Kercheval v. Doty

DixoN, C. J.

The question of Mrs. XerchevaVs title, or whether the same was valid in her or had passed to the defendant Doty by the tax deeds, at the time she made convey anee of the lands to him in consideration of which the bond and mortgage in suit were given, is not one which is open to examination or decision in this case, unless the truth should be that there was fraud, circumvention or some improper advantage on the part of the plaintiff in the transaction or settlement with the defendant, by which the defendant was induced to accept her conveyance of the lands and to execute and deliver his bond and mortgage in security. Fraud, it is said, will vitiate everything, and, no doubt, if shown, would vitiate a settlement of that kind. The objection of fraud, so far as any such is made, will be spoken of hereafter. Passing by such objection, or assuming that none exists, the negotiation which resulted *484 in tbe conveyance by tbe plaintiff and tbe giving back of tbe mortgage by tbe defendant, appears to bave been an adjustment and compromise of a tona fide controversy existing between tbe parties respecting tbe title to tbe lands; tbe plaintiff claiming title from tbe original sourcej or under the government, and tbe defendant that be bad acquired it by virtue of tbe tax deeds. It is not tbe policy of tbe law to stir up tbe embers or to rekindle or allow to be rekindled tbe fires of past strifes and controversies, tbe flames of which bave once been extinguished or tbe burning quenched by reconciliation and compact between tbe parties. Tbe law loves peace, and bates dissensions and turmoils and litigations, and all its policy and maxims are against their being' revived or unnecessarily prolonged. Tbe tendency of tbe judicial mind has always been, not to resuscitate contentions once fairly put to rest, nor to permit tbe way to be opened by which they may be renewed or further agitation succeed. Tbe matters adjusted being fairly the subject of debate or doubt at tbe time of settlement, and each party acting with full knowledge of tbe facts and of tbe nature of tbe claim asserted by tbe other, and neither being deceived or misled by tbe other, but tbe negotiation being honestly conducted, tbe inclination of tbe courts has been to treat such settlements as being in all respects as binding and conclusive and effectual to estop the parties, as would bave been the judgment or decree of a court of competent jurisdiction finally determining and adjudicating tbe same matters between tbe parties, and finding that their rights and interests were tbe same as they themselves bad determined them to be upon mutual and amicable agreement and concession. Such has ever been tbe view of tbe courts, and such tbe policy of tbe law, which favors tbe right of private arrangement and composure of differences, and encourages its exercise in order to prevent litigation and strife, and which will always sustain and uphold tbe action of tbe parties where no element of fraud or unfairness or of serious and *485 injurious mistake appears to have intervened. To constitute a valid compromise and adjustment under sucb circumstances, and one which will not be opened or allowed to be disturbed by the courts against the will of either party, it is in general only necessary that there should in good faith have existed a controversy between the parties upon some subject of pecuniary value and interest to themselves, and with regard to which their rights or the claims respectively set up by them, or by one of them and. denied by the other, may be said to have rested in some degree of doubt or uncertainty at the time, and thus to 'have been proper matters for amicable arrangement and pacification, or for judicial investigation in case no arrangement bad been made. Calkins v. The State, 13 Wis., 394 , and authorities there cited. To close the doors of dispute, therefore, and preclude all future investigation into the merits of the claims settled, these things only are requisite : that the claims should have been in some doubt, and their validity controverted ; that they should have been asserted in good faith; and that there should have been no fraud, undue advantage or mistake in the settlement. By mistake, as here used, is of course not intended a mistaken view or opinion respecting the validity or invalidity of the respective claims or any of them, but a detrimental mistake or ignorance of fact, by which the party was actually deceived and misled to his prejudice, and without which he would not have entered into the treaty or settlement. With this understanding, and within these terms, a settlement and compromise of doubtful claims, like those which existed between these parties respecting the title to the lands then in dispute, is final and conclusive; and, no matter what the actual and true merits of their respective claims may have been pending the controversy, the same will not afterwards be inquired into or examined. The settlement is a complete bar to such inquiry and examination. And that the claims here set up and settled were such as to bring them within the denomination of doubtful, or at least to exclude *486 all imputation of bad faitb in the parties wbo made them, there is ample evidence to show. A mere false claim, a sham, one set up without any colorable pretense or plausible foundation, might not come within the terms or definition of a compromise, and might not sustain it. Characterized by bad faith, the preferring of such a claim would itself be a fraud, and concessions made or rights yielded on the strength of it would not be lost nor the settlement be a bar. But such was not at all the nature of the claims here made and settled. When the compromise between these parties took place, the plaintiff asserted title under a patent from the United States to one Benjamin Kercheval, deceased, who, by his last will and testament, which had been duly admitted to probate at the place of his decease, had devised the same to the plaintiff. The answer of the defendant alleges that the agent of the plaintiff !< then claimed to bring, or had brought, an action or actions to recover the possession of the same (said lands) for and in behalf of the plaintiff; whereupon and for the purpose of avoiding legal'proceedings, and for the sole and only purpose of quieting the title to said lands,’’the settlement was made. The defendant asserted title under four several tax deeds issued at different dates between the years 1840 and 1856, both inclusive. Those tax deeds may have been supposed to be, and very possibly were, subject to some doubts and exceptions as to their validity. . Under those circumstances, there can be no doubt that the questions and differences between the parties were properly the subject of mutual arrangement and compromise, and that the settlement which did take place was the result of some concessions on the part of each to the demands made and rights asserted on the part of the other.

The foregoing principles and rules are elementary in our law, and no further citations are required in their support than those found in the brief of counsel for the plaintiff: 1 Parsons on Contracts, 438, and Stapilton v. Stapilton, 3 Leading Cases in Equity, Hare & Wallace’s Notes, 380, 406 to 430, and authorities referred to. “ The prevention of litigation,” says Mr. Par *487 sons, “ is a valid and sufficient consideration; for tbe law favors tbe settlement of disputes.” And again be says: “ With tbe courts of tbis country tbe prevention of litigation is not only a sufficient, but a highly favored consideration, and no investigation into tbe character or value of tbe different claims submitted will be entered into for the purpose of setting aside a compromise, it being sufficient if tbe parties entering into, tbe compromise thought at tbe time that there was a question between them.” And tbe learned authors of tbe notes above referred to also say: “When a compromise is effected with due legal solemnity, either in tbe form of a present release of all right, or of an executory agreement, it is necessarily binding at law, and will not be set aside in equity, unless on those grounds of mistake or fraud which give a right to equitable relief against every act or obligation. A compromise of doubtful rights will not, therefore, be opened or rescinded by chancery, even when unequal or harsh in its operation; nor where the only consideration for the relinquishment of a valid claim on the one side is the abandonment of an invalid one on the other. Eor, if it were necessary, in order to sustain an adjustment of conflicting claims, to determine their relative validity and value, no compromise would be possible, and the uncertainty, delay and scandal would be incurred, which such arrangements are usually designed to avoid.” And in another place they say: “ It is held in general in this country, that compromises are to be favored, irrespectively of the nature of the controversy compromised; and that they cannot be set aside because the event shows all the gain to have been on one side, and all the sacrifice on the other, if the parties have acted in good faith, and with a belief of the actual existence of the rights which they have respectively waived or abandoned. Hence, when a compromise has been fairly effected, its validity will be independent of the merits of the controversy on which it is founded, and it cannot be re-opened for *488 tbe purpose, or witb tbe effect, of reviving tbe dispute wbicb it was meant to terminate.”

To permit tbe defendant now to disregard tbe settlement, and raise anew the questions designed to be closed by it, thus casting tbe burden upon tbe plaintiff, at this late day, of establishing her title, after tbe defendant bad received and enjoyed tbe benefits of her conveyance, and of tbe peace and security afford by it, for a period of ten years and upwards before tbe commencement of this action, and after be bad sold and conveyed considerable portions if not all of tbe lands, would, as it seems to us, be tbe very extremity of injustice and wrong. Tbe defendant cannot be permitted to do so, unless tbe claim of fraud in the settlement is made out.

Tbe other objections taken and urged in behalf of tbe defendant are, that there was never a valid delivery of the bond and mortgage; or, if technically delivered, it was upon an agreement wbicb was never performed on tbe part of tbe mortgagee, and therefore voidable at tbe election of the mortgagor; and that tbe delivery was obtained by fraud, and, this action being between tbe original parties, that fact may be shown to defeat a recovery. It is in connection witb these ob jectionstbat tbe point of fraud to defeat tbe compromise will be considered.

In tbe view we have taken of the objections thus urged, no separate examination of them is required. Tbe actual delivery of tbe bond and mortgage into the bands of Mr. Field, tbe mortgagee, who acted and received tbe same as tbe agent of tbe plaintiff, is not a fact in dispute. Tbe bond and mortgage were delivered by tbe defendant to Mr. Field, and by him tbe mortgage was immediately put upon record. But tbe delivery to him, as is claimed, was upon an agreement or condition, in the nature of a condition precedent to' tbe instruments having any effect in bis bands, that be was first to execute and cause to be recorded a power of attorney, as spoken of, to John Pottej’, and that be *489 was also to record the power of attorney from tbe plaintiff to himself by virtue of which he had executed and delivered the deed of the lands in her name. The deed of the lands was executed and acknowledged on the 25th of April, 1859, and recorded in the office of the register of deeds of Winnebago county on the next day. The dates of execution, acknowledgment and recording of the mortgage were the same. No power of attorney to Mr. Potter was ever made or recorded; and that from the plaintiff to Mr. Field was not recorded until the 11th day of June, 1869.

The position assumed by counsel for the defendant is, that Mr. Field was merely entrusted with the keeping of the papers for a short time, in which he was to make up his mind whether he would execute the power of attorney spoken of, to Mr. Potter ; and, if he concluded to do so, that then the mortgage and other papers were to be recorded, and the delivery and arrangement considered complete. It is claimed that he retained and recorded the mortgage in violation of this agreement, and so that there was never any valid and sufficient delivery to make it binding and effectual in law. Counsel have exhibited great industry and research, and have referred us to several adjudged cases, in which it seems to have been held that there may, under some circumstances, be what is termed a conditional delivery, even where the deed or other instrument is put into the hands or custody of the grantee or other person in whose favor the same may have been executed. Cases of this nature are undoubtedly rare and exceptional, yet it seems not impossible for them to arise. Circumstances may occur where the grantor is willing to make the grantee the mere custodian or keeper of a deed not yet ready or intended to be finally delivered. Circumstances may possibly occur where, from necessity, the grantor will do so, or it may happen from the great trust and confidence reposed by him in the honor and integrity of the grantee. As observed by counsel, it seems to rest in the discretion of the parties and to be competent for them to make what agree *490 ment they will, as between themselves, in relation to the effect of the deed when placed in the bands of the grantee, or otherwise that it is competent for the grantor, in case he chooses to take upon himself such risk, to make the grantee his agent or trustee for the mere purpose of holding the deed. Such seems to be the effect of some of the decisions cited, and, unless there is something in the principles and policy of the law which should forbid a deed or other instrument voluntarily delivered over or passed into the possession of the grantee or other person to whom executed, from being shown by parol evidence to have been otherwise than absolutely delivered, the position of law contended for by counsel for the defendant seems to be established. It may, however, still be a question, how far verbal testimony should be admitted, if admissible at all, for the purpose of defeating the deed or other instrument in the hands of the grantee who insists upon its validity and upon the delivery as absolute. It may be a question whether delivery to the grantee upon parol condition ought to be sanctioned or permitted at all. Counsel admit that the possession of the instrument is prima facie evidence of an unconditional delivery, but they say it is only prima facie, even in case of a deed of land. The holder and person to whom the delivery was made is described in the instrument as the grantee, and the effort to show by parol that such is not his real character, or that he is not what the instrument on its face purports to make and acknowledge him to be, but that he is, in truth and in fact, only the depository or bailee of the grantor, having the instrument in his hands for the purpose of safe keeping merely, or holding it subject to the performance of some ulterior promise, condition or agreement — such effort, we say, seems at first blush to savor very strongly of being one to contradict or vary the express terms of a written agreement by verbal testimony, or to control it by showing some inconsistent contemporaneous parol agreement, which it is well known the rules and principles of evidence will ‘not permit. The evidence here to show the al *491 leged condition or agreement was merely verbal, no writing to tbat effect baying been made or signed by tbe parties, and tbe testimony was received against tbe objection of tbe plaintiff. It becomes, therefore, a question of very great delicacy and importance, wbetber sucb testimony was admissible; and we forbear to express any definite opinion upon it. Assuming tbat parol testimony is admissible for sucb purpose, it is manifest tbat it should only be received and acted upon witb tbe greatest caution. In cases of doubt or conflict, preference should always be given to tbe written instrument as expressing tbe true agreement of tbe parties and tbe whole of it, and as having been unconditionally delivered. Tbe case would be one of that class, where, tbe proposition being to set aside or invalidate a written contract by evidence of a far less certain and reliable character than tbe writing itself, tbe greatest clearness and certainty of proof would be required. It would be like those cases where tbe object is to correct or reform a deed or other instrument on tbe ground of mistake, or to set aside or rescind it on tbe same ground, or to show tbat a deed absolute on its face was executed and intended to operate only as a mortgage, or to prove that tbe character or contents of an instrument were unknown to a party when be signed it, and tbat be was deceived and misled into executing it; in all which cases, as well as some others of a different kind, tbe rule is tbat tbe facts must be established beyond any reasonable controversy. Newton v. Holley, 6 Wis., 592 ; Lake v. Meacham, 13 id., 355; Fowler v. Adams, id., 458; Harrison v. The Juneau Bank, 17 id., 340; McClellan v. Sanford, 26 id., 595; Kent v. Lasley, 24 id., 654; Kellogg v. Steiner, 29 id., 626; Murphy v. Dunning, 30 id., 296; Blanchard v. McDougal, 6 id., 167; Knoll v. Harvey, 19 id., 99; Tiernan v. Gibney, 24 id., 190. Whatever might be thought as to tbe preponderance of tbe testimony here, were it a question where less strict proof was required, it can hardly be claimed, we think, tbat it fulfills tbe requirements of tbe above rule. There is, at all events, most clear and undeniable con *492 flict of testimony. Tbe defendant and two witnesses besides bimself testify to tbe condition or agreement, but tbeir testimony is not always very clear and positive, while in some particulars they are shown to have been clearly mistaken. They were testifying to a transaction long since passed by, and it is not at all surprising that they should have fallen into mistakes, or that their memories should be in some respects at fault. On the other hand, Mr. Field, the agent of the plaintiff, who transacted the business and was himself the person to whom the mortgage was given, flatly and positively contradicts and denies that there was any such condition or agreement connected with the delivery of the bond and mortgage. Mr. Field, if not a lawyer, appears to be a man accustomed to business, and testifies with clearness and intelligence. No effort is made to impeach him, and in several quite material points he is corroborated by proofs made of other facts. It is clear, we think, that the testimony does not attain that certainty and clearness which ought to be required in order to establish the facts contended for by the defendant.

But if we were not against the counsel for defendant upon the foregoing point, it is very clear that we should be compelled to hold against them upon the point that the defendant had not waived the condition or agreement, as he claims it to have been, long before the commencement of this action. The position of counsel is, that mere silence on the part of the defendant for any length of time, with knowledge by him that the condition had not been complied with, and also with the plaintiff’s deed to him of the land recorded and in his possession, would not operate as a waiver on his part of the condition. We understand the letter of the defendant to Mr. Field of July 19th, 1859, as being a distinct waiver of the condition as the defend ant then claimed it to be. He says: “You are probably not aware that this default in you invalidates, should we choose to so consider it, the whole settlement.” This was a clear intimation that the defendant did not then choose so to consider it, although *493 be asserted that it was in bis power to do so. If such bad been bis intention, that was the time for him to have made bis election. It is fully shown that at the time of writing this letter the defendant knew that no power of attorney to Mr. Potter bad been executed, and also that the letter of attorney from the plaintiff to Mr. Field had not been recorded. He testifies that be found “the Kercheval power was not recorded,” about two months after the settlement. Now, with full knowledge of those facts, it clearly appears to us, under the circumstances of this casej that mere silence on the part of the defendant for any considerable length of time — -here for the period of ten years and upwards— would constitute a waiver. Such knowledge, as it seems to us, coupled with a retention of the deed from the plaintiff and assertion of title under it, ought now to estop the defendant from insisting upon or taking any advantage of the condition, or of the fact that it was not performed. Such knowledge raised a duty on the part of the defendant, both moral and legal, if he intended to disavow the settlement because the condition had not been complied with, to notify the plaintiff of such intention, and to restore or offer to restore to her such title as he had acquired under the deed, in order that she might pursue her remedy by action before it became forever too late. There may be cases where mere silence or acquiescence without any notice given will not amount to a waiver; but they must be entirely different from this, where, instead of tacitly assenting to the state of affairs as they were and continued for years, and thus inducing a belief that he was content, the nature of the transaction was such as to require the party to speak out and plainly make known his dissent, if that had been his purpose and intention. Cases far more strong in favor of the party maintaining his silence than anything' which the facts of this case suggest, may be found, in which it has been held that such party had waived his own rights by his mere silence, or by failing to give notice of his dissent, at a time when by so doing loss or damage to the rights of third persons might have been saved *494 and prevented. See Ladd v. Hildebrant, 27 Wis., 135 , and cases there cited.

We are furthermore of opinion that the subsequent sales and conveyances of the lands, or of considerable portions of them, by the defendant to different purchasers likewise constituted a waiver of the condition. Such sales and conveyances were made with full knowledge of the facts touching the nonperformance of the alleged condition, and with no notice to the plaintiff of any disavowal of the settlement on that account.

Now, with regard to what is claimed to have been fraud- in the compromise, or in obtaining delivery of the bond and mortgage, it grows entirely out of the alleged neglect of Mr. Field to comply with the condition upon which it is said the bond and mortgage were delivered. It seems hardly necessary, after what has already been said, to remark that this cannot be tortured into fraud, or anything in the nature of fraud, which will vitiate the settlement or avoid the bond and mortgage in the hands of the plaintiff. Mr. Field testifies, with respect to the power of attorney from the plaintiff to himself not having been immediately recorded, that it was a mere omission, and no doubt it was so. It was for the interest of the plaintiff as well as the defendant that it should have been upon recor’d, and no bad or fraudulent motive can be imagined for its having been withheld. And as to the power of attorney to Mr. Potter, enough has also been said with respect to that.

Upon the whole case, therefore, we can see nothing upon which the defense set up can possibly stand, and are of opinion that the judgment of the court below dismissing the complaint should be reversed, and the cause remanded to that court with direction that the proper judgment of foreclosure and sale be entered in favor of the plaintiff, as required by law and the rules and practice of the circuit courts in such cases.

By the Court. — It is so ordered.