St. Anthony Falls Water-Power Co. v. Merriman

Mitchell, J. The question raised by this appeal is whether the defendants are, upon the facts found, entitled to a reformation of the deed set out in their answer. Touching the previous lease between the same parties, the finding (the third) leaves it in much doubt whether their minds met upon and assented to the proposition, as their contract, that plaintiff should lease to defendants sufficient water-power, whatever amount that might be, to operate the machinery of the proposed mill, and that, for the purpose of carrying that intention into effect, they inserted in the written lease, as an equivalent expression, the term “fifty cubic feet of water per second, under the head and fall of thirty-five feet;” or whether, having started out in their negotiations with that idea, they finally settled down and [48] agreed upon a transfer of the specified number of feet, although mistakenly supposing that this was ample to run the mill. We are strongly inclined to the opinion that the latter is the correct construction to be placed upon the finding. But even if we assume the first theory suggested to be the true one, and that the expression above quoted was inserted in the lease under such a mutual mistake of fact as would have entitled defendants to a reformation of the written lease, yet it by no means follows that there is any ground for reforming the deed. There is now no occasion for reforming the lease. The term for which it was to run expired June, 1881, before the commencement of this action. The defendants during its full term enjoyed the use of all the water to which they claim to have been entitled, and nothing is now claimed against them on that account. The equities of the lease transaction have expired with the lease, and the right of the defendants to a reformation of the deed under which they now hold must depend upon the equities of the deed transaction alone. The only relevancy, if any, of the fact that a mistake was made in the lease, would be for the purpose of showing that a mutual mistake was also made in the deed. Therefore the findings (5 and 6) in respect to the agreement of sale and the execution of the deed really constitute the whole basis of defendants’claim to a reformation of the deed; and it seems to us that these findings entirely eliminate from the case any alleged meeting of the minds of the parties, or any agreement actually made that plaintiff should deed, waterpower enough to operate the mill. The finding is that “there was no express agreement as to the amount of water-power included in said purchase, * * * other than that it was to be the same amount of water-power which had theretofore been leased in and by the aforesaid lease.” There is no finding that there was any meeting of minds, or any agreement actually entered into, or any intention or understanding of the parties, that plaintiff should convey any other or greater amount of water-power than that actually expressed in the written deed as it now stands, viz., “fifty cubic feet per second.” It is true the court finds, in substance, that the parties at the time fully believed and understood that this amount of water would be ample to operate the mill, and but for that belief the descrip [49] tion and definition of the water-power written in the deed would not have been made or assented to; but it is not found that they made any agreement from which the written deed deviates. It does not appear, and cannot be known, what they would have done had they known that 50 feet of water per second was not sufficient to run the mill. It may be presumed that defendants would not have accepted the deed and paid their $5,000 had they been better informed. But there is nothing to show that plaintiff would have agreed, or ever did agree, to convey for $5,000, 600 horse-power instead of 200, or 146.78 cubic feet of water per second instead of 50 feet. The court cannot conjecture what contract the parties would have made had they then understood the facts as they now understand them. Presumably they' would either have made none, or else made one for 146.78 feet of water per second, at a much higher price than $5,000. Two facts must be kept in mind: (1) That this is an action to reform, and not to rescind, a contract; and (2) that the proposition which lies at the foundation of all suits to reform is that the court cannot make such a contract as it thinks the parties ought to have made, or would have made if better informed, but merely makes it what the parties intended it should be. Every reformation of a contract by the court necessarily presupposes that there has been a meeting of the minds of the parties, — an agreement actually entered into, — but for some cause they have failed fully or accurately to express it in the writing. In such a case the court will step in and reform the contract so as to express the actual intention of the parties ; and the burden is upon the party asking the reformation to prove both that there was an agreement and that the writing deviates from it. Now, the fatal defect in defendants’ case is that there is no antecedent agreement to which the writing can be conformed. The plaintiff never agreed to convey, for $5,000,146 78-100 cubic feet of water per second, or any other or greater amount than that now expressed in the deed. If we should assume to reform this deed in accordance with the prayer of defendants, we would be making a contract for the parties which they never made for themselves. The deed when thus altered would not express the agreement of the parties, and the court would be engaged in the singular office of doing right to one party at [50] the cost of a precisely equal wrong to the other. This cannot be done. The defendants invoke the doctrine of estoppel, and contend that plaintiff is estopped by its conduct from asserting that defendants have not the right to use sufficient water to operate their mill. It will be observed, upon examination of the findings, that any representations or expressions of opinion which plaintiffs may have made regarding the sufficiency of 200 horse-power to operate a saw-mill of the plan proposed, were made prior to and with reference to the execution of the lease, and that the expenditures of defendants in building the mill were made, not under or upon the faith of the deed, but of the lease alone. It does not appear that defendants have done any act, or expended any money, in reliance upon the deed, or that they have done anything except- what they were bound to do by the lease. In respect to the lease defendants have nothing of which to complain. As before remarked, they have enjoyed during its term all that they claim to have been entitled to, and nothing is claimed of them on account of it. Hence whatever might have been the case, had it been sought to enjoin defendants, during the term of the lease, from using water sufficient to operate their mill or to recover damages from them for using it, we fail to see that, under the facts, there is now a single element of an equitable estoppel. The order denying a new trial must therefore be affirmed.