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A MUTUAL MISTAKE WILL ENTITLE A BUYER TO RECOVER BACK HIS EARNEST MONEY

STONG V. LANE

66 Minn. 94, 68 N. W. 765 (1896)

Action by Stong. Verdict for plaintiff. Order refusing a new trial. Appeal.

MITCHELL, J. While the amount in controversy is small the principle involved is important. The facts are practically undisputed. The plaintiff being desirous of purchasing a lot as a site for a dwelling, a mutual acquaintance of the parties (but for whose acts defendant was in no way responsible) pointed out to plaintiff a lot which he said defendant had for sale. The lot thus pointed out fronted east on Third avenue south, being the second lot north from Franklin avenue, in Minneapolis. The party was mistaken. The lot which defendant had for sale (as agent for the owner) was the one directly opposite on the other side of Third avenue, being the side "Judge Jones' house is on." This lot fronted west. It was also the second lot north from Franklin avenue, but, as already stated, on the opposite side of Third avenue from the one pointed out to plaintiff. Thereupon plaintiff went to see defendant. The precise words by which he opened negotiations do not clearly appear, but their substance was that plaintiff either asked defendant if he had for sale a lot on Third avenue south, or stated that a lot had been pointed out to him by this mutual acquaintance as one that defendant had for sale, and inquired the price. The evidence is undisputed that defendant told plaintiff that he had for sale the lot on Third avenue south, being the second lot north of Franklin avenue, and "on the same side of the street Judge Jones' house was on." Nothing was said as to whether the lot fronted east or west. It is undisputed that Judge Jones' house is on the east side of Third avenue, and hence that a lot on that side would front west. Without defendant's giving any further or more definite description of the lot, and without plaintiff making any further inquiry as to its description and location, the plaintiff proceeded to negotiate as to price. The result was a verbal bargain of sale and purchase for $2,500, of which plaintiff paid down $100, the balance to be paid when the title was ascertained to be satisfactory, and upon defendant's procuring the proper deed. It appears that defendant's arrangement with the owner of the lot was that he was to have as his commission all he sold the lot for over $2, 500.. But without waiting for the sale to plaintiff to be consummated, defendant.immediately went to the owner, and himself bought the lot for $2,400, paying on the purchase price the $100

which he had received from plaintiff, and taking a deed running directly to the plaintiff. Very soon afterwards, on submitting to his counsel the abstract of title furnished by the defendant, plaintiff discovered that the lot described in it was not the lot which had been pointed out to him, and which he supposed he was buying. He then informed the defendant of his mistake, and demanded back his $100, which defendant refused to pay, but tendered a deed which plaintiff refused to accept, and then brought this action to recover back the $100. The evidence is undisputed that plaintiff was laboring under an honest mistake, and supposed that he was buying the lot which had been pointed out to him. It is also undisputed that defendant was equally honest in supposing he was selling the lot on the other side of the street, for which he was agent, and that he had no notice of plaintiff's mistake. It will be observed that the description of the two lots was the same except the reference to "the side of the street Judge Jones' house is on," which was applicable to the lot defendant had for sale, but inapplicable to the one which plaintiff supposed he was buying. It is familiar law that an honest mistake of one of the parties may be good ground for refusing specific performance, and leaving the other party to his action for damages, while it would be no ground for a rescission of the contract. But the question here is whether, upon the facts, plaintiff is entitled to a rescission, for that is, in effect, what he is asking for in seeking to recover the $100.

The trial judge instructed the jury to the effect that, to constitute a contract, the minds of the parties must have met-that is, as applied to this case, both parties must have had in mind the same lot; that if one of them referred to one lot, and the other to another lot, then there was no meeting of the minds of the parties, and hence no contract. Considered as a statement of the general rule of law, this might be incomplete and even incorrect. If there be a meeting of the minds upon the terms of the contract, and those terms are free from ambiguity, and there be no fraud or misrepresentation, a mistake of one of the parties only, resting wholly in his own mind, as to the identity of the subject matter of the contract, was never held in any well-considered case to be a ground for rescission. If it was, then all contracts would rest on a very uncertain foundation. Undoubtedly, in order to create a contract, the minds of the parties must meet and agree upon the expressed terms of the contract. Thus, in Rupley v. Daggett, 74 Ill. 351, one party offered to sell a horse for $165; the other party understood him to say $65. It was held that there was no contract. To the same head may be referred cases where a person, by mistake, enters into a different kind of agreement from that which he intended to make or supposed he was

making; as where he signed a bond supposing it to be a mere petition, or which he supposed he was signing merely as a witness. See Thoroughgood's Case, 2 Coke 9; Foster v. McKinnon, L. R. 4 C. P. 704. To the same general principle may be referred those cases where, after the parties have apparently agreed to the terms of a contract, it is made to appear that there was a latent ambiguity in an essential word, by which one of the parties meant one thing, and the other a different thing, the essential word being applicable to both. See Raffles v. Wichelhaus, 2 Hurl. & C. 906; Kyle v. Kavanaugh, 103 Mass. 356. In all these cases it was held there was no binding contract, because the minds of the parties had never met on its terms. But suppose, in Raffles v. Wichelhaus, there had been but one ship named Peerless, and hence no latent ambiguity in the terms of the contract; the defendant could not have been released from his contract merely because he had in mind, and supposed he was contracting with reference to, another ship of a different name. We do not wish to be understood as

endorsing the erroneous meaning not infrequently attached to the legal maxim that, to create a contract, the minds of the parties must meet and "agree on the same thing in the same sense."

Order affirmed.

FRAUDULENT REPRESENTATION

ANTLE AND BROTHER V. SEXTON ET AL

137 Ill. 410, 27 N. E. 691 (1891)

BAKER. J. This was an action on the case, by appellees, against appellants to recover damages for fraud and deceit in the sale of timber standing on the land of one Jameson. The subjects of the sale were the timber that had been bought by appellants from Jameson, a saw-mill and its appurtenances, and thirteen acres of timber on the Hadley land. The sum of $3,000 in gross, was paid for the property, no separate price being fixed for the different articles. The ground of fraud relied on was the representation that the tract of timber bought from Jameson contained eighty acres, when in fact the Jameson contract only conveyed to appellants thirty acres of timber. Appellees recovered in the circuit. court judgment for $900, and that judgment was affirmed in the appellate court, and the cause was brought here on a certificate of importance. In the written contract signed by the parties it is recited that the appellants agreed as follows:

"Second-That they hereby assign and transfer to said Sexton & Bybee all interest which they have acquired in and to about eighty

acres of saw-timber in Gardner township, Sangamon County, Illinois under a contract heretofore entered into by the said N. C. Antle & Bro. with one S. H. Jameson.

"Fourth-They hereby agree to assign over to said Sexton & Bybee the written contracts with said Jameson & Hadley, above referred to."

It is suggested by appellants, that where the means of knowledge are at hand and equally available to both parties, and the subject of purchase is open to inspection, the purchaser cannot be heard to say that he was deceived by the vendor's misrepresentations, and fault is found that the court instructed the jury, that if the representation was made "in such a way and under such circumstances as to induce a reasonably prudent man to believe that the matter stated was true," and if the plaintiffs, "in the exercise of reasonable prudence believed the representation to be true," etc., it sufficiently sustained the action for deceit. The false representation consisted in misstating the terms of the Jameson contract, and the parties did not stand upon an equal footing in respect thereto. Said contract was in the possession of appellants, and they had full knowledge of its provisions, while appellees did not have access to it, and it was withheld from their inspection upon a plausible pretext stated by appellants. The land upon which the timber grew was in a peculiar shape, and was contiguous to other timber lands, and although the timber was pointed out to appellees, yet it is manifest that without a knowledge of the boundaries and an actual measurement, no person could tell the number of acres in the tract. In numerous instructions given by the court, the knowledge of appellants that the representation was false, and the fact that the same was made with intent and for the purpose of deceiving and defrauding appellees, were made conditions precedent to the right of recovery. Surely, where a misrepresentation is made as to a material fact, and such misrepresentation is made knowingly, and for the express purpose of deceiving and defrauding and the party injured relies upon the statement made and under circumstances which would induce a reasonable prudent man to so rely, there must be a right of action at law for fraud and deceit. To throw a purchaser out of the court in such case, upon the plea he did not avail himself of the means of knowledge open to him, would be offering a premium on fraud and would be destructive of confidence in business transactions. There was no error of which appellant can complain in instructing the jury as above indicated. Linnington v. Strong, 107, Ill. 295; Endsley v. Johns, 120 id. 964; Schwabacker v. Riddle, 99 id. 343; Hicks v. Stevens, 121 id. 186.

Judgment affirmed.

CONTRACT DURING THE LIFE OF ANOTHER IS NOT WITHIN THE STATUTE OF FRAUDS

HEATH V. HEATH

31 Wis. 223 (1872)

Action for one-half of the amount expended by one of the parties over that expended by the other under an oral contract between them to support their mother for the remainder of her life. Counter-claim by the defendant for expenses in taking care of the mother for five years while plaintiff was absent from the State. Verdict for the defendant.

COLE, J. . . . These parties are brothers, and the defendant offered evidence tending to prove that a verbal contract was entered into between them in 1861, by which they agreed to support their mother during her natural life—each one contributing equally thereto in consideration of the homestead, which she had conveyed to them. It is suggested that such a contract would be void, because by its terms, it was not to be performed within a year from the making thereof. But this is a mistake. It is apparent that this contract might have been entirely performed within a year consistently with the understanding of the parties, because Mrs. Heath might have died within that time. "When the promise is to continue to do something until the contingency occur, as for instance to pay during the promisee's life; to pay during the life of another; to board the promisee during his life; to pay the expenses. of a child so long as it should be chargeable to the town; to educate a child; to support a child, who is eleven years old, till she is eighteen; to pay during coverture; in all these cases the promise is not affected by the statute, because the party whose life is involved may die within the year." Browne on Frauds (2d ed.), chap. 13, p. 276.

Judgment affirmed.

"PUFFING GOODS" IS NOT FALSE REPRESENTATION

GORDON V. PARMELEE

2 Allen (Mass.) 212 (1861)

An action on a promissory note given by the defendant in payment. for a farm. In the lower court the defendant was allowed to prove by way of recoupment in damages, that the plaintiff falsely represented that the farm was of a soil and capacity for productiveness and keeping of stock, greatly superior to what it was in fact, and that the land was covered with snow so the defendant could not judge of its productive

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