Herzberg v. Moore
| Decision Date | 04 September 1929 |
| Docket Number | 21384. |
| Court | Washington Supreme Court |
| Parties | HERZBERG v. MOORE et ux. |
Department 2.
Appeal from Superior Court, King County; Charles P. Moriarty, Judge.
Action by Ethel Herzberg against William W. Moore and wife. From a judgment of dismissal and an order denying plaintiff's motion for new trial, plaintiff appeals. Affirmed.
Tucker Hyland & Elvidge and W. Stevens Tucker, all of Seattle, for appellant.
J. H Templeton and Chas. F. Munday, both of Seattle, for respondents.
Alleging mutual mistake and inadvertence, plaintiff instituted this action to reform a real estate contract. The cause was tried to the court. This appeal is prosecuted from the order denying plaintiff's motion for a new trial and from the judgment dismissing the action.
A pertinent provision of the real estate earnest money receipt executed April 29, 1926, under which appellant agreed to convey to respondents by contract for warranty deed certain improved real estate, reads as follows:
'The property is to be conveyed by contract for warranty deed free from all liens and incumbrances, excepting taxes and local assessments becoming liens as between grantor and grantee after date hereof and excepting liens and incumbrances to be assumed by the purchaser as follows, to wit: Local assessment for Wheeler Street, et al., under district No. 3925, Ordinance No. 47778, amounting to $428.40, which amount is to be deducted from the purchase price of $6,600 hereafter mentioned, assumed by the purchaser and paid as it becomes due.'
Coincident in time with the making of this agreement, the appellant, in response to inquiry of respondents, informed them that all the improvements 'were in and paid for except this one of $428.40,' which was the assessment for the paving on Wheeler street in front of the property. At that time Knob Hill avenue at the side of the property was also paved, the assessment for which is the subject-matter of this controversy.
On the abstract of title delivered to the respondents is the certificate of the abstractor dated May 5, 1926, to the effect that no special assessment, other than that amounting to $428.40 for the paving of Wheeler street, had been levied against the property since March 5, 1919, as shown by the official assessment rolls in the office of the city treasurer. An attorney, acting for the appellant, made inquiry subsequent to May 5, 1926, but failed to discover any assessments on the property other than that of $428.40 for the Wheeler street paving.
On May 28, 1926, the parties entered into a real estate contract which provided, in so far as material to this action, that respondents were to pay to appellant the consideration of $6,600 as follows:
'First by the purchaser assuming and agreeing to pay as the same become due in annual payments those certain municipal assessments for paving Wheeler Street, et al., under Ordinance No. 47778, Dist. No. 3925, in the sum of $428.40. * * *
'The purchaser assumes and agrees to pay before delinquency all taxes and assessments that may as between grantor and grantee hereafter become a lien on said premises. * * *'
Subsequent to the execution of the foregoing contract (the record is silent as to the date the information was acquired), respondents learned that on May 11, 1926, another assessment under Ordinance No. 49545, amounting to $379.86, for the paving of Knob Hill avenue, which is on one side of the property, had become a lien on the property. The appellant testified that she did not know at the time she was negotiating with respondents for the sale of the property that assessments were unpaid on the Knob Hill avenue paving; that she never gave a thought to the assessment for the paving on the side street, and that she did not receive any notice of the assessments from the city treasurer until 'a long time after I had sold the house.'
Respondents' demand for payment of the Knob Hill Avenue paving assessment was refused by the appellant, who commenced this action for reformation of the contract of May 28, 1926, to conform, as she alleged, with the agreement of the parties, as shown by the earnest money receipt, that respondents assumed payment of all improvement assessments becoming liens subsequent to April 29, 1926.
The appellant does not claim that there was any fraud or bad faith in the making of the contract. She attempts to show only a mutual mistake.
'Reformation is a proper remedy where the parties have reached a definite and explicit agreement, understood in the same sense by both, but by their mutual or common mistake, the written contract fails to express the agreement.' Section 11, Black on Rescission and Cancellation (2d Ed.).
'When no question of fraud, bad faith or inequitable conduct is involved and the right to reform an instrument is based solely on mistake, it is necessary that the mistake be mutual, and that both parties understood the contract as the complaint or petition alleges it ought to have been, and as in fact it was except for the mistake.' 23 R. C. L. § 20, p. 327.
A contract may be reformed, upon the ground of mutual mistake, when the evidence of the error is clear and leaves little or no doubt as to what the real agreement of the parties was. If the earnest money receipt truly expressed the intention of appellant and respondents and the terms of the real estate contract herein are not in accord therewith, the contract may be reformed if the discrepancy arose through fraud or mistake. Respondents contend that the earnest money receipt does not express their intention, which was to restrict their assumption of payment of assessments to those for improvements made subsequent to the date of purchase. They insist that this is manifest from their interrogation of appellant as to the improvement assessments, which she represented to them had been paid. Were the respondents induced to make the purchase and accept the earnest money receipt by false representations of the appellant? The appellant testified as follows:
'Q. Mrs. Herzberg, you agreed to sell this property for $6600, did you not? A. Yes.
'Q. Assuming what? A. And assume the...
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