Sec 206

Hence it is settled that while a contract may be rescinded on the ground of an error of one party, induced or fraudulently taken advantage of by the other; or the fraud may be made the basis of an action for deceit; a contract based on mistake of both parties may be rectified, in our practice, by application to a court of equity.1 And a construction, adopted and acted on by both parties, will be regarded as worked into the contract, and, if not conflicting with its provisions, may be proved by parol, and a definite explanation thus given to ambiguous terms.2 Hence, rectification will be decreed on parol proof that the words used by the scrivener did not express the intention of the parties;3 and when, through a mistake even of law,4 the contract as executed fails to recite correctly the terms to which the parties had agreed.5 Whether the mistake be of fact, or of the application of fact to law, if it be bilateral rectification will be ordered.6 Even after an error in description of property has been carried through a series of deeds, it has been held, there being no laches, and the mistake being mutual, that the last vendee can obtain a decree of rectification against the original vendor.1 The case for rectification is strengthened when it is made to appear that the party against whom the relief is asked, after agreeing to the omitted terms, was cognizant of their subsequent omission from the document as engrossed, and was also cognizant of the fact that the other party was ignorant of the omission.2-The rule above stated will be applied to policies of insurance in all cases in which it plainly appears that stipulations which the parties had previously agreed to were omitted in the policy.3

Concurrent error ground for rectification of contract.

1 Story's Eq. Jur. 12th ed. sec 138 et seq.; Bispham's Eq. sec 191 ; Whart. on Ev. sec 933-4, 1021; Stephens v. Ins. Co., L. R. 8 C. P. 18; Druiff v. Parker, L. R. 5 Eq. 131; Hearn v. Ins. Co., 4 Cliff. C. C. 192; Lyman v. U. S., 17 Johns. 377; Nevius v. Dunlap, 33 N. Y. 676; Baker v. Massey, 50 Iowa, 399; Michel v. Tinsley, 69 Mo. 442; and cases cited in last section.

2 Wh. on Ev. sec 937; Forbes v. Watt, L. R. 2 Sc. & D. 214 ; Chicago v. Selden, 9 Wall. 50; Atlantic R. R. v. Bank, 19 Wall. 548 ; Reed v. Ins. Co., 95 U. S. 23; Fenderson v. Owen, 54 Me. 374; Stone v. Clarke, 1 Met. 378 ; Von Keller v. Schulting, 50 N. Y. 108; Caley v. R. R., 80 Penn. St. 363; Fryer v. Patrick, 42 Md. 516 ; Am. Ex. Co. v. Schier, 55 111. 140; West. R. R. v. Smith, 75 111. 496; and other cases cited Wh. on Ev. sec 937-8-9, 1021.

3 Canedy v. Marcy, 13 Gray, 373;.

Van Donge v. Van Donge, 23 Mich. 321; Kilmer v. Smith, 77 N. Y. 226; Huss v. Morris, 63 Penn. St. 367. 4 Supra, sec 199.

5 Oliver v. Ins. Co., 2 Curtis C. C. 277; Stockbridge Iron Co. v. Hudson Iron Co., 177 Mass. 290; McKay v. Simpson, 6 Ired. Eq. 452.

6 Supra, sec 198 ; Adams v. Stevens, 49 Me. 362 ; Jordan v. Stevens, 51 Me. 78; Brown v. Lamphear, 35 Vt. 252 ; Bruce v. Bonney, 12 Gray, 107; Woodbury Savings Bank v. Ins. Co., 31 Conn. 517; Hartford Ore Co. v. Miller, 41 Conn. 112; McKelway v. Armour, 2 Stock. Ch. 115; Gross v. Leber, 47 Penn. St. 520 ; Delaware Ins. Co. D. Gillett, 54 Md. 219 ; Irick v. Fulton, 3 Grat. 193; Miller v. Morse, 23 Mich. 365 ; Gelpoke v. Blake, 15 Iowa, 387 ; Jack v. Naber, 15 Iowa, 450 ; Loomis v. Hudson, 18 Iowa, 416 ; Wilder v. Lee, 64 N. C. 50; Lynam v. Califer, 64 N. C. 572.