Miller v. Stanich

• Decision Date: 03 April 1930
• Citation: 202 Wis. 539,230 N.W. 47
• Parties: MILLER v. STANICH.
• Court: Wisconsin Supreme Court

202 Wis. 539

230 N.W. 47

MILLER

v.STANICH.^a1

Supreme Court of Wisconsin.

April 1, 1930.

Dissenting Opinion April 3, 1930.

Appeal from a judgment of the Circuit Court for Milwaukee County; August E. Braun, Circuit Judge. Reversed.

Action commenced September 15, 1927, for reformation of a lease. From a judgment entered August 28, 1929, decreeing reformation, defendant appealed.

FOWLER and STEVENS, JJ., dissenting.Walter Schinz, Jr., of Milwaukee (Joseph F. Schoendorf, of Milwaukee, of counsel), for appellant.

Hugo J. Trost, of Milwaukee (Wm. R. McCaul, of Tomah, of counsel), for respondent.

FRITZ, J.

[1] Plaintiff, engaged in the whosesale fruit and cold storage business at Marshfield, Wis., acquired property located in Milwaukee, which was occupied by the defendant under a lease for a five-year term, commencing on June 6, 1922, with provision for extension and renewal for a further five-year term, at the lessee's option, providing he gave thirty days' notice of such intention. On February 14, 1927, Joseph A. Fleckenstein, who collected the rents as agent for plaintiff, was notified by Joseph F. Schoendorf, defendant's attorney, that defendant desired a new lease for the further term of five years. On February 15, 1927, Schoendorf prepared and mailed to Fleckenstein two copies of a proposed lease for those five years, with a clause again giving the defendant an option for an extension for an additional five-year term. Fleckenstein, without consulting plaintiff, notified Schoendorf that he did not believe that plaintiff would give defendant another option for an additional five-year term. Thereupon, Schoendorf prepared and mailed two copies of another lease for the five-year term, but without any option for a future renewal. Fleckenstein sent all of the copies to plaintiff during February, 1927. As plaintiff could not read the English language, his stenographer or one of his two adult sons, who were in business with him, read the leases to him, and he then discovered that one set contained the clause for another five-year renewal option, and that the other set did not contain such clause.

On March 15, 1927, defendant caused a notice of his intention to take advantage of the extension privilege to be served on the former owner and lessor and on Fleckenstein. On May 21, 1927, defendant also caused such a notice to be served on plaintiff. Thereupon plaintiff consulted his attorney at Wisconsin Rapids, and was advised that defendant was entitled to the first extension of five years. However, inadvertently, plaintiff's attorney inserted the date “May 24” in the blank spaces left for the date in the two copies which had the clause that granted defendant a new option for another five-year extension. Plaintiff returned to Marshfield, and there signed the two copies, in which his attorney had inserted “May 24,” and sent them to defendant, who signed them and returned one copy to plaintiff on June 1, 1927. There was no misrepresentation, concealment, or fraud in any respect on the part of either party or their respective agents or attorneys. The court found that the plaintiff intended to make a new lease for only the first extension of five years, without giving defendant any new option for a further extension; that plaintiff, on discovering his error, promptly demanded the cancellation of the provision for the second extension; and that, upon defendant's refusal to consent to such cancellation, plaintiff promptly commenced this action. On the other hand, the court also found that the defendant intended to obtain an option for an additional term of five years, but, failing in that, he intended to secure a new lease for merely the five-year extension under the original lease. Upon those facts the court concluded that plaintiff was entitled to judgment “cancelling and rescinding the provision contained in said lease purporting to grant an option for an additional five-year term”; and it was provided in the judgment that the lease dated May 24, 1927, “be and the same is hereby reformed by cancelling and striking out” the provision for the second renewal.

Although plaintiff may have made a mistake in signing and sending to defendant the copies of the lease which contained the provision giving defendant an option for a further renewal, nothing had occurred because of which the defendant had reason to believe that plaintiff did not intend to agree to that provision, or that plaintiff had made a mistake. Defendant, in good faith, had submitted two forms. Without being misled by any trick or artifice on the part of any one, plaintiff signed and sent the two copies, containing the clause for another option, to defendant for his signature. When defendant also signed those copies, he was entitled to assume that the minds of the parties had met as to all terms embodied in the signed instruments, and that the plaintiff, by signing, had evidenced his intention to agree to all of those terms. Nothing had been done by plaintiff, of which defendant had knowledge, that indicated an intention on plaintiff's part not to consent to the option for the additional extension. Nothing had occurred which can be said to evidence a meeting of the minds of the parties to another contract, which plaintiff is now entitled by reformation to have expressed in the lease which he voluntarily signed. There was no mutual mistake. At best, it was merely a unilateral mistake, without any fraud on the part of the defendant. Under the circumstances, there was no ground for reformation.

“In order to reform a contract on the ground of mistake, the general rule is that the mistake must be mutual, or mistake on one side and fraud on the other.” Chicago, St. P., M. & O. R. Co. v. Bystrom, 165 Wis. 125, 133, 161 N. W. 358, 361; Black on Rescission and Cancellation (2d Ed.) vol. 1, pp. 396, 398, 399, § 131, pp. 402-405.

As was said in Grant Marble Co. v. Abbot, 142 Wis. 279, 287, 124 N. W. 264, 267: “The minds of the parties met upon this contract; hence there is no ground for reformation. There was no mutual mistake. The parties to the contract made the contract they intended to make. Even if a mistake were made, it is established that it was the mistake of Mr. Grant, president of plaintiff; hence was not mutual. To allow reformation in this case would be to justify the court in making a contract for the parties which they themselves did not make. This the court cannot do. The plaintiff must show that the minds of the parties met upon the contract which it seeks to establish.”

Likewise, in Jentzsch v. Roenfanz, 185 Wis. 189, 193, 195, 201 N. W. 504, this court said:

“The determination of this case must rest upon the question of whether or not there was a mutual mistake. A mistake in order to be mutual means one reciprocal and common to both parties, where each alike labors under the misconception in respect to the terms of the written instrument. Botsford v. McLean, 45 Barb. (N. Y.) 478, 481.” Page 193 of 185 Wis., 201 N. W. 504, 505.

“While a mistake of one of the parties in a proper case may be grounds for rescission or cancellation, in order that there may be a reformation, the mistake must be mutual. In other words, the court cannot rewrite the contract which the parties had made so as to express an agreement which the parties had not entered into.” Page 195 of 185 Wis., 201 N. W. 504, 506.

[2] The mistake in the case at bar was in relation to but one clause or detail of the lease. It did not go to the entire contract as in the case of Chicago, St. P., M. & O. R. Co. v. Bystrom, supra. Consequently, in this case, plaintiff could not have rescission of the entire contract. However, even if he sought such rescission, to entitle him to relief because of his mistake, he would have to establish that there was fraud on defendant's part, or, at least, that he knew that plaintiff was laboring under a mistake (Grant Marble Co. v. Abbot, supra, page 289 of 142 Wis., 124 N. W. 264); or, in the case of a unilateral contract, such as a deed, that it was without consideration, and that the mistake was excusable. Chicago, St. P., M. & O. R. Co. v. Bystrom, supra, page 133 of 165 Wis., 161 N. W. 358.

[3] Respondent also contends that the provision granting the new option for a further five-year term is subject to cancellation, because there was no consideration for such grant, in excess of defendant's rights under the original lease. However, in so far as such grant constituted a modification of the original lease, no new consideration was necessary. Foley v. Marsch, 162 Wis. 25, 30, 154 N. W. 982;Schoblasky v. Rayworth, 139 Wis. 115, 117, 120 N. W. 822. The consideration for the original, executory contract is deemed imported into the modified contract, and such new contract becomes binding without any new consideration. Lynch v. Henry, 75 Wis. 631, 634, 44 N. W. 837.

For the reasons stated, the court erred in decreeing reformation of the lease dated May 24, 1927.

Judgment reversed, with directions to dismiss complaint.

FOWLER, J. (dissenting).

I feel that I must record a dissent. The case is so simple that to my mind the mere statement of it proves the decision of the court wrong. The plaintiff executed to defendant a lease in...