1 Okill v. Whittaker, 2 Phillips, 338; 11 Jur. 681.
2 See post, Sales.
3 Warner v. Daniels, 1 Woodb. & M. 91.
4 Mitchell v. Lapage, Holt, N. P. 253.
5 Pothier on Oblig. pt. 1, No. 9.
§ 539. Where there is a mutual mistake, as to a fact forming the basis of the contract, the contract will be void, although no fraud be practised.1 Thus, if the subject-matter of the contract, though supposed by both parties to be in existence, be actually destroyed at the time the contract is made, it will be void.2 Nor does it make any difference in the rule, that the subject-matter is known to both parties to be liable to accidents and contingencies, by which it may be destroyed at any moment. Thus, if a person should sell a house, which at the moment of the sale had been destroyed by fire or otherwise, though he was ignorant of the fact, the basis of their contract being gone, the contract would be void.3 So, also, if a horse be sold, which both parties believe to be alive at the time of the sale, but which is in fact dead, there is no sale.4 So, also, if an insurance should be made of goods supposed to be on board a particular ship, and the premium should be paid, and the goods should prove not to be on board, the insurer could recover the premium of insurance.5 So, also, where bills of exchange were drawn upon a firm in Havre by their agent in New York, and sold on the same day that the drawers failed, but the agent as well as the purchaser was ignorant of such failure at the time of the sale, it was held, that the purchaser was entitled to rescind the contract, on the ground of a mutual mistake of a material fact.6
1 Conner v. Henderson, 15 Mass. 319. And see Rice v. Dwight Manufacturing Co., 2 Cush. 80.
2 Raffles v. Wichelhaus, 2 H. & C. 906 (1864).
3 Young v. Adams, 6 Mass. 182; Jones v. Ryde, 5 Taunt. 488; Ellis v. Wild, 6 Mass. 321; Mudd v. Reeves, 2 Harr. & J. 368; Hargrave v. Dusenberry, 2 Hawks, 326; Markle v. Hatfield, 2 Johns. 456; Keene v. Thompson, 4 Gill & J. 463.
4 Salem Bank v. Gloucester Bank, 17 Mass. 1-33; Bank of U. S. v. Bank of Georgia, 10 Wheat. 333; Raymond v. Baar, 13 S. & R. 318; Price v. Neal, 3 Burr. 1354; Levy v. Bank of U. S., 4 Dall. 234; 1 Binn. 27.
5 Ellis v. Wild, 6 Mass. 321; Alexander v. Owen, 1 T. R. 225; 3 Starkie on Evid. 1089; post, § 1340-1351.
6 Gardiner v. Gray, 4 Camp. 144; Meyer v. Everth, 4 Camp. 22.
7 Bridge v. Wain, 1 Stark. 504; Shepherd v. Kain, 5 B. & Al. 240.
8 Chandelor v. Lopus, Cro. Jac. 4.
9 Williams v. Spafford, 8 Pick. 250.
10 Pothier on Oblig. pt. 1, ch. 1, n. 18. See also post, Implied Warranty, § 1060.
§ 540. Again, a mistake may arise in respect to the consideration to be paid for a certain act or thing, and the rule in such case is, that if the person who is to pay the consideration suppose it to be smaller than the other party intends, no contract would be effected;7 but if the party who is to pay the consideration suppose it to be larger than it is, a contract would arise for the lesser sum. Thus, if A. agree to buy two certain articles, supposing the price to be ten dollars apiece, and B. agree to sell it, understanding that he is to receive only ten for both, the sale of both would be understood to be for ten dollars.1 So, also, where shingles were sold and delivered at $3.25, but there was a mutual mistake as to whether this sum was to be paid for a bunch or for a thousand, it was held that unless both parties had understandingly assented to one or other of these views, no special contract as to price had been created.2
1 Miles v. Stevens, 3 Barr, 21.
2 Hitchcock v. Giddings, 4 Price, 135.
3 Allen v. Hammond, 11 Peters, 63; Hitchcock v. Giddings, 4 Price, 135; Daniell, 1; 1 Story, Eq. Jur. § 143; 2 Kent, Comm. 469.
4 1 Story, Eq. Jur. § 143, 143a; Allen v. Hammond, 11 Peters, 71. And see Hastie v. Couturier, 9 Exch. 102; 20 Eng. Law & Eq. 533.
5 Park on Ins. ch. 19, p. 503, 6th ed. 1809; Hammond v. Allen, 2 Sumner, 398.
6 Leger v. Bonnaffe, 2 Barb. 475.
7 Greene v. Bateman, 2 Woodb. & M. 362.
§ 541. Where money is paid by mistake, under an ignorance or forgetfulness of facts, or under a misapprehension of the state of the contract on which the party pays it, if he be not legally nor morally obliged to pay, it may be recovered back.3 Nor is it any defence to an action to recover such money, that the other party had the means of knowledge.4 But if money be paid in ignorance of a fact which would have absolved the party paying it in law, but not in morals and conscience, it would seem, that such a mistake ought not to be a sufficient ground to entitle the party paying to reclaim it. Thus, if the statute of limitation should have absolved a party from legal liability to pay a just debt, and in ignorance, or mistake, or forgetfulness, that the time prescribed already had passed, he should pay it, he could not reclaim the money. So money paid in settlement of a prosecution for bastardy, commenced in good faith, and with reason to believe that the complainant was with child, is paid upon a lawful consideration, and cannot be recovered back.6 But a negotiable security given by a party in satisfaction of a liability from which he had been discharged in law in ignorance of the facts which constituted such discharge, cannot be enforced against him, by the party to whom it was given, though he may have had the means of knowing those facts.1
1 Brown on Sales, § 223; Pothier, Contrat de Vente, n. 36.
2 Greene v. Bateman, 2 Woodb. & M. 359.
3 Kelly v. Solari, 9 M. & W. 54; Lucas v. Worswick, 1 Mood. & Rob. 293; Pearson v. Lord, 6 Mass. 84; Bond v. Hays, 12 Mass. 36; Lazell v. Miller, 15 Mass. 208; Mowatt v. Wright, 1 Wend. 355; Burr v. Veeder, 3
Wend. 412; Dickins v. Jones, 6 Yerg. 483; Whitcomb v. Williams, 4 Pick. 228; Goddard v. Merchants1 Bank, 2 Sandf. 247; Merchants' Bank v. M'Intyre, 2 Sandf. 431.