Foster v. Kingsley

Walton, J.

This is a bill in equity to obtain the reformation of a bond. The bond is for the conveyance of real estate. At the time it was given the real estate was encumbered by an outstanding mortgage, to secure the payment of $1500. The bond is so written as to require the conveyance of an unincumbered estate. It is claimed that this was a mistake; that it should have been so written as to require no more than the conveyance of the equity of redemption.

If the bond was still held by the obligee, there would be no difficulty in granting the reformation prayed for; for the obligee admits the error. But it is not now held by him. It has been assigned. And the evidence satisfies us that the assignees are bona fide holders for value. The question is not, therefore, whether it would be right to reform the bond as between the original parties to it, but whether it will be right to do so as between the obligor and the assignees. This, of course, will depend upon whether the assignees had notice of the error at the time the bond was assigned to them; for, to justify the reformation of a bond which has been assigned to a bona fide holder, for a valuable consideration, not only must the alleged error be proved, but it must-also be proved that the assignee had notice of the error at the time of the assignment. Whitman v. Weston, 30 Maine, 285. 1 Story’s Eq. Jur. § 165, and authorities there cited.

*155 Upon tins point the proof fails." We look in vain for the evidence that at the time of the assignment of the bond to them the assignees had any knowledge, from any source, that it did not truly embody the understanding and agreement of the parties. It looks as if one of the assignees might have had, at one time, a suspicion that the bond required of the obligor more than the latter was aware of; for he asked him, before taking the assignment of the bond, if he had read it. This the assignee admits. But he also swears that the obligor answered that he had, and knew what was in it, and that he would come up to the letter of it; that that was what it was made for. And both of the assignees swear directly and positively, that at the time of the assignment to them, they had no knowledge or intimation, from any source, that there was an error in the bond. And it is difficult to perceive how they could have had such knowledge; for neither the scrivener, uor the parties to the bond, liad then discovered the error. How can strangers be supposed to have been wiser than the parties themselves ? The contract was one which it was competent for the parties to make. No error was apparent upon the face of the bond. And it the parties who made the contract, and the scrivener who reduced it to writing, did not know that the instrument did not truly express the agreement, on what ground can it be assumed that the assignees knew it 1 They were not present when the agreement was made, nor when it was reduced to writing. How, then, could they know that the instrument was not correctly written ? It is impossible that any one coidd have told them of the error, for no one, not even the parties themselves, then knew of its existence. The assignees are undoubtedly chargeable with constructive notice of the existence of the outstanding mortgage, for it was a matter of public record. But notice of the existence of the mortgage would not be notice of an error in the bond. It is neither illegal nor uncommon for parties to give a bond for the conveyance of an unincumbered estate when it is perfectly well understood that the estate is under mortgage at the • time. If it is understood that the obligor is to remove the incumbrance the bond ought to be so written. Notice of the existence of a mortgage upon land, is not, therefore notice that a bond to- con *156 vey it by a deed of warranty is necessarily erroneously written.

A careful examination of the evidence fails to satisfy us that, at the time of the assignment of the bond to them the assignees had notice, actual or constructive, that it was not correctly written.7 The reformation prayed for cannot, therefore, be granted. A court of equity never interferes to relieve a party from the consequences of an error, when the only effect of such an interference would be to lift a burden from the shoulders of one and place it upon the shoulders of another, when both are equally innocent and equally free from fault. 1 Story’s Eq. Jur. §§ 64 c, 108, 139, 165, 381, 409, 434, 436.

Bill dismissed with costs for defendants.

Appleton, C. J., Barrows, Virgin, Peters and Libbev, JJ., concurred.