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doctrine respecting the effect of mistakes of law, or to clear the subject from some obscurities and uncertainties which still surround it. But it may be safely affirmned upon the highest authority as a well-established doctrine, that a mere naked mistake of law, unattended with any such special circumstances as have been above suggested, will furnish no ground for the interposition of a Court of Equity; and the present disposition of Courts of Equity is to narrow rather than to enlarge the operation of exceptions. It may however be added that where a judgment is fairly obtained at law upon a contract, and afterwards upon more solemn consideration of the subject the point of law upon which the cause was adjudged is otherwise decided, no relief will be granted in equity against the judgment upon the ground of mistake of the law; for that would be to open perpetual sources for renewed litigation.2

139. Where a bona fide purchaser for a valuable consideration without notice is concerned, equity will not interfere to grant relief in favor of a party, although he has acted in ignorance of his title upon a mistake of law; for in such a case the purchaser has at least an equal right to protection with the party laboring under the mistake.3 And where the equities are equal, the court withholds itself from any interference between the parties.1

of relief from contracts fairly entered into with a full knowledge of the facts," and under circumstances repelling all presumptions of fraud, imposition, or undue advantage having been taken of the party, none of which are chargeable upon the appellants in this case, the question then is, Were the complainants entitled to relief? To which we respond decidedly in the negative.' So far then as the Courts of the United States are concerned, the question may be deemed finally at rest.

1 Lord Cottenham, in his elaborate judgment in Stewart v. Stewart, 6 Clark & Finnell. 964 to 971, critically examined all the leading authorities upon this subject, and arrived at the same conclusion; and his opinion was confirmed by the House of Lords. Mr. Burge shows, in his learned Commentaries on Colonial and Foreign Law (vol. 3, p. 742, &c.), that the like rule prevails in the Civil Law, and in foreign countries on the Continent of Europe where the Civil Law prevails. Kelly v. Solari, 9 Mees. & Wels. R. 54, 57, 58, contains a like recognition of the doctrine by Lord Abinger.

2 Mitf. Pl. Eq. by Jeremy, 131, 132; Lyon v. Richmond, 2 John. Ch. R. 51.

Ante, § 64 c, § 108; Post, §§ 154, 165, 381, 409, 434, 436.

4 See Malden v. Merrill, 2 Atk. 8; Storrs v. Barker, 6 John. Ch. R. 166, 169, 170. In the Civil Law there is much discussion as to the effect of error of law; and no inconsiderable embarrassment exists in stating in what cases of error in law the party is relievable and in what not. It is certain that a

140. In regard to the other class of mistakes, that is, mistakes of fact, there is not so much difficulty. (a) The general rule is,

wide distinction was made between the operation of errors of law and errors of fact. In omni parte error in jure non eodem loco, quo facti ignorantia, haberi debebit; cum jus finitum et possit esse, et debeat; facti interpretatio plerumque etiam prudentissimos fallat.' Dig. Lib. 22, tit. 6, 1. 2. Hence in many

cases error of law will prejudice a party in regard to his rights; but not error of fact unless in cases of gross negligence. Dig. Lib. 22, tit. 6, 1.7. The general rule of the Civil Law seems to be, that error of law shall not profit those who are desirous of acquiring an advantage or right, nor shall it prejudice those who are seeking their own right. 'Juris ignorantia non prodest adquirere volentibus; suum vero petentibus non nocet.' Dig. Lib. 22, tit. 6, 1. 7; Pothier, Pand. Lib. 22, tit. 6, § 2, n. 2, 3. But then this text is differently interpreted by different civilians. See 2 Evans's Pothier on Oblig. Appendix, No. xviii. pp. 408 to 447; Ayliffe, Pand. B. 2, tit. 15, p. 116; 1 Domat, B. 1, tit. 8, § 1, art. 13 to 16. Domat, after saying that error of law is not sufficient as an error in fact is to annul contracts, says, that error or ignorance of law hath different effects in contracts; and then he lays down the following rules: (1) If error or ignorance of law be such that it is the only cause of a contract in which one obliges himself to a thing to which he is otherwise not bound, and there be no other cause for the contract, the cause proving false, the contract is null. (2) This rule applies not only in preserving the person from suffering loss, but also in hindering him from being deprived of a right which he did not know belonged to him. (3) But if by an error or ignorance of the law one has done himself a prejudice which cannot be repaired without breaking in upon the right of another, the error shall not be corrected to the prejudice of the latter. (4) If the error or ignorance of the law has not been the only cause of the contract, but another motive has intervened, the error will not annul the contract. And he proceeds to illustrate these rules. 1 Domat, B. 1, tit. 18, § 1, art. 13 to 17. See also Ayliffe, Pand. B 2, tit. 15; Id. tit. 17; 2 Evans's Pothier on Oblig. Appendix, No. xviii. p. 408; Id. 437; Pothier, Pand. Lib. 22, tit. 6, per tot. Ante, § 111, and note.

(a) Mistake of Fact. In the note on Mistake of Law appended to § 111 it is stated that relief from the consequences of mistake touching contracts is based on the consideration that the mistake relates to matter of the agreement as distinguished from inducements thereto, or to some condition precedent to the agreement; that is, on the ground that the minds of the parties have not met. It is not enough that there has been a mistake, however serious, in regard to an external matter not made a subject of the agreement or not a condition precedent thereto. See Dambmann v. Schulting, 75 N. Y.

55; Whittemore v. Farrington, 76 N. Y. 452; Laidlaw v. Organ, 2 Wheat. 178; post § 210.

It is there stated accordingly that the courts will interfere (a) where the minds of the parties did not meet at all, or (b) where they met on terms differing from those stated in the written embodiment of their contract. The first of these cases, (a), is a case for injunction and cancellation of the written instrument, and requires no proof of mistake or fault on the part of the defendant, if damages are not sought. Redgrave v. Hurd, 20 Ch. D. 1; Arkwright v. Newbold, 17 Ch. D. 301,

that an act done or contract made under a mistake or ignorance of a material fact is voidable and relievable in equity. The

320; Reese Silver Mining Co. v. Smith, L. R. 4 H. L. 64; Rawlins v. Wickham, 3 DeG. & J. 304; Paget v. Marshall, 28 Ch. D. 255. See Rider v. Powell, 28 N. Y. 310; Kilmer v. Smith, 77 N. Y. 226; Bridges v. McClendon, 56 Ala. 327, 333; Price v. Ley, 4 Giff. 235.

The second case, (b), is the case commonly spoken of as mutual mistake; so spoken of because usually the case is in fact one of mistake on both sides, if there is any mistake at all. This circumstance has often led courts to say that there must be mutual mistake to authorize the reformation of a contract, when it was only necessary to say that the intention with regard e. g. to a term sought to be imported into the writing must be mutual; that is, that that term must have been part of the contract actually made. It is clear that it need not be shown as necessary to this result either that the defendant was mistaken concerning the written instrument, or that he was guilty of fraud in putting it or having it put into the improper form. He merely may have seen that it was not in conformity with the agreement and kept silent; but this will not prevent rectification on satisfactory evidence of what was agreed. Rider v. Powell, 28 N. Y. 310. Comp. Cundy v. Lindsay, 3 App. Cas. 459. Upon the general proposition that the intention of the parties in regard to the term to be inserted or substituted should be one, see also Kilmer v. Smith, 77 N. Y. 226; Diman v. Providence R. Co., 5 R. I. 130; Thompsonville Co. v. Osgood, 26 Conn. 16; Ramsey v. Smith, 32 N. J. Eq. 28; Boyce v. Lorillard Ins. Co., 55 N. Y. 366; Dulany v. Rogers, 50 Md. 524; Young v. McGown, 62 Maine, 56; Schoonover v. Dougherty, 65 Ind. 463; Wright v. Goff, 22 Beav. 207; Metropolitan Soc. v. Brown, 26 Beav. 455; Paget v.

Marshall, 28 Ch. D. 255. Of course a term in excess of the agreement, that is, not assented to by one side, may be struck out, though nothing is to be put into its place.

Equity will sometimes annex to a decree for the reformation of a contract a term or a condition not in the contemplation of the parties when they executed the contract, where this appears to be necessary to justice in the now altered situation. Thus where by mistake in drawing a lease the rent was put at a lower rate than that agreed and the lessee had entered, the court on a bill to set the matter right gave the lessee an election to continue the tenancy at the higher rate, or abandon and pay for use and occupation during occupancy at the higher rate, receiving in turn compensation for repairs of a permanent nature, but not for the expense of taking possession and getting established in business on the premises. Garrard v. Frankel, 30 Beav. 445; s. c. 8 Jur. N. s. 985. For another example see Mining Co. v. Coal Co., 8 W. Va. 406, infra. And see Burr v. Hutchinson, 61 Maine, 514, concerning protection in the decree of the interests of third persons, a point considered infra.

But this right of reforming a written contract supposes that the situation has remained substantially unchanged. If on the contrary the parties cannot be put in statu quo substantially, equity will generally refuse relief. Crosier v. Acer, 7 Paige, 137, 143 (mistake of law); Eastman v. St. Anthony Falls Co., 24 Minn. 437. So if the fact about which the mutual mistake occurred was in its nature doubtful. Eastman v. St. Anthony Falls Co., supra.

Laches in the sense only of delay, though considerable, will not be a fatal objection to relief, especially in the

ground of this distinction between ignorance of law and ignorance of fact seems to be, that as every man of reasonable under

case of a grantor who has remained in possession, and no change of position by the defendant has taken place. Hutson v. Furness, 31 Iowa, 154; Farmers' Bank v. Detroit, 12 Mich. 445; McIntosh v. Saunders, 68 Ill. 128. The second and third of these cases show that the rule holds against a grantee in possession.

Even change of position by the defendant since the mistake may not always be a fatal obstacle to rectification, for the change itself may be a result, easily rectified, of the same mistake. Thus notwithstanding the fact that a lot of land conveyed by mistake, instead of an adjoining lot supposed to have been conveyed, has since been mortgaged back to the grantor under the same mistake, equity may, it seems, correct the first conveyance at the suit of the grantee, on his offering to transfer the mortgage to the lot intended. See Weston v. Wilson, 31 N. J. Eq. 51; Burr v. Hutchinson, 61 Maine, 514. It is also to be inferred from Grymes v. Sanders, 93 U. S. 55, that equity may sometimes, in the clearest and strongest cases, grant relief, though the parties cannot be put in statu quo. And see Beauchamp v. Winn, L. R. 6 H. L. 223, that difficulty in restoring the parties to their former position is not an objection to relief.

If the rights of innocent third persons would be (materially?) affected by reforming a written instrument, equity will, generally speaking, refuse its aid. Malony v. Rourke, 100 Mass. 190; Burr v. Hutchinson, 61 Maine, 514; Trustees of Schools v. Otis, 85 Ill. 179; Tabor v. Cilley, 53 Vt. 487; Mining Co. v. Coal Co., 8 W. Va. 406; Gray v. Robinson, 90 Ind. 527. Indeed the rule may probably be stated in broader terms, that mistake, whether arising upon a written

or a verbal contract, will not be corrected against an innocent third person who has acquired a title or a right in reliance upon the outward aspect of the contract; such right or title arising out of the same as though there were no mistake.

Some difficult questions however grow out of this rule. Does this put mistake on a footing with fraud or misrepresentation? That is, is there a contract notwithstanding the mistake, - a contract voidable between the parties, but valid towards innocent purchasers? Has the rule referred to a broad application, or may it be limited to cases in which the action of the third person has been induced by the action of the party aggrieved by the mistake?

To consider the last question first: Suppose A has purchased a horse from B, the title to which, by reason of mistake in regard to the identity of the animal on a sale by C to B, did not in the ordinary sense pass, cannot C recover the horse or its value from A? See Burr v. Hutchinson, 61 Maine, 514, a case of land. But if in any case he can, it is not broadly true that mistake cannot be set up against the rights of innocent third persons, and here is then a case where mistake does not stand on the same footing with fraud or misrepresentation, which in their ordinary aspect make a contract voidable only, not void. There is however a settled principle of equity that where the equities of the parties are equal there can be no interference, and the equity of the innocent purchaser for value in general at least is considered equal to that of the party injured by the mistake. Infra, § 165. But that principle too must be limited if the case put would in any phase stand in equity as well as at law, as it probably would. Compare Burr v.

standing is presumed to know the law, and to act upon the rights which it confers or supports, when he knows all the facts, it is

Hutchinson, supra. The only limitation upon the principle which can be admitted and still leave the principle good, appears to be this: that it cannot apply to the case of a mistake not due in any way to the mistaken plaintiff. E. g. suppose in the case above put the horse had without fault jumped fence into the field supposed to be occupied by the horse intended, and that the latter had also without fault of the owner escaped his enclosure. Now if (still without fault of the owner) the horse not intended to be sold or bought should be led away and sold before the mistake could be made known to the purchaser, it would seem clear that the owner could recover his property; the rule concerning the equality of equities either would not apply, or it would be considered that the equities were not equal, the plaintiff's equity being the greater.

It seems then that it is because of some act of the mistaken party, innocent and proper it may be, such as subscribing a contract containing a mistake unknown to the party at the time, by which the third person has been induced to change his position materially, that relief is refused, if refused at all (see Burr v. Hutchinson, 61 Maine, 514, where relief was granted on terms, without prejudice to third persons), and that where such an act is absent from the particular case, nothing but mistake remaining, relief will be granted. It follows that mistake pure and simple differs from (ordinary) fraud or misrepresentation in that it prevents the very existence of a contract, not simply making the contract voidable. And then it may well be considered between the original parties to the mistake, if that should become material, that the supposed contract had never come into being, the inducing act' in the case


of the third person not coming into play. See Cundy v. Lindsay, 3 App. Cas. 459.

The answer to the third question appears therefore to answer the other two. There is no contract in the case of mistake under consideration; there is only towards third persons an act which has the effect of precluding the mistaken plaintiff from alleging his mistake.

'Ordinary' fraud or misrepresentation has been spoken of here; for there is clearly a kind of fraud or misrepresentation which will be equivalent to mistake, so far as the present consideration is concerned. Thus if a person in obtaining insurance on risk A should represent it to be risk B, it would be clear that the minds of the parties had not met; there would be no contract, not merely a voidable contract. Goddard v. Monitor Ins. Co., 108 Mass. 56; Carpenter v. American Ins. Co., 1 Story, 57; Holmes, Common Law, 311. But fraud or misrepresentation which touches only the inducements to a contract is by the authorities deemed consistent with the existence of such contract; the contract however being voidable at the election of the injured party if that election is made before the rights of innocent persons have intervened.

Mistake will of course be corrected, where possible, against subsequent purchasers without value or with notice Willcox v. actual or constructive. Foster, 132 Mass. 320; Young v. Cason, 48 Mo. 259; Rhodes v. Outcalt, Ib. 367; Farmers' Bank v. Detroit, 12 Mich. 445; Adams v. Stevens, 49 Me. 362; Ruhling v. Hackett, 1 Nev. 360; infra, §§ 165, 176. Thus it has lately been decided that where a mortgage of land after being assigned has been discharged by the mortgagee by mistake, the assignee, though he has

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