Patrick v. Adams

The opinion of the court was delivered by Redfield, Ch. J. The question intended to be raised by the pleadings is whether, if one of the parties to a bond of submission to arbitrators claims that, by mistake, some part of the controversy agreed to be submitted is omitted from the bond, and the other party accedes to this claim and agrees to have the bond corrected, so as to include the omission, but subsequently refuses to have the alteration made, the other party is thereby released from performance of the bond? It is a familiar principle that a contract cannot be altered except by another contract of equal force. A bond cannot be altered by a mere oral agreement upon consideration, because the bond being a contract of a higher nature is not merged in the oral agreement. But it is held that where the defendant in a bond is induced not to perform it by an oral contract to accept something else, this .shall bind the other party, because it will be a fraud upon the obligor to allow him to be thus misled. And the fraud of the obligee is a defense to a bond. This is the effect of the cases cited by the defendant in the argument. And if the defense comes [380] within this- principle it' should prevail. As, if the plaintiff had agreed to waive the bond, and trusting to - such agreement the defendants had omitted to attend the arbitrators, they could probably not be made liable. But a mere naked agreement, or one upon- consideration, does not have this effect. And it seems to us the rejoinder here only presents the case of an agreement to alter, or at most to release the bond, which was not so acted upon by the defendant as to amount to any fraud in. the plaintiff. The whole contract upon both sides being revocable, the most the plaintiff’s oral agreement to alter the bond, so as to include the chancery suit, could amount to, was an agreement to submit that to the same arbitrators at the same time. This of course must be equally revocable with thp bond, and must have been so understood by the defendants. It then became, on the construction put upon it in the rejoinder, an additional contract of submission. This the plaintiff has revoked, and if it was a binding contract he is liable for damages, probably, for doing so. But as this contract could not merge or supersede the bond, we think the revocation of it is no such fraud upon the defendants as will excuse them from performing the bond. And the mere fact that there was a mistake in the bond will be no defense to it. So that the party’s only remedy, upon the facts alleged in the rejoinder, seems to be an action upon the subsequent agreement, or an application to a court of chancery to reform the bond. We treat the new contract as a mere oral or parol contract, because the counsel on both sides so treat it, and because the construction being most strongly against the pleader, it is presumed that, if the law requires the new contract to be under seal in order to merge the former one, and it is not so alleged, it was not under seal, and if the pleader requires to show a contract under seal or in writing under the statute of frauds, he must so allege in his plea, or it will be presumed against him. But it seems to us the bond, as set forth on oyer, probably did include the chancery suit, and the provision in regard to the arbitrators deciding the case according to law is to be understood chancery law in the chancery suit. It is perhaps somewhat questionable whether, after craving oyer of the condition of the bond, and spreading it upon the [381] record, a plea that it did not contain the chancery suit between the .parties, when in terms it included all disputes and controversies between them, might not be regarded as a departure or repug-nancy in pleadings. But we have not chosen to decide the case upon any such ground. Judgment reversed. Judgment, rejoinder is insufficient, and the plaintiff recover his damages and costs.