82 Neb. 344 | Neb. | 1908
This was an action in equity to reform a written contract of employment. The defendant, the Kingman Implement Company of Omaha, was one of several corporations whose names commenced with the name “Kingman,” and whose headquarters were in Peoria, Illinois. Among the others were Kingman & Company and the Kingmán Plow Company. Martin Kingman was the founder of these corporations and the president of each of them. The several corporations were in law distinct, but the general management was in the hands of Mr. Martin Kingman, and they were treated as if they were all branches of one house located at Peoria. In April, 1900, the plaintiff came to Omaha as manager of the defendant company. His contract of employment was in writing, for the making of which a printed blank prepared for the use of Kingman & Company was used, and it seems to have been made in the name of the latter company, although plaintiff was thereby employed to manage the business of the Kingman Implement Company of Omaha. The printed blank contained the following clause: “It is fully understood and agreed that if the said party of the second part is unable to do the work assigned to him in a manner satisfactory to said Kingman & Company, or should there be a failure or partial failure or destruction of crops, financial disturbance, fires, strikes or otherwise that would disarrange the business of the party • of the first part, they have option at any time of terminating this agreement.” In November, 1902, the term of the above contract having expired, a new contract was negotiated between the plaintiff and Mr. Kingman acting
On December 1, 1903, Mr. Kingman as president, and in the name of the Kingman Plow Company wrote a letter to the plaintiff, whom he.addressed as manager of the Kingman Implement Company, discharging him, and this letter was on December 3 delivered to the plaintiff by a Mr. Hatfield, who had been employed by the defendant to succeed the plaintiff. On January 6, 1904, the plaintiff llegan an action in the county court to recover an instalment of salary which was due him if the contract was still in force, and this action was appealed to the district court in November, 1904. The district court having held that the contract gave to the employer the absolute right of discharge, and that the plaintiff was not entitled in that suit to any reformation of the contract, said court, upon the application of the plaintiff, stayed proceedings in said suit to enable the plaintiff to bring an action for the reformation of the contract, and this action was thereupon begun. A trial being had to the court, it was found that the contract in question did not correctly state the real contract between the parties in three particulars: First, in failing to state the capacity in which the plaintiff was employed; second, in failing to state the name of the defendant as the employing party; and, third, in failing to state the true agreement in respect to the right of the defendant to terminate the contract. Judgment was accordingly rendered reforming said contract so as to make the defendant party of the first part thereto, and to show that the plaintiff was employed as general man:
1. The defendant complains of that part of the decree which reforms the contract so as to describe the plaintiff as general manager, upon the ground, not that plaintiff was not in fact to be such general manager, for that is admitted, but that such portion of the agreement was not intended to be expressed in the written contract, and that therefore there was no mistake made in leaving it out. Admitting this argument to be valid, and that the facts did not present a case calling for a reformation of the contract in this particular, we cannot see how the defendant is in any manner prejudiced thereby. Should the capacity in which the plaintiff was employed become material in the action now pending op any other action brought upon the contract as reformed, such capacity will, it is true, appear from the contract; but it will appear just as the defendant now admits and would then be compelled to concede the fact to be. The principle that this court will not reverse a judgment of the court below for errors not prejudicial to the party complaining is too well settled to need the citation of authorities.
2. While characterizing the matter as unimportant, the defendant insists that there is no evidence that the contract was really intended to be in the name of the defendant, the Kingman Implement Company of Omaha, and that the use of the name of Kingman & Company was a mistake. It is argued that, when the bargain was made, nothing was said about the name of the company. The proof is that Mr. Kingman said to the plaintiff: “We want you to stay with us.” By the use of the words “we”
3. This is not the only reason for sustaining this finding of the district court. When the plaintiff brought his action in the county court, it was against both Kingman & Company and this defendant, and it Avas there stipulated that the contract was that of this defendant. Upon that stipulation the action was dismissed as to Kingman & Company. There Avere in these facts all the elements of an estoppel; the deliberate act of the defendant stipulating that it was a party, and the act of the plaintiff in dismissing his action against the other defendant made in reliance thereupon and to his prejudice. These facts were pleaded, and the district court rightly held that they estopped the defendant from denying that it was a proper party to such contract.
4. Martin Kingman died in December, 1904, before this action was begun, and without the taking of his testimony
5. This brings us to .the question whether, assuming the plaintiff’s testimony to be true, it clearly and satisfactorily established his right to a reformation of the contract. The negotiations for a contract seem to have been had in Mr. Kingman’s room at the Paxton hotel in Omaha. At that time the plaintiff had been acting as manager for the defendant for some two years under a contract containing identically the same clause as did the one we are considering. Mr. Kingman asked the plaintiff if he intended to stay with the company, told him that he wished him to do so, and that he wanted to make a contract for five years. The plaintiff objected to this, and said he preferred to make a contract for one year. After a discussion of the reasons pro and con, Mr. Kingman proposed to make a contract for three years, $2,600 for the first, $2,800 for the second, and $3,000 for the third. The plaintiff assented to this, and Mr. King-man said: “I have not any contracts with me, I will prepare one and send it to you.” The plaintiff then told Mr. Kingman that he wanted a straight contract, and Mr. Kingman asking him, “What do you mean by a straight contract?” he replied, “I mean an unqualified contract for three years.” Mr. Kingman said: “That is what we shall have. That is what we have.” This the plaintiff did not agree to, and he told Mr. Kingman that his understanding was, under the existing contract, that he was on trial; that, if he succeeded, all right, and, if he did not, Mr. Kingman was at liberty to terminate the contract. But Mr. Kingman demurred that this was not the meaning of the contract, and, in substance, said that his understanding of the meaning was that, if the plaintiff became unable on account of sickness or injury to do the business of the defendant to their satisfaction, he was to have
This presents the question whether a party to a contract who signs the same upon the assurance of the other party that he understands the provisions of the contract to have a certain specified meaning may, in case the contract cannot be so construed, have an action in equity to reform the same so that it shall clearly express the meaning specified. It is said by Mr. Pomeroy: “If, on the other hand, after making an agreement, in the process of reducing it to a written form, the instrument, by means of a mistake of law, fails to express the contract which the parties actually entered into, equity will interfere with the appropriate relief, either by way of defense to its enforcement, or by cancelation, or by reformation, to the same extent as if the failure of the writing to express the real contract was caused by mistake of fact. In this instance there is no mistake as to the legal import of the contract actually made, but the mistake of law prevents the real contract from being embodied in the written instrument.” 2 Pomeroy, Equity Jurisprudence (3d ed.), sec. 845. The same author (sec. 847), in discussing a mistake of law accompanied with inequitable conduct of the other party says: “Whatever be the effect of a mistake pure and simple, there is no doubt that equitable relief, affirmative or defensive, will be granted when the ignorance or misapprehension of a party concerning the legal effect of a transaction in which he engages, or concerning his own legal rights which are to be affected, is induced, procured, aided or accompanied by inequitable conduct of the other parties. It is not necessary that such inequitable conduct should be intentionally misleading, much less that it should be actual fraud; it is enough that the misconcep
We think the above principle should govern the disposition of this case, and that the contract should be reformed to express the meaning which Mr. Kingman assured the plaintiff he placed upon it. We therefore recommend that the judgment of the district court be affirmed.
By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is
Affirmed.