30. When instrument may be rectified

When, through fraud or a mutual mistake of the parties, a contract or other instrument in writing does not truly express their intention, either party, or his representative in interest, may institute a suit to have the instrument rectified: and if the court finds it clearly proved that there has been fraud or mistake in framing the instrument, and ascertain the real intention of the parties in executing the same, the court may in its discretion rectify the instrument so as to express that intention, so far as this can be done without prejudice to rights acquired by third persons in good faith and for value.

Illustrations

A., intending to sell to B. his house and one of three godowns adjacent to it, executes a conveyance prepared by B., in which, through B.’s fraud, all three godowns are included. Of the two godowns which were fraudulently included, B. gives one to C., and lets the other to D. for a rent, neither C. nor D. having any knowledge of the fraud. The conveyance may, as against B. and C., be rectified so as to exclude from it the godown given to C., but it cannot be rectified so as to affect D.’s lease.

By a marriage settlement, A., the father of B., the intended wife, covenants with C., the intended husband, to pay to C., his executors, administrators, and assigns, during A.’s life, an annuity of $5,000. C. dies insolvent and the official receiver claims the annuity from A. The court, on finding it clearly proved that the parties always intended that this annuity should be paid as a provision for B. and her children, may rectify the settlement and decree that the official receiver has no right to any part of the annuity.