Citation. 425 Pa. 430, 229 A.2d 741 (Pa. 1967)
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Brief Fact Summary.
One party allowed another to deposit waste near their property during the construction of a road. The parties agreed to a procedure of how the waste was to be concealed. This procedure, however, was not contained in the parties' written agreement.
Synopsis of Rule of Law.
" 'A court of equity has the power to reform the written evidence of a contract and make it correspond to the understanding of the parties. … However, the mistake must be mutual to the parties to the contract.' "
The Plaintiffs, Mahlon Bollinger and Vinetta Bollinger (the "Plaintiffs"), agreed to allow the Defendant, the Central Pennsylvania Quarry Stripping Construction Company (the "Defendant"), to deposit certain construction refuse near their property while they were constructing a highway. The Plaintiffs allege the parties had a mutual understanding about how the waste was to be concealed. The topsoil on the Plaintiffs' property would be removed, the refuse deposited and then the topsoil replaced. The Plaintiffs and the Defendant signed an agreement, which did not include this provision although they were under the impression it did. The Plaintiffs never read the agreement. The Defendant initially followed the mutual understanding, but over time began diverting from it. The Plaintiffs remonstrated. The Defendants point to the written agreement and argue that nothing in it says they must remove soil, lay down the waste and then replace the soil on top. Only when the Defendant began digressing from the parties' oral agreement, did the Plaintiffs learn the waste disposal provision was not in the contract. This suit followed in an attempt to reform the contract.
Should the contract be reformed to include a paragraph that was left out due to a mutual mistake?
The court first quoted [Bugen v. New York Life Insurance Co.], which stated " 'A court of equity has the power to reform the written evidence of a contract and make it correspond to the understanding of the parties. … However, the mistake must be mutual to the parties to the contract.' " Mutual mistake can still be found even if one party argues there was not a mistake. Generally, parties are bound by agreements even if they do not read them or do not understand them. However, equity allows for an exception to this rule, upon a finding of mutual mistake. This court agreed with the lower court's finding that reformation was appropriate especially because the Defendant initially followed the mutual agreement, but at some point discontinued doing so. Additionally, the Defendant agreed to conceal the waste in a similar fashion on one of the Plaintiffs' neighbor's property. Further, if the Defendant did not think they were bound by the waste disposal provision, they never would have followed it at all.
This case demonstrates how narrow the reformation remedy really is. There must be a mutual mistake and nothing less.