This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Reformation is given either (a) when the mistake is mutual or (b) when there is mistake on the one side and fraud or unfair dealing on the other. By mutual mistake is meant that the parties must have come to an actual oral agreement before they have attempted to reduce it to writing, which attempt fails by reason of mistake, and reformation enforces the original contract. The rule that mistake in expression must be mutual means therefore that to obtain reformation the parties must show that there was a valid contract between them, which contract is not correctly set forth in the writing to be reformed.1 In granting reformation, therefore, equity is not making a new contract for the parties, but is establishing and perpetuating the real contract between the parties which, under the technical rules of law, could not be enforced but for such reformation.2 On the other hand, reformation is often sought where A intends to have a certain stipulation in the contract, but this intent has not been communicated to B, or B has not assented thereto In such case, whether or not A can have rescission,3 he cannot have the contract reformed so as to express his own uncom-municated intention, or to express his proposition to which B has not assented, even if A thought that such term was incorporated in the written contract.4 Thus where the grantee assumes a
1See Ch. LVI.
2 See Sec. 1207-1213.
3 See Sec. 1214.
4 Newton v. Wooley, 105 Fed. 541; Brown v. Meserve, 91 Fed. 229; 33 C. C. A. 472; Kentucky, etc., Association v. Lawrence, 106
Ky. 88; 49 S. W. 1059; Lindley v. Sharp, 7 T. B. Mon. (Ky.) 248; Conner v. Groh, 90 Md. 674; 45 Atl. 1024; Sidney School-Furniture Co. v. School District, 130 Pa. St. 76; 18 Atl. 604.
1 Henkle v. Assurance Co., 1 Ves. Sr. 317; Townshend v. Stangroorn, 6 Ves. Jr. 328; Shelburne v. Inehi-quin, 1 Bro. Ch. 338; Stone v. Godfrey, 5 DeG. M. & G. 76; Haddon v. Neighbarger, 9 Kan. App. 529; 58 Pac. 568; Wheel Co. v. Miller (Ky.), 50 S. W. 62; Conner v. Groh, 90 Md. 674; 45 Atl. 1024; Ludington v. Ford, 33 Mich. 123; Benn v. Pritchett, 163 Mo. 560; 63 S. W. 1103; Scheer v. Scheer, 148 Mo. 447; 50 S. W. Ill; affirming 67 Mo. App. 371; Nebraska, etc., Co. v. Ignowski, 54 Neb. 398; 74 N. W. 852; Wilson v. Wilson, 23 Nev. 267; 45 Pac. 1009; Green v. Stone, 54 N. J. Eq. 387; 55 Am. St. Rep. 577; 34 Atl. 1099; reversing 32 Atl. 706; Ray v. Durham County, 110 N. C. 169; 14 S. E. 646; Diman v. R. R. Co., 5 R. I. 130; Deseret National Bank v. Din-woodey, 17 Utah 43; 53 Pac. 215; Robinson v. Braiden, 44 W. Va. 183; 28 S. E. 798.
2Roszell v. Roszell, 109 Ind. 354; 10 N. E. 114; Welshbillig v. Dien-hart, 65 Ind. 94.
3 See Sec. 71 et seq.
4Hearne v. Ins. Co., 20 Wall (U. S.) 488; Tyson v. Chestnut, 100 Ala. 571; 13 So. 763; McGuigan v. Gaines, 71 Ark. 614; 77 S. W. 52; Ward v. Yorba, 123 Cal. 447; 56 Pac. 58; Loftus v. Fischer, 106 Cal. 616; 39 Pac. 1064; Crane v. McCor-mick, 92 Cal. 176; 28 Pac. 222; Bowman v. Besley, 122 la. 42; 97 N. W. 60; Williams v. Hamilton, 104 la. 423; 65 Am. St. Rep. 475; 73 N. W. 1029; Bigelow v. Wilson, 99 la. 456; 68 N. W. 798; Simpson v. Kane, 98 la. 271; 67 N. W. 247; Breja v. Pryne, 94 la. 755; 64 N. W. 669; Buckley v. Frankfort (Ky.), 44 S. W. 139; J. G. Mat-tingly Co. v. Mattingly. 96 Ky. 430; 27 S. W. 985; rehearing denied 31 S. W. 279; Byrne v. Gunning, 75 Md. 30; 23 Atl. 1; Whit-worth v. Lowell, 178 Mass. 43; 59 specific mortgage, and a second mortgage exists of which the grantor was in ignorance when he executed the conveyance, the deed will not be reformed so as to require the grantee to assume such second mortgage.5 Thus where A intended that a clause should be inserted in a contract allowing him to draw certain additional funds,6 or providing for a mortgage on land sold,7 or that a certain clause in the printed form of the contract should be stricken out,8 or Where A meant to have an assignment made to B and himself jointly and by inadvertence had it made to B alone,9 or where A thinks that the price fixed in the contract is for a part of the buildings contracted for, when in fact it is for all the buildings,10 or thinks that certain goods are to be invoiced at the actual wholesale cost, when the contract provides for invoice "at wholesale cost as shown by cost marks on the goods,"11 or that the area of a lot, which he offers for sale, is less than it really is, so that he offers it for sale for less than it is worth,12 or that land conveyed by a mortgage does not include certain lots actually covered by it,13 or that the amount of goods covered by his order is different from that expressed therein,14 or that a deed to him does not contain a clause whereby he assumes a mortgage, the grantor not knowing of such mistake,15 or where A thinks that he is buying from B a larger tract than B thinks he is selling,16 he cannot have the contract reformed to express his intention if B did not acquiesce therein. So a term to which B did not assent and which was inadvertently omitted from the written contract cannot be inserted by reformation though A had offered such term and it was accepted by B's attorney, since the attorney had no authority to do anything but advise B, and he did not in fact, communicate such offer to B.17 So if there is a mistake as to the identity of the realty conveyed,18 or leased,19 rescission may be had in a proper case but not reformation. Reformation is even more clearly denied where one party believes that he will receive more than the contract provides for and the adversary party does not know of such mistake. Thus A agreed to convey to B, four acres along a section line. B assumed that this excluded the area of a highway along such line, though there was nothing in the contract or negotiations to warrant such belief. Reformation was denied.20 Even if each party had intended that certain realty should be included in a given conveyance, reformation will not be given if such intention was not communicated by each to the other.21 Still less can the erroneous understanding of the parties after the execution of a contract, as to the legal effect thereof, give the right to reformation.22
N. E. 760; Chute v. Quiney, 156 Mass. 189; 30 N. E. 550; Page v. Higgins, 150 Mass. 27; 5 L. R. A. 152; 22 N. E. 63; Ocean Beach Association v. Trust Co. (N. J. Eq.), 48 Atl. 559; Green v. Stone, 54 N. J. Eq. 387; 55 Am. St. Rep. 577; 34 Atl. 1099; reversing 32 Atl. 706; Miller v. Ins. Co., 42 N. J. Eq. 459; 7 Atl. 895; Atkinson v. Far-rington Co. (N. J. Eq.), 28 Atl. 315; Harbeck v. Pupin, 145 N. Y. 7©; 39 N. E. 722; Syms v. New York, 105 N. Y. 153; 11 N. E. 369; Mitchell v. Holman, 30 Or. 280; 47 Pac. 616; (citing Kleinsorge v. Rohse, 25 Or. 51; 34 Pac. 874; Epstein v. Ins. Co., 21 Or. 179; 27 Pac. 1045; Stephens v. Murton. 6 Or. 193; Lewis v. Lewis, 5 Or. 169) ; Phillips v. Port Townsend Lodge, 8 Wash. 529; 36 Pac. 476;
Kropp v. Kropp, 97 Wis. 137; 72 N. W. 381; Coates v. Buck, 93 Wis. 128; 67 N. W. 23.
5 Moore v. Graves, 97 la. 4; 65 N. W. 1008.
6 Mitchell v. Holman, 30 Or. 280; 47 Pac. 616.
7Breja v. Pryne, 94 la. 755; 64 N. W. 669.
8 Crane v. McCormick, 92 Cal. 176; 28 Pac. 222.
9 Kropp v. Kropp, 97 Wis. 137; 72 N. W. 381.
10Whitworth v. Lowell, 178 Mass. 43; 59 N. E. 760.
11 Simpson v. Kane, 98 la. 271; 67 N. W. 247.
12 Chute v. Quiney, 156 Mass. 189; 30 N. E. 550.
13 Ocean Beach Association v. Safe Deposit Co. (N. J. Eq.), 48 Atl. 559.
14Coates v. Buck, 93 Wis. 128; 67 N. W. 23.
15 Green v. Stone. 54 N. J. Eq. 387; 55 Am. St. Rep. 577; 34 Atl. 1099; reversing 32 Atl. 706; distinguishing Bull v. Titsworth, 29 N. J. Eq. 73, on the ground that in the earlier case the grantee had demanded rescission promptly.
16 Page v. Higgins, 150 Mass. 27; 5 L. R. A. 152; 22 N. E. 63. The court said that this was "not one and the same mistake . . . but two different mistakes." In this case A and B owned tracts near each other but not adjoining, and A thought that B owned an intermediate tract, while B thought C owned it. Hence in their negotiations both referred to B tract as beginning at A's boundary. A drew the deed and inserted the description and B, being illiterate thought that the land conveyed was what he had agreed to sell, namely "what he owned" east of a given wall.
17 Ward v. Yorba, 123 Cal. 447; 56 Pac. 58.
18 Page v. Higgins, 150 Mass. 27; 5 L. R. A. 152; 22 N. E. 63; Stewart v. Gordon, 60 O. S. 170; 53 X. E. 797.
19 Morris v. Kettle, 56 N. J. Eq. 826; 34 Atl. 376.
20 Clark v. Mossman, 58 Neb. 87; 78 N. W. 399; (citing Huyck v. Andrews, 113 N. Y. 81; 10 Am. St. Rep. 432; 3 L. R. A. 789; 20 N. E. 581; Wilson v. Cochran, 46 Pa. 229; Scribner v. Holmes, 16 Ind. 142; Kutz v. McCune, 22 Wis. 628; 99 Am. Dec. 85).