, in Garrett County. The red line located on the plat, made part of the lease, and which was intended to outline the land demised to Hubble, does not include any part of the tract known as “Come By Chance.” Hubble entered the premises under this lease, and some eighteen or nineteen months thereafter filed his petition, which is the subject of this proceeding. The petition does not allege fraud or misrepresentation, but relies for relief on the sole ground that a mistake had been made in the preparation of the lease executed by the receivers to him. To succeed in this effort, the burden of proof was upon him to show that in the preparation of the lease a mutual mistake was made, that is to say, that the terms thereof did not express what the parties had mutually agreed to.

One must show, in order to be relieved, that the mutual mistake was made in reducing the contract to writing, and— ⁴²² “ ‘In every case, it must clearly and satisfactorily appear that the precise terms of the contract had been orally agreed upon, and that the writing afterwards signed fails to be, as it was intended, an execution of such previous agreement, but, on the contrary, expresses a different contract.’ A court of equity will not make a contract for the parties. The mistake may be either as to 'the contents or the effect of the instrument; but the mistake of both parties must be in regard to the same matter. * * * The authorities all require that the parol evidence of the mistake and of the alleged modification must be most clear and convincing—in the language of some judges, ‘the strongest possible’— or else the mistake must be admitted by the opposite party; the resulting proof must be established beyond a reasonable doubt. Courts of equity do not grant the high remedy of reformation upon a probability, nor even upon a mere preponderance of evidence, but only upon a certainty of the error.” The above statement of the law is taken from 5 Pomeroy’s Equity Juris., (2nd Ed.), Sec. 2096, and was quoted in the very able opinion delivered for this Court by Judge Mitchell in the case of Brockmeyer v. Norris, 177 Md. 466 , at page 472, 473, 10 A. 2d 326 , at page 329. In that case the Court quotes from Dulany v. Rogers, 50 Md. 524 , 533: “It is incumbent, however, upon the party seeking to reform a written instrument to show by conclusive proof, that it does not embody the final intention of the parties; Courts will not rectify it unless it was executed under a common mistake—both parties having done that which neither of them intended.

A mistake on one side may be ground for rescinding, but not for reforming a written agreement.” The evidence shows that shortly before the filing of the petition in this case a dispute arose as to whether the property leased to Hubble included that part of the Big Vein or Pittsburgh Seam of coal that was beneath the surface of the tract known as “Come By Chance.” Mr. Douglas was mining coal on property adjacent to ⁴²³ that owned by the corporation. He wanted to lease the eight or ten acres of the property known as “Come By Chance” for the purpose of mining coal. He thought that the lease to Hubble did not comprise that land, and when this dispute became more or less acute Hubble filed his petition in this proceeding. Mr. Walker, one of the receivers, filed a separate answer, in which he admitted that the “Come By Chance” area was omitted from Hubble’s lease by a mistake, and he testified that “it was our intention to lease Mr. Hubble all of the strippable big vein on the Moscow-Georges Creek property.” He did not go on the land before the lease was executed, but he “went over it on the map with him (Hubble), that was all” and he had been over the land before and since his conference with Hubble.

He stated that he outlined in red ink, on the plat, the land that was leased to Hubble, and he imagined that he did this after the lease was drawn and that he did not know that he left out the eight acres, which was part of the tract known as “Come By Chance.” When he made this plat he “calculated the area around the crop and I figured around eighty acres strippable coal; there is supposed to be 120 acres of big vein, as near as I can tell.” He says that between eight and ten acres at the north end of the property were left out of the Hubble lease by oversight on his part and he discovered his mistake in the fall of 1945 when Douglas brought it to his attention. He further testified that the Big Vein section of the property comprises one hundred and twenty to one hundred and forty acres. He talked to his co-receiver in the presence of Mr. Wilson, about leasing the area in controversy to the Russell Coal Mining Company, and he thereafter told Mr. Wilson or Mr. Douglas to see Mrs. Somerville about any further negotiations concerning the leasing of this area, but he does not know whether they saw Mrs. Somerville. Hubble testified there were “no red lines on it (the plat) at all” and that he learned from Mr. Douglas that ⁴²⁴ his lease didn’t cover the eight acres in question.

He was negotiating at the time for an assignment of the eight acres in question to the Russell Mining Company, and that company was working the adjoining property. Hubble testified: “I always contended we had all the coal under that property on the six hundred acres of the big vein coal.” Q. “Prior to the execution of your lease, did you go over the property and try to locate that red line indicated on there?” A. “No, sir.” Q. “Why not?” A. “I didn’t know they had any use of it; in fact I thought we had the entire property. I didn’t know why the red line was put on.” On cross examination he testified he read the lease before he signed it, and “they thought the crop came along that particular red line, that was the only thing.” Q. “You accepted the lease with the red line indicated on the lease and on the map. You knew, of course, that the property took in altogether 120 acres ?” A. “That is correct; they claim it contained six hundred acres altogether.

Q. “And that lease conveyed eighty acres?” A. “In other words, they figured out of the 120 acres, there might be eight acres that could be stripped.” There is no evidence in the case that shows that anyone figured out that only eight acres could be stripped out of the one hundred and twenty acres. Mr. Gunter was counsel for the receivers and drew the lease to Hubble. He spoke at some length of a conversation he had with Aleck Sloan, who said that he and Hubble were interested in strip-mining operations of the company’s property. He speaks of an option which had been given by the receivers to Hubble and Aleck Sloan.

He talked about this option, and stated Mrs. Somerville was only interested in Carson Thomas; that she wanted him protected in his rights under his lease. She instructed him “to so draw the lease that Thomas’ rights as far as deep mining should be retained, and I remember distinctly there was nothing said whatever about excepting any eight or ten or any other ⁴²⁵ acres. When I drew the lease, it was the intention of everybody that all the strippable coal should go to these men, except the deep operations to Mr. Thomas in his present operations.” He further testified: “So when these men came and negotiated for the lease, since the receivership could not hire a surveyor and