that mental assent, which is unexpressed, constitutes a contract; and though parties have arrived at a definite understanding as to the terms of the proposed bargain, if they contemplate a writing as the first obligation binding upon them their mutual understanding prior to the writing will not make a contract.45 Nor can even a fully expressed intention operate as a conveyance of land. Moreover, if there is, as undoubtedly is often the case, a contract prior to the erroneous writing expressing the actual intent, the writing has subsequently been accepted and agreed to as the contract or conveyance which shall be substituted for the original agreement. It is a confusing fiction to imagine that equity in reforming this later instrument is specifically enforcing an existing contract. An examination of the chancery cases shows no insistence on a binding agreement prior to the writing of which reformation is sought. Equity does insist that the parties shall have come to a complete mutual understanding of all the essential terms of their bargain, for, otherwise, there would be no standard by which the writing could be reformed. 46 Knowledge by one party of the other's

45 See supra, § 28.

Mackenzie v. Coulson, L. R. 8 Eq. 368, 375; Hunt v. Rousmaniere's Adm'r, 1 Pet. 1, 14, 7 L. Ed. 27; Robertson v. Walker, 51 Ala. 484; Guilmartin v. Urquhart, 82 Ala. 570, 1 So. 897; Louis Werner Sawmill Co. v. Sessoms, 120 Ark. 105, 179 S. W. 185; Burt v. Los Angeles Olive Growers' Assoc., 175 Cal. 668, 166 Pac. 993; Allen v. Kitchen, 16 Idaho, 133, 100 Pac. 1052; McGinnis v. Boyd, 279 Ill. 283, 116 N. E. 672; Citizens' Nat. Bank v. Judy, 146 Ind. 322, 43 N. E. 259; White v. Shaffer, 130 Md. 351, 99 Atl. 66; Wood v. Standard Drug Store, 192 Mich. 456, 158 N. W. 844; Ellison v. Fox, 38 Minn. 454, 38 N. W. 358; Fritz v. Fritz, 94 Minn. 264, 102 N. W. 705; Meek v. Hurst, 223 Mo. 688, 122 S. W. 1022, 135 Am. St. Rep. 531; Slobodisky v. Phenix Ins. Co., 52 Neb. 395, 72 N. W. 483; Ray v. Durham County, 110 N. C. 169, 14 S. E. 646; Allen v. Roanoke, etc., Co., 171 N. C.

339, 88 S. E. 492; Mitchell v. Holman, 30 Ore. 280, 47 Pac. 616; Boyce v. Hamburg-Bremen Fire Ins. Co., 24 Pa. Super. 589; Darden v. Vanlandingham (Tex. Civ. App.), 189 S. W. 297; Ledyard v. Hartford Fire Ins. Co., 24 Wis. 496; Anderson v. Freeman, 88 Wash. 608, 153 Pac. 307; Grant Marble Co. v. Abbot, 142 Wis. 279, 124 N. W. 264.

In Le Gendre v. Scottish Union & Nat. Ins. Co., 95 N. Y. App. Div. 562, 564, 88 N. Y. S. 1012, the court infringed upon this principle. The following extracts from the opinion explain the case: "We regard this as a plain case for the reformation of the policy. It is manifest that the plaintiff intended to insure the property contained in his residence. He doubtless knew, although even that has not been shown, that his house was on the north instead of the south side of the road; and it is evident that the erroneous description in the policy locating

mistake regarding the expression of the contract is equivalent to mutual mistake. Thus if one party before the execution of the instrument knew of or discovered the error in it, reformation will be allowed against him though the mistake is not strictly mutual.47 And so reformation may be allowed to make an instrument conform to fraudulent misrepresentations. 48 Doubtless the mistake is one of law, but this should not preclude relief.49

It is not enough to justify reformation that the court is satisfied that the parties would have come to a certain agreement had they been aware of the actual facts.50 Nor will equity

reform a contract where acquired rights of bona fide purchasers for value would be disturbed.51 But neither creditors 52 nor a trustee in bankruptcy53 are such purchasers, and reformation may be had in spite of their adverse interest. Reformation nearly always involves rescission. If the instrument of which reformation is sought had no validity or effect, there would be no occasion to apply to equity unless by a bill quia timet in the cases where that might be appropriate to prevent an invalid document from injurious operation by its appearance of validity. Generally, therefore, the instrument of which reformation is sought is valid until avoided, and the first step towards the desired relief must be to rescind the written contract or conveyance into which the parties have entered; but where the parties clearly intended an instrument of a different tenor as to which their minds were at one, it is inequitable to destroy the transaction into which the parties actually entered except upon the terms of establishing a transaction into which they in

minds could not have met on the transfer of such a claim. What the parties did not agree to cannot be added by the court. The defendant paid a small sum for a doubtful claim, large in amount, and ran the risk of losing what he paid for the chance of realizing a great profit. He is entitled to the contract in the form in which it was made without interference by the court in the guise of reformation. The plaintiff got what he agreed to take and assigned what he agreed to assign, and he has no more right to a reformation of the contract than he would have to strike out a warranty of soundness from a bill of sale of a horse, because he and the purchaser both believed the horse to be sound when in fact it was unsound." See also Snell v. Insurance Co., 98 U. S. 85, 25 L. Ed. 52; St. Anthony Falls Water Power Co. v. Merriman, 35 Minn. 42, 27 N. W. 199; Webster v. Stark, 10 Lea, 406, 413; Hendricks v. Goodrich, 15 Wis. 679. Cf. cases of alteration cited infra, § 1913, ad fin.

51 Malden v. Menill, 2 Atk. 8; Early

v. Owens, 68 Ala. 171; Davidson v. Davidson, 42 Ark. 362; Allen v. Elder, 76 Ga. 674, 2 Am. St. Rep. 63; Mayor, etc., of Macon v. Dasher, 90 Ga. 195, 16 S. E. 75; Pence v. Armstrong, 95 Ind. 191; Dart v. Barbour, 32 Mich. 267; Robertson v. Smith, 191 Mich. 660, 158 N. W. 207, Ann. Cas. 1918 D. 145; Martin v. Nixon, 92 Mo. 26, 4 S. W. 503; Quick v. Stuyvesant, 2 Paige, 84; Ray v. Durham County, 110 N. C. 169, 14 S. E. 646; Coates v. Smith, 81 Or. 556, 568, 160 Pac. 517; Farmers' & M. Bank v. Citizens' Nat. Bank, 25 S. D. 91, 125 N. W. 642; Farley v. Deslonde, 69 Tex. 458, 6 S. W. 786; Robinson v. Braiden, 44 W. Va. 183, 28 S. E. 798. Thus where a note secured by mortgage had been transferred to a holder in due course, the mortgage could not be reformed. Dunham v. W. Steele, etc., Co., 100 Mich. 75, 58 N. W. 627.

52 Coates v. Smith, 81 Or. 556, 568, 160 Pac. 517.

53 Zartman v. First Nat. Bank, 216 U. S. 134, 54 L. Ed. 418, 30 Sup. Ct. 368.

tended to enter.54 Circumstances may have supervened, however, making this impossible or inequitable, and in such a case rescission only is allowable.55

§ 1549. Reformation can only make a writing express what parties intended should be written.

The province of reformation is to make a writing express the bargain which the parties desired to put in writing. Agreements of which they did not desire written expression will not be put into writing by decree of the court. Therefore, if parties intentionally make an oral agreement which is unenforceable for the reason that it is not in writing, the court cannot order a writing executed even though the parties erroneously supposed that their oral bargain was legally valid. Similarly, if the parties to a written instrument understand that part of their previous agreement has been omitted from the writing and rely on oral agreement with one another to vary or add in certain respects to the written agreement, whether they rely on moral obligation or believe that such a variation or addition is legally valid, equity cannot reform the writing by the insertion of the oral agreement. 56 Still more clearly if, because

54 See Laver v. Dennett, 109 U. S. 90, 27 L. Ed. 867, 3 Sup. Ct. 73.

55 Thus in Abbott v. Dow, 133 Wis. 533, 113 N. W. 960, the parties intending to convey lot 1, described, by a clerical error in their written contract, lot 2. Before discovery of the mistake, lot 1 was conveyed by the defendant, without fault on his part, to a purchaser for value without notice. The plaintiff was allowed rescission though the court said that except for the intervening rights of a third person, reformation would have been the proper remedy. See also Jeakins v. Frazier, 64 Kans. 267, 67 Pac. 854.

In Brickey v. Linnertz, 241 Ill. 187, 89 N. E. 342, a deed purported to convey land which the parties did not intend should be conveyed and which the grantor did not own; but the

grantor also did not own the land which the parties intended to be conveyed. The court rescinded the contract. See also Macey v. Furman, 90 Wash. 580, 156 Pac. 548.

56 Betts v. Gunn, 31 Ala. 219; Holland Blow Stove Co. v. Barclay, 193 Ala. 200, 69 So. 118, L. R. A. 1915 D. 941; Ligon's Adm. v. Rogers, 12 Ga. 281; Richardson v. Perrin, 137 Ga. 432, 436, 73 S. E. 649; Andrew v. Spurr, 8 Allen, 412; Brintnall v. Briggs, 87 Ia. 538, 54 N. W. 531; Mighill v. Rowley, 224 Mass. 586, 113 N. E. 569; Henderson v. Stokes, 42 N. J. Eq. 586, 8 Atl. 718; Trotter v. Brevoort, 60 N. Y. App. D. 562, 69 N. Y. S. 1028; (cf. Steinbach v. Prudential Ins. Co., 62 N. Y. App. D. 133, 70 N. Y. S. 809, 172 N. Y. 471, 65 N. E. 281); Shenandoah Valley R. Co. v. Dunlop, 86 Va. 346, 10 S. E. 239;

of mistake as to an antecedent or existing situation, the parties make a written instrument which they might not have made, except for the mistake, the court cannot reform the writing into one which it thinks they would have made, but in fact never agreed to make. 57

If, however, the mistake is of sufficient importance and the status quo can be restored, equity should rescind the whole transaction, unless the mistake is one of law and the court feels