45 Barb. 478 | N.Y. Sup. Ct. | 1866
It is a familiar and well settled doctrine that where, through mistake or fraud, a contract or conveyance fails to express the actual agreement of the parties, it will be reformed by a court of equity so as to conform to such agreement and carry into effect the real intent of the contracting parties. This doctrine was fully established in this state in the case of Gillespie v. Moon, (2 John. Ch. 585,) in an opinion of Chancellor Kent, which Chief Justice Spencer, in Lyman v. The United Insurance Co. (17 John. 377,) in the Court of Errors, said “ commanded his entire assent and would remain a land mark for future decisions.”
Such is the present case. If there was mistake in thexecution of the notes in question in this action, in the omission of the words “zvith interest” in the two promissory notes of $1000 each, having the longest time to run, such omisssion was clearly well known, at the time, to the defendant, and was unknown to the plaintiff. The first question which meets us therefore, in the examination of the case is, whether the proof makes out a clear case of mistake on both sides, such as we have seen is called in some cases, a mutual
The case as it comes before us now is essentially changed. The referee find facts which clearly imply, what I think he ought to have found as a matter of fact, that the contract between the parties called for interest on the four notes which the defendants gave and were to give in part consideration for the property sold to them by the plaintiff. He does find, however, that in the parol agreement for the trade between the parties, nothing was said by either party on the subject of interest on that part of the consideration n.ot paid down, "or upon the notes to be given by the defendants. If this were so, and there is conflict in the evidence on this point, I do not think it at all conclusive on the question whether the notes were not to draw interest. The parties were contracting for a sale of personal property, and agreed upon a sale thereof, by the plaintiff to the defendants for $6000, of which sum $2000 was to be paid in hand and the balance in four annual installments of $1000 each. There was then the sum of $4000 upon which a credit was to be giyeq and the
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The notes subsequently drawn by the defendants’ attorney were to be prepared to perfect and complete this contract. They were all to be on interest, and the two notes not upon interest were not such as the agreement, made, recognized and assented to in and by the said chattel mortgage, plainly called for and required. It is not pretended that there was any change of the agreement, or any new terms made by the parties after the reading of the bill .of sale and the chattel 'mortgage. The referee finds that when the parties came together again the plaintiff examined the two notes having the shortest time to run, and seeing they were on-interest assumed that the other two were also on interest, without examination, and accepted the notes believing that all were so drawn as to bear interest; and that the defendants knew at the time of the delivery of the notes that the two having the shortest time to run were so drawn as to bear interest, and that the two others were so drawn as not to bear interest, and that they purposely abstained from calling the attention of the plaintiff to the fact that the two last notes were not on interest. Nothing I think can be clearer than that both parties understood that these notes and all of them were to draw interest. This then is a case where the contract as executed and evidenced in the written .papers was a mistaken one as to both sides, and that it was not earned out according to the agreement as the same was understood by both parties. Such error in the written evidence of the contract presents a clear case of mistake on both sides. The referee, we think, should have so found as matter of fact.
But, T think the plaintiff is entitled to have these notes reformed also upon the ground of fraud ; and that upon the facts found by the referee and appearing in the proof he would have been warranted- in directing a judgment for the plaintiff on this ground. Assuming that the chattel mortgage expressed upon its face the true agreement between the
In Wiswall v. Hall, (3 Paige, 313,) where a vendee made an untrue deed of the premises, which he professed to sell, relief was given on the ground of fraud, and the defendant decreed to rectify the conveyance. In DePeyster v. Hasbrouck, (1 Kern. 582,) a mortgage was reformed, for the fraud of the mortgagor in making and executing it so as not to cover all the property embraced in the propositions and agreement for the loan intended to be secured by such mortgage. The case of Rider v. Powell, (28 N. Y. Rep. 310,) is also quite in point. In that case Eider made an oral contract to sell^ his farm to the defendant for $4600, of which $1600 was to be paid in hand and secured by notes, and the balance to be secured by a bond and mortgage for $3000 on the premises, payable in ten installments with annual interest. The bond and mortgage given to secure the $3000 provided for the payment of $300 and interest on the same in yearly payments till the whole sum was paid, so that Eider should receive interest on the installments
We think, therefore, that the plaintiff was entitled to the relief demanded in his complaint, and that such relief can clearly be granted, based upon the ground of mistake and fraud, or upon either ground of mistake or fraud; and the referee should have so found and decided. The judgment must therefore be reversed and a new trial granted, with costs to abide the event.
Welles, E. D. Smith and Johnson, Justices.]