CHAPTER III. OF THE RECTIFICATION OF INSTRUMENTS 1. may be 31. When, through fraud or a mutual mistake 2 of the When parties, a contract or other instrument in writing does not instrument truly express their intention 3, either party, or his represen- rectified. tative in interest, may institute a suit to have the instrument rectified; and if the Court find it clearly proved that there has been fraud or mistake in framing the instrument 5, and ascertain the real intention of the parties in executing the same, the Court may in its discretion rectify the instrument so as to express that intention, so far as this can be done without prejudice to rights acquired by third persons in good faith and for value. Illustrations. (a) A, intending to sell to B his house and one of three godowns adjacent to it, executes a conveyance prepared by B, in which, through B's fraud, all three godowns are included. Of the two godowns which were fraudulently included, B gives one to C and lets the other to D for a rent, neither C nor D having any knowledge of the fraud. The conveyance may, as against B and C, be rectified so as to exclude from it the godown given to C; but it cannot be rectified so as to affect D's lease". (b) By a marriage-settlement, 4, the father of B, the intended wife, covenants with C, the intended husband, to pay to C, his executors, administrators and assigns, during A's life, an annuity of Rs. 5,000. C dies insolvent and the official assignee claims the annuity from A. The Court, on finding it clearly proved that the parties always intended that this annuity should be paid as a provision for B and her children, may rectify the settlement and decree that the assignee has no right to any part of the annuity". 1 This chapter is founded on the draft New York Civil Code, articles 1899-1902. Lord Justice Fry treats the subject in his chapter (xv) on Mistake. 2 For a case in which an instrument drawn up under a mistake as to its legal effect was reformed, see Walker v. Armstrong, 8 De G. M. & G. 531. 3 i. e. their intention as to the meaning and legal effect of the instrument at the time of its execution, Wilkin- 5 Breadalbane v. Chandos, 2 Myl. i. e. purchasers for valuable consideration without notice. D being a purchaser for value without notice. This illustration is from the Law Commissioners' sixth report, cl. 12. Pearce v. Verbeke, 2 Beav. 333. Intent of parties. Principles of rectification. Specific enforcement of rectified contract. 32. For the purpose of rectifying a contract in writing, the Court must be satisfied that all the parties thereto intended to make an equitable and conscientious agreement. 33. In rectifying a written instrument, the Court may inquire what the instrument was intended to mean, and what were intended to be its legal consequences, and is not confined to the inquiry what the language of the instrument was intended to be 1. 34. A contract in writing may be first rectified and then, if the plaintiff has so prayed in his plaint and the Court thinks fit, specifically enforced. Illustration. A contracts in writing to pay his attorney, B, a fixed sum in lieu of costs. The contract contains mistakes as to the name and rights of the client, which, if construed strictly, would exclude B from all rights under it. B is entitled, if the Court thinks fit, to have it rectified, and to an order for payment of the sum, as if at the time of its execution it had expressed the intention of the parties 2. When rescission may be CHAPTER IV. OF THE RESCISSION OF CONTRACTS 3. 35. Any person interested in a contract in writing may sue to have it rescinded, and such rescission may be adjudged adjudged. by the Court in any of the following cases, namely:(a) where the contract is voidable or terminable by the plaintiff ; 1 Walker v. Armstrong, 8 De G. M. & G. 531. 2 Stedman v. Collett, 17 Beav. 608. This chapter is taken for the most part from the draft N. Y. Civil Code, the framers of which remark that the discretion of the Court as to costs [see, in India, the Code of Civil Procedure, sec. 220] is a sufficient check upon frivolous suits for rescission. 4 A member of a Hindú family of proprietors defrauded by a contract between the manager and a third party has a right to have the contract altogether rescinded, 4 Bom. 29, fol 5 () where the contract is unlawful for causes not apparent on its face1, and the defendant is more to blame than the plaintiff 2; (c) where a decree for specific performance of a contract of sale, or of a contract to take a lease, has been made, and the purchaser or lessee makes default in payment of the purchasemoney or other sums which the Court has ordered him to pay 3 When the purchaser or lessee is in possession of the subjectmatter, and the Court finds that such possession is wrongful, the Court may also order him to pay to the vendor or lessor the rents and profits, if any, received by him as such. possessor 5. 4 In the same case, the Court may by order in the suit in which the decree has been made and not complied with, rescind the contract, either so far as regards the party in default, or altogether, as the justice of the case may require. Illustrations to (a).-A sells a field to B. There is a right of way over the field of which A has direct personal knowledge, but which he conceals from B. B is entitled to have the contract rescinded. to (b).-A, an attorney, induces his client B, a Hindú widow, to transfer property to him for the purpose of defrauding B's creditor's. Here the parties are not equally in fault, and B is entitled to have the instrument of transfer rescinded". In the absence of any condition as to compensation the purchaser's demand for compensation would, like any other requisition, enable the vendor to rescind under the condition for rescission. If there is a condition for compensation and an error covered by that condition is admitted or clearly proved by the purchaser, the vendor will have to give compensation and cannot rescind on the ground of unwillingness to comply with the purchaser's requisition,' Law Quarterly Review, iii. 61. 1 Simpson v. Howden, 3 Myl. & Cr. 99: Gray v. Mathias, 5 Ves. 286, 294. Williams v. Bayley, L. R., 1 H. L. 200, 216. Where the parties are equally in fault, neither can obtain relief. Where a person has been induced to enter into a contract by representations which turn out to be untrue, it is no answer to his claim for re scission to say that if he had used due diligence he would have discovered the untruth, Redgrave v. Hurd, 20 Ch. D. 1. 3 In such cases there must, apparently, be a new suit for rescission. Otherwise in England, Hutchings v. Humphreys, 54 L. J., Ch. 650. i.e. actually received, not also such as, but for his wilful default, he might have received, Collett, 213. 5 Clark v. Wallis, 35 Beav. 460. And where a sale of immoveable property is set aside for fraud, the purchaser is not entitled to any allowance for repairs or lasting improvements, 5 Bom. 450, 462, following Master of Clare Hall v. Harding, 6 Hare, 273. Ford v. Harrington, 16 N. Y. 285, cited in the notes to § 1903 of the draft N. Y. Civil Code. Rescission for mis take. Alterna tive prayer sion in suit for 36. Rescission of a contract in writing cannot be adjudged for mere mistake, unless the party against whom it is adjudged can be restored to substantially the same position as if the contract had not been made. 37. A plaintiff instituting a suit for the specific performance for rescis- of a contract in writing may pray in the alternative that, if the contract cannot be specifically enforced, it may be rescinded and delivered up to be cancelled; and the Court, if it refuses to enforce the contract specifically, may direct it to be rescinded and delivered up accordingly. specific perform ance. Court may require party re 38. On adjudging the rescission of a contract, the Court may require the party to whom such relief is granted to make scinding to any compensation to the other which justice may require 2. do equity. When cancellation may be ordered. CHAPTER V. OF THE CANCELLATION OF INSTRUMENTS 3. 39. Any person against whom a written instrument is void or voidable, who has reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, may sue to have it adjudged void or voidable, and the Court may, in its discretion, so adjudge it and order it to be delivered up and cancelled 4. If the instrument has been registered under the Indian Registration Act, the Court shall also send a copy of its decree to the officer in whose office the instrument has been so registered, and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation. 1 See Mosely v. Virgin, 3 Ves. 184: Fry, 457, who adds the proviso that the alternative relief is based on the same state of facts, though with different conclusions as to law. a Holbrook v. Sharpey, 19 Ves. 131: Bromley v. Holland, 5 Ves. 618. See Act IX of 1872, secs. 64, 65. 3 Taken for the most part from the draft N. Y. Civil Code, arts. 1906, 1908. 1 7 Mad. H. C. 372: 7 Cal. 736. English cases are: Threlfall v. Lunt, 7 Sim.627 (bill of exchange): Peake v. Highfield, Russ. 559 (forged deed): Ogilvie v. Jeaffreson, 2 Giff. 353 (conveyance procured by fraud): Willas v. Willan, 16 Ves. 72 (signature obtained by surprise). As to the limitation for such suits, see Act XV of 1877, sched. II. art. 91, in vol. ii. of this work: see too L. R., 1 I. A. 192. Illustrations. (a) A, the owner of a ship, by fraudulently representing her to be seaworthy, induces B, an underwriter, to insure her. B may obtain the cancellation of the policy 1. (b) A conveys land to B, who bequeaths it to C and dies. Thereupon D gets possession of the land and produces a forged instrument stating that the conveyance was made to B in trust for him. C may obtain the cancellation of the forged instrument 2. (c) A, representing that the tenants on his land were all at will, sells it to B, and conveys it to him by an instrument dated the 1st January 1877. Soon after that day, A fraudulently grants to C a lease of part of the lands dated the 1st October 1876, and procures the lease to be registered under the Indian Registration Act. B may obtain the cancellation of this lease". (d) A agrees to sell and deliver a ship to B, to be paid for by B's acceptances of four bills of exchange, for sums amounting to Rs. 30,000, to be drawn by A on B. The bills are drawn and accepted, but the ship is not delivered according to the agreement. A sues B on one of the bills. B may obtain the cancellation of all the bills *. 40. Where an instrument is evidence of different rights or What indifferent obligations, the Court may, in a proper case, cancel struments it in part and allow it to stand for the residue. Illustration. A draws a bill on B, who endorses it to C, by whom it appears to be endorsed to D, who endorses it to E. C's endorsement is forged. C is entitled to have such endorsement cancelled, leaving the bill to stand in other respects". may be partially cancelled. 41. On adjudging the cancellation of an instrument, the Power to Court may require the party to whom such relief is granted party for require to make any compensation to the other which justice may whom inrequire". 1 Thornton v. Knight, 16 Sim. 510, per Sir L. Shadwell. "Masters v. Braban, cited 1 Russ. 560, 561. 3 Pierce v. Webb, 3 Brown, C. C. 16, note. 4 Anglo-Danubian Co. v. Rogerson, L. R., 4 Eq. 3. 5 So where A contracted to cultivate indigo for B, for a certain number of years, on certain lands, of some of which A was only sub-tenant. During the continuance of the contract, A's immediate landlord was ejected, and A consequently lost possession of the lands of which he was sub-tenant. A VOL. I. 3 R strument is was held entitled to have so much 6 7 Ben. 630, 642, where the plain- |