This section is from the book "Popular Law Library Vol7 Equity Jurisprudence, Trusts, Equity Pleading", by Albert H. Putney. Also available from Amazon: Popular Law-Dictionary.
Mistakes as to fundamental nature or character of the subject matter of the contract also furnish a basis for equitable relief. In Barth vs. Devel,5 both parties to a deed believed that the land conveyed included the land upon which a certain building was located, which proved not to be the case. The decision in this was in part as follows:
"The question presented for determination is whether the mutual mistake of the parties with reference to the location of the building occupied by the plaintiff at the time of the making of the deed by defendant to her, is, under the circumstances of this case, a ground for relief in equity. One of the circumstances to be considered is that the mistake related to a material fact, which constituted the only basis for the payment by plaintiff to defendant of the money sought to be recovered back. The premises conveyed to plaintiff by defendant were materially different from the premises the plaintiff intended to purchase, and from the premises defendant supposed he was selling to her. In Daniel vs. Mitchell, 1 Story, 172-190: 'Nothing is more clear in equity than the doctrine that a bargain founded in a mutual mistake of the facts, constituting the very basis or essence of the contract, or founded upon the representations of the sellers, material to the bargain, and constituting the essence thereof, although made by innocent mistake, will avoid it.' In Marvin vs. Bennett, 8 Paige, 312-321, it is held that equity will give relief in cases of mutual mistake, 'where the subject-matter of the sale and purchase is so materially variant from what the parties supposed it to be that the substantial object of the sale and purchase entirely fails.' By reason of the failure of the defendant to convey, not only almost the entire building intended to be conveyed, but also a failure to convey anything of material value to the plaintiff, there is a failure of the basis of the contract between the parties, without their assent, and to enforce such an agreement is inequitable. Miles vs. Stevens, 3 Pa. St., 21-37. Equitable relief will be granted in cases of mistake when the fact concerning which the mistake is made, is material to the transaction, affecting its substance and not merely its incidents, and the mistake itself is so important that it determines the conduct of the mistaken parties. 2 Pom., Eq. Jur., 856. Counsel for appellant contend that under the evidence in this case the plaintiff is not entitled to the relief she demands, by-reason of the application of the following claimed legal principles, as stated in the argument for appellant: First Where the means of information are alike open to both parties, and when each is presumed to exercise his own judgment in regard to extrinsic matters, equity will not relieve. Second. When the facts are unknown to both parties, or when each has equal and adequate means of information, in such cases, if the party has acted with good faith, equity will not interfere. Third. When each party is equally innocent, and there is no concealment of facts, mistake or ignorance is no foundation for equitable interference. The case of Crowder vs. Langdon, 3 Ired. Eq., 476, is cited in support of the foregoing proposition. An examination of that case will show that but little weight should be given to the case as an authority in support of the propositions contained in the head-notes. It appears that one of three partners in the mercantile business negotiated with another partner for the purchase of that partner's interest in the partnership; that during said negotiation, the partner having the interest for sale produced the books of the firm, and also a paper called the "blue paper," purporting to be a statement of the assets and liabilities of the firm, the figures of which statement were taken from the firm books, and that after adding the sum of $1500.00 to the sum of the liabilities, as they appeared from said statement, and deducting the sum of $600.00 from the assets on account of bad debts, which addition and deduction were made at the instance of the disinterested partner, the statement, as so changed, was taken as the basis of the contract of sale and purchase made by the parties. It turned out that the liabilities of the firm were underestimated in nearly the sum of $2,500, and the purchaser brought an action to rescind the contract and recover back the purchase money paid. The foregoing statement contains all the facts relating to a mistake in the case, and shows that there was no question of mistake to which the principles announced could be applied. Mistake is not ground for relief, unless the mistake is acted upon and forms the basis of the contract, and when it is not acted upon the principles announced have no application, as is shown by the case cited, from which we quote: 'If, however, we were satisfied that, the plaintiff acted upon the statement contained in the blue paper, as the known and declared basis on which he contracted, we should be inclined to grant him relief.' The case of Grymes vs. Sanders, 93 U. S., 55, cited by counsel, turned upon the fact that the mistake with reference to the location of the shaft had not animated and controlled the conduct of the party complaining, as appears from the following statement in the opinion: The subsequent conduct of the appellees shows that the mistake had no effect upon their minds for a considerable period after its discovery, and then it seems to have been rather a pretext than a cause.' This fact, so stated, brings the case within the principle, that, to warrant relief in equity, 'the court must be satisfied that but for the mistake the complainant would not have assumed the obligation from which he seeks to be relieved,' announced by the court in that case. The case of Weber vs. Stark, 10 Lea, 406, cited by counsel for appellant, was determined upon a question of fact relating to the intention of the parties. It was found by the court that the contract of sale made by the defendant to the plaintiff expressed the intention of the parties, and this finding clearly appears from the review of the evidence by the court on pages 412 and 413, of the opinion, which review also shows that there was no mistake as to the lots plaintiff intended to buy, but a mistake made by him as to an extrinsic fact. The case of White vs. Williams, 48 Barb., 222, was also determined upon a question of fact as to the intention of the parties. The mistake in this case was not in relation to ground intended to be purchased and sold, but in relation to an extrinsic fact relating to said ground.