It is to be borne in mind that this case is in its essence an action to reform a deed to compel the defendant grantors to keep the promise they had made, both orally and in writing, to convey to the plaintiffs one-half acre of land. The deed itself is not properly regarded as the sole agreement between the parties. It was executed unilaterally by the defendant grantors, purportedly to fulfill their prior written commitment.
As cited below, the authorities are abundant and unanimous that where there has been a mutual mistake, or a unilateral mistake, accompanied by inequitable conduct by one of the parties, a court of equity will order correction of the deed to conform to and fulfill the obligation of a prior written agreement. This was the purpose and effect of the findings and decree entered by the trial court.
The defendants had over a period of time advertised for sale tracts of land containing one-half acre which met the requirements for horses or duplexes. The defendant Anne Cooper, who was the co-owner of the property to be sold, was a licensed and experienced real estate saleswoman. It is indicated that she was familiar with the entire situation including the zoning regulations. In the talks with the plaintiffs, their interest in the keeping of horses was discussed. The receipt executed by defendants for the plaintiffs' first payment stated that the money received was for "one half Acre." Even after the survey had been made and the defendants knew of its results, they issued a receipt acknowledging payment in full for "one half acre." After the plaintiffs discovered *Page 43 that the deed gave only about eighty-five one-hundredths of the one-half acre, instead of the full one-half acre the defendants had agreed to convey, they made request of the defendants that the deed be corrected to give the amount of property that had been agreed upon and committed in writing. The discussions availing nothing, the plaintiffs commenced this action seeking performance of the agreement and reformation of the deed.
It should be noted that the statute of frauds presents no problem here. Its requirements are satisfied by the written receipts; and also by the part performance. Neither is the parol evidence rule an impediment. It cannot reasonably be contended that the receipts and/or the deed in this case represent the complete agreement of the parties. Moreover, the rule does not apply in suits to reform written instruments where there was no meeting of the minds of the parties due to mistake, fraud, or inequitable conduct by one of the parties.1
The law is well established and supported by many authorities that deeds may be reformed where that is necessary to carry out the intent and agreement of the parties. The governing principle was announced by the United States Supreme Court as long ago as 1892 in the case of Simmons Creek Coal Co. v. Doran: ". . . the jurisdiction of equity to reform written instruments, where there is mutual mistake, or mistake on one side and fraud on the other, is undoubted."2
This sound doctrine is reflected in the text of American Jurisprudence under the title Reformation of Instruments:
The reformation of written instruments is one of the oldest branches of equity jurisprudence. . . .
While the right to have reformation is ordinarily limited to written agreements, the right of reformation is not restricted in its application to any class or kind of conventional instruments, with regard either to the form or the subject matter of the contract between the parties.
Reformation may be had with respect to instruments operating inter vivos and evidencing executed contracts, such as deeds, including mineral deeds, partition deeds, deeds of appointment or settlement, and conveyances of homesteads.3
The test to be applied in determining whether a deed is reformable is set forth with clarity in Powell's treatise on real property, which is amply supported by cases and other respected authorities.
An equitable proceeding to reform a deed or other written instrument may have any one of three functions: (1) to get back for the grantor, mortgagor, or vendor something from which he did not intend to be parted; or (2) to acquire for the grantee, mortgagee, or vendee, something which he thought he was going to get, but has not; or (3) to adjust between persons named as grantees, their intended rights so that each will have what he was intended to get, but no more. The basis for including the *Page 44 discussion of reformation at this point is its applicability to deeds; but the same doctrines apply to other instruments such as mortgages, contracts relating to land, and leases.
The power to obtain the reformation of a written instrument exists when it can be satisfactorily proved (1) that the instrument, as made, failed to conform to what both parties intended; or (2) that the claiming party was mistaken as to its factual content and the other party, knowing of this mistake, kept silent; or (3) that the claiming party was mistaken as to its factual content because of fraudulent affirmative behavior of the other party. In the absence of some one of these situations relief in the form of reformation cannot be obtained.4
Other authorities, too numerous to list herein, affirm the principles just stated. A few examples should suffice: The test at 66 Am.Jur.2d, pp. 554-555, states:
A written instrument may be reformed where there is ignorance or a mistake on one side and fraud or inequitable conduct on the other . . . Thus, unilateral mistake may be the basis for relief when it is accompanied by the fraud of, or is known to, the other party.
In Phillips v. Pitts,5 a case analogous to our present one, the Supreme Court of Washington approved reformation of a deed to include water rights which had been part of the agreement, but were omitted from the deed, assigning reliance upon the proposition that a deed may be reformed to conform to the contract to sell land.6
Considering the present case in the light of the law above stated there are only two alternatives: Either, (a) the defendants thought they could, and intended to, convey to the defendants a one-half acre tract as they agreed in writing to do. In that case the deed was made out under a mutual mistake of fact; in which case equity can clearly grant relief as did the trial court.7 Or, (b) the defendants knew that they could not convey, and were not conveying, the full one-half acre which they knew that the plaintiffs thought they were getting, but defendants nevertheless remained silent and conveyed the smaller tract. Moreover, under the latter alternative, they not only remained silent, but gave a receipt for the purchase price, reciting that it was for one-half acre. This would amount to fraudulent deception, or at the very least inequitable conduct, for which equity should grant relief as the trial court did.8 This conclusion is supported by the express finding of the trial court that "at the time the [deed] was given, the defendants were aware that they possessed a full one-acre piece of realty andhad instructed the surveyor to survey a smaller amount than a one-half (1/2) portion thereof to be conveyed to the plaintiffs." This finding of fact by the trial court is supported by the testimonies of both the plaintiffs and the defendants.
It is suggested that the plaintiffs should have used "simple arithmetic" to ascertain that the metes and bounds description included only about eighty-five one-hundredths of a half acre. I agree with the trial court that it is unfair and unrealistic to expect the plaintiffs as ordinary lay persons to know that a half acre of land contains 21,780 square feet; and to perceive that the description in the deed covered only 18,850 square feet. *Page 45
Applicable to this point is the case of Broida v. Travelers Ins. Co.,9 wherein the Supreme Court of Pennsylvania stated the principle which should govern here:
. . . [the] negligent failure of the plaintiff to discover a variance between the instrument as written and the mutual understanding of the parties is not fatal to his right to have it reformed.10
Whatever else may be said about the matter, the question as to whether the plaintiffs were negligent and therefore estopped from complaining of the defendants' conduct is a question of fact; and the trial court made no such finding, but found the issues for plaintiffs.
In summary, there is ample credible evidence to support the view adopted by the trial court: that the defendants advertised and otherwise represented to the plaintiffs that they were selling them a one-half acre tract of land as desired by the plaintiffs; that the plaintiffs had bargained for, and bought and paid for that amount of land; there is no finding that the plaintiffs were either careless or negligent in assuming that the deed contained the one-half acre as represented, or that they were lacking in diligence in discovering the mistake and seeking redress therefore. This court has been consistent and invariable in declaring that in equity cases we will not disturb the findings of the trial court unless the evidence clearly preponderates against them.11
In consequence of what has been said above, it is my opinion that the trial court was right in thinking it unconscionable to permit the defendants to make the representations and the agreement to sell the necessary "one half acre," then to violate their agreement by conveying a lesser quantity; and that he did that which equity and justice requires by decreeing that the defendants keep their written commitment to convey the promised one-half acre of land. (All emphasis added.)