§ 1597. Burden of clear proof is on complainant. Though equity will not permit the parol evidence rule to prevent it from granting relief for mistake, "the purpose of a written contract is to furnish a record of the terms of the agreement of the parties not easily impeached, and thereby to avoid subsequent disputes and conflicting testimony and claims regarding its terms and their meaning. To accomplish this purpose, and to prevent such disputes from annulling written agreements, two rules have been firmly established in equity: First, that the burden is on the complainant to prove the mutual mistake, or the mistake of one party and the deceit, fraud, or inequitable conduct of the other, upon which he relies for a modification or avoidance of the contract; and, second, that in view of the written record of the terms of the agreement made at the time a preponderance of the evidence is insufficient, and nothing less than evidence that is plain and convincing beyond reasonable controversy will constitute such proof as will warrant a modification or reformation of a written agreement." 76 Though it is settled that there must be more than a mere preponderance of evidence in order to justify relief in equity from mistake in a written instrument, the language of different courts varies in regard to the quantum of evidence necessary to sustain the burden of proof thrown upon one who seeks relief. In many cases it is said that proof must be beyond a reasonable doubt," but this mode of expression has been criti 677, 30 U. S. App. 40, 14 C. C. A. 50; Hurto v. Grant, 90 Iowa, 414, 57 N. W. 899; Yocum v. Foreman, 14 Bush, 494; Ætna Indemnity Co. v. Baltimore, etc., R. Co., 112 Md. 389, 76 Atl. 251, 136 Am. St. Rep. 389; Paulison v. Van Iderstine, 28 N. J. Eq. 306; White v. Campbell, 80 Va. 180; Sable v. Maloney, 48 Wis. 331, 4 N. W. 479; Van Brunt v. Ferguson, 163 Wis. 540, 158 N. W. 295. See also supra, § 1594. 76 Bailey v. Lisle Mfg. Co., 238 Fed. 257, 266, 152 C. C. A. 3. "Moore v. Tate, 114 Ala. 582, 21 So. 820; Parker v. Carter, 91 Ark. 162, 120 S. W. 836, 134 Am. St. Rep. 60; Franklin v. Jones, 22 Fla. 526; Houser v. Austin, 2 Idaho, 204, 10 Pac. 37; Sutherland v. Sutherland, 69 Ill. 481; Wachendorf v. Lancaster, 61 Iowa, 509, 16 N. W. 533, 14 N. W. 316; Dare v. Foy, 180 Ia. 1156, 164 N. W. 179; Schaefer v. Mills, 69 Kans. 25, 76 Pac. 436; Andrews v. Andrews, 81 Me. 337, 17 Atl. 166; Stockbridge Iron Co. v. Hudson Iron Co., 102 Mass. 45, 107 Mass. 290; Steinberg v. Phoenix Insurance Co., 49 Mo. App. 255; Henderson v. Stokes, 42 N. J. Eq. 586, 8 Atl. 718; Boyertown Nat. Bank v. Hartman, 147 Pa. 558, 23 Atl. 842, 30 Am. St. Rep. 759; Deseret Nat. Bank v. Dinwoodey, 17 Utah, 43, 53 Pa. 215; Bailey v. Woodbury, 50 Vt. 166; cized,78 and the better and commoner way of appraising the quantum of proof is to state that the evidence must be clear and satisfactory or words of similar effect.79 § 1598. Law and equity; rescission at law. Rescission and reformation are generally thought of as remedies appropriate to courts of equity. There are, however, obvious limitations to the power of equity to grant relief. Equity will entertain a bill for reformation only where a writing is involved; and the right to maintain a suit for cancellation or rescission and restitution is dependent either on the contract or conveyance being written or relating to such a subject-matter that the remedy at law is deemed inadequate. The right to maintain an action at law for money paid under substantially the same kinds of mistake as courts of equity have regarded as giving jurisdiction for the rescission of a written contract to sell Fudge v. Payne, 86 Va. 303, 10 S. E. 78 Stille v. McDowell, 2 Kans. 374, 85 Am. Dec. 590; Wall v. Meilke, 89 Minn. 232, 94 N. W. 688; Southard v. Curley, 134 N. Y. 148, 31 N. E. 330, 16 L. R. A. 561, 30 Am. St. Rep. 642; Archer v. California Lumber Co., 24 Or. 341, 33 Pac. 526. 79 Campbell v. Northwest Eckington Imp. Co., 229 U. S. 561, 57 L. Ed. 1330, 33 S. Ct. 796; Philippine Sugar Est. &c. Co. v. Philippine Islands, 247 U. S. 385, 62 L. Ed. 1177, 38 S. Ct. 513; Upson Nat. Co. v. American Shipbuilding Co., 251 Fed. 707, 709; Ezell v. Humphrey, 90 Ark. 24, 117 S. W. 758; Connecticut F. Ins. Co. v. Wigginton, 134 Ark. 152, 203 S. W. 844; Sullivan v. Moorhead, 99 Cal. 157, 33 Pac. 796; Loukowski v. Pryor, 46 Col. 584, 106 Pac. 7; Robertson v. Rigsby, (Ga. 1918), 95 S. E. 973; Rexroat v. Vaughn, 181 Ill. 167, 54 N. E. 917; Anderson v. Stewart, 281 Ill. 69, 117 N. E. 743; Murphy v. First Nat. Bank, 95 Iowa, 325, 63 N. W. 702; Dare v. Foy, 180 Ia. 1156, 164 N. W. 179; Mahoning Coal Co. v. Dowling (Ky.), 124 S. W. 370; Scott v. Spurr, 169 Ky. 575, 184 S. W. 866; Etna Indemnity Co. v. Baltimore, etc., R. Co., 112 Md. 389, 76 Atl. 251, 136 Am. St. Rep. 389; Robertson v. Smith, 191 Mich. 660, 158 N. W. 207, Ann. Cas. 1918 D. 145; German-American Ins. Co. v. Davis, 131 Mass. 316; Mikiska v. Mikiska, 90 Minn. 258, 95 N. W. 910; Griffin v. Miller, 188 Mo. 327, 87 S. W. 455; Story v. Gammell, 68 Neb. 709, 94 N. W. 982; Green v. Stone, 54 N. J. Eq. 387, 34 Atl. 1099, 55 Am. St. Rep. 577; Harding v. Long, 103 N. C. 1, 9 S. E. 445, 14 Am. St. Rep. 775; Clayton v. Freet, 10 Ohio St. 544; Manley v. Smith, 88 Oreg. 176, 171 Pac. 897; Furuset v. Aaby, 88 Oreg. 278, 170 Pac. 1180, 171 Pac. 1054; School District v. Hartong, 89 Oreg. 155, 173 Pac. 570; Cranston Print Works v. Dyer, 19 R. I. 208, 32 Atl. 922; Kropp v. Kropp, 97 Wis. 137, 72 N. W. 381. land is well settled 80 and similar redress may be sought in an appropriate case for goods delivered or services rendered under a mistake.81 Payments in counterfeit money or forged securities may likewise be rescinded.82 The same fundamental reason not only for rescission but for reformation may arise in regard to oral contracts or sales concerning ordinary personal property as in regard to written contracts or deeds concerning land. Here, as in not a few other cases, courts of law have had presented to them the alternative of attempting to adapt equitable relief to legal procedure, or of leaving the parties without relief. And, here as usually, courts of law are more and more disposed to take the former alternative. There is also a tendency for courts of law to assume the functions of courts of equity even in cases where unquestionably relief might be obtained by an equitable proceeding. Instances of this may be found even in the Federal Courts.83 There seems no reason to doubt that wherever equitable pleas are allowed at law, either under a code procedure or otherwise, even in cases where a bill to rescind for mistake of fact might be entertained as a direct equitable proceeding, such a mistake of fact as equity would regard ground for unconditional rescission may be set up as a defence to an action at law. Judgment for the defendant by a court of law has the same practical effect as a decree of rescission by a court of equity.84 80 See supra, § 1574. 81 See supra, § 1575. 82 See supra, § 1572. 83 In United States v. Charles, 74 Fed. 142, 20 C. C. A. 346, 36 U. S. App. 766, a mail contractor was sued on a written contract to carry from T the mail for V. Shortly before the contract was made the Post-Office at V had been discontinued, and this fact had been unknown or not present to the minds of the contracting parties. To fulfil the contract it would be necessary to carry the mail for V to Q some distance further and across a river. Though the observance between law and equity in the Federal Courts has been sharper than in any other courts, it was held that the mutual mistake of fact was a good defence at law to the Government's action. 84 Zuspann v. Roy, 102 Kan. 188, 170 Pac. 387; Eustis Mfg. Co. v. Saco Brick Co., 198 Mass. 212, 217, 84 N. E. 449; Barlow v. Elliott, 56 Mo. App. 374; Gill v. Pelkey, 54 Ohio St. 348, 360, 43 N. E. 991; Raymond v. Toledo, etc., R. Co., 57 Ohio St. 271, 48 N. E. 1093. See also Scott v. Littledale, 8 E. & B. 815, where the equitable plea at law was held bad only because in that case equity would not have rescinded the contract. See also Pierson v. McCahill, 21 Cal. 123. In Alabama, etc., Railway Co. v. Jones, 73 Miss. 110, 127, 19 So. 105; 55 Am. St. Rep. 488, the court said, $1599. Reformation at law. Even the power of equity to reform contracts has been to some extent borrowed by courts of law, in fact, though not in name; for the result attained by a court of equity may frequently be reached by a court of law by simply admitting evidence of the actual intention of the parties and enforcing the bargain which the parties intended to make.85 The same principle, may be applied by a court of law to an oral contract as to a writing. For instance, in case of a sale by sample, if the sample is subject to a secret defect unknown to the parties, the obligation of the seller is to furnish, not goods like the sample, but goods of the kind to which the sample seems to belong.86 In terms, such a contract obviously binds the seller to furnish defective goods only. But the mutual mistake as to a material fact can be rectified and the parties "put in the same position as if their erroneous assumption had been correct, and, therefore, their contract, instead of being avoided, is upheld, according to their true intention." 87 So recovery by a corporation has been allowed on a promise in terms made to a corporation of another name, the plaintiff corporation being in fact intended as the promisee; 87 and re "The right which one has to nullify an alleged ratification by him of a voidable release executed by him, by showing that when he was alleged to have so ratified, he was not aware of his private legal right arising out of the facts, to repudiate such release, is a substantive right, and not the mere rule by which a court of chancery administers his right; and, as such substantive right, it is available in avoidance of such alleged release, as well at law as in equity. If such person filed his bill to cancel an alleged written ratification, on such ground, all that the court does is to cancel and annul the alleged written ratification, so that it shall not form the basis for the assertion of any right resulting therefrom to the party holding it against the person filing the bill. When such person is allowed to show at law want of knowledge of such private legal right to repudiate the release, the same end is accomplished, the proof cancels and annuls the alleged written ratification. It is the same substantive right, inhering in the very truth and justice of the case administered in both instances-administered in one form in one forum and in another form in another." 85 See an illustration of this, supra, §302. But see Aradalou v. New York &c. R. Co., 225 Mass. 235, 114 N. E. 297. 86 Heilbutt v. Hickson, L. R. 7 C. P. 438; Drummond v. Van Ingen, 12 A. C. 284; Coates v. Cook, 101 Ga. 586, 28 S. E. 982. Compare Dickinson v. Gay, 7 Allen, 29, 83 Am. Dec. 656. 87 Sir F. Pollock, Wald's Pollock, Contracts (3d ed.), p. 620. 87a Blenkiron Bros. v. Rogers, 87 covery has been allowed of money paid under a written contract which because of a mistake reformable in equity provided for too large a payment.88 It seems probable that such a short cut to the relief to which the plaintiff is undoubtedly entitled will find favor with the courts, though the difference between the quantum of proof required by a court of equity for relief on the ground of mistake and that required by a court of law may well be urged in opposition.89 The situation just considered, where a promise in the contract was erroneously written for too large a sum must not be confused with one where an excessive payment is made for a conveyance of real estate and the deed recites the consideration which the plaintiff in fact paid. Here the only difficulty which the plaintiff meets is that he is endeavoring to contradict a recital of fact in a deed, not to deny a promise in the teeth of the parol evidence rule. Such a contradiction of recitals though formerly not permitted is now generally allowed at law for any purpose except that of invalidating the conveyance.90 Modern decisions, therefore, have generally permitted recovery of an overpayment for land though it is stated in recitals as the consideration for the conveyance." The question Neb. 716, 127 N. W. 1062, 31 L. R. A. (N. S.) 127, Ann. Cas. 1912 A. 1043. 88 Ragsdale v. Turner, 141 Iowa, 604, 120 N. W. 109. But see contra, Boyce v. Wilson, 32 Md. 122; Farquhar v. Farquhar, 194 Mass. 400, 80 N. E. 654; Borough Paper Co. v. Scher, 170 N. Y. S. 395. See, also, Keener, Quasi Contracts, 123; Woodward, Quasi Contracts, § 180. 89 See 32 Harv. L. Rev. 179; also, supra, § 750. 90 See supra, § 115a. 91 Solinger v. Jewett, 25 Ind. 479, 87 Am. Dec. 372 (quoted with approval in Wolcott v. Frick, 40 Ind. App. 236, 81 N. E. 731); Goodspeed v. Fuller, 46 Me. 141, 71 Am. Dec. 572; Cardinal v. Hadley, 158 Mass. 352, 33 N. E. 575, 35 Am. St. Rep. 492; Wilson v. Randall, 67 N. Y. 338; White v. Miller, 22 Vt. 380; Butt v. Smith, 121 Wis. 566, 99 N. W. 328, 105 Am. St. Rep. 1039 (cf. Ohlert v. Alderson, 86 Wis. 433, 57 N. W. 88). The decisions which seem opposed are either of early date or follow early cases without sufficient appreciation of the change in the law regarding the contradiction of recitals in sealed instruments, or they present facts where under no procedure was the plaintiff entitled to recover. Carter v. Beck, 40 Ala. 599; Williams v. Hathaway, 19 Pick. 387 (but see contra, Cardinal v. Hadley, 158 Mass. 352, 33 N. E. 575, 35 Am. St. Rep. 492); Howes v. Barker, 3 Johns. 506, 3 Am. Dec. 526 (but see contra, Wilson v. Randall, 67 N. Y. 338); Farmers', etc., Bank v. Galbraith, 10 Pa. St. 490, 51 Am. Dec. 498; Kreiter v. Bomberger, 82 Pa. St. 59, 22 Am. Rep. 750; Baker v. Barley, 34 Pa. Super. 169. |