Hathaway v. Brady

Crocker, J. delivered the opinion of the Court—Cope, C. J. and Horton, J. concurring.

This is an action upon three promissory notes, one for $500, one for $6,197.43, and the other for $2,000. The case was tried by a jury, who rendered a verdict for $11,151.30. The defendant moved for a new trial, which the Court ordered to be granted, unless the plaintiff would remit the sum of $1,127.78 from the amount of the verdict. The plaintiff remitted the amount, and thereupon the Court refused a new trial, and the defendant appeals.

The first note sued on is as follows:

“ $500. San Lorenzo, Oct. 4th, 1857.

“ For value received, I promise to pay to the order of George Hyde, five hundred dollars, with interest at the rate of two per cent, until paid. Lewis Brady.”

The complaint avers that the agreement of the defendant was to pay interest at the rate of two per cent, per month, but that by mistake the words per month were omitted in the note; and he asked that the mistake be corrected by inserting the omitted words in the note, and for judgment thereon accordingly. The answer of the defendant denies that there was any agreement to pay two per cent, per month, or that the words “per month” were omitted by mistake. On the trial the Court permitted the plaintiff to prove the facts thus put in issue by parol evidence, and this the defendant now assigns as error.

It is evident from the face of the promissory note that there is an omission of some kind in that part which relates to the rate of interest. If it be true that the words “ per month ” were intend[124]ed to be inserted by the parties, and that they were omitted by mistake, the plaintiff has a right to have such mistake corrected. The power of a Court of Equity to correct mistakes in written contracts is clear and undoubted. And in such case the mistake may be proved by parol evidence, though such proof should fully and clearly establish the facts. (Wagonblast v. Washburn, 12 Cal. 212; Palmer v. Vance, 13 Id. 556; Eldridge v. See Yup Co., 17 Id. 55 ; Lestrade v. Barth, 19 Id. 661; Pierson v. McCahill, 21 Id. 122.) But it is urged that as the statute regulating the rate of interest requires that a contract for a greater rate of interest than ten per cent, per annum shall be in writing, therefore the agreement to pay a greater rate cannot be proved by parol. The power of a Court of Equity to correct mistakes in contracts which the statute requires to be in writing—such as conveyances of real estate—and to permit such mistake to be proved by parol evidence, is as well established as in cases where the contract is not required to be in writing. In fact, the greater class of cases in which this relief has been granted has been that of conveyances of real estate, which the law requires to be in writing. (1 Story’s Eq. Secs. 158, 159.) It follows that there utas no error in the action of the Court upon this point.