Long v. Eaves & Co.

• Decision Date: 19 June 1911
• Docket Number: 14950
• Citation: 56 So. 178,99 Miss. 888
• Parties: G. W. LONG v. EAVES & COMPANY
• Court: Mississippi Supreme Court

56 So. 178

99 Miss. 888

G. W. LONG v. EAVES & COMPANY

No. 14950

Supreme Court of Mississippi

June 19, 1911

APPEAL from the chancery court of Lee county, HPN. J. Q. ROBBINS Chancellor.

Suit by G. W. Long against Eaves & Co. From a decree dismissing the bill, plaintiff appeals.

The facts are as follows:

Appellant entered into the following contract with appellees "Tupelo, Miss., Nov. 2, 1907. Mr. G. W. Long, Tuperlo Miss.--Dear Sir: We beg to confirm sale to you to-day of two hundred bales of cottong (200 B/C) for January delivery in Tupelo, Miss., at (10 1/2) ten and one-half cents per pound basis Middling with one-eight cent differences above and below. Yours very truly. [Signed] Eaves & Co., G. W. Long.

Eaves &amp Co. is a partnership compose of J. H. Eaves and S. B. Hinds, and is engaged inthe purchase and sale of spot cotton. Appellant is not a cotton man, nor is he familiar with the terms of the trade. The trade between appellant and appellees was concluded by Hinds. with full informationobtained from Eaves, who dictated the contract, which was in due time executed by Hinds and Long. Appellant inquired of Hinds if this contract called for delivery of middling cottong and was advised that it did, and relied upon the representations of Hinds in regard to the entire transation. Appellees did not deliver middling cotton, but tendered some cotton which was below middling, which was refused by appellant.

Appellant thereafter filed a bill in chancery, setting up the facts and alleging fraud on the part of appellees, and seeking a recovery of one thousand, two hundred dollars, being the profit which he could have made out of a resale of the cotton, had middling cotton been delivered by appellees at the price stipulated in the agreement. The chancellor found that the appellees had perpetrated fraud, but dismissed appellant's bill for the reason set out in his opinion, which is as follows:

"I have given this case repeated consideration. I have frequently read and reread this evidence. From this evidence, I believe this contract most unconscionable. I believe the evidence shows that the defendants "put up a job," in the language of the street, on the complainant. The evidence shows that one of the defendants purposely and intentionally, so as to make it a one-sided contract--"heads I win, tails you lose."

"The evidence shows that the other defendant knew of this; knew that his partner had prepared the loaded dice, and still insisted on playing the game with this loaded dice. He induced Mr. Long, his friend, to sign this one-sided contract, when he knew that Long did not understand the effect of the contract, and when he knew that Long was relying upon and trusting him. I think that under the circumstances Long had the right to inquire of Mr. Hinds about the effect of the contract, and had the right to rely upon his statement. But Long's confidence was misplaced; this friend did not act square with him, but, on the contrary, deceived him as to the effect of the contract.

"If this contract had been made, as complainant understood it, he would have made about one thousand, two hundred dollars. As it turns out, he makes nothing. If the contract is interpreted as it is written, he should get nothing.

"If the market had gone against complainant and this were an effort to force him to comply with the contract, I would not hesitate under this evidence to declare the cntract fraudulent, and that it could not be enforced.

"On the other hand, the complainant has lost nothing but some profit he would have made, if the contract had been written as he understood the deal. He seeks to reform and enforce the contract in accordance with what he conceives to have been the true contract, and with what the evidence in fact shows that he understood. The deal, although relating to spot cotton, was really and in fact a speculative venture. The contract was so drawn that it mattered little to defendants whether the market went up or down; they would not lose. But as it turned out the complainant failed to make some profits that he should have made.

"Does that present a case for equitable relief? I think the evidence shows the transaction a pure speculation, and his loss is purely speculative, and not real. Courts of equity will not uphold, nor sustain, nor approve such an unconscionable contract as this is shown to be, and would grant relief to prevent its enforcement. But it does not follow that equity should reform and enforce this contract for the benefit of him who was imposed on and deceived into making the contract, and grant him damages for the profits he would have made. If it be a speculative venture, pure and simple, equity will simply leave the parties where they are without relief.

"I confess that I do not like for such a transparent fraud as this contract was to pass through my court, without a more substantial condemnation than mere words; but I feel so sure of the correctness of the position that equity should and will not enforce purely speculative ventures that I must not allow my antipathy to fraud to lead me into a violation of other sound and well-established principles of equity.

"The bill will be dismissed."

Decree reversed.

C. P. Long, for appellant.

No written contract is beyond the reach of a court of equity for the purpose of reforming it, if the prayer for relief is timely presented. Palmer v. Hartford Ins. Co., 54 Conn. 488.

In the present case, it is not contended that there was any mutual mistake between the parties, but that there was a mistake on the part of the appellant caused by the fraud and misrepresentations of the appellees and the willful, palpable fraud and misrepresentations on their part. The court has found such to be the case, and that the instrument or contract was not written on account of this fraud and misrepresentations according to the contract of the parties. Where this state of affairs exists, it is not necessary to prove a mutual mistake, but the party guilty of the fraud and misrepresentation, where the testimony shows what the true contract was, is estopped to take advantage of his own wrongs.

In other words, so far as the oral requirements are concerned, there was an agreement or meeting of minds, and each party understood the contract exactly alike, but the fraud was in the preparation of the written contract by appellees. Under the agreement it was the duty of appellees to prepare the written contract exactly as they and appellant had traded.

"If one whose duty it is to prepare a written contract, according to a previous agreement, by changing its terms and delivering it as in accordance with such agreement, prepares one materially different from the agreement, he commits a fraud which entitles the deceived party to a reformation." v. Freeman, 99 Ga. 376; McDonald v. Youngbluth, 46 F. 836; Hay v. Star Fire Ins. Co., 77 N.Y. 235; Bergen v. Ebey, 88 Ill. 269.

"If stipulations are kept out of a contract by fraud, the contract may be reformed in equity and specifically enforced." Cubberly v. Cubberly, 39 N.J.Eq. 514.

"Equity may reform a deed for fraud, notwithstanding the plaintiff's negligence." Hitchens v. Pettingill, 58 N.H. 3.

"A court of equity may reform a bill of sale of a vessel to allow its registry and enrollment under the laws of the United States." Sprague v. Thurber, 17 R. I. 454.

"An ordinary contract for the sale of merchandise may be reformed where the negligence of the defendant in signing the contract was not so gross as to bar him of the right of reformation on the ground of fraud and mistake." Sutton v. Risser, 104 Ia. 631.

"If there has been mistakes or fraud in the giving of a note, it may be reformed, in equity, according to the general principles above mentioned, to conform to the actual agreement between the parties." Miller v. McCarty, 47 Minn. 321; 28 Am. St. Rep. 375; Kropp v. Kropp, 97 Wis. 137; Lee v. Percival, 85 Ia. 639; Loudermilk v. Loudermilk, 98 Ga. 780.

"Equity will relieve against a mistake, either of law or of fact, where it is produced by misleading statements or misrepresentations of the other party to the contract." Lott v. Kaiser, 61 Tex. 665; Bales v. Hunt, 77 Ind. 355-360; Snell v. Ins. Co., 98 U.S. 85.

"A mistake of law as to a contract, caused by fraud, imposition, or misrepresentation, may be relieved against in equity." Kyle v. Bebley, 81 Wis. 67; Bush v. Merriman, 87 Mich. 260.

"If one party to a contract is mistaken, either as to law or fact, and the other, with knowledge, contracts with him equity will relieve upon the ground of fraud." State v. Paup, 13 Ark....