In at least six jurisdictions - California, Montana, North Dakota, South Dakota, Oklahoma, and Georgia - the rule has been modified by legislative enactment. In the first five, the statute, after providing that apparent consent is not free when obtained through mistake and that mistake may be either of fact or of law, defines the latter as "(1) A misapprehension of the law by all parties, all supposing that they knew and understood it, and all making substantially the same mistake as to the law; or (2) a misapprehension of the law by one party, of which the others are aware at the time of contracting, but which they do not rectify."1
The mistake defined in the second clause contains an element of fraud which affords a separate and obvious ground for relief. But the definition in the first clause is of a mistake in the true sense, and is remarkable in that by its terms relief is confined to cases in which the mistake is common to all parties. This is a distinction which, as will presently appear, has found some favor elsewhere. Its merits will be briefly discussed on a later page (post, Sec. 42). At this point it is only necessary to note that while the statute does not expressly extend to cases of an action at law to recover money paid, or other benefits conferred, the exception of such cases has not been recognized. Thus, in Gregory v. ClabrougKs Executors,2 it was held that the proceeds of the crop upon mortgaged premises, paid by the mortgagor to the mortgagee on the advice of an attorney that the mortgagee was entitled thereto because the mortgage covered "rents, issues, and profits," might be recovered as money paid under mistake of law common to all parties within the provisions of the code.
must be closely scrutinized to see which way the equity lies." It has been contended by Mr. Corry Montague Stadden ("Error of Law," 7 Columbia Law Rev. 476) that at the present day in England, as well as in France and Germany, there is no difference between mistake of law and mistake of fact. But see Henderson v. Folkstone Waterworks Co., 1885, 1 Times L. R. 329.
1 California Civil Code, Sec. 1578; North Dakota Revised Codes, 1905, Sec. 5299; South Dakota Civil Code, Sec. 1207 ; Oklahoma Compiled Laws, 1909, Sec. 1058; Montana Civil Code, Sec. 2123.
2 1900, 129 Cal. 475; 62 Pac. 72.
In Georgia, before the adoption of the statute, it had been held that money paid under a mistake of law, as distinguished from ignorance of the law, might be recovered, the court in one case 1 defining the distinction as follows: "Ignorance implies passivity; mistake imputes action. Ignorance does not pretend to knowledge, but mistake assumes to know. Ignorance may be the result of laches, which is criminal; mistake argues diligence, which is commendable." The statute appears to recognize this distinction, for it provides that "mere ignorance of the law" will not authorize the intervention of equity.2 And in the following section a further limitation of the jurisdiction appears to be raised by the provision defining the mistakes which are relievable as mistakes of law "as to the effect of an instrument on the part of both contracting parties."3 Does this mean that unless the mistake of law be (1) as to the effect of an instrument, and (2) common to all parties, relief will not be granted? If so, the old rule of no recovery is but slightly relaxed.