Carey v. Gunnison
| Decision Date | 08 April 1885 |
| Citation | 22 N.W. 934,65 Iowa 702 |
| Parties | CAREY v. GUNNISON ET AL |
| Court | Iowa Supreme Court |
Appeal from Fremont District Court.
THIS action was brought to recover for damages alleged to have been sustained by reason of a breach of a contract entered into between the plaintiff and the defendant, whereby the latter purchased of the former his interest in a stock of goods. There was a trial to a jury, and verdict and judgment were rendered for the defendant. The plaintiff appeals.
REVERSED.
Draper & Thornell and James McCabe, for appellant.
W. W Morsman, for appellees.
I.
The plaintiff, as a member of the firm of Carey & Warren, was at one time in trade as a hardware merchant in Shenandoah, Iowa. In 1877 he sold, as he supposed, his interest in the stock to the defendant, Gunnison, who became a partner with Warren. The plaintiff agreed to pay of the indebtedness of Carey & Warren the sum of $ 10,000, and Warren & Gunnison agreed to pay the remainder. The agreement was reduced to writing. The plaintiff has paid indebtedness in excess of $ 10,000, and which he avers Gunnison should have paid, but failed to pay. This action is brought to recover for such payments.
The defendant, while admitting the execution of the agreement declared on, averred in his answer that he was induced to enter into it by the fraud of the plaintiff, and also that the agreement was entered into by mutual mistake. He averred that it was represented by the plaintiff that the aggregate liabilities of Carey & Warren would not exceed $ 15,000, and that it was believed and understood that the defendant Gunnison's liability would not exceed $ 5,000, which amount he has paid, but that the liabilities of Carey & Warren amounted to $ 19,000. He also averred that he had no knowledge of the amount of the liabilities of Carey & Warren, and relied upon Carey's representation, and entered into the written contract under the mistaken belief that the liabilities would not exceed $ 15,000, and that, if the facts had been known, the contract would not have been made. Such being the defendant's answer, the plaintiff moved to transfer the issue in respect to the alleged mistake to the equity side of the docket for trial as an equitable issue. The court overruled the motion, and the plaintiff assigns the ruling as error.
The case is now before us upon rehearing. When it was first before us, it was assumed that the issue presented was an equitable issue, but the court thought that, nevertheless, as no affirmative relief was sought, it might be tried by a jury. Upon further consideration of the case we have come to think that this view cannot be sustained. It seems to us that the court improperly assumed that the issue is an equitable one. The defendant does not aver in his answer that there was an agreement that the liability which he assumed should be limited to $ 5,000. If such had been the fact, it would appear that the mistake was made when the parties came to put their oral agreement in writing. But there is no pretense that there is any difference between the terms of the oral agreement and of the writing intended to express it. The mistake, then, if any, was in regard to the subject-matter of the contract. If the facts are as averred, the parties did not know what they were contracting about. They supposed that they knew, but they were mistaken. Where a material mutual mistake is made by parties in respect to the subject-matter of a contract, the result is that in contemplation of law there is no contract. The minds of the parties do not meet. If an action be brought on such contract, it is competent for the defendant to deny its existence, and in support of the denial he may allege and prove the mistake. In such case the determination required is as to the existence of the contract, and that determination may be expressed in a simple judgment for or against the defendant, as the fact in regard to the alleged mistake shall appear to be. If the defendant shall not be satisfied to plead merely defensively lest the plaintiff should withdraw his action and reserve his pretended contract for enforcement at what he might deem a more favorable time, it would be the defendant's right to set up the mistake by cross-action, and ask for cancellation. In such case he would invoke the equity powers of the court, because the relief prayed for could be granted only by a decree.
In case the party aggrieved by the mistake should not see fit to wait-until he should be sued, it would be his right to bring an action for cancellation, and the issue then presented would be the same as in the case of the cross-action above supposed. If the mistake did not exist in the subject-matter so as to prevent the minds of the parties from meeting, but merely in the terms of the writing by which the parties undertook to express their valid oral agreement, then the writing, being conclusive in an action of law, would need to be reformed, or, what is substantially the same thing, the true agreement of the parties would need to be determined and expressed in a judicial decision. The determination and expression of the true agreement would call for the exercise of equity powers. But the determination of the existence or non-existence of a contract, where...
To continue reading
Request your trial