Lewitt v. Park Eccl. Soc. , 103 Conn. 285 ( 1925 )

The motion to correct the finding was properly denied by the trial judge for the reason given by him. Quite likely the first part of the paragraph quoted in the statement might have been found had it been asked for without the last five words. The trial judge had a right to treat the requested paragraph as a whole. The judge was asked to find as a fact that plaintiffs had observed the gangway, not that they had opportunities of observation. The court has found that the gangway was a well cindered driveway, and the evidence of Fisher showed that George LeWitt had been on the driveway. That he observed anything especially is not hereby proven. But even if the appearance of the gangway showed its use by vehicular traffic, that would in no way indicate that adjoining owners had rights of way.

Passing to the questions raised by reasons of appeal one, two, three, four and nine, the defendant claims that the description contained in the agreement does not necessarily include the gangways, and that as a matter of construction the land covered by the contract was bounded by the inner lines of these gangways, and that rights in these latter would pass as appurtenances. This contention is negatived by the finding of Mr. Gilman in his certificate of title, agreed to as correct by defendant, also by defendant's express allegation in the fourth paragraph of its second defense that "there existed on said land of the defendant . . . certain rights of way in favor of the owners of other lands," and further by the terms of the deed which the defendant tendered plaintiffs and claimed they should accept, wherein it is expressly stated that the premises described and conveyed "are subject to rights of way to adjoining owners as may appear of record." It is further contended by defendant that the contract was not intended to be a conveyance of property, and since all parties were familiar with the property as it stood on the ground, but not with the property lines as regarding adjoining owners, they therefore added the words, "however otherwise said real estate may be bounded," to allow for any error of description of any sort. We cannot infer any such intent from these words, in connection with the surroundings. Having reference to ordinary terms used in conveyancing, these words would seem to be applicable to the names of adjoining proprietors, and equivalent to the often used terms "now or late" and "now or formerly" applied to certain designated persons. Such words are in universal use, since when drawing a contract or deed, it is the exception rather than the rule that the draftsman has at his disposal the information necessary to give with accuracy the up-to-date ownership of surrounding tracts. The finding of the court that the parties intended to contract for the sale of the fee of the entire corner tract of which defendant owned the fee is entirely justified by the subordinate facts found.

The principal point at issue between the parties is raised by the rulings made by the trial court upon evidence offered by defendant to sustain the allegations of its second (equitable) defense. The plaintiffs are suing to recover money had and received by defendant and unlawfully retained by it, since a failure of consideration arose out of the refusal of defendant to perform its contract of sale of land. The consideration for the payment of the money was the full and complete performance of the contract, which until full performance remained executory. The evidence was offered to show a mistake in the contract, whereby it failed to evidence the true intent of the parties, and was to the general effect that plaintiffs, prior to the execution of the contract, were fully aware of the existence of certain rights of way and did not regard them as incumbrances, and that the agreement of sale did not contain their real contract. No fraud or misrepresentation is alleged in the second defense. The court in substance held that this was an attempt to reform a written contract, unambiguous in its terms and not tainted in any way by fraud, by parol evidence, and then to enforce the same in favor of defendant. The court held that under our law this could not be done and excluded the evidence.

Defendant, prior to bringing the action in question, had sued for a reformation of the contract and a specific performance of the same, but had withdrawn the same, as stated in its brief, by reason of the decision of this court in Osborn v. Phelps, 19 Conn. 63, and affirmed in Bryant Electric Co. v. Stein, 95 Conn. 211,213, 111 A. 204, wherein we said: "There is a difference of judicial opinion upon the question whether a court of equity may first reform a contract by the introduction into it of a new term derived from parol evidence, and then enforce it as a written contract sufficient under the statute of frauds. . . . But in this State the question is no longer open."

In considering the effect of these decisions, the defendant claims that even though its claim cannot be made the subject of an action in the form brought by it and then abandoned, still that allegations similar to those contained in it may be used defensively in an answer, and relief obtained to the extent of allowing it to retain the $5,000 paid as earnest money under the contract.

Professor Williston, in his work on Contracts (Vol. 3, § 1555), observing that in some jurisdictions contracts relating to land are reformed and enforced though within the statute of frauds, continues: "In other decisions, however, American courts have declined to reform such an executory contract, especially if it is sought to enlarge the terms of the writing, unless there has been such part performance or other circumstances as will make a failure to reform work a fraud upon the complainant. The latter cases seem sound. Where the only effect of a refusal to reform a contract is the loss of an executory bargain which the parties intended to make, it seems impossible to give relief on any principle that would not justify the entire destruction of the statute. There seems little reason to distinguish between enlarging the terms of the writing and diminishing them. In either case a contract is being enforced at variance with the writing and to the disadvantage of one of the parties." See also Wainwright v. Talcott, 60 Conn. 43, 53,22 A. 484.

Defendant seeks to avoid the operation of our decisions above quoted, by claiming the right to use defensively such facts as are alleged in the second defense, and also claims that we have in effect overruled these decisions, and suggests that we now administer the coup de grace.

As bearing upon the claim first stated, we will briefly consider the matter from the point of view of procedure. Defendant, by the provisions of the Practice Act, undoubtedly had the right to plead an equitable defense in the present action (General Statutes, § 5554) and was not compelled to resort to a separate action to enforce an equitable claim which he sought to establish. The Practice Act created no new substantive rights. "The substitution of our Practice Act for the common-law system of pleading has not changed the situation save as it has abolished certain formal distinctions and employed a new nomenclature. The same facts will entitle one to the same redress as before, and to no other redress." Avery v.Spicer, 90 Conn. 576, 581, 98 A. 135. The same rule which prevents a reformation of a contract by parol evidence and then performance thereof, a fortiori would preclude reformation and recovery of damages for breach of the reformed contract. The defendant is here seeking damages, liquidated damages, yet as to its legal position, it is in the same position as if the contract had not provided for liquidated damages, and it was suing for an unliquidated sum. It follows that defendant cannot prevail in its contention unless it can show some exception to the doctrine just considered or some modification of it in the line of its claims. We pass to a consideration of the cases cited by defendant in this behalf. In Fisk's Appeal,81 Conn. 433, 71 A. 559, it was held that parol evidence, though inadmissible to support a claim to lands, was competent to prove an accountability for the proceeds of a sale. The case was also concerned with constructive fraud. It is not germane to the present discussion.Schempp v. Beardsley, 83 Conn. 34,75 A. 144, deals with an oral agreement to support a person for life. No written instrument is involved. InDowner v. Cheseborough, 36 Conn. 39, the case did not turn in any way upon the general statute of frauds, but was concerned with a special statute of New York requiring a writing to vary the implied legal effect of an indorsement of a note. This court held that the law to be applied was the then law of Connecticut allowing oral evidence to be given to show the nature of the indorsement, that is, that the law merchant of Connecticut and not that of New York applied. In Nanos v. Harrison, 97 Conn. 529,117 A. 803, the question of the defensive effect of the lease turned upon its conclusiveness in an action setting up constructive fraud. The case in no way sustains any claim made by defendant. In McCusker v. Spier,72 Conn. 628, 45 A. 1011, reformation of a deed asked for by defendant was denied on the ground that no mutual mistake was shown, but plaintiffs were denied relief in that they did not come into equity with clean hands. Furthermore, the case is concerned with an executed contract. In Blakeman v. Blakeman,39 Conn. 320, the court dealt with an executed contract, by reforming a deed. The same is true with regard to Knapp v. White, 23 Conn. 529; Allis v. Hall, 76 Conn. 322,56 A. 637; McCusker v. Spier, 72 Conn. 628,45 A. 1011; Humphrey v. Gerard, 83 Conn. 346,77 A. 65; Butler v. Barnes, 60 Conn. 170, 21 A. 419; Jenner v. Brooks, 77 Conn. 384, 59 A. 508; Corticelli SilkCo. v. Slosberg, 101 Conn. 44, 124 A. 818.

New York Insulated Wire Co. v. Kasden, 83 Conn. 215,76 A. 294, involves no question of reformation of any instrument. It was concerned with the correction of an error in a merchandise account. In ParkBros. Co., Ltd. v. Blodgett Clapp Co., 64 Conn. 28,29 A. 133, the court held that a contract for delivery of merchandise might be reformed for a mistake of law as well as of fact. The extended discussion in the opinion is concerned with this point. There was no claim made in the case involving the doctrine of Osborn v.Phelps, 19 Conn. 63, nor is that case and other adjudications following its authority, referred to. Bronson v.Leibold, 87 Conn. 293, 87 A. 979, was an action to cancel a deed, by reason of unilateral mistake. There was no question of mutual mistake, or reformation involved. No question of reformation was involved inRomanoff v. DeSanto, 101 Conn. 504, 126 A. 694. The action was for damages for refusing to take title under a contract of sale of real property. The defense was the existence of a lease for one month, not mentioned in the contract. The court admitted parol evidence, and held that under the facts the lease was not an incumbrance.

From the above review of the cases cited by defendant, we cannot conclude that the doctrine of Osborn v. Phelps has in any way been modified, or that it is in any way inapplicable where the facts invoked are pleaded defensively rather than in an original complaint, or in a cross-complaint. Nor can we hold that it in effect has been overruled or that it should be overruled. It represents a distinction, vital, logical and just, between executory and executed contracts as regards their reformation by means of parol testimony, and that to give relief such as is claimed in the instant case, as Williston observes in the extract before quoted, is impossible "on any principle that would not justify the entire destruction of the statute."

We have left, then, a contract of sale of land, drawn with exceptional care for details by a skilled and learned draftsman, entirely without ambiguity, and as to the execution of the same no fraud, actual or constructive, is claimed, which the plaintiffs declined to perform on account of admitted incumbrances upon the property to be conveyed. The consideration moving to the plaintiffs had failed, and upon the facts found the defendant had no right to retain the earnest money paid, and the judgment rendered was correct.

There is no error.

In this opinion the other judges concurred.