14 N.Y.S. 395 | N.Y. Sup. Ct. | 1891
On or about the 6th day of August, 1888, the plaintiff and the defendants formed a copartnership in the business of the manufacture and sale of mechanical wood-pulp, at the village of Dexter in Jefferson county, upon premises prior to that time owned and occupied by the defendants. The title to the premises was in the defendant Jones, but he had, on the 11th February, 1888, given a contract of sale of an undivided half thereof to the defendant Hunter, upon which there was unpaid $1,500. On the 6th August, 1888, the plaintiff paid to Jones the sum of $2,000 in cash, and executed and delivered to him two notes of $1,000 each, payable to the order of Jones, with interest, one being payable on April 1, 1889, and the other April 1, 1890. At about the same time a written agreement was prepared by the plaintiff, or under his direction, and was signed by all the parties, and the defendant Jones executed and delivered to plaintiff a deed of an undivided one-third of the property, and a similar deed to the defendant Hunter. Thereupon the the parties commenced their business, and continued until about the 1st of August, 1889, when differences arose as to the ownership of the $4,000 advanced in money and notes by the plaintiff; the plaintiff claiming that it was a part of the capital of the concern, and the defendants claiming that it belonged entirely to them as the purchase price of a one-third interest in the property. Thereupon the plaintiff commenced this action for a dissolution, alleging, among other things, that the $4,000 referred to was part of the capital, and should be accounted for as such. The written contract was attached to the complaint, and sustained this view. The defendants, in their answer, among other things alleged that the agreement in fact between the parties was that the plaintiff should pay the defendants $4,000 for one-third interest in the property; that the property was considered to be of the value of $12,000, and was the capital of the concern, of which, upon the conveyance to plaintiff, the parties became equal owners; and that by mutual mistake the written articles did not state correctly the agreement, and a reformation was asked. The special term found with the defendants upon the facts, and directed a reformation accordingly. Upon this appeal both parties are content to have a dissolution, and the struggle is over the reformation of the agreement and
In Devereux v. Fire Office, 4 N. Y. Supp. 655, it was held by this court, that to justify a reformation of a written contract on the ground of mutual mistake the evidence should be clear and convincing, and such as to leave no-reasonable doubt as to the existence of the mistake alleged. Does the evidence in this case come up to that standard? The defendant Jones and Mr. Hunter, the husband and agent of the other defendant, testify in one way; the plaintiff the other. The plaintiff testifies that he said to Hunter: “I will put in $4,000 into this business,—$2,000 in cash and $2,000 in notes,—and Mr. Jones must give each of us a title to the undivided third of the property.” The defendant Jones and Mr. Hunter testify that they offered to sell a third interest to plaintiff for $4,000, and then become equal partners, and that plaintiff accepted the offer. The theory of the defendants is strongly corrob-. orated by the conduct of all the parties. The $4,000 did not go into the business, and no one acted as if it was so expected. The plaintiff says Hunter was to have title to one-third, and still there was no way for Hunter to pay Jones the $1,500 balance due on the contract except by the use of a part of the $4,000. The agreement provided that none of the parties should withdraw from the business more than his share of the profits except $10 a week,, and still, if the theory of plaintiff is correct, the defendants had and used $2j000 of the capital to the knowledge of plaintiff without objection. The failure of plaintiff to charge the defendants with this upon the books of the firm which he kept, his acceptance of a receipt from Jones for the $2,000 to-apply on the purchase of the property, his joining with defendants in raising-the $600 needed in the fall of 1888, his failure to raise any question on the subject until the spring of 1889. when the business was less prosperous, his making the notes and renewals to the order of Jones, all indicate conduct on his part utterly inconsistent with his present theory, and conclusively and beyond a reasonable doubt showing, in connection with the other evidence, that the $4,000 was not a part of the capital, and was not so considered by the plaintiff until long after the agreement was made. .That being so, the agreement failed to express the contract in fact made or the mind of either party. It was therefore a case of mutual mistake. But it is said that all parties knew the contents of the agreement, and the mistake, if any, was as to the true construction or meaning of the paper as written, and that, therefore, it was a mistake of law, and the parties have no remedy. In Pitcher v. Hennessey, 48 N. Y. 416, it was held that where parties intending to reduce a paroi agreement to writing, and because they are ignorant of the force of language and misunderstand the meaning of the terms used, make a contract different from that designed, equity will grant relief by reforming the instrument and compelling the parties to execute and perform their agreement as they make it, and it matters not whether such a mistake be called one of law or of fact. A similar doctrine is laid down in 1 Story, Eq. Jur. § 115; 2 Pom. Eq. Jur. § 845. So in Born v. Schrenkeisen, 110 N. Y. 59,17 N. E. Rep. 889, it is said that where there is no mistake about the agreement, and the only mistake is in the reduction of that agreement to writing, such mistake of the scrivener or of either party, no matter how it occurred, may be corrected. Within the rule of the Pitcher Case, the defendants are entitled to relief.