Hughey v. Smith

Mr. Justice Moore delivered the opinion of the court. 1. The right of a court of chancery to reform or annul a written contract, the execution of which was induced by the fraud of the defendant, or resulted from the mutual mistake of both parties, is a well-recognized principle of equitable jurisprudence. Such being the ease, the only question to be considered is whether or not the complaint herein states facts sufficient to constitute a cause of suit. The rule is settled in this state that, in a suit to reform a written instrument on the ground of misapprehension of the facts involved, the complaint must distinctly allege what the original agreement of the parties was, or point out with clearness and precision wherein there was a misunderstand [326] ing, and that such mistake was mutual and did not arise from the gross negligence of the plaintiff, or that his misconception originated in the fraud of the defendant: Evarts v. Steger, 5 Or. 147; Lewis v. Lewis, 5 Or. 169; Stephens v. Murton, 6 Or. 193; McCoy v. Bayley, 8 Or. 196; Foster v. Schmeer, 15 Or. 363 (15 Pac. 626); Hyland v. Hyland, 19 Or. 51 (23 Pac. 811); Meier v. Kelly, 20 Or. 86 (25 Pac. 73); Epstein v. State Ins. Co., 21 Or. 179 (27 Pac. 1045); Kleinsorge v. Rohse, 25 Or. 51 (34 Pac. 874); Osborn v. Ketchum, 25 Or. 352 (35 Pac. 972); Thornton v. Krimbel, 28 Or. 271 (42 Pac. 995); Mitchell v. Holman, 30 Or. 280 (47 Pac. 616); Sellwood v. Henneman, 36 Or. 575 (60 Pac. 12); Stein v. Phillips, 47 Or. 545 (84 Pac. 793); Bower v. Bowser, 49 Or. 182 (88 Pac. 1104); Smith v. Interior Warehouse Co., 51 Or. 578 (94 Pac. 508, 95 Pac. 499); Howard v. Tettelbaum, 61 Or. 144 (120 Pac. 373). “The equitable jurisdiction for the correction of mistakes,” says a text-writer, “is exercised only in order that the real intention of the parties is carried out; and if the particulars wherein there has been a failure to express correctly the intention of the parties are not pointed out the court will have nothing to guide it in making the correction”: 14 PI. & Pr. 42. See, also, 18 PI. & Pr. 824. 2. It will be remembered that it is alleged in the complaint that it was the opinion of the parties to the contract that the lease to Borba would expire on April 1, 1912. There is no averment anywhere in the plaintiffs’ pleading that the termination of the Borba lease could not have been discovered by the exercise of reasonable diligence on the part of Mr. and Mrs. Hughey; nor is it alleged that the parties intended to make the term begin with the ending of Borba’s estate in the premises. To entitle a party to equitable relief in consequence of a mutual mistake, it should be alleged [327] and proved that the fact misapprehended could not have been discovered by the exercise of reasonable diligence on the part of the party seeking the redress invoked: Willard’s Eq. 70; Lewis v. Lewis, 5 Or. 169. 3, 4. The allegation that Mrs. Hughey at the time of the lease was in failing health and memory does not show that she was mentally incapacitated from executing a valid agreement. So, too, the statement that her husband was a man of limited education and unable to read or write does not allege that he was incompetent, by reason of his illiteracy, to yield his assent to the contract; and hence the relief sought cannot be predicated on any intellectual disqualifications of the lessors. The declaration that except for the mutual mistake referred to Hughey and his wife would not have executed the lease to Smith is not an allegation of any material fact, but rather the statement of a conclusion of law sought to be deduced from the preceding averments, and insufficient for any purpose: Hyland v. Hyland, 19 Or. 51, 57 (23 Pac. 811). Though this is a suit to cancel a contract, and not to reform an agreement, wherein possibly the averments of the complaint are not required to be so specific with respect to the original intent of the parties as in cases for the reformation of a written contract, yet after a careful examination and consideration of the complaint it is believed that the plaintiffs’ pleading does not state facts sufficient to' constitute a cause of suit, and that no error was committed in sustaining the demurrer. It follows that the decree should be affirmed; and it is so ordered. Affirmed.