Dulany v. Rogers

Robinson, J., delivered the opinion of the Court. In February, 1870, a written agreement was executed between H. W. Rogers, the complainant, and Olivia W. Dulany and Walter Dulany, whereby Mrs. Dulany was to convey to Rogers a tract of land containing 300 acres, valued at six thousand dollars, as an inducement to take her son Walter into partnership with him in the real estate brokerage business. The following is the clause out of which this controversy has arisen: “In case the said Walter Dulany shall elect to determine the said partnership, or in case by death of either party, the same should he dissolved, then the said Henry W. Rogers, is to pay to the said Olivia W. Dulany, the said agreed price of six thousand dollars, less expenses, or the amount which may have been realized in case of sale, less however the entire amount which may have been ⁵³² paid to or received by the said Walter Dulany from the said partnership, it being understood that no interest is to be charged.” This agreement was executed in duplicate, Rogers retaining one copy and Mrs. Dulany the other. In May, 1873, the partnership was dissolved by the election of Walter Dulany.

The sum received by him on accoimt of his share' of the profits of the partnership, amounted to $3001.68, and suit was brought by the executors of Mrs. Dulany under the written agreement, to recover the difference between the amount thus received by Walter, and $6000 the sum agreed upon as the value of the 300 acres of land. This bill is filed by Rogers to restrain the executors from prosecuting this suit, to reform the written agreement on the ground of mistake, and fo'r further relief. The bill alleges that the partnership was formed under a verbal agreement between the complainant and Mrs. Dulany, some time prior to the execution of the written agreement of February, 1870 — that under this verbal agreement Mrs. Dulany was to give to the complainant the 300 acres of land as a bonus for taking her son Walter into partnership with him — that the clause in the written agreement upon which the suit at law was brought, and by which the complainant was to pay to Mrs. Dulany, upon the dissolution of the partnership at the election of Walter, the difference between the sum received by him from the partnership and $6000, the price agreed upon as the value of the 300 acres of land, was inserted by mistake, and constituted no part of the original agreement. There can be no difficulty in regard to the well settled principles of law by which this case is to be governed.

If parties enter into an agreement, and through an error in the reduction of it to writing, the written agreement fails to express their real intentions or contains terms or stipulations contrary to their common intention, a Court ⁵³³ of equity will correct and reform the instrument so as to make it conform to the intention of the parties. Wake vs. Harrop, 1 H. & C., 202 ; Beaumont vs. Bransley, T. & R., 41; Ashurst vs. Mill, 7 Ha.; Barrow vs. Barrow, 18 Beav.; Scholfield vs. Lockwood, 33 L. I. Ch., 106; Druiff vs. Parker, L. R., 5 Eq., 137; Reade vs. Armstrong, 7 Ir. Ch., 137. It is incumbent, however, upon the party seeking to reform a written instrument to show by conclusive proof, that it does not embody the final intention of the parties ; Courts will not rectify it unless it was executed under a common mistake, — both parties having done that which neither of them intended.

A mistake on one side may be ground for rescinding, but not for reforming a written agreement. Lord Townsend vs. Stanegroom, 6 Ves., 334; Mortimer vs. Shortall, 2 Dr. & War., 372; Fowler vs. Fowler, 2 D. & J., 265 ; Eaton vs. Bennett, 34 Beav., 196; Fallon vs. Robins, 16 Ir. Ch., 422. In this case tbe burden was upon the complainant to show that the written agreement either did not express the common intention of the parties, or that it was executed by him by mistake, such as will justify a Court of equity in setting it aside.

That the partnership began under a verbal agreement between the complainant and Mrs. Dulany, fifteen months before the execution of the written agreement; and that by it Mrs. Dulany was to convey to him the 300 acres of land, as a bonus to take her son Walter into partnership with him, is we think satisfactorily established. But for this verbal agreement, it was competent surely for the parties to substitute a written agreement, containing terms and stipulations, in regard to their rights respectively upon a dissolution of the partnership, and in regard to which, the verbal agreement was silent. And if such written agreement was executed, it is but fair to presume that it expresses the final intention of the parties. The circumstances under which the written agreement was prepared, and the reasons which led to its adoption, ⁵³⁴ are fully explained by the testimony of Mr. Gill.

He says, “In a conversation with Mrs. Dulany about the partnership between the complainant and her son Walter,” he found, “ that while she understood there was a general agreement, none of the particulars or details of the agreement were provided for, or at least understood by her, and I told her there ought to be some agreement about it in writing.; I saw Mr. Rogers and talked the matter over with him, and afterwards talked it over further with Mrs. Dulany, making myself