Opinion
20500.
SUBMITTED JUNE 8, 1959.
DECIDED JULY 8, 1959.
Reformation. Clayton Superior Court. Before Judge Reynolds. March 19, 1959.
Preston L. Holland, for plaintiff in error.
Frank E. Blankenship, G. Eugene Ivey, contra.
The judgment of the court below, sustaining the demurrers of one of the defendants and the motion to dismiss of the other, was erroneous and must be reversed.
SUBMITTED JUNE 8, 1959 — DECIDED JULY 8, 1959.
J. W. Head brought his petition originally against Mrs. E. B. Stephens, seeking to recover a money judgment on account of the failure of the defendant to assume and pay a certain home-improvement loan with First National Bank of Atlanta, as was agreed between the parties on the sale of certain described property by the plaintiff in error to the defendant in error. The suit as finally amended, however, was a suit to reform a deed executed by J. W. Head, conveying certain described property to Mrs. E. B. Stephens and Mrs. Janelle S. Scott, who was added by amendment as a defendant.
The petition alleged in substance that the plaintiff listed his home for sale with a named real-estate company; that, at the time, he had a loan on the property with Jefferson Mortgage Company in the amount of $8,832.31 and a home-improvement loan with First National Bank of Atlanta in the amount of $685.40; that the real-estate company sold the property to the defendants; that they orally agreed that the consideration was to be $850 cash for the plaintiff's equity in the property, and the defendants were to assume and pay the balance due on the two loans above set out; that the deed executed by the plaintiff to the defendants erroneously stated that the consideration was "Ten dollars and other valuable consideration"; that, after the deed was executed, the defendants accepted the loan book evidencing the monthly payments to First National Bank and made several payments to Jefferson Mortgage Company; that some time prior to December 9, 1955, the defendant Mrs. E. B. Stephens visited offices of First National Bank and she thereafter informed the plaintiff that she would not pay the obligation and returned the loan book to him; that thereafter the bank declared the entire loan due and payable, and that, in order to protect his credit, he paid off the loan.
It is then alleged that, as a result of a mutual mistake in drafting the deed, the deed failed to express the true agreement between the parties; that the actual, real consideration for the deed was not "Ten dollars and other valuable consideration," but was the sum of $850 cash for the plaintiff's equity and the assumption of the two loans above set out; that both parties in the preparation and execution of the deed acted under a mistake as to the law pertaining to a recital of consideration in a deed of conveyance, and believed it necessary, in order to carry out the intention of the parties, that a nominal money consideration be recited, both parties believing and intending and agreeing that the true consideration was the defendants' promise to pay $850 for the plaintiff's equity and to assume the two loans above referred to.
The prayers of the petition were for a reformation of the deed to show the true intention of the parties and for other relief.
Demurrers were filed by Mrs. E. B. Stephens. An oral motion to dismiss the petition was made by Mrs. Janelle S. Scott. On March 19, 1959, an order was entered sustaining the oral motion to dismiss made by Mrs. Janelle S. Scott, and in the same order all of the demurrers of Mrs. E. B. Stephens were sustained. The exception here is to this judgment.
1. We first consider the ruling on the demurrers filed by Mrs. E. B. Stephens. In ground 6 of the renewed demurrers, it is contended that the petition should be dismissed because the amendment sought to change the cause of action from one at law to one in equity. This ground should have been overruled. A petition at law may be changed to a petition in equity by amendment not otherwise objectionable. Johnson v. Boyd, 202 Ga. 531, 532 ( 43 S.E.2d 524); Bank of Tifton v. Bryan, 194 Ga. 735 ( 22 S.E.2d 467).
2. There is no merit in ground 7 of the renewed demurrers, in which it is contended that the petition as amended seeks to change the cause of action from one ex contractu to one ex delicto. The petition as amended and as originally filed seeks in each case to establish and enforce a contract. This ground of demurrer should have been overruled.
3. Grounds X, X (sic), XI, and XII contend that the petition does not allege sufficient facts to entitle the plaintiff to a special lien for the amount paid to First National Bank; to a lis pendens, and to costs of litigation. Assuming that the allegations of the petition are true, which we must do in ruling on demurrers, the petition does set out facts which, if proved, will entitle the plaintiff to the relief sought in the portions of the petition attacked. It was error to sustain these grounds of demurrer.
4. With these matters disposed of, we come to the real issue in this case, which is raised in one way or another by the remaining grounds of the demurrer. This question is whether the petition as amended sets out a cause of action for the reformation of the deed in question. The petition alleges that the parties to the deed orally agreed that the consideration was to be $850 cash for the plaintiff's equity and that the defendants were to assume and pay the loans on the property above referred to. It is alleged that, due to a mutual mistake of law as to the effect of a recital of a nominal consideration in a deed, the deed failed to state the true consideration agreed on by the parties. In this respect, the instant case is almost identical with Miller v. Shaw, 212 Ga. 302 ( 92 S.E.2d 98), where it was held that it was error to sustain a demurrer to count two of the petition, in which reformation of a deed because of a mutual mistake of law was sought. Code §§ 37-202 and 37-204 provide for reformation of contracts because of a mutual mistake of law. See also Mason v. Cobb, 148 Ga. 469 ( 96 S.E. 1042).
The fact that the agreement was not in writing will not bar a recovery, since what is sought to be enforced is not an oral agreement which is barred by the statute of frauds, but to reduce to writing the true agreement between the parties, to prevent an unconscionable advantage to one of the parties to a contract. In Wyche v. Greene, 11 Ga. 159 (2), it was said: "If a writing has been executed with a view of obtaining a particular object, and by mistake it has been so drawn as not to have the contemplated operations at law, chancery will reform the instrument, so that it will fulfill the intention of the parties. Agreements, whether executed or executory, within or without the statute of frauds, whether for the conveyance of real or personal property, will be reformed by courts of equity, on the ground of mistake." See also White Hamilton Lumber Co. v. Foster, 157 Ga. 493 ( 122 S.E. 29), and cases cited.
It is contended by the defendants in error that the demurrer was properly sustained because the petition seeks to vary by parol evidence the terms of a written instrument. There is no merit in this contention. "Under the provisions of section 4572 of the Code (1910), resort to parol evidence is necessary to reform the instrument. A written instrument is evidence of what the parties intended to do; but when a party seeks reformation of an instrument, the instrument is not the best evidence in such controversy. The very purpose of resorting to parol evidence is to contradict the instrument." Sapp v. Ritch, 169 Ga. 33, 35 ( 149 S.E. 636). See also cases there cited and Green v. Johnson, 153 Ga. 738 ( 113 S.E. 402), and Nelson v. Spence, 129 Ga. 35, 36 ( 58 S.E. 697). It therefore appears that the petition sets out a cause of action for reformation of the deed, to make it state the true agreement between the parties. It was therefore error to sustain the demurrers to the petition as amended.
5. With reference to the sustaining of the motion to dismiss made by Mrs. Janelle S. Scott, it is sufficient to say that the deed itself attached to the petition shows that she was an original party to the deed and is a necessary party to this proceeding, and what has been said above applies equally to the ruling on her motion to dismiss the petition.
6. From what has been said above, the judgment of the court below, sustaining the demurrers of Mrs. E. B. Stephens and the motion to dismiss made by Mrs. Janelle S. Scott, was error.
Judgment reversed. All the Justices concur.