Mulkey v. Spicer

The allegations of the petition were sufficient to set forth a cause of action for reformation, and the trial court erred in sustaining a general demurrer to the petition.

NO. 15891. JULY 10, 1947. REHEARING DENIED JULY 22, 1947. J. N. Mulkey brought a suit against M. L. Spicer and E. P. Hoffman, individually and as a partnership, trading as Spicer Construction Company, seeking to recover a balance alleged to be due, under a written contract, for the purchase-price of personal property and timber. The plaintiff attached to the petition a copy of the contract entered into between the parties.

The consideration, as expressed in the written contract of sale, is in the following language: "At and for the sum of $13,900, the sum of $4000 having heretofore been paid, the sum of $2700 having been paid contemporaneously herewith, and $3500 on January 28, 1944, the balance to be paid as the timber from the land above described is cut at the rate of $10 per thousand board feet. In any event, however, the entire indebtedness shall be paid on or before May 28, 1944."

The trial court construed the language of the contract to mean that the total purchase-price was $13,900. The plaintiff then sought by amendment to show that the total sale price was $17,900, or $13,900 exclusive of the "$4000 having heretofore been paid." He sought to reform the contract in this respect. He alleged, as the basis for the reformation sought, the following: "On or about the 28th day of December, 1943, plaintiff, with M. L. Spicer, a member of the partnership constituting Spicer Construction Company, one of the defendants herein, went to the office of Blair Carmichael, the attorneys representing the defendants, when they were referred to Mr. Hubert Schroeder, an attorney connected with said firm of Blair Carmichael, and, in the presence of said Schroeder and each other, discussed in detail the question of the consummation of sale of the properties described in Exhibit ``A' to their petition. . . Said Schroeder was representing the defendants, and an agreement was reached by which the defendants were to pay plaintiff the sum of $13,900 for the articles set forth in said exhibit exclusive of the sum of $4000, which had been previously paid, as is fully set forth in the original petition. It was the purpose and intent of the said Schroeder, as attorney for said defendants, to draw a contract to said effect providing for the payment of $2700 on that date, the payment of $3500 on January 27, 1944, and the balance to be paid as the timber was cut from said property at the rate of $10 per thousand board feet, the entire amount to be paid, however, on or before May 8, 1944. It was understood between the parties at the time said contract was drawn that the same was intended to mean that the defendants agreed to pay plaintiff the sum of $13,900 in addition to the sum of $4000 theretofore paid under the oral agreement. If the contract as drawn and as shown by said exhibit is construed as providing a sales price of $13,900, against which the $4000 theretofore paid was to be credited, then the same was a mistake of the scrivener and did not represent the mutual agreement of the parties, and the mistake was unintentional on the part of the attorney who acted as scrivener in drawing said contract for defendants and was unintentional on the part of plaintiff, unmixed with any negligence on his part in relying on the interpretation put on the contract by defendants' attorney when the contract was delivered to plaintiff and placed of record."

The trial court held that the petition as amended was not sufficient in law to authorize a court of equity to reform the written agreement as prayed, and sustained a general demurrer to the petition. The exception is to this judgment. 1. It is strongly urged that the plaintiff in error is not entitled to have the instrument in question reformed for the reason that it does not appear that he was diligent. It is contended that, if he could read, he should have read.

In Green v. Johnson, 153 Ga. 738 (113 S.E. 402), Mr. Justice Hines, speaking for the court, collected and differentiated in a very able manner the authorities up to that time on the question of diligence in a case of this kind. After discussing at length the authorities, the court expressed its conclusion in that case as follows: "Equity will not lend its aid to reform a written contract because of mistake as to its contents on the part of a complaining party who was able to read, and fraud of the other party which consisted only in making false representations as to such contents, on which the complaining party relied as true because of confidence in the party making them, no confidential relation existing between the parties, and no sufficient excuse appearing why the complaining party did not read the instrument; but this principle does not apply to actions for the reformation of instruments which, by mutual mistake, do not evidence the true agreement of the parties. . . In all cases where the form of the conveyance or instrument is, by mutual mistake, contrary to the intention of the parties in their contract, equity will interfere to make it conform thereto. . . Reformation may be granted even in cases of negligence by the party complaining, if it appear that the other party has not been prejudiced thereby." This ruling has been cited many times with approval. In Cheatham v. Palmer, 178 Ga. 223 (172 S.E. 462), a case in which reformation was sought because of the alleged mistake of the scrivener in preparing a written instrument, the court held: "The petition alleges that by mutual mistake of the parties a deed executed by petitioners to the defendant does not express the intention of the parties to the contract, and prays for reformation of the instrument. Such petition was not subject to a general demurrer. Civil Code (1910), §§ 4567, 4578; Green v. Johnson, 153 Ga. 738 (4) (113 S.E. 402)." This court, in McCollum v. Loveless, 187 Ga. 262, 267 (200 S.E. 115), dealing with the question of diligence by the complaining party where reformation is sought, held: "The principle stated in the third note, which is taken verbatim from the Code [§ 37-212], was codified from the decision in Werner v. Rawson, 89 Ga. 619 (15 S.E. 813), which was largely based on a statement of the general principle given by the author of Pomeroy's Equity Jurisprudence. The ruling is well fortified by the authorities generally, and was applied in Green v. Johnson, 153 Ga. 738 (113 S.E. 402), and in Cain v. Varnadore, 171 Ga. 497 (156 S.E. 216). The principle is applicable here. If the allegations of the petition be founded on fact, the defendant will not be prejudiced by the reformation of the deed so as to make it speak the truth. The relief here sought is not based on fraud, but on mutual mistake. Therefore cases cited by the plaintiff in error, which deal with the proposition that equity will not reform a written contract on account of fraud, the fraud consisting of false representations as to its contents on which the complaining party relied when there was no reason to justify him in so relying, are not in point." See also Steadham v. Cobb,186 Ga. 30 (196 S.E. 730); Hill v. Agnew, 199 Ga. 644 (34 S.E.2d 702); W. P. Brown Sons Lumber Co. v. Echols,200 Ga. 284 (36 S.E.2d 762).

The allegations with reference to mutual mistake were sufficient as against a general demurrer. An inadvertent mistake by a scrivener, unknown to the parties, is a mutual mistake as between the parties; and "a petition for reformation will lie where by mistake of a scrivener and oversight of the parties a writing does not express the real contract between the parties."W. P. Brown Sons Lumber Co. v. Echols, supra.

We think that the allegations of the petition as amended bring this case squarely within the rules of law announced in the above-cited authorities; and the petition was not, therefore, subject to dismissal on general demurrer.

2. It is further contended that the contract cannot be reformed as to one of the defendants, for the reason that he was not present when the contract was executed and did not participate in the negotiations, but simply signed the contract when it had been prepared and was later presented to him. The petition alleges that the contract was signed by a partnership composed of two partners, and that one of the partners was present and participated in the preliminary negotiations, and was present when the contract was prepared. The other partner was, of course, bound by the action of this partner. See Code, §§ 75-202, 75-302. And the fact that the other partner later signed the contract in nowise negatives the theory of a mutual mistake as between the plaintiff on the one hand and the partnership on the other.

It follows from what has been said above that it was error to sustain a general demurrer and dismiss the petition.

Judgment reversed. All the Justices concur.