This section is from the book "Popular Law Library Vol7 Equity Jurisprudence, Trusts, Equity Pleading", by Albert H. Putney. Also available from Amazon: Popular Law-Dictionary.
Deeds, contracts or other written instruments, inter-vivos, will be reformed by equity, when on account of mutual mistake, or mistake on one side and fraud on the other, such instruments do not represent the true intention of the parties.
This form of equitable relief is much more effective than any which can be obtained at common law in such cases. A common law court can declare a contract either valid or invalid, but cannot enforce it according to the terms intended by the parties.
A contract or other instrument may be reformed at the suit of any of the parties to the original contract, or anyone claiming under them.3
A contract or other instrument may be reformed as against any of the original parties, or anyone claiming under them, except bona fide holders for value without notice.4
Parol evidence is admitted to prove mistake even although the instrument is one which the statute of frauds requires to be in writing.5
2 Sharon vs. Terry, 36 Fed., 337. 3 East vs. Peden, 108 Ind., 92;
8 N. E., 722. 4 Hyland vs. Hyland, 19 Or., 51;
23 Pac, 811. 5 Beardsley vs. Duntley, 69 N. Y., 577; 3 Keener Eq. Cas., 344.
Some cases hold that parol evidence can only be admitted for the purpose of taking away from the contract, not for the purpose of adding to it. See Glass vs. Hulbert, 102 Mass., 24; 3 Keener Eq. Cas., 327.