Opinion
(December Term, 1849.)
When an instrument is intended to carry an agreement into execution, but, by reason of a mistake either of fact or of law, does not fulfill that intention by passing the estate or the thing barbained [bargained] for, equity corrects the mistake by decreeing a proper instrument to be executed.
CAUSE removed from the Court of Equity of RICHMOND, at Fall Term, 1849.
W. Winslow and Haigh for plaintiff.
Strange for defendant.
In May, 1846, the plaintiff sold to the defendant a negro boy for the price of $350, to be paid $150 in cash and the balance by a transfer of three shares of stock in the Bank of Cape Fear, marked No. 32. Accordingly the negro was delivered and a bill of sale executed by the plaintiff in the usual form, with a warranty of title and soundness, "except (453) a small rupture"; and the $150 was paid, and a paper purporting to transfer the three shares of stock was signed by the defendant and accepted by the plaintiff. This paper was drawn by the plaintiff, and both parties, at the time it was signed, believed it to be a valid transfer. It turned out not to be so, and the bank refused to recognize the plaintiff as the owner of the stock unless he procured a legal transfer to be made on the books of the corporation. The plaintiff called upon the defendant to make the transfer; he refused, and this bill was filed. The prayer is that the defendant be decreed to execute a legal transfer of the stock and be enjoined from receiving the dividends.
The defendant admits that he refused to execute a valid transfer of the stock, and alleges that he had a right to refuse, because the plaintiff cheated him in the sale of the negro by inserting the exception "as to a shall rupture" in the bill of sale without his knowledge, and because the rupture is in fact a large and serious one, greatly impairing the value of the slave.
It was urged in the argument for the plaintiff that stock in a bank or manufacturing company could not always be bought in the market, like cotton, corn, or Government stock in England, and therefore equity should decree a specific performance of contracts to convey such stock, because a recovery of the value will not, as a matter of course, enable the purchaser to get "the thing" which he contracted for. There is some force in this suggestion, but it is not necessary to decide the question, as there is another ground upon which the plaintiff is entitled to relief.
This is not merely an executory contract. It is an executed contract, or at least one which the parties intended to be executed. The defendant paid the $150 and signed the instrument which purports to transfer the stock, intending to execute the contract on his part. It was accepted as such by the plaintiff, who delivered the negro and bill of sale as an execution on his part. It turns out that the instrument is not effectual, by reason of a mistake as to the manner in which the transfer is required to be made. The plaintiff seeks to have the mistake corrected. His equity is clear. He stands on higher ground than one who seeks the specific performance of an executory contract.
When an instrument is intended to carry an agreement into execution, but, by means of a mistake either of fact or of law, does not fulfill that intention by passing the estate or the thing bargained for, equity corrects the mistake. In the exercise of this jurisdiction no distinction is taken in any of the cases between real or personal property, whether the mistake be in reference to a matter of law or of fact.
If a vendor, by mistake in drawing a deed, conveys land which he did not intend to sell, the mistake will be corrected. Pugh v. Brittain, 17 N.C. 34. So if a deed conveys only a life estate, when the contract was for the fee simple. So if a deed of bargain and sale, by (455) mistake as to the necessity of enrollment, is not enrolled in six months, equity will compel the execution of another deed, which may be enrolled. Curtis v. Perry, 6 Ves., 745.
If a defective conveyance be made, as a mortgage in fee by feoffment, without livery, equity will make good this defect. So when a power is defectively executed. Cotton v. Sayer, 2 P. Wms., 623. So in case of copyhold land, where the conveyance is not effectual for want of a surrender. Drake v. Robinson, 1 P. Wms., 442. In all cases where the intention of the parties is to execute a contract by a conveyance, and their purpose is not effected, by reason of a mistake, equity gives relief; for it is against conscience to take advantage of a mistake.
The defendant relies upon the ground that he was cheated, and insists on the rule that "a plaintiff must come into equity with clean hands." The rule is not applicable to this case, for the effect of it would be to allow the defendant to keep the negro, although he has only paid one-third of the price he agreed to give — in other words, to take advantage of an admitted mistake by way of reprisal or set-off for the fraud alleged to have been practiced upon him.
There is no proof of the fraud alleged by inserting the words "with the exception of a small rupture" in the bill of sale without the defendant's knowledge. There is some proof in reference to the extent of the rupture, but we do not feel called upon to declare how the fact is; for if the degree of unsoundness exceed that provided for in the bill of sale, the defendant has a plain and adequate remedy by an action at law upon the warranty. There is no principle of law, equity, or morals by which he can keep the negro and take advantage of a mistake to avoid paying the price.
(456) If he had offered to rescind the contract, and to return the negro upon the repayment of the $250, he would have made out an equity, provided the fraud had been proved. But to pay over one-third of the price, refuse to pay the balance, and hold on to the negro, is a summary mode of redress, inconsistent with the course of this Court in the administration of justice.
The defendant must be decreed to execute a transfer of the stock, to be approved by the master, and of the dividends accrued since the time of the contract, and to pay the costs of this suit.
PER CURIAM. Decreed accordingly.
Cited: Hart v. Roper, ante, 352; Foulkes v. Foulkes, 55 N.C. 264; Womack v. Eacker, 63 N.C. 163; Lyman v. Califer, 64 N.C. 573; Day v. Day, 84 N.C. 410; Kornegay v. Everett, 99 N.C. 34.