Bowers v. Bennett

• Decision Date: 12 March 1917
• Citation: 30 Idaho 188,164 P. 93
• Parties: WILLIAM C. BOWERS, Appellant, v. RICHARD BENNETT, Sr., Respondent
• Court: Idaho Supreme Court

164 P. 93

30 Idaho 188

WILLIAM C. BOWERS, Appellant, v. RICHARD BENNETT, Sr., Respondent

Supreme Court of Idaho

March 12, 1917

Rehearing Denied April 14, 1917.

APPEAL from the District Court of the Fourth Judicial District, for Elmore County. Hon. Chas. O. Stockslager, Judge.

Action for damages and cross-complaint for reformation of contract. Judgment for defendant. Affirmed.

Judgment affirmed. Costs awarded to respondent. Petition for rehearing denied.

Richards & Haga and McKeen F. Morrow, for Respondent.

Where there is any substantial evidence to support the findings of the trial court, they will not be disturbed on appeal. (Smith v. Faris-Kesl Const. Co., 27 Idaho 407, 150 P. 25; Bower v. Moorman, 27 Idaho 162, 147 P. 496; Pomeroy v. Gordan, 25 Idaho 279, 137 P. 888, and cases cited; Brown v. Grubb, 23 Idaho 537, 130 P 1073.)

A party seeking reformation of a contract is not required to establish his case beyond a reasonable doubt, and the findings will not be disturbed on appeal, even though the evidence is conflicting. (Panhandle Lumber Co. v Rancour, 24 Idaho 603, 135 P. 558; Sullivan v Moorhead, 99 Cal. 157, 33 P. 796; Hutchinson v. Ainsworth, 73 Cal. 452, 2 Am. St. 823, 15 P. 82; Wilson v. Moriarty, 88 Cal. 207, 211, 26 P. 85; Home & Farm Co. v. Freitas, 153 Cal. 680, 96 P. 308.)

Parol evidence is admissible to supply terms omitted from writing by mistake, and findings based thereon will be sustained even though the evidence is conflicting. (Jarrett v. Prosser, 23 Idaho 382, 130 P. 376; 2 Pomeroy Eq. Jur., secs. 858, 859; Walden v. Skinner, 101 U.S. 577, 25 L.Ed. 963; Gillespie v. Moon, 2 Johns. Ch. (N. Y.) 585, 7 Am. Dec. 559.)

The conditions on which a deed or other instrument is deposited in escrow may rest in parol or be partly in parol and partly in writing, and the rule that a written contract must be taken to contain the entire agreement of the parties has no application in such cases. (11 Am. & Eng. Ency. Law, 334; Gaston v. City of Portland, 16 Ore. 255, 19 P. 127; Stanton v. Miller, 58 N.Y. 192; Fred v. Fred (N. J.), 50 A. 776; Minnesota & Oregon Land & T. Co. v. Hewitt Inv. Co., 201 F. 752, Nichols v. Oppermann, 6 Wash. 618, 34 P. 162; Cannon v. Handley, 72 Cal. 133, 13 P. 315; Bronx Inv. Co. v. National Bank of Commerce, 47 Wash. 566, 92 P. 380.)

Where a written instrument is drawn and executed which is intended to carry into execution a parol agreement, but by mistake of the draftsman, either as to fact or law, it does not fulfill or violates such oral agreement, equity will correct the writing so that it will conform to the agreement, unless the mistake was willful or fraudulent on the part of the party seeking reformation. (Christensen v. Hollingsworth, 6 Idaho 87, 96 Am. St. 256, 53 P. 211; Panhandle Lumber Co. v. Rancourt, 24 Idaho 603, 135 P. 558; Jarrett v. Prosser, 23 Idaho 382, 130 P. 376; Wollan v. McKay, 24 Idaho 691, 15 P. 832; Lestrade v. Barth, 19 Cal. 660; Hathaway v. Brady, 23 Cal. 121; 24 Am. & Eng. Ency. Law, 646, 20 Am. & Eng. Ency. Law, 823; Snell v. Insurance Co., 98 U.S. 85, 95, 25 L.Ed. 52, 56; Dennis v. Northern P. Ry. Co., 20 Wash. 320, 55 P. 210; Adams v. Reed, 11 Utah 480, 40 P. 720; Chamberlain v. Thompson, 10 Conn. 243, 26 Am. Dec. 390; Newcomer v. Kline, 11 Gill & J. (Md.) 457, 37 Am. Dec. 74.)

Where reformation of a written contract is sought by way of defense in an action thereon or as incidental to other relief prayed for or other defenses made, no demand on the other party to reform the contract is necessary. (34 Cyc. 944; Nichols & Shepard Co. v. Berning, 37 Ind.App. 109, 76 N.E. 776; Parchen v. chessman, 49 Mont. 326, Ann. Cas. 1916A, 681, 142 P. 631, 146 P. 469; Jones v. McNealy, 139 Ala. 378, 101 Am. St. 38, 35 So. 1022; Johnson v. Sherwood, 34 Ind.App. 490, 73 N.E. 180; First Nat. Bank v. Bacon, 113 A.D. 612, 98 N.Y.S. 717; Citizens' Nat. Bank v. Jury, 146 Ind. 322, 43 N.E. 259.)

The general rule seems to be that of the California courts, that demand is never necessary before seeking reformation. (Danielson v. Neal, 164 Cal. 748, 130 P. 716; Home & Farm Co. v. Freitas, 153 Cal. 680, 96 P. 308; Braithwaite v. Henneberry, 124 Ill.App. 407, 222 Ill. 50, 78 N.E. 34.)

Restoration of the status quo is not a condition precedent to reformation. (Keeley v. Sayles, 217 Ill. 589, 75 N.E. 567.)

Respondent did not waive the provision of the agreement entitling him to a surrender of the deed on failure to pay the instalment due October 1, 1908. (Prairie Dev. Co. v. Leiberg, 15 Idaho 379, 98 P. 616.)

Claude W. Gibson, for Appellant.

To sustain the judgment reforming the written escrow agreement, the evidence must be such as to leave no reasonable doubt in the mind of a reasonable court as to what the mistake consists of, what correction should be made, that the mistake was mutual and common to both parties, and that both have done what neither intended, and that the mistake was of both parties. (Houser v. Austin, 2 Idaho 204, 10 P. 37; Jarrett v. Prosser, 23 Idaho 382, 130 P. 376; note b to 117 Am. St. 230; Miller Bros. v. McCall Co., 37 Okla. 634, 133 P. 183; 34 Cyc. 915.)

Demand for reformation before suit is indispensable. None was made. (34 Cyc. 944; Axel v. Chase, 77 Ind. 74; Black v. Stone, 33 Ala. 327; Brainerd v. Arnold, 27 Conn. 617; Kessler v. Pruitt, 14 Idaho 175, 93 P. 965.)

Defendant did not put plaintiff in statu quo, which was imperative before or when suit for reformation was begun. (Cassidy v. Metcalf, 66 Mo. 519, 535; Keeley v. Sayles, 217 Ill. 589, 75 N.E. 567; Youngstown Electric Light Co. v. Butler County Poor Dist., 21 Pa. Super. Ct. 95.)

If time was of the essence of the contract, by his actions defendant waived the same. (Douville v. Pacific Coast Casualty Co., 25 Idaho 396, Ann. Cas. 1917A, 112, 138 P. 506; Watson v. White, 152 Ill. 364, 38 N.E. 902; Prairie Dev. Co. v. Leiberg, 15 Idaho 379, 98 P. 616.)

MORGAN, J. Budge, C. J., and Rice, J., concur.

OPINION

MORGAN, J.

This action was commenced by appellant to recover damages for breach of an escrow agreement. He alleges in his complaint, among other things, that on April 5, 1907, respondent executed a deed conveying to him certain land; that he paid part of the purchase price and executed two promissory notes for the balance, one note showing on its face that it was due Oct. 1, 1908, and the other Oct. 1, 1909, and each providing that interest be paid annually; that immediately after the execution of the notes, and on the same day, the parties entered into a written agreement by the terms of which the deed and notes were placed in escrow in a certain bank, the deed to be delivered to appellant upon the condition that the interest upon the notes be paid at the time provided therein, and that the principal be paid on or before Oct. 1, 1909, and if the principal or interest be not so paid, the respondent, at his option, might declare a forfeiture and retain, as liquidated damages, any and all sums paid under the terms of the contract; that on April 24, 1908, he paid the annual interest on the notes, which was due April 5th, and that respondent accepted the same; that on Oct. 1, 1908, he tendered the interest due on the notes and respondent refused to accept it unless the principal of the note purporting on its face to be due Oct. 1, 1908, be paid; that he made another tender Oct. 31st of interest, which was refused for the same reason; that on Nov. 2, 1908, respondent declared the contract forfeited, took the deed from escrow and destroyed it, marked the notes void, gave notice that he considered the contract terminated, and demanded that appellant vacate the premises; that on March 2, 1909, and July 1, 1909, appellant tendered the whole amount due, principal and interest, but respondent refused to accept the same or convey the premises.

Respondent filed an answer and cross-complaint admitting the execution of the deed, notes and agreement and the placing of the same in escrow, but alleged that prior to the execution of the escrow agreement, he and appellant entered into an oral contract, by the terms of which the notes were to be paid when they became due as shown upon their face, namely, Oct. 1, 1908, and Oct. 1, 1909, and that it was the intention of both parties that the escrow agreement should so provide, but that the scrivener who wrote the agreement, inadvertently and through mistake, failed to incorporate the provisions that the notes should be paid when they matured as shown upon their face, but provided instead that both of them be paid on or before Oct. 1, 1909, and that the parties, through a mutual mistake as to the terms of the written agreement in this respect, signed the same. Respondent denied that appellant had ever made any tender to him of the interest or principal and prayed judgment that the agreement be reformed to conform to the true intent of the parties, that appellant be declared to have been in default since Oct. 1, 1908, and that all sums paid by him be retained as damages.

Appellant answered denying the material allegations of the cross-complaint. By stipulation the case was tried before the judge without a jury. Findings of fact and conclusions of law were made and judgment was thereupon entered in favor of defendant, from which this appeal is prosecuted.

Appellant contends that the court erred in finding that the real agreement was oral and that, through the mistake of the scrivener, the written agreement was made to provide for both notes to be due on or before Oct. 1, 1909, instead of one being due Oct. 1, 1908, and the other Oct. 1, 1909, and that this escrow agreement was signed by both parties under the mutual mistake that it embodied the terms of the oral contract. Appellant testified that there was no oral understanding that one...