Court Opinion

ID: 8863885
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:58:39.821107+00
Date Added: 2024-06-11T17:05:55.686789
License: Public Domain

SHIPMAN, Circuit Judge.
I concur in the result reached in this case, but not in all the restrictions which the opinion will be construed to place upon the power of a court of equity either to reform. or rescind contracts upon the ground of mistake. The word “mistake” is of so broad a character, and includes so many varied *36circumstances, that rules which undertake to define what a court of equity can do or cannot do in regard to the correction of a mistake, either unilateral or mutual, seem to me to confuse rather than to enlighten. Each case must, in a great measure, he governed by its own circumstances, which appeal or do not appeal to the judgment or the conscience of the chancellor.
If the case now under consideration was simply that the complainant offered to do specified work, and nothing else, for the city of Rochester, for about $857,000; that in this single proposal there was a clerical error of about $36,000, notice of which was communicated to,the city when the proposal was being read; that it was accepted as written; that the fact of the mistake was hardly denied, and clearly appeared upon judicial investigation,—it would seem to me that the power of a court of equity to purge a contract from such an error, upon such terms as should be just to the city, or to rescind it entirely, if the amendment was found to be impracticable, ought to be generally recognized. This record presents other circumstances which are-important. After the bid of another party upon contract No. 1 had been accepted, the complainant protested that it was entitled to both contracts,—an assertion which the city’s proposals showed to be without foundation,—and offered to do all the work upon the correction of the two alleged errors in No. 2,—a proposition which it was impossible for the city to accept. At this stage of the business, the complainant -wanted to do the entire work, and apparently wanted nothing else. Its conduct compelled the city’s agents to go forward, and complete the award of contract No. 2, in accordance with the terms of the bid. The complainant thereupon, without any additional statement or negotiation, defaulted, and the city gave the contract to the next lowest bidder, for a much larger sum than that contained in the complainant’s proposals. The bill of complaint prays for a reformation and amendment of the proposal upon contract No. 2 in respect to the two alleged errors, or for its rescission and cancellation; also that the defendant be either required to enter into' a contract for the work described in both contracts as reformed, or that the bids for the whole work be rejected. To compel the city to contract with the complainant for the whole work would be manifestly improper. The alleged error in regard to the tunnel excavation was not one which can properly be called a mistake; it was the result of negligence. The question, therefore, is, shall contract No. 2 be reformed or rescinded by reason of the single error. A decree for the reformation of a contract presupposes a willingness on the part of the mistaken person to execute as reformed. The history of the case, as shown in the record, makes it very doubtful whether a willingness to execute contract No. 2 existed. The complainant, it is right to assume, honestly blundered in supposing that the contracts were to be let for the entire work, which was the result at which it was aiming both in its proposals and in its subsequent proposition. It made three kinds of mistakes. It supposed, or acted as if it supposed, that both proposals must be considered together and be accepted or be rejected; it made *37one clerical error in one proposal; and also an error throngii haste in filling out the estimates. It is impossible to say that it was ever willing to carry out that contract with or without the correction, or that its default was occasioned by the clerical error. It is as probable that it' would have defaulted with a correction as without it. A rescission cuts cf. the city from the right to sue upon its penal bond by reason of the default of the complainant, which I think ought not to be permitted, under the circumstances heretofore stated.