Woolner v. Layne

• Decision Date: 30 December 1970
• Docket Number: No. 32,32
• Citation: 181 N.W.2d 907,384 Mich. 316
• Parties: Sidney WOOLNER and Doris Woolner, Plaintiffs-Appellants, v. Chester LAYNE and Evelyn Layne, Defendants-Appellees.
• Court: Michigan Supreme Court

Page 907

181 N.W.2d 907

384 Mich. 316

Sidney WOOLNER and Doris Woolner, Plaintiffs-Appellants, v. Chester LAYNE and Evelyn Layne, Defendants-Appellees.

No. 32.

Supreme Court of Michigan.

Dec. 30, 1970.

Rapaport, Siegrist & Sablich, Lansing, for plaintiffs and appellants.

Farhat, Burns & Luoma by Robert W. Luoma, Lansing, for defendants-appellees.

Before the Entire Benth, except KELLY, J.

PER CURIAM.

Facts requisite to exposure of our reason for grant of leave to appeal (381 Mich. 769) are not difficult of statement. The plaintiff lessors and the defendant lessees executed a one year lease covering plaintiffs' house and lot. The lease set forth an express obligation of the lessees to pay the sum of all taxes levied against the demised premises during the stated term and the sum of all insurance carried on the house during that term.

Defendants, sued for the two sums by plaintiffs, refused to pay on strength of an affirmative defense. The defense, obviously framed upon and around the rule appearing in 2 Restatement, Contracts, § 505, p. 973 (quoted and discussed post), was 'that in negotiations between the parties the payment of taxes and insurance by the defendants was not contemplated by the parties;' that 'defendants assert during the preparation of the written lease by a third party, a provision requiring defendants to pay taxes and insurance upon the premises during the term of their lease was erroneously included in said lease by the said third party;' that 'defendants signed (said) lease mistakenly in that they overlooked said provision;' that 'plaintiffs also signed said lease mistakenly being unaware of said provision contained in said lease or in the alternative that plaintiffs signed said lease with knowledge that the provision for payment of taxes and insurance by defendant was contained therein, but knowing full well that said provision was not contemplated by the parties and should not have been contained in said lease, therefore acting fraudulently as to defendants * * *.'

Plaintiffs, replying, framed the issue as tried and brought to appeal by flatly denying the foregoing affirmative allegations.

The trial judge, dictating his opinion from the bench, held that in the absence of fraud, reformation of a contract is not warranted by the mistake of one party and, to warrant reformation, that the asserted mistake must be that of both parties.

These defendants have failed to sustain their pleaded burden of proving what Division 2 seems to have concluded was established as a matter of law, that is to say, that the Plaintiff lessors knew when they signed the lease that it did not accurately express the intention of the other parties and that they, the Plaintiff lessors, did know what that intention was, thus bringing said section 505 into play.

When completely quoted § 505 reads (emphasis ours):

' § 505. Reformation Where a Mistake of One Party is Known to the Other.

'Except as stated in §§ 506, 509--511, if one party at the time of the execution of a written instrument knows not only that the writing does not accurately express the intention of the other party as to the terms to be embodied therein, but knows what that intention is, the latter can have the writing reformed so that...