## Facts

- Beynon Building Corp. executed a mortgage note requiring 200 monthly principal-and-interest payments that, as drafted, would amortize the debt with payments of about $694 per month.
- Beynon received and relied on an installment schedule stating $649 per month for 180 months, and it made payments in that amount.
- National Guardian Life Insurance Co., as assignee and holder of the note, accepted the $649 payments for years without recalculating whether they amortized the debt.
- In September 1979, Beynon tendered $1,299.20 as the “final two payments” and demanded a release of the mortgage.
- National recalculated the loan and concluded that $649 for 180 months could not fully amortize the debt; it refused to release the mortgage and asserted a mutual mistake in the payment schedule.
- Beynon claimed the mortgage was paid in full and argued any reformation claim was time-barred under a ten-year limitations period because National should have discovered the mistake decades earlier.

## Issues

1. Whether National proved, by clear and convincing evidence, a mutual mistake justifying reformation of the mortgage note/payment terms to reflect the parties’ actual agreement.
2. Whether a ten-year statute of limitations barred National from obtaining reformation or relying on mutual mistake where the error was allegedly discoverable long before 1979.

## Decision

- The appellate court affirmed the trial court’s judgment for National.
- The court held National established mutual mistake by clear and convincing evidence and that reformation was an appropriate equitable remedy.
- The court rejected Beynon’s limitations defense, concluding the reformation claim was not barred where National lacked actual knowledge of the mistake and acted without inequitable delay after discovery.
- Beynon was not entitled to a mortgage release based on the erroneous installment schedule.

## Legal Principles

- A court in equity may reform a written instrument that fails to express the parties’ actual agreement due to mutual mistake.
- Reformation requires proof of both the mistake and the parties’ true agreement by clear and convincing evidence.
- Reformation corrects the writing to conform to the agreement actually made; it does not create a new contract.
- Limitations principles in equitable reformation do not necessarily bar relief where the mistake was not discovered (and was not shown to be knowingly ignored) until later performance, and where no inequitable delay or laches is shown.

## Conclusion

The court upheld reformation of the mortgage documents because the evidence clearly showed both parties mistakenly followed an installment schedule that could not amortize the loan, and equity permitted correction of the payment terms despite a limitations defense where the mistake was not actually discovered until the loan’s purported payoff.


Beynon Building Corp. v. National Guardian Life Insurance Co., 455 N.E.2d 246 (Ill. App. Ct. 1983)