Nat'l House & Farms Ass'n Inc. v. N.Y. Sash & Door Co. Inc., 149/268.

Citation49 A.2d 577
Decision Date07 November 1946
Docket Number149/268.
CourtNew Jersey Court of Chancery


Suit by National House and Farms Association, Inc., against New York Sash & Door Company, Inc., to reform a written contract, restrain action at law on original contract and for enforcement of contract as reformed by an accounting.

Decree advised in favor of complainant.

In a suit to reform a contract, it will be reformed where it appears either that the mistake was mutual, or that the defendant unconscionably withheld knowledge of the mistake made by the complainant.

Atwood C. Wolf, of Jersey City, for complainant.

Gurtman & Schomer, of Passaic (Aaron Z. Schomer, of Passaic, of counsel), for defendant.

LEWIS, Vice Chancellor.

Complainant brings this suit to reform a written contract with defendant to restrain an action at law brought by defendant on the original contract, and for the enforcement of the contract, as reformed, by an accounting.

Complainant, hereinafter called the house company, was engaged in the business of building homes, and had in August, 1942, a large quantity of building material. It found itself unable to use this as its operations were frozen because of the war emergency. It accordingly negotiated a sale of all this material to defendant, hereinafter called the sash company. The contract, as signed, provided for a sale price of $29,000 for a long list of items attached to the contract, with a provision for increases and deductions in accordance with values scheduled in the list for excesses and shortages over the items listed. The sash company paid the $29,000 and brought suit at law for the items listed, chiefly lumber, not delivered, claiming an overpayment at the rates set forth in the schedule of some $6,000. The house company counterlcaimed for an alleged underpayment of some $11,000.

This controversy has been before the courts several times. In the suit now before this court on final hearing, the house company made a motion to restrain the action at law, and the sash company made a motion to dismiss the bill herein. Both motions were denied, 134 N.J.Eq. 6, 34 A.2d 10, and the denial of the motion to strike the bill was appealed from and affirmed by the Court of Errors and Appeals, 135 N.J.Eq. 150, 36 A.2d 894. The action at law was tried, with a judgment entered, dismissing both the complaint and the counterclaim. The sash company appealed from this judgment and the Court of Errors and Appeals reversed it, 131 N.J.L. 466, 36 A.2d 891, reinstating both the complaint and the counterclaim for trial. This retrial awaits the decision in the present suit.

This court is therefore enabled, under the decision of the Court of Errors and Appeals, to pass on the merits of the contention that complainant is entitled to a reformation of the contract, on a consideration of the testimony had on final hearing. The rulings of the higher court on the principles involved here are, of course, controlling in this court. The Court of Errors and Appeals held that in the action at law, since the terms of the integration are clear and explicit, extraneous evidence cannot be considered in aid of construction, and that if the instrument does not express the common intention, reformation in equity is the appropriate remedy. It also held that there could be no res judicata by the judgment in the Circuit Court, since it was reversed. This court is therefore free to decide whether the facts now adduced at final hearing entitle complainant to a reformation.

The reformation sought is as to certain items in the schedule attached to the contract, with a corresponding increase in the price to be paid. In the schedule are several sets of items of rough lumber, under columns headed ‘unit’ where are first set forth the number of items, then the size of each piece, as 2 x 4', then the ‘unit price’, which in each case regarding lumber is ‘55 M’, and finally in the last column a price for all the pieces of that size. In all the items of lumber, the final figure is the number of pieces, multiplied by $.055, and not at the rate of $55 per thousand feet of board measure. It is contended that the last column, the price, should be figured at the unit price $55 and the contract should be reformed accordingly. This would increase the amount to be paid by many thousands of dollars since all the pieces contain several and some many board feet. It is conceded that the expression 55 M is well understood in the trade to mean $55 per thousand board feet.

The error in calculating the value of price of the lumber was caused by the mistake of a stenographer in the employ of the house company who was directed to copy the partly made up list and extend the figures into the final column. She did so with the wrong method of computation, and as a result the totals of all the items in the schedule aggregated some $35,000 instead of some $48,000. Relying on the accuracy of the smaller figure, the president of the house company entered...

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