De Voin v. De Voin

LyoN, J. I. There seems no reason to doubt that the plaintiff paid the defendant $1,450 for the interest of the latter in the partnership property and business, in the erroneous belief that the firm indebtedness was only $6,600. The complaint alleges, and the testimony tends to prove, that when the attention of defendant was called to the fact that there was a mistake in the computation of the firm liabilities which, when corrected, would reduce the value of his interest in the firm property $500, he promised to repay the plaintiff that sum. If the plaintiff made the purchase on the faith of the accuracy of the computation, although the mistake was not a mutual one, we cannot doubt it is a good consideration for such promise by the defendant, and a sufficient basis for an action for money had and received. This will appear by reference to any elementary treatise on the subject of equitable and moral considerations. In such case, the written agreement of the parties in which plaintiff covenanted to pay $1,450 for defendant’s interest in the firm property is no impediment to showing by parol testimony the moral consideration for such promise. Had the court submitted to the jury the question whether the defendant promised to repay the $500 on being informed of the error in the computation, and had the jury found specially that such promise was made, we think the plaintiff would be entitled to judgment therefor. Rut the question was not submitted to the jury, and there was no finding on the subject. Indeed, during the trial the court stated that a recovery on such promise was not sought by plaintiff, but that proof of it was admitted as bearing on the question of mutual mistake. These remarks of-the court were not challenged by plaintiff; hence the judgment cannot be upheld on the ground that the defendant promised to repay the $500 to the plaintiff, and it seems very clear that the plaintiff cannot maintain this action for money had and received on any other ground. Probably [70] he might have maintained it had the agreement been reduced to writing, and were the mistake a mutual one. But we have here no such case. II. The alleged mistake in the written agreement is not that the instrument does not express the terms of the contract just as the parties directed it to be written, but that there was a mistake in one subject matter of the contract, to wit, the amount of the firm liabilities, but for which mistake no contract would have been made, or, if made, its terms would have been different. Hence, conceding the mistake to have been mutual, it is not perceived how an action to reform the instrument can be maintained. If a promise by defendant to repay the $500 cannot be .proved, we strongly incline to the opinion that, whether the mistake was or was not mutual, the only remedy of plaintiff was promptly to rescind the contract, or institute appropriate proceedings to that end. If the mistake was not mutual,— that is, if the plaintiff entered into the contract on the basis of actual indebtedness of the firm, and the defendant entered into it without any reference thereto,— the minds of the parties did not meet as respects that important element in their contract. This also is a valid ground for the cancellation of the contract in equity. 2 Pom. Eq. Jur. § 870, and cases cited; 1 Story, Eq. Jur. § 141. The rule on the subject is thus stated by Mr. Pomeroy: “ Cancellation is appropriate when there is an apparently valid written agreement or transaction embodied in.writing, while in fact, by reason of a mistake of both or one of the parties, either no agreement at all has really been made, since the minds of both parties have failed to meet upon the same matters, or else the agreement or transaction is different, with respect to its subject matter or terms, from that which was intended. Eeformation is appropriate when an agreement has been made, or a transaction has been entered into or determined upon, as intended by all the [71] parties interested, but in reducing such agreement or transaction to writing, either through the mistake common to both parties, or through the mistake of the plaintiff accompanied by the fraudulent knowledge or procurement of the defendant, the written instrument fails to express the real agreement or transaction.” Pages 843, 344. But probably it is now too late for the plaintiff to avail himself of the right to a cancellation of tljp agreement. III. The court submitted to the jury the question of fraud, and instructed them that if they should find there was fraud on the part of defendant the plaintiff would be entitled to recover. This was error, for the reason that there was no testimony given on the trial tending to show any fraud on the part of defendant. Were there no other cause for reversal, this instruction alone would be fatal'to the judgment. By the Court.— The judgment of the circuit court is reversed, and the cause will be remanded for a new trial.