139 Cal. App. 62 | Cal. Ct. App. | 1934
Walter C. Hartman, one of the defendants above named, in the year 1928 executed to Louis S. Strauss and Edgar L. Strauss, copartners doing business as Strauss Brothers, six promissory notes. Five of the notes contained a provision for the payment of the principal “with interest payable monthly at the rate of one (1) per cent per month from date until paid . . . should the interest not be paid when due it shall thereafter bear like interest as the principal, and at the option of the holder of this note the whole sum of principal and interest shall become immediately due and payable”. The sixth provided for such payment “with interest at the rate- of twelve per cent per annum from date until paid, interest payable . . . , and if not so paid, to bear the same rate of interest as the principal.” Hartman paid interest thereon until January, 1929, when he was adjudicated a bankrupt, and Arthur S. Bruce was appointed trustee of his estate. The trustee also paid certain interest on the notes, the
The actions were tried together. The trial court found in accordance with the above allegations, and a decree was entered in each suit that the notes be reformed as prayed. Bruce as trustee has appealed from these judgments.
According to the testimony of all the parties to the instruments' and the attorney who drafted the same the provisions in question were inserted by mistake and did not truly express the agreement previously made. This evidence was amply sufficient to support the finding of the trial court.
But appellant claims that the instruments being usurious on their face they cannot be reformed, and that the court erred in its admission of evidence for that purpose and in its conclusion that the usurious provisions should be stricken therefrom. He cites the following cases in support of his contention: Merced County v. Shaffer, 40 Cal. App. 168 [180 Pac. 342], Ainsworth v. Morrill, 31 Cal. App. 509 [160 Pac. 1089], and Martin v. Kuchler, 212 Cal. 536 [299 Pac. 52, 53]. The first mentioned was an action to reform a bail bond, it being alleged that through mutual mistake of the parties it did not express their true intent. The bond did not in form comply with the requirements of the statute nor with the order of the court fixing the amount of bail. It was held that such a bond, being statu
It has been held that equity will not contravene the positive enactments and requirements of law and defeat its policy by supplying under the guise of amending defective instruments those deficient elements of form without which the agreement is absolutely void even as between the parties to it; nor will it fabricate for contracting parties those essential ingredients of a contract without which in the eye of the law there subsists no valid contract whatever (Dickinson v. Glenney, 27 Conn. 111; Oatman v. Niemeyer, 207 Cal. 424, 426 [278 Pac. 1043]). In such cases it has been uniformly held that no ground for equitable
Section 3399 of the Civil Code provides that, when through fraud or the mutual mistake of the parties, or the mistake of one party which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised to express that intention; and where it is shown that due to a mistake of the scrivener a writing does not set forth the true contract which the parties had made, relief by way of reformation may be granted (Lestrade v. Barth, 19 Cal. 660; Tarke v. Bingham, 123 Cal. 163 [55 Pac. 759] ; San Jose Ranch Co. v. San Jose L. & W. Co., 132 Cal. 582 [64 Pac. 1097] ; Oatman v. Niemeyer, supra; Mortara v. Rizzi, 104 Cal. App. 420 [285 Pac. 1071]); where such is the case and through an honest mistake in drafting the instrument a usurious provision is inserted therein which is contrary to the agreement and true intent of the parties, the right to relief by a revision thereof has frequently been recognized both in law and equity. (Norris v. W. C. Belcher Land Mortgage Co., 98 Tex. 176, 192 [82 S. W. 500, 83 S. W. 799]; Goodale v. Wallace, 19 S. D. 405 [103 N. W. 651, 117 Am. St. Rep. 962, 9 Ann. Cas. 545]; Ward v. Anderberg, 31 Minn. 304 [17 N. W. 630]; Long v. Greene County etc. Co., 252 Mo. 158 [158 S. W. 305]; Wheeler v. Meray, Bail. Eq. (S. C.) 507; 29 Am. & Eng. Ency. of Law, 2d ed., 463. See, also, Williston on Contracts, see. 1599.)
The mere failure of the parties to read the instrument with sufficient attention to perceive the mistake will not prevent reformation (Los Angeles etc. R. Co. v. New Liverpool Salt Co., 150 Cal. 21 [87 Pac. 1029]); nor is the jurisdiction of equity to correct errors in contracts caused by mutual mistake suspended by the bankruptcy law. (Zartman v. First Nat. Bank, 216 U. S. 134 [30 Sup. Ct. 368, 54 L. Ed. 418].) The relief asked was properly given, and the record discloses nothing which would justify a reversal of either judgment.
The judgments appealed from are affirmed.