LEMOGE ELECTRIC v. COUNTY OF SAN MATEO

Reset A A Font size: Print

District Court of Appeal, First District, Division 2, California.

LEMOGE ELECTRIC, a corporation, Plaintiff and Appellant, v. COUNTY OF SAN MATEO, State of California, Defendant and Respondent,

Civ. 16389.

Decided: October 21, 1955

John F. O'Dea, San Francisco, for appellant. Keith C. Sorenson, Dist. Atty. of the County of San Mateo, Howard E. Gawthrop, Deputy Dist. Atty., Redwood City, for respondent.

The plaintiff appeals from a judgment for defendant entered after sustaining a demurrer to plaintiff's complaint without leave to amend. The complaint alleges that plaintiff submitted a bid of $172,421 for certain electrical work to be done for defendant, which was the lowest bid offered. On the day following the opening of the bids plaintiff discovered that it had made a clerical mistake in one item by using the figures $104.52 when the correct figure and the one intended was $10,452. The plaintiff immediately called this mistake to the attention of the Board of Supervisors but the Board with full knowledge of the error ‘adopted Resolution No. 8018, inequitably accepting the erroneous bid of plaintiff and unconscionably attempting to bind it to the consequences of its mistake * * *.’ It is further alleged ‘That the said mistake is of such a material and fundamental character that there has been no meeting of the minds of plaintiff and defendant * * *.’ The prayer of the complaint was for a reformation to make the contract recite a price of $184,165.39, the figure which plaintiff alleges would have been its bid but for the mistake.

The case is not a proper one for reformation. Section 3399 Civil Code provides: ‘When, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised * * *,so as to express that intention * * *.’ (Emphasis ours.)

The emphasized language authorizes reformation only when the written contract does not truly express the intention of the parties, i. e., of both parties. As said in Bailard v. Marden, 36 Cal.2d 703, at pages 708–709, 227 P.2d 10, at page 13: ‘The purpose of reformation is to effectuate the common intention of both parties which was incorrectly reduced to writing. To obtain the benefit of this statute, it is necessary that the parties shall have had a complete mutual understanding of all the essential terms of their bargain; if no agreement was reached, there would be no standard to which the writing could be reformed.

‘Otherwise stated, ‘(I)nasmuch as the relief sought in reforming a written instrument is to make it conform to the real agreement or intention of the parties, a definite intention or agreement on which the minds of the parties had met must have pre-existed the instrument in question.’ 45 Am.Jur. § 7, p. 586; Holmes v. Anderson, 90 Cal.App. 276, 265 P. 1010; 5 Williston, Contracts (rev. ed.), § 1548, p. 4339; Rest., Contracts, § 504, comment b. Our statute adopts the principle of law in terms of a single intention which is entertained by both of the parties. ‘Courts of equity have no power to make new contracts for the parties, * * * (N)or can they reform an instrument according to the terms in which one of the parties understood it, unless it appears that the other party also had the same understanding.’ (22 Cal.Jur. § 2, p. 710.) If this were not the rule, the purpose of reformation would be thwarted.'

Here, according to the allegations of the complaint, there was no intention ever expressed by the Board of Supervisors to accept the corrected figure of $184,165.39 to which appellant is asking to have the contract reformed. Instead the Board ‘with full knowledge * * * of the error’ adopted its resolution ‘accepting the erroneous bid of plaintiff * * *’ Nor was plaintiff misled by the action of the Board. He knew that the Board was acepting the erroneous bid and was not accepting the corrected bid. To allow reformation in this case would be to make a new contract for the parties, which equity will never do, since “[c]ourts of equity have no power to make new contracts for the parties”. Bailard v. Marden, supra, 36 Cal.2d 703, 708, 227 P.2d 10, 13.

Appellant has been able to find no case allowing reformation in such a situation. It cites Moffett, Hodgkins & Clarke Co. v. City of Rochester, 178 U.S. 373, 383, 20 S.Ct. 957, 44 L.Ed. 1108. What was said of reformation in that case is the baldest dictum, since reformation had been rendered impossible before that case reached the court. McQuillin on Municipal Corporations, Third Edition, Volume 10, page 337 cites the Moffett case as the only authority for reformation in such a situation. It furnishes no such authority as have pointed out.

The facts alleged would apparently justify a decree of rescission. Kemper Const. Co. v. City of Los Angeles, 37 Cal.2d 696, 235 P.2d 7. Appellant did not pray for rescission but for reformation only. If rescission was still possible we might reverse on the ground that the complaint states a cause of action for rescission, but the question of rescission has been rendered moot. By appellant's own statement on oral argument it has now fully performed the contract. Appellate courts will not entertain moot questions and a question is rendered moot where ‘an event occurs which renders it impossible * * * to grant * * * any effectual relief * * *.’ Consolidated, etc., Corp. v. United Automobile, etc., Workers, 27 Cal.2d 859, 863, 167 P.2d 725, 727.

Appellant has suggested no other relief to which it could be entitled.

Judgment affirmed.

DOOLING, Justice.

NOURSE, P. J., and KAUFMAN, J., concur.