Loftus v. Fischer
Before: Garoutte
Synopsis
Pleading—Defective Denials—Admissions. —Imperfect and defective denials, if acted upon as sufficient at a trial, are in no sense admissions of the allegations of a pleading which are attempted to be denied.
Findings—Conclusiveness of Appeal.—Where the evidence is not before the appellate court the findings of fact are conclusive as to the matters therein stated.
Sale of Stock—Action to Reform Contract—Acknowledgment of Indebtedness—Condition of Sale—Indivisible Contract.—Where a purchase of stock in a mining corporation is made on condition that the purchaser acknowledge an indebtedness of a specified sum as properly due on part of the shares, and also acknowledge an aggregate indebtedness to the seller of the stock in a specified sum, the contract is an entirety and indivisible, and cannot be reformed by striking out the acknowledgment of indebtedness upon the shares upon the ground of mistake of fact or law.
Id.—Mistake of Law.—A mistake of law of the purchaser in believing the advice of the vendor of the stock that under the contract only the dividends of the stock should be applied to the payment of the indebtedness is no ground upon which to reform the contract so as to conform to plaintiff’s intentions as to what the contract should be in disregard of the intentions of the vendor, especially where it appears that no misrepresentations were made by the vendor and no fraud was practiced by him upon the purchaser, and that the purchaser entered into the contract with the full knowledge of its contents and its meaning.
Practice—Trial Without Passing upon Demurrer—Error Without Prejudice.—The fact that a trial was had without passing upon a demurrer to the answer before rendering a decision in the ease is not prejudicial error where it appears that the demurrer is without merit, and it will be presumed upon appeal that it would have been overruled if passed upon by the trial court.
Garoutte, J. This is an action in equity to reform a written contract. Judgment went for the defendant, and an appeal is taken upon the judgment-roll alone, without a bill of exceptions. The contract sought to be reformed was the result of the following state of facts: Loftus was the owner of 5,000 shares of stock of a certain mining corporation. Fischer was the owner of a much larger number of shares. Loftus desired to purchase of Fischer 6,800 shares. Fischer claimed that Loftus was already indebted to him in the sum of $5,000. The price agreed upon for the stock was $10,971.80, and no money was to be paid in hand at the time. As a result of these negotiations the following contract was entered into between the parties:
“Know all men by these presents, that the undersigned, Edward 0. Loftus, .... hereby acknowledges ■ that he is indebted to Jacob A. Fischer, of the city and county of San Francisco, state of California, in the sum of fifteen thousand nine hundred and seventy-one and eighty-one one-hundredths ($15,971.81) dollars, the purchase price of eleven thousand eight hundred (11,800) shares of the capital stock of ... . mining company, . . . . which said shares the undersigned, E. 0. Loftus, has herewith deposited with said J. A. Fischer as security for said sum aforesaid; and the said E. C. Loftus does [618]hereby agree to repay said sum, together with interest at the rate of eight (8) per cent per annum from and after the twelfth day of June, 1891, it being, however, understood and agreed that said Fischer is to look to said shares alone for payment of said sum of $15,971.81, and that no liability outside thereof is to attach to said Loftus.”
Plaintiff alleges that he was not indebted to defendant in the said sum of $5,000, and that defendant willfully and knowingly misrepresented the facts in reference •thereto; and by his complaint he prays for a decree that he was laboring under a mistake of fact as to such matter, and further prays that the agreement be modified “in so far as the same provided and recited that the plaintiff was or is indebted to the defendant in any other or greater sum than $10,971.80.” He further asks for a decree that said agreement was signed and executed by the plaintiff under a mistake of law, in that he, the plaintiff, was laboring under a misapprehension of the law in regard to the legal meaning and effect of said agreement, and believed and supposed that said agreement provided that the indebtedness mentioned in said agreement should be paid only out of dividends declared on the said stock.
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