certain lumber August 1st, 1886, will be reformed before an action is brought for a breach thereof by inserting the date intended by the parties, viz.: August 1st, 1887, although persons engaged in the lumber business might be able to infer from the contract itself the proper time of delivery, and where an action is brought on the contract for a breach thereof, it should be reformed to express the real intent of the parties. Reformation of insurance policy. A policy of insurance may be reformed, even after a loss, where there was a mutual mistake of the parties, by reason of which certain property intended to be covered by the policy was omitted. 2 So, where it is claimed that insurance was effected on the tontine plan, by which the policy-holder, after a certain period, was entitled to withdraw a certain sum, if he so desired, the policy may be reformed. And a mortgagee who has stated the nature of his interest to the insurance agent and requested a policy of insurance on that interest which, through mistake, was made in favor of the mortgagor, may have the policy reformed to protect his interest. 4 1 Cameron v. White, 74 Wis. 425. The court says: We do not understand that the counsel make any complaint upon the regularity of the trial, but insist that there was no necessity for a reformation of the contract, claiming that it was apparent on its face when it was intended that its performance should take place. The mistake in the contract was in stating that it should be performed on or before the 1st of August, 1886, when it appeared on the face of the contract that the contract itself was made December 28th, 1886, some months after its performance was required. It was claimed by the plaintiff that there was a mistake in the date of performance, and that it was intended to have been written the 1st day of August, 1887, instead of 1886. We think the court was right in holding that it was necessary to reform the contract to make it conform to the agreement of the parties before an action for its breach could be sustained. The date of performance stated in the contract being an impossible date, there Relief granted, when. As a general rule, a written instrument will be reformed to express the true contract of the parties in all cases of mutual mistake, and also where there has been a mistake in one side and fraud on the other. But to warrant the action of the court the actual ground upon which relief is sought should be set forth in the petition—that is, if a mistake is the ground for relief, that should be alleged. So, of any other cause. The plaintiff should set out the contract as he claims it was in fact made, and as the parties intended it should be, and the mistake therein. A contract or other instrument may be reformed and enforced as reformed in the same action. In nearly all the code states an action to reform an instrument, and for judgment on it as reformed, is held to constitute but a single cause of action. This subject is discussed in another place, and need not be further considered here. In framing the petition the pleader should set forth the instrument as intended to be made. Second. Set forth that part of the instrument which shows the error complained of. Third. Point out the mistake which is claimed to exist. Thus, first, suppose the mistake is in the description of land conveyed, the plaintiff should allege that on a day named he purchased from the defendant certain lands (describing them) for a specified sum. Second. That on a day named the defendant, under his hand, executed and delivered to plaintiff a deed, intending thereby to convey said premises to plaintiff, but, by mistake the description of said premises conveyed by said deed is as follows (give description as in the deed). Third. The description in said deed is erroneous in this (state wherein the error consists, as, where a certain course in running the lines should be south instead of north). sum stated. Avery v. Eq. Life, etc., Co., 117 N. Y. 451. But where a husband, in his own name, took out a policy for his wife on her separate estate, and the application was filled out by the agent, who knew to whom the property belonged, a reformation of the policy in favor of the wife was decreed. Ger. Ins. Co. v. Gneck, 130 Ill. 345. 1 Avery v. Eq. Life, etc., Co., 52 Hun, 392; N. Y. Co. v. Ins. Co., 23 N. Y. 357; Miller v. Davis, 10 Kas. 541; Guernesy v. Ins. Co., 17 Minn. 83; Stewart v. Carter, 4 Neb. 564. The description will then conform to the contract of the parties as set forth in the first paragraph of this petition. Add appropriate prayer. RE-EXECUTION OF INSTRUMENTS. Re-execution of instruments accidentally lost or destroyed is akin to the remedy for reformation of instruments, and is governed by the same rules. In many cases the defect complained of occurs only in the execution of the instrument. 1 In Pennsylvania, under the statute of that state, it was held that a defective acknowledgment of a lease might be corrected, even after an action in ejectment was brought to recover the land. 2 As between the parties and persons having notice, it is probable that an action of this kind may be maintained in a proper case without the aid of a statute. The form of the petition will be substantially the same as for the reformation of an instrument. RESCISSION. The right to rescind or avoid a contract proceeds upon the ground that a party has been fraudulently betrayed into making it, and, having thus been induced to part with his own property, may resume possession of it on returning that which he has himself received, and thus placing the other party in the same position that he was before the contract was made. 3 Where, however, a contract is to be rescinded, it must be rescinded in toto. 4 If that which the plaintiff returns is diminished in value by natural causes, or in the ordinary or proper use of it, he may still return it, as, in such case, the contract being rescinded, such diminution is the loss of the original owner. If, however, it be injured by his own negligence and greatly dimin 1 Heaton v. Fryberger, 38 Iowa, 185; Miller v. Davis, 10 Kas. 541; Parlin v. Stone, 1 McCrary, 443. 2 Appeal, etc., Natural Gas Co., 18 Atl. R. 630. 3 Snow v. Alley, 11 N. E. R. 773; see Marsh v. McNair, 48 Hun, 117. 4 Hunt v. Silk, 5 East, 449; Clark v. Dickson, El. Bl. & El. 148; Sheffield Nickel Co. v. Unwin, L. R. 2 Q. B. 214 ished in value, he cannot return it, and his right to rescind is gone. Where property received is entirely worthless it need not be returned, and so strictly has this rule been held that articles which are of the slightest value, or the loss of which may be disadvantageous in any way, must be returned, even if they have no intrinsic or market value — such as casks containing worthless lime, or the sacks which had been on rejected bales of cotton. 1 Where a note of the party has been received. If the note of a party against whom a rescission is claimed has been given to the rescinding party, it is sufficient, ordinarily, for the latter to tender the return of it at the trial; for, as between the parties to it, this is not property, but a promise only. 2 Where property has passed into the possession of a party having notice of the fraud, it may be reclaimed without proving that defrauding party has been restored to his original position. In such case, the party in possession of the property, known by him to have been obtained by fraud, is not in the position to raise the question whether restoration has been made or not. This is a matter with which he has no concern, and is irrelevant to the issue. 3 The right to rescind must be exercised with reasonable promptness on discovering the fraud. 4 If the adverse parties to an agreement procured by fraud put themselves in such situation that they cannot be placed in statu quo, with full knowledge that the plaintiff claimed that the contract was procured by fraud, and that he intended to rescind the same, the rule that rescission will not be granted, unless the plaintiff can restore the adverse parties to the position which they occupied before entering into the contract, will not be applied. " 1 Snow v. Alley, 11 N. E. R. 773; Conner v. Henderson, 15 Mass. 319; Morse v. Brackett, 98 Id. 205; Estabrook v. Swett, 116 Id. 303. 2 Snow v. Alley, 11 N. E. R. 773; Thurston v. Blanchard, 22 Pick. 18; Bridge v. Batchelder, 9 Allen, 394. 3 Snow v. Alley, 11 N. E. R. 773; Stevens v. Austin, 1 Metc. 557; Man ning v. Albee, 11 Allen, 520, and 14 Allen, 7. 4 Higham v. Harris, 108 Ind. 246; 5 Harper v. Terry, 70 Id. 264; Hopkins v. Shenader, 71 Ill. 449; Hammond v. Pennock, 61 N. Y. 145; Met. El. R. Co. v. Manh. El. R. Co., 11 Daly, 373. In framing a petition for rescission the plaintiff should set forth the contract and the fraudulent representations by which he was induced to enter into it. Second. Allege that, relying upon said representations of the defendant, he entered into the contract in question, and conveyed or delivered the property which he now seeks to reclaim or have reconveyed. Third. Allege the facts showing that the representations were wholly false, of which the plaintiff had no knowledge. Fourth. Allege that as soon as the plaintiff discovered that the representations were false, to wit: on a day named, he applied to the defendant and tendered him the property which he had received, and requested him to return or reconvey the property which the defendant had received from the plaintiff. Fifth. Allege that the plaintiff brings the property into court for the purpose of having the same delivered to the defendant, when he will accept it and return or reconvey the property received by him. Add appropriate prayer. CANCELING AND DELIVERING UP INSTRUMENTS. The cases in which a court of equity will grant relief by setting aside or canceling a deed, bond or other security, are those in which there has been actual fraud on the part of the defendant in obtaining the instrument, or constructive fraud against public policy where the plaintiff is not in fault. The court will interpose in some cases of constructive fraud when the agreement should not be permitted to stand, although both plaintiff and defendant are alike guilty.1 There are many cases of constructive fraud where the court will relieve if the plaintiff is not in pari delicto. As a rule, however, if the parties stand in pari delicto, the court will not interpose. 2 Thus, if two or more persons engage in a fraudulent transaction to injure another, neither law nor equity will relieve Lord St. John v. Lady St. John, 11 Ves. 535; Millard's Eq. 304. Bolt v. Rogers, 3 Paige, 154. |