Chelsea National Bank v. Smith

New Jersey Court of Chancery

Chelsea National Bank v. Smith

69 A. 533, 74 N.J. Eq. 275, 1908 N.J. Ch. LEXIS 89

CourtNew Jersey Court of Chancery

DecidedMarch 6, 1908

StatusPublished

Cited by7 cases

This text of 69 A. 533 (Chelsea National Bank v. Smith) is published on Counsel Stack Legal Research, covering New Jersey Court of Chancery primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Chelsea National Bank v. Smith, 69 A. 533, 74 N.J. Eq. 275, 1908 N.J. Ch. LEXIS 89 (N.J. Ct. App. 1908).

Pincite

Opinion

Leaming, V. C.

The agreement cannot be treated as a present demise so as to afford complainant a legal remedy under it; for the agreement contemplates the execution of a formal lease, and by its terms title was to be acquired by the lessor before a demise could be made. Wood L. & T. § 183. It may be that a bill for the specific performance of the agreement would have been an appropriate remedy for complainant, as is forcefully urged by defendant; but I am entirely satisfied that the remedy by reformation of the lease, as here sought, can be appropriately awarded. The general [278]*278rule of equity is that to warrant the reformation of a contract for mistake, the mistake must be mutual; whereas in the case of an unilateral mistake the remedy is rescission. But a court of equity will reform a contract in the ease of a mistake of one party accompanied by fraud or other inequitable conduct of the other party. 4 Pom. Eq. Jur. (3d ad.) § 1376. The present case is well within that rule. The lessor believed that the lease was drawn to conform to the written agreement. Defendant observed that it was not so drawn. No negotiation or discussion had been had touching any reduction of rent, and defendant must have known that the variance between the agreement and the lease was a clerical error. The single fact that the amount named in the lease as the total rent for the four years was the same as provided in the agreement, and that the installment payments aggregated a lesser amount, disclosed the existence of a clerical mistake. I cannot entertain the slightest doubt that defendant well knew that the lessor was signing the lease under the belief that it conformed to the agreement, and also that he well knew that his silence would operate to enable him to procure the terms not agreed upon, and that he also intended that his silent concealment should so operate. To adopt the language of Cubberly v. Cubberly, 39 N. J. Eq. (12 Stew.) 514, the rent payment now in question was kept out of the lease by the covinous contrivance of defendant. Under these circumstances, defendant, by his conduct in effect, asserted to his lessor that he was executing the lease called for by the prior agreement. Under the lease so procured he has occupied the demised premises until this time, and now seeks to avoid the rent payment which his wrongful conduct induced his lessor to believe he had stipulated to pay. Under these conditions there can be no doubt of the power and duty of a court of equity to reform the lease so that it may read as the agreement of the parties provided it should read. I will advise a decree to that effect.

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Leaming, V. C.

The agreement cannot be treated as a present demise so as to afford complainant a legal remedy under it; for the agreement contemplates the execution of a formal lease, and by its terms title was to be acquired by the lessor before a demise could be made. Wood L. & T. § 183. It may be that a bill for the specific performance of the agreement would have been an appropriate remedy for complainant, as is forcefully urged by defendant; but I am entirely satisfied that the remedy by reformation of the lease, as here sought, can be appropriately awarded. The general [278]*278rule of equity is that to warrant the reformation of a contract for mistake, the mistake must be mutual; whereas in the case of an unilateral mistake the remedy is rescission. But a court of equity will reform a contract in the ease of a mistake of one party accompanied by fraud or other inequitable conduct of the other party. 4 Pom. Eq. Jur. (3d ad.) § 1376. The present case is well within that rule. The lessor believed that the lease was drawn to conform to the written agreement. Defendant observed that it was not so drawn. No negotiation or discussion had been had touching any reduction of rent, and defendant must have known that the variance between the agreement and the lease was a clerical error. The single fact that the amount named in the lease as the total rent for the four years was the same as provided in the agreement, and that the installment payments aggregated a lesser amount, disclosed the existence of a clerical mistake. I cannot entertain the slightest doubt that defendant well knew that the lessor was signing the lease under the belief that it conformed to the agreement, and also that he well knew that his silence would operate to enable him to procure the terms not agreed upon, and that he also intended that his silent concealment should so operate. To adopt the language of Cubberly v. Cubberly, 39 N. J. Eq. (12 Stew.) 514, the rent payment now in question was kept out of the lease by the covinous contrivance of defendant. Under these circumstances, defendant, by his conduct in effect, asserted to his lessor that he was executing the lease called for by the prior agreement. Under the lease so procured he has occupied the demised premises until this time, and now seeks to avoid the rent payment which his wrongful conduct induced his lessor to believe he had stipulated to pay. Under these conditions there can be no doubt of the power and duty of a court of equity to reform the lease so that it may read as the agreement of the parties provided it should read. I will advise a decree to that effect.

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Bluebook (online)

69 A. 533, 74 N.J. Eq. 275, 1908 N.J. Ch. LEXIS 89, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chelsea-national-bank-v-smith-njch-1908.

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