Grant Marble Co. v. Abbot

Tbe following opinion was filed January 11, 1910: KeewiN, J. While there axe allegations in tbe complaint pertinent to an action for rescission, from tbe whole complaint it is manifest that tbe idea of tbe pleader was to state a cause of action for reformation. But tbe complaint also alleges a promise, either express or implied, on tbe part of defendant to pay for work in tbe sixth story what tbe same was reasonably worth. If it were necessary to pass upon tbe action of tbe court below in overruling tbe motion of defendant to make tbe complaint more definite and certain, we might find it difficult to sustain such ruling. But we do not pass upon tbe question, since it appears plain that tbe judgment below must be reversed upon the merits, and therefore technical errors need not be treated. It is entirely clear — 287 — from the findings and the evidence that no case for reformation was made. The contract attacked either by way of reformation or rescission is that made for the work on the ■sis stories for the agreed price of $24,150. The minds of the parties met upon this contract, hence there is no ground for reformation. There was no mutual mistake. The parties to the contract made the contract they intended to make. Even if a mistake were made, it is established that it was the mistake of Mr. Grant, president of plaintiff; hence was not mutual. To allow reformation in this case would be to justify the court in making a contract for the parties which they themselves did not make. This the court cannot do. The plaintiff must show that the minds of the parties met upon the contract which it seeks to establish. Lake v. Meacham, 13 Wis. 355; Ledyard v. Hartford F. Ins. Co. 24 Wis. 496; Petesch v. Hambach, 48 Wis. 443, 4 N. W. 565; Braun v. Wis. R. Co. 92 Wis. 245, 66 N. W. 196; Kruse v. Koelzer, 124 Wis. 536, 102 N. W. 1072; Auer v. Mathews, 129 Wis. 143, 108 N. W. 45. The court below, however, did not reform the contract, but awarded judgment to the plaintiff for the reasonable value of the work done not exceeding contract rates, less payments. Counsel for respondent argues that a contract may be reformed where there is mistake on one part and fraud on the other, and cites on this point James v. Cutler, 54 Wis. 172, 10 N. W. 147. But the doctrine of that case is not out of harmony with other cases on the subject in this court It recognizes the universal rule that there must be a contract upon which the minds of the contracting parties met, which is not expressed in the writing sought to be reformed, the purpose of the reformation action being to conform the written contract to the real contract made by the parties. And in case a fraud is practiced by one party by which the real contract is not reduced to writing and the other party by mistake receives such writing as the real contract, equity will lend its aid to the party thus defrauded. — 288 — In James v. Cutler, supra, there was an agreement to convey land, and it appeared that by mistake of both parties, or by the fraud of the grantor and mistake of the grantee, all the' land agreed to be conveyed was not included in the deed, and it was held that equity would reform. But here no case was made for reformation for two reasons: Eirst, no contract was made except that reduced to writing; and second, there was no fraud on the part of the defendant The court below found that there was no fraudulent intent on the part of defendant, and could not have found otherwise on the evidence. But the court further found that the mistake on the part of Grant, president of the plaintiff, was induced by the acts and omissions of the defendant’s agents, and it is upon this finding that the plaintiff predicates fraud. Just what acts and omissions of defendant’s agents induced the contract is not specified in the finding. Erom the argument it is obvious that the contention is that because the agents of defendant knew that the architect of plaintiff first made a bid on five stories and that the plaintiff adopted five-story figures on a six-story contract, there was a mistake of fact sufficient tO' avoid the contract, or mistake on the part of plaintiff and fraud on the part of defendant entitling plaintiff to reformation. The proof shows clearly that Grant, president of plaintiff, made the contract with full knowledge that it covered six stories of the building, and signed it with such knowledge. The defendant also signed it so understanding it. No other or different contract was intended to be made by the parties. But counsel for plaintiff claims that Grant made a mistake in applying five-story figures to a six-story contract. If so, such mistake cannot be charged to defendant, but must rest upon the party whose negligence caused it. All the facts were within reach of Grant, and he had but to open his eyes and see them. His own architect, Heimerl,. who had full knowledge of the facts, was within call, and could have been consulted upon the subject if Grant had de — 289 — sired. But be took it upon bimself to figure tbe six-story contract and make tbe figures, and tbe contract so made was signed and agreed to by both parties. There is no merit whatever in tbe claim that tbe acts and omissions of the agents of defendant were of such a character as to mislead Grant. There is no evidence that tbe agents of defendant were conscious of Grant’s alleged mistake, and no reason why they should have been. They knew that tbe architect of plaintiff, with whom Grant was in communication, bad full knowledge of tbe facts, and bad a right to assume that Grant was fully informed. We deem further discussion of the point unnecessary. It is very clear that no case for reformation of tbe contract was made. Kruse v. Koelzer, 124 Wis. 536, 102 N. W. 1072. Tbe court below did not find that the plaintiff was entitled to reformation, but rescinded tbe contract. It is also clear that tbe court was in error in rescinding tbe contract. Even if steps bad been seasonably taken to rescind, there is no evidence in tbe record which would warrant rescission. We have seen that there was no mutual mistake and that tbe minds of tbe parties met upon tbe contract, and it does not appear that any agent of tbe defendant knew that Grant or any agent of tbe plaintiff was laboring under a mistake. Under such circumstances a court of equity will not rescind. Johnson v. Parker, 34 Wis. 596; J. A. Coates & Sons v. Buck, 93 Wis. 128, 67 N. W. 23; Brillion L. Co. v. Barnard, 131 Wis. 284, 111 N. W. 483. Tbe burden of proof was upon tbe plaintiff to prove by ■ clear and satisfactory evidence that tbe defendant or bis agents knew of Mr. Grant’s mistake. Bowe v. Gage, 127 Wis. 245, 106 N. W. 1074; Lavassar v. Washburne, 50 Wis. 200, 6 N. W. 516; Shaw v. Gilbert, 111 Wis. 165, 86 N. W. 188; Deering v. Hoeft, 111 Wis. 339, 87 N. W. 298; Russell v. Scofield, 134 Wis. 21, 113 N. W. 1094; Parker v. Hull, 71 Wis. 368, 37 N. W. 351; Glocke v. Glocke, 113 Wis. 303, 89 N. W. 118; Braun — 290 — v. Wis. R. Co. 92 Wis. 245, 66 N. W. 196; Blake O. H. Co. v. Home Ins. Co. 73 Wis. 667, 41 N. W. 968; Seeman v. Biemann, 108 Wis. 365, 84 N. W. 490. Nor is there any finding of knowledge on the part of defendant of Grant’s alleged mistake, and there is a finding that there was no fraudulent intent on the part of defendant. Moreover, if the plaintiff ever had a right to rescind, it failed to seasonably exercise such right, but proceeded to complete the contract and brought an action to reform. One who seeks to rescind must act promptly upon discovery of the facts which he claims entitle him to rescission and take no steps in affirmance of the contract. Booth v. Ryan, 31 Wis. 45; Bostwick v. Mut. L. Ins. Co. 116 Wis. 392, 89 N. W. 538, 92 N. W. 246; Pfeiffer v. Marshall, 136 Wis. 51, 116 N. W. 871. And where a mistake occurs through a party’s own want of ordinary care by reason of which he sustains loss, he cannot rescind. Standard Mfg. Co. v. Slot, 121 Wis. 14, 98 N. W. 923; Warner v. Benjamin, 89 Wis. 290, 62 N. W. 179; Kaiser v. Nummerdor, 120 Wis. 234, 97 N. W. 932; Mamlock v. Fairbanks, 46 Wis. 415, 1 N. W. 167; Farr v. Peterson, 91 Wis. 182, 64 N. W. 863; Van Beck v. Milbrath, 118 Wis. 42, 94 N. W. 657; Metcalf v. Mut. F. Ins. Co. 132 Wis. 67, 112 N. W. 22. It follows under the repeated decisions of this court upon the established facts that the plaintiff was not entitled to a rescission. But it is further argued by counsel for respondent that by force of certain communications between Grant, president of plaintiff, and the agent of defendant, a new promise was made to pay for the sixth-story work. This contention is predicated upon the letter written by defendant to his agent set out in the statement of facts. Afterwards, in reply to a. communication by plaintiff asking if it could draw for money, defendant replied positively that it could not, and that he was under no obligation to pay anything above the contract price and that he owed nothing legally, and that whatever he — 291 — might do was purely a gratuity. The letter above referred to was written by defendant in reply to a letter from Miss Bright, secretary of defendant, in which she stated that Grant claimed the alleged mistake, if not corrected, would cause the plaintiff a loss of $3,000. The case was tried on the theory of recovery on quantum, meruit and not for amount of loss sustained. In fact, it is claimed by appellant that the evidence shows a profit of $612, but it is manifest that the question of whether there was a loss was not tried; the theory of the plaintiff being that it was entitled to recover the reasonable value of the work in the sixth story, not exceeding contract rates. The defendant contends that he is not liable for any sum above the contract price on any theory, upon the ground that the correspondence did not amount to a promise and that his agent had no authority to bind him in that regard. We are inclined to the opinion, and so hold,, that the plaintiff is entitled to recover whatever loss it actually sustained upon the contract made in writing, but beyond that plaintiff has made no case entitling it to recover anything. Of course, plaintiff did not prosecute the case, as we have seen, upon the theory of recovery for the loss sustained, and therefore should pay the costs incurred. Upon the record and under the rules of pleading and procedure, this court would doubtless be justified in ordering dismissal of the action on the merits. But, under the liberal rules of practice in equity cases, we think the court is warranted in holding the case for the purpose of ascertaining the amount of loss, if any, that has been sustained by plaintiff on the contract and thus end the litigation in this suit. Harrigan v. Gilchrist, 121 Wis. 127, 99 N. W. 909; Fleming v. Ellison, 124 Wis. 36, 102 N. W. 398; Franey v. Warner, 96 Wis. 222, 71 N. W. 81; Combs v. Scott, 76 Wis. 662, 45 N. W. 532; Cole v. Getzinger, 96 Wis. 559, 71 N. W. 75; Gates v. Paul, 117 Wis. 170, 94 N. W. 55; Stevens v. Coates, 101 Wis. 569, 78 N. W. 180. We shall therefore order the case dismissed — 292 — unless tbe plaintiff elects to take further evidence on th© question of whether it did in fact sustain a loss on the contract and the amount thereof, and pay all costs incurred up to the time of filing such election. By the word “loss,” as above used, is not meant loss of profits, but any sum in excess of the contract price necessarily expended in doing the job. By the Court. — The judgment is reversed, and the cause remanded to the court below with directions to dismiss the complaint unless plaintiff shall, within twenty days from the filing of the remittitur, elect to take further evidence on the issue as to whether or not there was a loss on the contract,, and, if so, the amount thereof, and pay all costs up to the time of filing such election, and, in case .of failure so to do,, the action be dismissed upon the merits, with coste. Upon a motion for a rehearing there was a brief for the respondent signed by Winlder, Flanders, Bottwm & Fawsett, attorneys, and F. C. Winlder and Charles F. Fawsett, of counsel; and for the appellant a brief by Fronde M. Hoyt. The motion was denied April 5, 1910.