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.
Utah. Deseret National Bank v. Din-woodey, 17 Utah 43, 53 Pac. 215.
parties execute an irrevocable power of attorney, thinking it will operate as a mortgage;2 or a bill of sale, thinking that it will operate as a chattel mortgage;3or a contract for the surrender of a lease, thinking that it will operate as an option, to be accepted at the election of one party;4 where an insurance policy is taken in the name of a mortgagee, who applies for it, thinking that it will operate as if taken out by the owner of the building with a clause making the loss payable to the mortgagee; 5 or in the name of the husband who effects it, thinking that it will protect the interest of his wife, the real owner of the building;6 or payable to the owner who takes it, thinking that it will protect the interest of the contractor who is erecting the building;7 or a contract which a party to it executes, believing that it does not make him liable as partner.8 So if the parties know and intend the very words used, the fact that such words do not pass the estate intended, owing to mistake of law, does not justify reformation. Thus where a deed is made to A and his "minor heirs," under the belief that "heirs" is equivalent to "children";9 or A deeds land to B, his daughter, and C, her husband, "and their bodily heirs," thinking that this includes all the heirs of her body;10 or A conveys all his interest in certain realty to B, thinking that he has only a life interest, whereas he has a fee,11 no relief can be given. Rescission is also refused in cases of this sort. Thus where A deeded a right of way to a railroad, not knowing that it would prevent him from recovering damages inflicted on the rest of his property by the operation of the railroad, he can not avoid his contract, at least where the railroad company did not know of his mistake and take advantage of it.12
Washington. Phillips v. Port Town-Bend Lodge, 8 Wash. 529, 36 Pac. 476
Wisconsin. St. Clara Female Academy v. Ins. Co., 93 Wis. 57, 66 N. W. 1140.
2 Hunt v. Rousmanier, 21 U. S. (8 Wheat.) 174, 5 L. ed. 589.
3Hershey v. Luce, 56 Ark. 320, 323, 19 S. W. 963, 20 S. W. 6. 4 Ohlander v. Dexter, 97 Ala. 476, 12 So. 51.
5 Ordway v. Chace, 57 N. J. Eq. 478, 42 Atl. 149.
6Schmid v. Ins. Co. (Tenn. Ch. App.), 37 S. W. 1013.
7 St. Clara Female Academy v. Ins. Co., 93 Wis. 57, 66 N. W. 1140.
8 Woolworth v. McPherson, 55 Fed-558.
9 Seymour v. Bowles, 172 111. 521, 50 N. E. 122.
10Atherton v. Roche, 192 111. 252, 55 L. R. A. 591, 61 X. E. 357.
11 Campbell v. Newman, 51 Okla. 121, 151 Pac. 602.
12Eldridge v. R. R., 88 Me. 191, 33 Atl. 974.
If on the other hand, there has been a valid oral contract prior to the written contract which the parties have failed to reduce to writing correctly because of mistake as to the legal effect of the words used in the written contract, reformation can be had and the written contract thus made to conform to the oral agreement.13 The intention of the parties may be expressed in writing by many different combinations of words, and if the real intention of the parties is not set forth in the combination which they have inserted in the contract, reformation may be given without regard to the motive which caused such mistake.14 Thus where A and B agreed that a certain debt should bear interest, but omitted reference thereto from the note given for such debt, thinking it would bear interest without a provision therefor,15 or agreed orally that B would accept such amount of tool steel prior to January 1, 1890, as he needed in his work, not to exceed fifteen tons, and by mistake as to the effect of the written contract worded it so that B was to take fifteen tons of tool steel prior to January 1, 1890,16 reformation may be had to make the written contract express the oral agreement. So if the contract provides for a conveyance to A and B, and by mistake as to the legal effect of the deed conveyance is made to A only,17 or if the contract requires a conveyance of an undivided four-fifths interest in certain realty and by mistake as to its legal effect the grantee accepts a deed which conveys only "three-fifths" thereof,18 reformation may be had. Where an instrument intended as a receipt for an advancement has by mistake as to the legal effect thereof been drawn in the form of a note, reformation may be given.19 A written agreement "to receipt" to the maker of a note "for note given me to-day," may be reformed so as to conform to the real agreement to receipt for the obligation represented by the note and to cancel it upon performance of certain specified conditions.20 Where specific property is agreed upon, a misdescription thereof may be reformed even if the parties know the very form of expression which they have used to describe it.21 Reformation will be given where a mortgage is drawn covering "fixtures and furniture," under the belief that such description includes property which in law comes under neither of these terms.22 So where the parties agreed on specific property to be covered by insurance, a mistake in describing it, due to a mistake as to the effect of the terms used in describing it, may be corrected by reformation.23 Where a husband and wife have agreed to convey a homestead and by mistake as to the legal effect of the conveyance the husband alone executes it, reformation may be had.24 In a number of cases it is said that equity will not reform contracts or deeds for a mistake of law.25 In many of the cases in which this principle is laid down, the courts avoid its application to the particular case and give reformation on other grounds. In some jurisdictions it is said that this principle "is confined to mistakes as to the general rules of law, but has no application to mistakes of persons as to their own private rights and interests."26 By the application of this principle a mistake of a non-resident as to the law of the forum is regarded as a mistake of fact.27 Accordingly, a non-resident may have reformation of a written contract so as to make it conform to the oral contract as to the payment of taxes by the grantee, although such mistake was due to a mistake as to the law of the place where the land was situated.28 There are, however, cases in which reformation has been denied where the parties have deliberately chosen language which does not express their intention as embodied in their oral contract, and where the mistake is not as to the words used, but only as to their legal effect. Reformation has been denied where a guardian under these circumstances executes a mortgage intended to bind his ward's property only, and instead makes himself personally liable.29 So if the parties intend to convey a fee, but deliberately select words which pass a lesser estate, reformation has been denied.30
13 United States. Hunt v. Rous-manier, 26 U. S. (1 Pet.) 1, 7 L. ed. 27.
Alabama. Skidmore v. Stewart, - Ala. - , 75 So. 1.
Arkansas. Spaulding Manufacturing Co. v. Godbold, 92 Ark. 63, 29 L. R. A. (N.S.) 282, 121 S. W. 1063.
Connecticut. Palmer v. Ins. Co., 54 Conn. 488, 9 Atl. 248; Park v. Blod-gett, 64 Conn. 28, 29 Atl. 133.
Georgia. Loudermilk v. Loudermilk, 98 Ga. 780, 25 S. E. 927; Dolvin v. American Harrow Co., 125 Ga. 699, 28 L. R. A. (N.S.) 785, 54 S. E. 706.
Iowa. Stafford v. Fetters, 55 Ia. 484, 8 N. W. 322; Reed v. Root, 59 Ia. 359, 13 N. W. 323; Lee v. Percival, 85 Ia. 639, 52 N. W. 543; Williams v. Ever-ham, 90 Ia. 420, 57 N. W. 901; Williams v. Hamilton, 104 la. 423, 65 Am. St. Rep. 475, 73 N. W. 1029; Turpin v. Gresham, 106 Ia. 187, 76 N. W. 680, Pierce v. Houghton, 122 Ia. 477 [sub nomine, Fierce v. Houghton, 98 N. W. 306]; Bonbright v. Bonbright, 123 la. 305, 98 N. W. 784; Hyde Park Investment Co. v. Glen wood Coal Co., 170 Ia. 593, 153 N. W. 181.
Massachusetts. Sparks v. Pittman, 51 Mass. 511; Holdsworth v. Tucker, 143 Mass. 369, 9 N. E. 764.
Michigan. McGraw v. Muma, 164 Mich. 117, 129 N. W. 20.
Minnesota. Wall v. Meilke, 89 Minn. 232, 94 N. W. 688; Nelson v. Vassen-den, 115 Minn. 1, 35 L. R. A. (N.S.) 1167, 131 N. W. 794.
Missouri. Corrigan v. Tiernay, 100 Mo. 276, 13 S. W. 401; Michigan Buggy Co. v. Woodson, 59 Mo. App. 550.
New Hampshire. Eastman v. Provident, etc., Association, 65 N. H. 176, 23 Am. St. Rep. 29, 5 L. R. A. 712, 18 Atl. 745.
New York. Maher v. Ins. Co., 67 N. Y. 283; Avery v. Society, 117 N. Y. 451, 23 N. E. 3.
North Carolina. Lutz v. Thompson, 87 N. Car. 334; Kornegay v. Everett, 99 N. Car. 30, 5 S. E. 418.
Rhode Island. Sprague v. Thurber, 17 R. I. 454, 22 Atl. 1057.
Vermont. Beardsley v. Knight, 10 Vt. 185, 33 Am. Dec. 193.
Wisconsin. Wisconsin, etc., Bank v. Mann, 100 Wis. 596, 76 N. W. 777 [questioning, Neff v. Rains, 33 Wis. 689].
14 Nelson v. Vassenden, 115 Minn. 1, 35 L. R. A. (N.S.) 1167, 131 N. W. 794.
15 Loudermilk v. Loudermilk, 98 Ga. 780, 25 S. E. 927.
16 Park v. Blodgett, 64 Conn. 28, 29 Atl. 133.
17Corrigan v. Tiernay, 100 Mo. 276, 13 S. W. 401.
18 Parish v. Camplin 139 Ind. 1, 37 N. E. 607.
19Hausbrandt v. Hofler, 117 Ia. 103, 94 Am. St. Rep. 289, 90 N. W. 494.
20 Dolvin v. American Harrow Co., 125 Ga. 699, 28 L. R. A. (N.S.) 785, 54 S. E. 706.
21 Walden v. Skinner, 101 U. S. 577, 25 L. ed. 963; Eberle v. Heaton, 124 Mich. 205, 82 N. W. 820; Jeikins v.
Jenkins University, 17 Wash. 173, 50 Pac. 785 [modifying on rehearing, 17 Wash. 160, 49 Pac. 247]; State v. Lo-renz, 22 Wash. 289, 60 Pac. 644.
22 Ryder v. Ryder, 19 R. I. 188, 32 Atl. 919.
23Maher v. Ins. Co., 67 N. Y. 283.
24 Whitmore v. Hay, 85 Wis. 240, 39 Am. St. Rep. 838, 55 N. W. 708.
25Louis Werner Sawmill Co. v. Ses-soms, 120 Ark. 105, 179 S. W. 185; Schlosser v. Nicholson, 184 Ind. 283, 111 N. E. 13.