If the form of conveyance is, by accident or mistake, contrary to the intention of the parties in their contract, equity shall interfere to make it conform thereto.
(Orig. Code 1863, § 3047; Code 1868, § 3059; Code 1873, § 3114; Code 1882, § 3114; Civil Code 1895, § 3970; Civil Code 1910, § 4567; Code 1933, § 37-215.)
Law reviews.- For comment advocating principle that grantee may obtain reformation of deed of gift over opposition of heirs of grantor, see 25 Ga. B.J. 445 (1963).
JUDICIAL DECISIONS
Reformation as applied to a contract is a remedy cognizable in equity for the purpose of correcting an instrument so as to make it express the true intention of the parties, when from some cause, such as fraud, accident, or mistake it does not express such intention. The remedy is not available for the purpose of making a new and different contract for the parties, but is confined to establishment of the actual agreement. Deck v. Shields, 195 Ga. 697, 25 S.E.2d 514 (1943).
An IRS objection to the proposed reformation of certain deeds to reflect that all parties to the transfer of a Georgia nursing home had intended an omitted tract to be included within the description was rejected despite the IRS's insistence that a lien filed pursuant to 26 U.S.C. § 6321 was effective to encumber the omitted tract because all criteria for reformation pursuant to O.C.G.A. § 23-2-25 were met. Nat'l Assistance Bureau, Inc. v. Macon Mem'l Intermediate Care Home, Inc., F. Supp. 2d (M.D. Ga. June 8, 2009).
When the form of the conveyance or instrument is, by mutual mistake, contrary to the intention of the parties equity will interfere to make it conform thereto. In such cases, it is wholly immaterial from what cause the defective execution of the intent of the parties originated. Hill v. Agnew, 199 Ga. 644, 34 S.E.2d 702 (1945); Sheldon v. Hargrose, 213 Ga. 672, 100 S.E.2d 898 (1957).
Reformation to correct mutual mistake.
- When personal property is sold, and a bill of sale with warranty of title is executed by the vendor, and the property is again sold with warranty of title, the last vendee and the vendee's vendor may join in an equitable petition against the original vendor, having for its purpose the reformation of the original bill of sale by including certain items of property omitted therefrom by mutual mistake. Chapman v. Cassels Co., 180 Ga. 349, 179 S.E. 91 (1935).
No cause of action for reformation.
- When the plaintiffs sued as remaindermen to recover undivided interests in land after death of the life tenant, relying on a deed which by its terms plainly vested in them the remainder interest claimed, and the defendant contended that the deed had been so reformed by an equitable decree for reformation of the deed, rendered 50 years earlier, as to vest the fee-simple title in the person originally named as life tenant, from whom he purchased, the so-called decree of reformation was void, for the reason that it was based upon a petition that did not state a cause of action for reformation, and did not contain enough to amend by as related to such relief, therefore the evidence demanded a verdict for the plaintiffs. Deck v. Shields, 195 Ga. 697, 25 S.E.2d 514 (1943).
Reformation of lease and option agreement.
- When a petition is brought by assignee for reformation of a written lease and option agreement, alleging a valuable consideration, and that permanent improvements had been made on the property involved, and that an alleged inadequate description of the property had been made by mistake of the scrivener, it having been the intention of the parties that the description contended for be inserted in the agreement, and further alleging that unless so reformed an unconscionable advantage would be acquired by the defendant, such allegations state a case for reformation of the lease and option agreement. Martin v. Oakhurst Dev. Corp., 197 Ga. 288, 29 S.E.2d 179 (1944).
Reformation to correct description of land.
- In action for specific performance of option agreement to convey land, plaintiff may have description of land reformed so as to fulfill parties' intention. Martin v. Oakhurst Dev. Corp., 197 Ga. 288, 29 S.E.2d 179 (1944).
Wrong property foreclosed upon.
- Trial court properly reformed security deed and declared that suing lender had first priority over certain tract of land since there was no doubt that parties intended for the tract to have been subject to the security deed alone; trial court also properly directed verdict in favor of suing lender as to its claim for rescission and cancellation of the deed it obtained when it mistakenly foreclosed on the wrong tract, as such relief was the proper remedy. DeGolyer v. Green Tree Servicing, LLC, 291 Ga. App. 444, 662 S.E.2d 141 (2008).
Judgment creditor had no right to intervene in action for reformation of a deed.
- Trial court abused the court's discretion in allowing a borrower's judgment creditor to intervene as a matter of right pursuant to O.C.G.A. § 9-11-24 in the borrower's action against the lender for reformation of a deed pursuant to O.C.G.A. § 23-2-25. The creditor had no interest directly relating to the subject matter of the suit and had other remedies. Potter's Props., LLC v. VNS Corp., 306 Ga. App. 621, 703 S.E.2d 79 (2010).
Question of fact as to whether reformation warranted.
- Trial court erred in granting summary judgment to the borrowers on the bank's claim for equitable reformation of the security deeds because evidence included the fact that a portion of the 2003 loan paid off a joint debt previously secured by the property and the borrowers subsequently represented to the bankruptcy court that the debt secured by the property was jointly owed, which created a question of fact as to whether the debt was secured by the real property at issue. Bank of Am., N.A. v. Cuneo, 332 Ga. App. 73, 770 S.E.2d 48 (2015).
In a lender's suit for reformation of a security deed to reflect that a different parcel owned by the borrower was the collateral, rather than the parcel described in the deed, the trial court erred in granting summary judgment for the borrower because inconsistencies in the loan documents raised an issue of fact as to whether there was a mistake. JPMorgan Chase Bank v. Cronan, 355 Ga. App. 556, 845 S.E.2d 298 (2020).
Reformation not warranted.- Creditor could not prevail on the creditor's claim for equitable reformation of a security deed executed by a debtor that did not own the property because nothing in the chain of title provided constructive notice to a potential purchaser of the property of the creditor's equitable interest in the property. Stearns Bank, N.A. v. Rent-A-Tent, Inc. (In re Rent A Tent, Inc.), 468 Bankr. 442 (Bankr. N.D. Ga. 2012).
Court would not construe an agreement and a deed together as creating a fee simple subject to a condition subsequent because a month-long gap between the execution of the agreement and the deed was too great of a gap in time to deem the documents as being executed contemporaneously. Nor would the court reform the documents to do so as the creditor failed to demonstrate a mistake of present or past fact relievable in equity, either by rescission or reformation. Kelley v. McCormack (In re Mitchell), 548 Bankr. 862 (Bankr. M.D. Ga. 2016).
Taking as true for purposes of a Chapter 7 trustee's motion for judgment on the pleadings a bank's contention that the parties involved in the sale, financing, and purchase of the property at issue intended that the property be conveyed to the debtor wife alone and intended that the security deed encumber the entire property rather than only an undivided one-half interest, the bank was not entitled to reformation of a special warranty deed (SWD) under Georgia law because as a security deed grantee, it was not an original party to the SWD or in privity with any party to the SWD. Bank of Am., N.A. v. Adams (In re Adams), 583 Bankr. 541 (Bankr. N.D. Ga. 2018).
Reformation warranted.- Creditor prevailed on the creditor's claim for equitable reformation of a security deed executed by a debtor that did not own the property because a later modification of the deed was filed and was within the chain of title for the property, providing any potential purchaser of the property constructive notice of the creditor's equitable interest in the property. Stearns Bank, N.A. v. Rent-A-Tent, Inc. (In re Rent A Tent, Inc.), 468 Bankr. 442 (Bankr. N.D. Ga. 2012).
Reformation was appropriate under Georgia law as it was clear that both a Chapter 13 debtor and a bank intended the legal description in a security deed to include tract two only, and that a mutual mistake occurred due to a scrivener's error. There was no prejudice to the debtor as the trustee required the debtor to propose a Chapter 13 plan as though the deed had been reformed; further, prejudice due to the loss of debtor's house was not grounds to deny reformation as the debtor contracted and intended to pledge tract two as collateral, the debtor had the use of the loan proceeds, and the debtor used funds to satisfy an earlier debt on the tract. Deutsche Bank Nat'l Trust Co. v. Thompson (In re Thompson), 499 Bankr. 908 (Bankr. S.D. Ga. 2013).
Trial court did not err in granting summary judgment to the bank as to the bank's claim for reformation to include a mistakenly omitted signature on the security deed as the borrowers had not suffered prejudice when the borrowers received a loan and used part of that loan to satisfy an earlier loan from another lender relating to the property, and the borrowers failed to show that the borrowers would suffer any prejudice if the deed were reformed. Vibert v. Bank of America, N.A., 327 Ga. App. 782, 761 S.E.2d 162 (2014).
Bankruptcy court did not commit clear error in reforming a security deed and cancelling a quitclaim deed due to the parties' mutual mistake because the undisputed facts showed that the Chapter 13 debtor and the lender intended for the security deed's legal description to include one tract and not three tracts. Thompson v. Deutsche Bank Nat'l Trust Co. (In re Thompson), F. Supp. 2d (S.D. Ga. Aug. 11, 2014).
Lenders were entitled to equitable reformation as the evidence demonstrated that the parties had earlier attempted to modify the security deed to include both parcels in the legal description attached to the security deed and to establish both parcels as security for the subject loan. Black v. Nationstar Mortgage, LLC, 344 Ga. App. 217, 809 S.E.2d 487 (2018).
Cited in Cheatham v. Palmer, 178 Ga. 223, 172 S.E. 462 (1934); McCollum v. Loveless, 187 Ga. 262, 200 S.E. 115 (1938); Bender v. Randall Bros., 189 Ga. 197, 5 S.E.2d 889 (1939); Gibbs v. H.T. Henning Co., 189 Ga. 675, 7 S.E.2d 238 (1940); Redmond v. Sinclair Ref. Co., 204 Ga. 699, 51 S.E.2d 409 (1949); Srochi v. Postell, 206 Ga. 59, 55 S.E.2d 603 (1949); Flagg v. Hedrick, 215 Ga. 16, 108 S.E.2d 703 (1959); Polk v. Sherod, 240 Ga. 680, 242 S.E.2d 157 (1978); Curry v. Curry, 267 Ga. 66, 473 S.E.2d 760 (1996); Vance v. Jackson, 233 Ga. App. 480, 504 S.E.2d 529 (1998).
RESEARCH REFERENCES
ALR.
- Does right of grantor to maintain a suit in equity to set aside his conveyance for cause survive to his heir, 33 A.L.R. 51.
Power of equity in absence of statute to render deficiency judgment in foreclosure action, 34 A.L.R. 1015.
Right to reformation of contract or instrument as affected by intervening rights of third persons, 44 A.L.R. 78; 79 A.L.R.2d 1180.
Right to reformation of conveyance as depending upon consideration, 69 A.L.R. 423; 128 A.L.R. 1299.
Right of present claimant of title as against original or intermediate grantor to reformation to correct error in description common to conveyances in chain of title, 89 A.L.R. 1444.
Reformation on ground of mutual mistake regarding character or extent of estate or title imported by language used in instrument, 141 A.L.R. 826.
Incontestable clause as applicable to suit to reform insurance policy, 7 A.L.R.2d 504.
Right to reformation of contract or instrument as affected by intervening rights of third persons, 79 A.L.R.2d 1180.