of mistake as to an antecedent or existing situation, the parties make a written instrument which they might not have made, except for the mistake, the court cannot reform the writing into one which it thinks they would have made, but in fact never agreed to make. 57 If, however, the mistake is of sufficient importance and the status quo can be restored, equity should rescind the whole transaction, unless the mistake is one of law and the court feels Braun v. Wisconsin Rendering Co., 92 Wis. 245, 66 N. W. 196; Pullen's Will, 166 Wis. 254, 165 N. W. 25. In Hughes v. Payne, 27 So. Dak. 214, 217, 130 N. W. 81, the court said: "In a bill to reform a contract an allegation that, 'It was never conceived by either of the parties that it was necessary to reduce all of said contract to writing in order to make the same binding between the parties thereto,' negatives any theory of accidental omission, and does not present a cause for equitable relief. Clark v. Hart, 57 Ala. 390; Stodalka v. Novotny, 144 Ill. 125, 33 N. E. 534; Roundy v. Kent, 75 Iowa, 662, 37 N. W. 146; Andrew v. Spurr, 8 Allen, 412; Wise v. Brooks, 69 Miss. 891, 13 So. 836; Grieve v. Grieve, 15 Wyo. 358, 89 Pac. 569, 9 L. R. A. (N. S.) 1211." In Meacham Con. Co. v. Hopkinsville, 164 Ky. 703, 707, 176 S. W. 187, the court said: "The authorities dealing with this question are not harmonious, some of them holding that when parties have deliberately entered into a written contract, with a full and clear understanding of its meaning and effect, neither of them will be allowed to say that the writing did not express their real intention or be permitted to vary or contradict its terms and conditions by evidence of prior or simultaneous verbal agreements or arrangements. Others hold that although the meaning and effect of the writing may have been fully understood, one of the parties, upon clear and convincing evidence of a prior or present agreement that the terms and conditions as expressed in the writing should not be enforced or would not be binding may have it reformed to express the true intention and agreement of the parties at the time of its execution. "This latter view was adopted by this court in the early case of Coger's Executors v. McGee, 2 Bibb, 321, 5 Am. Dec. 610." Other illustrative cases on the subject are Ware v. Cowles, 24 Ala. 446, 60 Am. Dec. 482; Stevens v. Cooper, 1 Johns. Ch. 425, 7 Am. Dec. 499; Rearich v. Swinehart, 11 Penn. St. 233, 51 Am. Dec. 540; Dwight v. Pomeroy, 17 Mass. 303, 9 Am. Dec. 148; Oliver v. Oliver, 4 Rawle, 141, 26 Am. Dec. 123; McElderry v. Shipley, 2 Md. 25, 56 Am. Dec. 703; Martin v. Hamlin, 18 Mich. 354, 100 Am. Dec. 181. See also Pomeroy's Equity Jurisprudence, Vol. 2, Sec. 854. "If this were a private case between private individuals involving private rights, we would follow the rule laid down in Coger v. McGee, but we do not think the equitable principle announced in that case should be allowed to control this one. The mayor of the city was empowered by the council to execute this contract, and it does not appear that the council at any time consented or agreed that the contract as written should be construed otherwise than according to its terms." 57 See the preceding section. constrained by that circumstance; and though a direct decree of reformation could not be granted, it would be proper to make the decree of rescission conditional on the refusal of the defendant to assent to reformation. 1550. Reformation of conveyances. The commonest illustrations of reformation concern conveyances. Where a deed conveys a different or larger estate or right than was intended, and both parties shared an intent as to the estate which should have been conveyed, the grantor is allowed a reformation of the instrument so that it shall express this intent; 58 and under similar circumstances where a deed conveys a smaller estate or gives a smaller right than was intended, or inadequately describes an estate or right, the grantee is allowed a reformation of the instrument so that it shall express the real intention. 59 Where, however, the parties misap 58 Baker v. Paine, 1 Ves. Sr. 456; Rob v. Butterwick, 2 Price, 190; Murray v. Parker, 19 Beav. 305; Ivinson v. Hutton, 98 U. S. 79, 25 L. Ed. 66; Philippine Sugar Estates Development Co. v. Government of Philippine Ids., 247 U. S. 385, 62 L. Ed. 1177, 38 Sup. Ct. 513; Dulo v. Miller, 112 Ala. 687, 20 So. 981; Felton v. Leigh, 48 Ark. 498, 3 S. W. 638; Capelli v. Dondero, 123 Cal. 324, 55 Pac. 1057; Jackson v. Magbee, 21 Fla. 622; Dazey v. Binkley, 285 Ill. 513, 121 N. E. 165; Schlehofer v. United States Brewing Co., 189 Ill. App. 470; Fleetwood v. Brown, 109 Ind. 567, 9 N. E. 352, 11 N. E. 779; Smelser v. Pugh, 29 Ind. App. 614, 64 N. E. 943; Pritchett v. Frisby, 23 Ky. L. Rep. 433, 63 S. W. 10; Andrews v. Andrews, 81 Me. 337, 17 Atl. 166; Boulden v. Wood, 96 Md. 332, 53 Atl. 911; Tarbell v. Bowman, 103 Mass. 341; Goode v. Riley, 153 Mass. 585, 28 N. E. 228; Gould v. Emerson, 160 Mass. 438, 35 N. E. 1065, 39 Am. St. Rep. 501; Peques v. Mosby, 15 Miss. 340; Cassidy v. Metcalf, 66 Mo. 519; Tapley v. Herman, 95 Mo. App. 537, 69 S. W. 482; Cox v. Hall, 54 Mont. 154, 168 Pac. 519; Busby v. Littlefield, 31 N. H. 193; Searles v. Churchill, 69 N. H. 530, 43 Atl. 184; Walker v. Bourgeois, 88 N. J. Eq. 124, 102 Atl. 250; Gillespie v. Moon, 2 Johns. Ch. 585, 7 Am. Dec. 559; Andrews v. Gillespie, 47 N. Y. 487; Gallup v. Bernd, 132 N. Y. 370, 30 N. E. 743; Ring v. Mayberry, 168 N. C. 563, 84 S. E. 846; Maxwell v. Wayne Nat. Bank, 175 N. C. 180, 95 S. E. 147; Hamilton v. Asslin, 14 S. & R. 448; Baab v. Houser, 203 Pa. 470, 53 Atl. 344; Haines v. Stare, 249 Pa. 494, 95 Atl. 81; Lawrence v. Staigg, 8 R. I. 256; Perkins v. Kirby, 39 R. I. 343, 97 Atl. 884; Davidson v. Greer, 3 Sneed, 384; Ross v. Armstrong, 25 Tex. Sup. 354, 78 Am. Dec. 574; May v. Adams, 58 Vt. 74, 3 Atl. 187; Hull v. Watts, 95 Va. 10, 27 S. E. 829; Allen v. Yeater, 17 W. Va. 128; Hagenah v. Geffert, 73 Wis. 636, 41 N. W. 967; Reade v. Armstrong, 7 Ir. Ch. 266, 375; M'Cormack v. M'Cormack, 1 L. R. Ir. 119. 59 Barstow v. Kilvington, 5 Ves. 593; Johnson v. Bragge, [1901] 1 Ch. 28; Warren v. Crow, 195 Ala. 568, 71 So. prehended the extent of the grantor's interest and a conveyance of a half interest in an estate was made, which it was supposed was the whole of the grantor's right, for a consideration based on the supposed extent of the right, equity refused to reform the conveyance so that it would convey an additional right in fact owned by the grantor, without further consideration than that originally fixed for the half interest.60 § 1551. Reformation of releases. A release though general in terms will be reformed so as to cover merely the right with regard to which the parties were dealing and exclude rights of which they were ignorant.61 This principle has sometimes been extended so as to exclude from the operation of a release unknown or unexpected consequences 92; Hataway v. Carnley, 198 Ala. 39, 73 So. 382; Fuller v. Hawkins, 60 Ark. 304, 30 S. W. 34; Seegelken v. Corey, 93 Cal. 92, 28 Pac. 849; Palmer v. Hartford Co., 54 Conn. 488, 9 Atl. 248; Taylor v. Glens Falls Co., 44 Fla. 273, 32 So. 887; Kerchner v. Frazier, 106 Ga. 437, 32 S. E. 351; Way v. Roth, 159 Ill. 162, 42 N. E. 321; Benner v. Dove, 283 III. 318, 119 N. E. 349; Walls v. State, 140 Ind. 16, 38 N. E. 177; Earl v. Van Natta, 29 Ind. App. 532, 64 N. E. 901; Hallam v. Corlett, 71 Iowa, 446, 32 N. W. 449; Stead v. Sampson (Ia.), 155 N. W. 978; Bodwell v. Heaton, 40 Kans. 36, 18 Pac. 901; White v. Curd, 86 Ky. 191, 5 S. W. 553; Thomas v. Conrad, 114 Ky. 841, 71 S. W. 903, 74 S. W. 1084; Levy v. Ward, 33 La. Ann. 1033; Frantom v. Nelson, 142 La. 850, 77 So. 867; Philpott v. Elliott, 4 Md. Ch. 273; Hodge . Cole, 140 Mass. 116, 2 N. E. 774; Chambliss v. Person, 77 Miss. 806, 28 So. 21; Henderson v. Beasley, 137 Mo. 199, 38 S. W. 950; Palmer v. Wood, (Mo. 1918), 201 S. W. 857; Gwyer v. Spaulding, 33 Neb. 573, 50 N. W. 681; Hitchins v. Pettingill, 58 N. H. 386; Lewis v. Ferris (N. J. Eq.), 50 Atl. 630; Steinbach v. Prudential Ins. Co., 172 N. Y. 471, 65 N. E. 281; Manheimer v. Kuhn, 173 N. Y. App. D. 135, 159 N. Y. S. 437; Davenport v. The Widow, and Heirs of Sovil, 6 Oh. St. 459; Bradshaw v. Provident Trust Co., 81 Or. 55, 158 Pac. 274; McLeod v. Kirkland (Tex. Civ. App.), 184 S. W. 721; Darden v. Vanlandingham (Tex. Civ. App.), 189 S. W. 297; Lord v. Horr, 30 Wash. 477, 71 Pac. 23; Croft v. Hanover Fire Ins. Co., 40 W. Va. 508, 21 S. E. 854, 52 Am. St. Rep. 902; Smith v. McCune, 78 W. Va. 307, 88 S. E. 846; Silbar v. Ryder, 63 Wis. 106, 23 N. W. 106; Gimbel v. Tolman, 161 Wis. 382, 154 N. W. 628. 60 Jeakins v. Frazier, 64 Kans. 267, 67 Pac. 854. 61 Ramsden v. Hylton, 2 Ves. Sr. 304; Cholmondeley v. Clinton, 2 Mer. 171, 352; Lindo v. Lindo, 1 Beav. 496, 506; Lyall v. Edwards, 6 H. & N. 337, 348; London & South Western Ry. Co. v. Blackmore, L. R. 4 H. L. 610, 623; Gandy v. Macaulay, 31 Ch. Div. 1; Haven v. Foster, 9 Pick. 112, 19 Am. Dec. 353; Reggio v. Warren, 207 Mass. 525, 93 N. E. 805, 32 L. R. A. (N. S.) 340; Dambmann v. Schulting, 75 N. Y. 55, 62. See also infra, § 1825. of a known right to which the release applied and was intended to apply. Thus where a release is given by one injured in an accident and more serious injuries develop than were supposed to exist at the time of the settlement, it is a question of fact whether the parties assumed as a basis of the release the known injuries, or whether the intent was to make a compromise for whatever injuries from the accident might exist whether known or not. On a fair interpretation not only of the language of the instrument, but of the intention of the parties, the latter supposition is more likely, but presumably out of tenderness for injured plaintiffs some courts have gone very far in finding the facts in accordance with the former possibility.62 62 Thus in Great Northern Ry. Co. v. Reid, 245 Fed. 86, 89, 157 C. C. A. 382, the court said: "The release itself is as broad as it could be made, acquitting the company of all liability arising on account of the injuries received by appellee, whether then appearing or growing out of the same by development in the future, or arising or to arise out of any and all personal injuries sustained at any time or place while in the employ of the railway company prior to the date of the release. In such a release, however, the general language will be held not to include a particular injury, then unknown to both parties, of a character so serious as clearly to indicate that, if it had been known, the release would not have been signed. This was the conclusion reached in Lumley v. Wabash R. Co. (C. C. A. 6th Circuit), 76 Fed. 66, 22 C. C. A. 60. See, also, Tatman v. Philadelphia, B. & W. R. Co. (Del. Ch.), 85 Atl. 716." "The rule unquestionably applies to settlements of the kind here involved that they neither can nor ought to be impeached and set aside for fraud or mistake, except upon clear and convincing proofs. Chicago & N. W. Ry. Co. v. Wilcox, 116 Fed. 913, 54 C. C. A. 147." "We agree with the court below that it should not be disturbed as it re- § 1552. Effect of parol evidence rule and Statute of Frauds on right of reformation of executed transactions. The right of reformation wherever allowed is necessarily an invasion or limitation of the parol evidence rule, since when equity reforms a writing it enforces an oral agreement at variance with the writing which the parties had agreed upon as a memorial of their bargain. This limitation is necessary to work justice, and there seems no more reason to object to it in case of reformation than in case of rescission for fraud or for mistake. In either case, unless the mistake precludes the existence of a contract at law,63 it should not be denied that the writing correctly states the actual contract or conveyance which has been made, but as it is inequitable to allow the enforcement of it, and (where reformation is appropriate) as justice requires the substitution of another in its place, equity gives relief; and to that end necessarily admits any relevant parol evidence. and of Nelson v. Minneapolis Railway Co., 61 Minn. 167, 63 N. W. 486. And it is in cases of like effect that it is held honesty in representing what is in fact untrue is no reason for not setting aside a settlement made because of mutual mistake. See Pendarvis v. Gray, 41 Tex. 326; First Nat. Bank v. Hackett, 159 Wis. 113, 149 N. W. 703; Tatman v. Railway (Del. Ch.), 85 Atl. 716, 721; Culbertson v. Blanchard, 79 Tex. 486, 15 S. W. 700; Houston & T. C. R. Co. v. Brown (Tex. Civ. App.), 69 S. W. 651; Berry v. Insurance Co., 132 N. Y. 49, 30 N. E. 254, 28 Am. St. Rep. 548. It is said in the Tatman Case that in order to invalidate a release on account of mutual mistake, the mistake must relate to a past or present fact material to the controversy, and not to an opinion respecting future conditions or results of present facts. It cites Chicago & N. W. Railway v. Wilcox, 116 Fed. 913, 54 C. C. A. 147; Nelson v. Chicago & N. W. Railway, 111 Minn. 193, 126 N. W. 902; Houston v. Brown (Tex. Civ. App.), 69 S. W. 651; Homuth v. Metropolitan Street Railway, 129 Mo. 629, 31 S. W. 903, and distinguishes the Houston case. And the case of Winter v. Great Northern Ry. Co., 118 Minn. 487, 136 N. W. 1089, is readily distinguishable from the case at bar. And so of Lumley v. Wabash R. Co., 76 Fed. 66, 22 C. C. A. 60, and Union Pacific Railway v. Artist, 60 Fed. 365, 9 C. C. A. 14, 23 L. R. A. 581. In Chicago & N. W. Railway v. Wilcox, 116 Fed. 913, 54 C. C. A. 147, a suit in equity to rescind, approved in the Tatman Case, complainant compromised and released a claim for a broken hip. She knew when she settled that her hip had been broken, and that it was a bad break. She was induced by the statement of her own physician, who was also the company's physician, to believe, and did believe, that she would be well within a year, and she settled upon that basis. She was mistaken, and her injury and disability turned out to be permanent. It is held her mistake was not a mistake of fact, but a mistake in opinion." Colorado Springs &c. Ry. v. Huntling (Colo.), 181 Pac. 129; Miles v. New York Cent. R. 178 N. Y. S. 673. 63 See supra, § 94. |