Russell v. Curran

• Decision Date: 07 June 1949
• Docket Number: 2439
• Citation: 66 Wyo. 173,206 P.2d 1159
• Parties: CALVIN A. RUSSELL, Plaintiff and Respondent, v. LORING J. CURRAN, Defendant and Appellant
• Court: Wyoming Supreme Court

206 P.2d 1159

66 Wyo. 173

CALVIN A. RUSSELL, Plaintiff and Respondent, v. LORING J. CURRAN, Defendant and Appellant

No. 2439

Supreme Court of Wyoming

June 7, 1949

APPEAL from District Court, Goshen County; SAM M. THOMPSON, Judge.

Action by Calvin A. Russell against Loring J. Curran to reform written contract for sale of certain property. From a judgment for plaintiff, defendant appeals.

Judgment affirmed.

For the Plaintiff and Respondent the cause was submitted on the brief of Erle H. Reid and Hal E. Morris of Torrington, Wyoming and oral argument by Mr. Morris.

POINTS OF COUNSEL FOR APPELLANT.

When a court of equity is authorized to correct mistakes or reform written instruments, the mistakes like fraud constitute one of the exceptions to the admission of parol evidence to modify or contradict written instruments. Courts of equity have adopted a rigid rule in respect to such evidence and require the most clear and convincing proof to establish mistake or reform in written instruments, mere preponderance of evidence is not sufficient. Smith v. Butler (Ore.) 4 P. 517.

Courts of equity will reform written contracts upon the ground of mistake, but not in all cases. When parties have reduced their contracts to writing, the writing is presumed to contain the final agreement arrived at between them and to express their real intention, and when a mistake in the writing is claimed by a party, the burden rests upon him to establish the evidence that is clear, satisfactory, and convincing that the contract as written does not contain an agreement actually entered into by the parties, that there is a mistake in it as to the material fact, that the mistake is mutual and that it did not occur by or result from the negligence of the party claiming it. Grieve v Grieve, 15 Wyo. 358, 89 P. 569, 9 L. R. A. (N. S.) 1211.

While a court of equity has power to reform an instrument for a mistake, and parol evidence is admissible to prove the mistake, nevertheless to justify reformation, the mistake must have been mutual and both its existence and its mutuality must be established by evidence that is clear and satisfactory. Stoll v. Nagle, 15 Wyo. 86, 86 P. 26.

Parol evidence that the seller agreeing to pay any freight in excess to a certain rate, contradicts the writing and is inadmissible. Minnesota Sandstone Company v. Clark (Wash.) 77 P. 803.

Equity will not reform a contract on the ground of mistake unless the party asking reformation shows clearly not only that the alleged mistake exists, but that it was mutual and was not caused by negligence of the party asking a reformation. Mitchell v. Holman, (Ore.) 47 P. 616.

Parol understandings, although they induce the making of a contract are merged in the writing and parol evidence of them cannot be introduced to change the contract or show any intent different from that expressed in the instrument. Rosen v Lura B. Tackett, 222 Mich. 673, 30 A. L. R. 939.

For the Defendant and Appellant the cause was submitted on the brief and oral argument of J. L. Sawyer of Torrington, Wyoming.

POINTS OF COUNSEL FOR RESPONDENT.

As a general rule, a person whose rights or liabilities are affected by a written contract may introduce parol evidence to show accident, mistake or fraud whereby the writing failed to express the actual agreement, and to prove the modification necessary to be made, whether such variation consists in limiting the scope of the contract, or in enlarging and extending it to embrace land or other subject matter which had been omitted through fraud or mistake. Grieve v. Grieve, 89 P. 569, 10 R. C. L. 1056.

It is practically a universal rule that in suits to reform written instruments on the ground of fraud or mutual mistake, parol evidence is admissible to establish the fact of fraud or of a mistake and in what it consisted, and to show how the writing should be corrected in order to conform to the agreement or intention which the parties actually made or had, and this even though the instrument in question is within the statute of frauds. So far as the introduction of such proof may be said to violate the statute, it is immaterial whether it comes from the complainant or the respondent. The nature of the action is such that it is outside the field of operation of the parol evidence rule. If this were not so, a rule adopted by the courts as a protection against fraud and false swearing would, as has been said in regard to the analogous rule known as the statute of frauds, become the instrument of the very fraud it was intended to prevent. Evidence of fraud or mistake is seldom found in the intrument itself, and unless parol evidence may be admitted for the purpose of procuring its reformation, the aggrieved party would have as little hope of redress in a court of equity as in a court of law. 36 A. J. 455.

Generally where both parties have an identical intention as to the terms to be embodied in a proposed written instrument and the writing executed by them or at their direction is materially at variance with that intention, either party may obtain a decree conforming the writing to their intention if innocent third persons will not be unfairly affected thereby. 45 A. J. 615.

A writing is not the contract when it fails to express that on which the minds of the parties met, and courts freely exercise the power to correct mistakes when the proof leaves no doubt that the real contract was something else. 17 C. J. S. 495.

Reformation rather than rescission is the proper remedy where the parties to a contract and conveyance of a residence property agreed from the start on the identity of the property and its boundaries, but through mutual mistake supposed that it had a frontage of thirty feet, whereas the actual frontage was only twenty-eight and eighty-seven hundredths feet. 19 A. J. 74.

When either party to a contract makes an error, which the other party is bound to know, then the insistence on that erroneous writing is fraud. 17 C. J. S. 496.

The term mistake always involves the conception that the victim has been guilty of some degree of negligence which may or may not be excusable in the circumstances of the particular case; and that courts of equity are not bound by cast-iron rules, but are governed by rules which are flexible and adapt themselves to particular exigencies, so that relief will be granted when, in view of all the circumstances, to deny it would permit one party to suffer a gross wrong at the hands of the other. Little Horn State Bank of Wyola v. Gross (Mont.) 300 P. 277.

RINER, Chief Justice. KIMBALL, J. and BLUME, J. concur.

OPINION

RINER, Chief Justice.

In this action brought in the District Court of Goshen County by Calvin A. Russell as plaintiff, now the respondent, against Loring J. Curran as defendant and now the appellant, it was sought to obtain the reformation of a written contract for the sale of certain property entered into between these parties on September 17, 1947. The judgment brought here for review was in favor of the plaintiff and the defendant feeling that the trial court was wrong in its conclusion instituted these proceedings by direct appeal. The parties will be subsequently referred to herein as positioned in the District Court or by their surnames.

In order to obtain a reasonable idea of the issues involved in the action a brief outline of the pleadings before us in the record may be given as follows: Plaintiff's petition states in paragraph numbered "1" that the property which defendant agreed to sell and plaintiff to buy was Lot 36 Highway Subdivision, Goshen County, Wyoming together with the house thereon and the furniture therein. The price for this house and lot was to be the sum of $ 8350, the price of the furniture to be $ 1400 a total sale price of $ 9750; in paragraph number "2" that at that time one Donald J. McDonald doing business as Donald J. McDonald Company was acting as agent for said defendant and on behalf of both parties put the contract aforesaid in writing, said writing being marked Exhibit A and made a part of said petition; that when the written agreement was drawn through mutual error and mistake of both parties it omitted any reference to the furniture, the agreement having been hastily drawn; that it was accordingly agreed between them that the parties would later draw another written contract supplying all the details of the agreement but this was never done; that plaintiff thereafter caused to be paid to the defendant the sum of $ 9750 and the defendant fraudulently removed the furniture from said house and since has fraudulently refused to deliver the furniture in question here to plaintiff to his damage in the sum of $ 1400 which defendant has fraudulently refused to pay. Equitable relief and a judgment in the plaintiff's favor was prayed in the sum last mentioned. Exhibit A aforesaid is verbatim as follows:

"Donald J. McDonald Co.

Torrington, Wyo., 9/17, 1947

Received of Calvin Russell the sum of $ 100.00 DOLLARS, being a deposit and part payment, on account of BARGAIN AND SALE, made this day by Donald J. McDonald Co., as agent for Loring Curran of the certain lot, piece or parcel of land situate in the County of Goshen, State of Wyoming, and more particularly described as follows, to wit:

Lot 36, Highway Subdivision, Near Torrington, Wyo. Said property having been this day sold to said Calvin Russell for the sum of $ 9750 Dollars, on the following terms and conditions, to wit: $ 100 Dollars, in hand paid, receipt whereof is hereby acknowledged,

$ 9650 upon closing of loan

Taxes: Pro Rata--1947

Assessments: None

Insurance: Pro Rata

Possession: Oct. 15, 1947

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