McIsaac v. McMurray

• Citation: 93 A. 115,77 N.H. 466
• Parties: McISAAC v. McMURRAY.
• Decision Date: 02 February 1915
• Court: New Hampshire Supreme Court

93 A. 115

77 N.H. 466

McISAAC

v. McMURRAY.

Supreme Court of New Hampshire.

Feb. 2, 1915.

Exceptions from Superior Court, Merrimack County; Branch, Judge.

Action by William McIsaac against Harry G. McMurray for personal injuries received by plaintiff in a collision between defendant's automobile and plaintiffs bicycle. Judgment of nonsuit ordered, and plaintiff excepts. Exception overruled.

The defendant pleaded the general issue, with a brief statement setting up a release of the plaintiff's cause of action. The material part of the release is as follows:

"I, William McIsaac, * * * for and in consideration of the sum of seventy-five dollars * * * to me in hand paid by Harry McMurray, * * * the receipt whereof is hereby acknowledged, * * * remise, release, and forever discharge the said Harry McMurray, his successors and assigns, of and from all and all manner of actions, suits, damages, executions, claims, and demands whatsoever, in law or in equity, which against the said Harry McMurray, arising out of an automobile collision occurring September 1, 1912, I ever had, now have, or which my heirs, executors, or administrators hereafter can, shall, or may have, for, upon, or by reason of any matter, cause, or thing whatsoever from the beginning of the world to the date of these presents."

The foregoing instrument was signed and sealed by the plaintiff on September 17, 1912.

The plaintiff filed an answer to the defendant's brief statement, alleging in substance, that the release is fraudulent, was made under a mutual mistake of fact, and is void; that the physicians for both parties assured the plaintiff previous to the date of the release that his injuries were not serious, consisting of bruises, that no bones were broken, and that he would soon be able to resume his occupation; that both parties acted under a mutual mistake of fact as to the extent and nature of the plaintiff's injuries, which in fact consisted of a fracture of the neck of the femur of the left hip; and that this injury was unknown to either party when the release was executed. After the plaintiff's counsel had opened the case to the jury upon the grounds of the above answer, the court ordered a nonsuit, on the assumption that the plaintiff's evidence would sustain his claim that both parties supposed at the time of the settlement that the injuries consisted of simple bruises only. To this order the plaintiff excepted.

George V. Hill and Martin & Howe, all of Concord, for plaintiff. Jones, Warren, Wilson & Manning, of Manchester, for defendant.

WALKER, J. The language of the release is sufficiently broad to cover all the damages suffered by the plaintiff in consequence of the collision, and to preclude the plaintiff from maintaining an action against the defendant therefor. Its execution is admitted, and its legal construction as constituting a bar to the plaintiff's action is not denied. But it is argued that it was entered into under a mistake, made by both parties, in reference to a material matter of whose existence they were justifiably ignorant, and that the release would not have been made if that fact had been known and appreciated. The plaintiff therefore is practically seeking to have the release set aside, in order that he may proceed with his action at law. The superior court granted the defendant's motion for a nonsuit, and the plaintiff excepted.

One question presented by the exception is whether the plaintiff may have relief for the alleged mistake by a practical cancellation of the release, found to be equitable by the verdict of a jury in an action at law, or whether the fact of the mistake and its effect upon the contract should not be tried in an equitable proceeding in aid of the suit at law. It cannot be doubted that the jurisdiction in equity in relation to the subject of mistake in written contracts is ample and convenient.

"The power of a court of equity to correct mistakes of fact is a very wide and general one." Bisp. Eq. (7th Ed.) § 190.

"Cases in which the remedy sought and obtained is one which equity courts alone are able to confer must, upon any consistent system of classification, belong to the exclusive jurisdiction of equity." 1 Pom. Eq. Jur. § 138.

"But a mistake in a deed or other written instrument may be rectified in equity. And where an instrument is drawn and executed, which is intended to carry into effect a previous agreement, but which, by mistake of the draftsman, either as to fact or law, does not fulfill that intention, equity will correct the mistake." Webster v. Webster, 33 N. H. 18, 22 (66 Am. Dec. 705).

Where there is a mutual mistake in regard to the quantity of land included in a deed equity affords the appropriate remedy. Newton v. Tolles, 66 N. H. 136, 19 Atl. 1092, 9 L. R. A. 50, 49 Am. St. Rep. 593.

Stebbins v. Robbins, 67 N. H. 232, 38 Atl. 15, was a writ of entry to foreclose a mortgage which had been discharged through a mistake as to the extent of the mortgaged property. Upon the suggestion that the plaintiff's remedy was in equity, the plaintiff was permitted to file an amendment to the declaration in the nature of a bill in equity. In Eastman v. Association, 62 N. H. 555, it was held that when the beneficiary of life insurance is to be named in an entry on the member's certificate, or on a book of the association, and there is no such entry, parol evidence is not admissible in a suit at law to show to whom the member intended the benefit should be paid. But, upon a subsequent bill in equity between the same parties (65 N. H. 176, 18 Atl. 745, 5 L. R. A. 712, 23 Am. St. Rep. 29), such evidence was admitted to show that a mistake of law was made at the time of the contract as to the effect of not naming the beneficiary.

Although one reason of the rule is that the remedy sought in cases of mistake in written instruments is peculiarly applicable to proceedings in equity, relief in most cases could not be obtained at law, because parol evidence which tends to vary and contradict such a writing is not admissible, while in equity it is.

"A written contract that does not express the intention of the parties may be reformed in equity; but in this suit at law the policy cannot be altered by parol evidence." Tasker v. Insurance Co., 59 N. H. 438, 445.

"It is an elementary doctrine that parol evidence is not, in general, admissible between the parties to vary a written instrument, whether the same has been voluntarily adopted, or made in pursuance of a legal necessity. It is equally well established that mistake, fraud, surprise, and accident furnish exceptions to this otherwise universal doctrine. * * * This exception rests upon the highest motives of policy and expediency for otherwise an injured party would generally be without remedy." 2 Pom. Eq. Jur. § 858.

In Tilton v. Tilton, 9 N. H. 385, 392, this principle of equity is stated as follows:

"In our opinion, a court of equity is competent to correct and reform any material mistake in a deed or other written agreement, whether that mistake be the omission or insertion of a material stipulation; and whether it be made out by parol testimony, or be confirmed by other more cogent proofs. * * * This principle is apparently at variance with a well-established rule of evidence, observed equally in courts of law and of equity, and resting upon the most satisfactory reasons, that, when the parties have reduced their agreement to writing, the written instrument is the only admissible evidence of the terms of that contract, and is not to be controlled, added to, altered, or varied by parol. Fraud is, however, an exception to the rule, and so, in our judgment, is a case of mistake clearly made out. For it would be a reproach to the jurisprudence of the country, if it were not in its power to relieve from the consequences of a mistake unequivocally established. But the mistake must be made out in the most clear and decided manner, and to the entire satisfaction of the court."

See, also, 1 Sto. Eq. Jur. § 156; Busby v. Littlefield, 31 N. H. 193; Minot v. Tilton, 64 N. H. 371, 10 Atl. 682; Searles v. Churchill, 69 N. H. 530, 43 Atl. 184.

In Sherburne v. Goodwin, 44 N. H. 271, 277, it is said:

"It is urged also for the plaintiffs that, if the terms of the release are such as to include this fund, it is a mistake, and that the release should be reformed. But, independent of the question whether any such mistake is shown as would entitle the party to this sort of relief, it is quite clear that it could be granted only upon proceedings instituted for that purpose, and under such circumstances as would enable the court to do justice to both parties, and not by simply excluding from the effect of the release the particular demand, and thus evading the rule that prohibits the introduction of parol evidence to contradict a written instrument."

Another reason why relief for mistake in a written contract should be sought in equity is that courts of equity seem in such case to have adopted a more stringent rule as to the burden of proof or the weight of the evidence than obtains at law, in order probably to show that in equity the parol evidence rule is recognized and is not to be lightly set aside. This principle was considered in Searles v. Churchill, supra, where it was held that a written instrument will be reformed in equity when it fails to express the intention of the parties in making the contract which it purports to contain; and, to warrant such decree, the mistake alleged must be established as matter of fact by clear and convincing proof. Tilton v. Tilton, supra; Busby v. Littlefield, supra; Wiswall v. Harriman, 62 N. H. 671; Healy v. Healy, 76 N. H. 504, 85 Atl. 156. It is unnecessary in this discussion to attempt to define what is meant by "clear and convincing proof"; it is sufficient to note that it must at least be strong enough to overcome the presumption that the written instrument contains the essential terms of the...