Sharp v. Jones
| Decision Date | 17 September 1986 |
| Docket Number | No. 48A04-8604-CV-111,48A04-8604-CV-111 |
| Citation | 497 N.E.2d 593 |
| Parties | Lawrence SHARP and Bertha Sharp, Appellants (Plaintiffs Below), v. Gregory K. JONES, Linda Jones, Larry W. Brown, and Nancy M. Brown, Appellees (Defendants Below). |
| Court | Indiana Appellate Court |
Ronald L. McNabney, Anderson, for appellants.
Joan Bashaw Gregg, Anderson, for appellees.
Plaintiff-Appellant Lawrence and Bertha Sharp (Sharps) appeal an adverse judgment in a land contract dispute.
We reverse.
Because we reverse, we address only the following issues:
1. whether the trial court's reformation of the land contract was proper, and
2. whether the trial court erred in admitting certain evidence.
On September 1, 1976, the Sharps entered into a land contract as sellers with defendant/appellees Gregory Jones, Linda Jones, Larry Brown, and Nancy Brown (Jones) as purchasers. The sale price of the land involved was $36,444. As to payment, the contract provided
Five Thousand ($5,000.00) dollars is to be paid in cash on or before delivering this contract and the balance of the first above named amount, namely: $31,444.00 is to be paid in installment (sic) of not less than $700.00 to be paid upon the principal on the 1st day of December, 1977, and a like amount on the 1st day of December of each year thereafter, with the balance of the principal due on said contract due and payable September, 1991.
Buyers shall have the right to pay an additional sum upon the principal on the 1st day of month (sic) during the continuance of this contract providing same is paid in multiples of one hundred dollars.
In addition to the principal payments, interest is to be paid monthly at the rate of 8 1/2% per annum; said interest is to be computed upon the amount of principal due at the beginning of each month's period. The first payment of interest is
to be made October 1, 1976. First payment of interest is: $267.27. 1
(R. 211-212).
It also provided for late fees assessed at 2% of any amounts paid more than 10 days late. The final payment was due on September 1, 1991. 2
Jones made payments of $267.27 each month from the contract's inception until the Sharps filed this action for either specific performance or cancellation of the land contract. The Sharps's complaint stated (a) Jones owed late charges, (b) had refused to erect a fence as required by the contract, and (c) had set a fire causing damage to the Sharps's adjoining property. After the suit was filed, Jones continued to tender monthly payments of $267.27 to the court. Jones also counterclaimed, requesting the court to "reform" the contract so only the interest on the principal would be due each month.
(b) "reformed" the contract by determining
* * * the contract should be reformed in that after the date of this Judgment future monthly interest payments should be based on 8 1/2% of the principal balance.
(c) ordered Jones to pay the yearly amount of principal due in December, and
(d) awarded the previous monthly payments tendered to the court to the Sharps.
The Sharps appeal, claiming the trial court erred by reforming the contract and by miscalculating the principal.
The Sharps claim the trial court's judgment is contrary to law because it provides for a reduction of the amount of monthly payments to be made by the Jones's. When discussing the standard of review in such cases, our First District recently said
When a judgment is attacked as being contrary to law, this court neither considers the credibility of the witnesses nor weighs the evidence, instead, we look solely to the evidence most favorable to the judgment, together with all reasonable inferences therefrom, and it is only when this evidence is without conflict and leads to but one conclusion and the trial court reaches a contrary conclusion, will we reverse a decision for being contrary to law. Litzelswope v. Mitchell, (1983) Ind.App., 451 N.E.2d 366.
Indiana-Kentucky Elec. Corp. v. Green (1985), Ind.App., 476 N.E.2d 141, 143.
Our disposition of the issues in this case has been made more difficult because we have not been favored with an appellee's brief. In such cases, we apply a less stringent standard of review with respect to showings of reversible error. The appellant need only establish prima facie error to win reversal. Johnson County Rural Electric v. Burnell (1985), Ind.App., 484 N.E.2d 989, 991; Indiana State Board of Health v. Lakeland Disposal Service (1984), Ind.App., 461 N.E.2d 1145. In this context, "prima facie " means at first sight, on a first appearance, or on the face of it. Harrington v. Hartman (1968), 142 Ind.App. 87, 233 N.E.2d 189, 191 (quoting Ellet v. Ellet (1965), 137 Ind.App. 96, 205 N.E.2d 555, 556).
The trial court erred when it stated it was reforming the contract. The contract reads in pertinent part:
In addition to the principal payments, interest is to be paid monthly at the rate of eight and one-half percent per annum; said interest is to be computed upon the amount of the principal due at the beginning of each month's period. The first payment of interest to be made October 1, 1976. First payment of interest is: $267.27. (R. 212)
When the trial court provided in its order "after the date of this Judgment future monthly interest payments should be based on 8 1/2% of the principal balance", it was enforcing the terms of the contract as written, not reforming it. Defining "reform", Black's Law Dictionary says
REFORM. To correct, rectify, amend, remodel. Instruments inter partes may be reformed, when defective, by a court of equity. By this is meant that the court, after ascertaining the real and original intention of the parties to a deed or other instrument, (which intention they failed to sufficiently express, through some error, mistake of fact, or inadvertence,) will decree that the instrument be held and construed as if it fully and technically expressed that intention. Churchill v. Meade, 92 Or. 626, 182 P. 368, 371; Gross v. Yeskel, 100 N.J.Eq. 293, 134 A. 737.
Black's Law Dictionary 1446, Rev. 4th Ed. (1968). Thus, the trial court incorrectly labeled its action a "reformation".
The Sharps request on appeal the contract not be reformed apparently because of the trial court's misnomer below. However, for this court to grant the relief the Sharps seek, the contract must, in fact, be reformed. We will treat this appeal as if such a request had been made.
Reformation of a contract is appropriate only when both parties mistakenly execute a document which does not express the true terms of their agreement, or when one party so executes but the other acts fraudulently or inequitably while having knowledge of the other's mistake. First Equity Security Life Ins. Co. v. Keith (1975), 164 Ind.App. 412, 329 N.E.2d 45, 49. This rule is recognized in Pearson v. Winfield (1974), 160 Ind.App. 613, 313 N.E.2d 95, where this court said
In Indiana, equity has jurisdiction to reform written documents in only two well defined situations:
(1) where there is a mutual mistake,--that is, where there has been a meeting of the minds, an agreement actually entered into, but the contract, ... in its written form does not express what was really intended by the parties thereto; and
(2) where there had been a mistake of one party, accompanied by fraud or inequitable conduct by the remaining parties. Citizens National Bank of Attica v. Judy, et al. (1896), 146 Ind. 322, 43 N.E. 259.
Similarly, mistake by the scrivener will permit reformation of the instrument where it is apparent both parties were mistaken as to the actual contents of the instrument. Allen v. Bollenbacher (1912), 49 Ind.App. 589, 97 N.E. 817, 819.
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