May one recover, in an action at law, money paid in excess of what was justly due the defendant, where it appears that such excess was called for by the terms of a written contract which is valid and enforceable at law but which, because of a mistake in its formation, does not express the actual intention of the parties? If the mistake is such that a court of equity would not reform the contract, it is clear that there can be no relief at law. At least, it would be an absurd anomaly to compel a defendant to restore that which the courts of both law and equity would have assisted him to obtain. But what if the mistake is of such a character that the plaintiff is entitled to a reformation of the contract, and therefore by a resort to equity might successfully have resisted the collection of the sum sought to be recovered ?
392, (overpayment on contract to buy land due to mistake in survey); Calkins v. Griswold, 1877, 11 Hun (N. Y. Sup. Ct.) 208, (overpayment for grapes under mistake as to quantity); Ransom v. Masten, 1889, 52 Hun (N. Y. Sup. Ct.) 610; 4 N. Y. Supp. 781, (overpayment due to fact that defendant filled contract calling for "pounds" with "packages" weighing ½ lb.); Payne v. Witherbee, Sherman & Co., 1909, 132 App. Div. 579; 117 N. Y. Supp. 15, (overpayment due to mistake in computing amount due under contract for electric power); Simms v. Vick, 1909, 151 N. C. 78; 65 S. E. 621; 24 L. R. A. (N. S.) 517, (overpayment on note due to fact that payor had forgotten previous payment); Houston, etc., R. Co. v. Hughes, 1911, Tex. Civ. App. ; 133 S. W. 731, (overpayment of contractor for construction of road bed); Noyes v. Parker, 1892, 64 Vt. 379; 24 Atl. 12, (overpayment under mistake as to quantity of butter delivered).
Property: Inman v. White Lumber Co., 1910, 14 Cal. App. 551; 112 Pac. 560, (ties delivered in excess of number required by contract); Johnson v. Saum, 1904, 123 la. 145; 98 N. W. 599, (mare delivered in payment of debt in ignorance of fact that part of debt had previously been paid); Caldwell v. Dawson, 1862, 4 Metc. (61 Ky.) 121, (delivery of charcoal in excess of amount called for by contract); Pittsburg Plate Glass Co. v. McDonald, 1903, 182 Mass. 593 ; 66 N. E. 415, (plaintiff by mistake furnished more glass than was called for by contract: no recovery, chiefly on the ground that the defendant received no benefit).
11897, 69 Vt. 521; 38 Atl. 267.
2 McClary v. Michigan, etc., R. Co., 1897, 102 Mich. 312; 60 N. W. 695.
Relief at law has been denied in such cases upon the ground that, except in a proceeding in equity for the reformation of the contract, parol evidence cannot be admitted to show that the parties intended to make a contract different from that set out in the instrument:
Boyce v. Wilson, 1869, 32 Md. 122: Action for money had and received. The plaintiff agreed to buy from the defendant certain real estate and mining stocks, at certain valuations. According to the testimony of the plaintiff, they made a calculation of the amount the plaintiff was to pay and found it to be $90,322. The agreement was then reduced to writing, but the plaintiff subsequently, and after paying the consideration set out in the contract, discovered that the calculation had been, made on an erroneous basis and that the sum which ought to have been expressed was $81,250. Maulsby, J. (p. 127): "Can the parol evidence vary the written contract, by striking therefrom the consideration expressed in it, and inserting in its stead another reduced consideration? The plaintiff has made no mistake which a court of law can correct, if he has paid only that sum which his contract obliged him to pay. He cannot recover at law a sum paid by mistake, unless that sum were over and above what he had contracted to pay. . . . The written contract may not have been in accordance with the intention of the parties. It may have expressed, by mistake, one consideration, when the real intention out of mind at the moment of its execution, was that it should have expressed another. But, whatever may have been the mistake, or how-produced, it can find no recognition until the written contract shall have been reformed and made to conform to the intention of the parties, and this a court of law cannot effect. A court of equity alone can reform a written contract."1
1 For the same reason it is held in some jurisdictions that where an agreement is made for the sale of land and a mistake as to the price is carried into the recitals of the deed of conveyance, money paid as a result of such mistake cannot be recovered in an action at law. Carter v. Beck, 1867, 40 Ala. 599; Williams v. Hathaway, 1837, 19 Pick. (Mass.) 387; (cf. Cardinal v. Hadley, 1893, 158 Mass. 352; 33 N. E. 575); Howes v. Barker, 1808, 3 Johns. (N. Y.) 506; 3 Am. Dec. 526, (but see, contra, Wilson v. Randall, 1876, 67 N. Y. 338); Farmers', etc., Bank v. Galbraith, 1849, 10 Pa. St. 490; 51 Am. Dec. 498; Kreiter v. Bomberger, 1876, 82 Pa. St. 59; 22 Am. Rep. 750. In Howes v. Barker, supra, Chief Justice Kent said (p. 510): "I confess that I have struggled hard, and with the strongest inclination, to see if the action for money had and received would not help the plaintiff in this case; but I cannot surmount the impediment of the deed, which the plaintiff has accepted from the defendant, and which contains a specific consideration in money, and the quantity of acres conveyed, with the usual covenant of seisin. Sitting in a court of law, I think I am bound to look to that deed, as the highest evidence of the final agreement of the parties, both as to the quantity of the land to be conveyed, and the price to be given for it. If there be a mistake in the deed, the plaintiff must resort to a court of equity, which has had a long established jurisdiction in all such cases; and where even parol evidence is held to be admissible to correct the mistake."
In other jurisdictions the deed is not regarded as concluding the parties as to the consideration agreed to be paid: Solinger v. Jewett, 1865, 25 Ind. 479; 87 Am. Dec. 372 ; (quoted with approval in Wolcott v. Frick, 1907, 40 Ind. App. 236: 81 N. E. 731); Goodspeed v. Fuller, 1858, 46 Me. 141; 71 Am. Dec. 572; Cardinal v. Hadley, 1893,158 Mass. 352; 33 N. E. 575 (cf. Williams v. Hathaway, 1837, 19 Pick. (Mass.) 387); White v. Miller, 1850, 22 Vt. 380; Butt p. Smith, 1904, 12 Wis. 566; 99 N. W. 328; 105 Am. St. Rep. 1039, (cf. Ohlert v. Alderson, 1893. 86 Wis. 433 ; 57 N. W. 88). In White v. Miller, supra, the court said (p. 386): "The purpose, for which the deed is made, is not to state the contract between the parties in regard to the terms of the purchase, but to pass the title to the land. The deed is not, strictly speaking, an agreement between the grantor and the grantee. It is executed by the grantor alone, and is a declaration by him, addressed to all mankind, informing them that he thereby conveys to the grantee the land therein described. The object is to pass the title, - not to declare the terms upon which the land had been old and the mode in which payment was to be made. ... It is not intended to say, that the terms of a contract of sale may not be recited in the deed; and when the pression of the intent, and it cannot be varied by parol; but when the contract rests in parol the intent of the parties may be shown by oral proof, and when the intent is ascertained it is to control."
To this argument Professor Keener replies that the parol evidence is introduced not for the purpose of varying the terms of the contract but merely for the purpose of showing that by reason of a mistake in its formation, the retention by the defendant of a certain sum of money, paid to him according to its terms, is inequitable.1 Conceding the soundness of this limitation of the parol evidence rule, the objection remains that to grant relief is in effect to reform the instrument in an action at law. In jurisdictions where equitable defenses are allowed at law, this objection may not be substantial; but it would be manifestly absurd for a court of law to refuse to listen to evidence of the mistake when offered as a defense to an action to enforce the contract, and forthwith, in an action for money had and received brought by the defendant in the former action, admit the evidence and decree restitution.