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Lane v. Mathews

Supreme Court of Arizona

July 17, 1952

LANE et ux.
v.
MATHEWS

Affirmed.

Nasib Karam, of Nogales, for appellants.

Norman Herring, of Tucson, for appellee.

Stanford, Justice. Udall, C. J., and Phelps, J., concurring. La Prade, Justice (dissenting). De Concini, Justice (dissenting).

OPINION

Stanford, Justice.

Page 1026

[74 Ariz. 203] The original opinion in this case was handed down on March 31, 1952 and reported in 73 Ariz. 435, 242 P.2d 557. Appellee timely filed a motion for rehearing which raised doubt as to the correctness of the original decision. After consideration of appellee's motion, the motion for rehearing was granted thereby nullifying the original opinion. In order to better understand the principles involved in this case, we again relate some of the necessary facts.

This action arose out of the alleged breach of the conditions and undertakings of a farm lease. E. C. Lane and Millie Lane, appellants and defendants below, hereinafter styled lessors, own a farm near McNeal, Arizona. Sometime during the month of February, 1948, Bob Mathews, appellee and plaintiff below, hereinafter styled lessee, entered into negotiations with lessors to lease the farm on a percentage basis of the crop grown. The terms to be later incorporated in a written lease were discussed by the parties at the farm in the presence of J. M. Jessen, lessors' attorney, who resides and practices law in California. Jessen made a written memorandum of the terms agreed upon and on his return to California drew up a lease and mailed three copies to lessors, two of which were to be signed by the respective parties. Lessors read the lease and then, without signing it, delivered the lease to lessee for his signature. Lessee, who can neither read nor write, had the agreement read to him. Not being satisfied with the terms thereof, lessee took the agreement to Alfred Putts, his financial backer, for inspection. Putts and lessee took the lease to Lloyd Helm, a Douglas attorney, and had the last page changed to embody the terms and conditions which they contend had been agreed upon by the parties. Helm's secretary removed the original last page, number seven, and substituted the new page seven embodying the changes. The secretary also copied the secreterial marks on the new page as they appeared on the original six pages of the lease, i. e., JMJ:MSJ and the date 3/16/48, which was also on the original seven pages. Lessee then signed the lease and returned it to lessors without mentioning the changes which had been made on the last page. Lessor E. C. Lane testified that he did not reread the lease before signing it but stated that he checked the pages noting the identifying marks on the bottom of each page. After so inspecting the lease, lessors signed it before a notary public in their attorney's office in California.

Lessee brought this action for damages to the cotton crop as a result of lessors' [74 Ariz. 204] refusal to keep the water pumps and engines in good repair, as they were required to do under the terms of the signed written lease. Due to lack of irrigation, approximately 200 acres of cotton were damaged. Lessors answered and counterclaimed, praying for reformation of the agreement to exclude the provisions in the written lease which were added by lessee on the last page and for damages to their farm machinery. Their defense was fraud or mutual mistake. The trial was before a jury in two phases, the first, on the issues of fraud or mutual mistake, and the second on the question of the breach of the lease. At the close of the first phase of the trial the court instructed the jury to return a verdict in favor of lessee on the issue of mutual mistake and submitted the following interrogatories on the issue of fraud:

"Did E. C. Lane and Millie Lane know that the last page of the farm lease had been changed before they signed it?"
Answer -- "No."
"If your answer to the above interrogatory numbered one (1) is no, then: did E. C. Lane and Millie Lane act as reasonably prudent persons in failing to read the last page of the Farm Lease?"
Answer -- "Yes."
"Under the instructions of the court, did E. C. Lane and Millie Lane sign and execute the farm lease as the

Page 1027

result of fraud on the part of Bob ...

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