" 19

deprived of the benefit to which he is entitled by it, and there is no sound reason, and, as we think, no well-considered authority, for the proposition that, although a court of equity will not reform a contract except for the mistake of both parties, it will rescind one merely for the mistake of one party." And in the same case it was said: "A very extended examination of the reports has failed to disclose a case in which a judgment rescinding a contract has proceeded solely upon the ground that the terms as reduced to writing, although expressing the understanding of one party, did not express that of the other. In all the reported cases where there was not the element of mutual mistake, or mistake on one side with knowledge on the other, there was some undue influence, misrepresentation, surprise, or abuse of confidence, or the contract was so oppressive as to be unconscionable."

Where parties treat upon the basis that the fact which is the subject of the agreement is doubtful, and the consequent risk each is to encounter is taken into consideration in the stipulations assented to, the contract will be valid, notwithstanding any mistake of one of the parties, provided there be no concealment or unfair dealing by the opposite party such as would affect any other contract.20 So, a contract to report the testimony at a judicial hearing at a stated sum per folio cannot be rescinded merely because one of the parties did not understand the meaning of the word "folio." 21 And a misunderstanding between the parties to a contract for the furnishing of a lot of square-edged lumber, as to whether boards and plank square-edged at one side and wany-edged at the other are "square-edged" lumber, will not give either party the right to rescind.22 On the other hand, where a purchaser orders a quantity of scrap iron, and by mistake there is included in the shipment certain mill machinery consigned to a third person, and the

19 Moffett, Hodgkins & Clarke Co. v. City of Rochester, 91 Fed. 28, 33 C. C. A. 319.

20 Ancient Order of United Workmen v. Mooney, 230 Pa. 16, 79 Atl. 233.

21 Law Reporting Co. v. Texas Grain & Elevator Co. (Tex. Civ. App.) 168 S. W. 1001.

22 Montgomery v. Ricker, 43 Vt. 165.

purchaser pays for the whole as scrap iron, this will not pass title to the machinery to him where neither he nor the seller has any such intention.28

§ 129. Mistake of One Party Induced by Fraud or Artifice of Other.-A mistake of fact in a material particular, though existing in the mind of only one of the parties, will be sufficient ground for rescission or cancellation, when the fraud, artifice, or trick of the other party induced him to fall into the mistake originally or encouraged him to persist in it, or prevented its discovery.24 Thus, for instance, where the terms of a contract are discussed and settled between the parties in conversation, and afterwards embodied in a written memorandum, and one of them is not aware that an important provision, materially affecting his interests, has been omitted from the writing, it is a mistake on his part; but if that provision was purposely and fraudulently omitted by the act or instigation of the other party, it is a fraud justifying the rescission of the contract.25 Again, if one of the parties induces the other to fall into a misapprehension or erroneous belief in regard to the substance or terms of the contract, by fraudulently concealing from him material facts which are within his own knowledge, and which would have influenced the decision of such other party, a case is made out for equitable relief.20 But it must be remembered that, in the absence of misrepresentation or fraud, ignorance of a fact known to the opposite party will not justify the interposition of equity, unless there is some reason why the injured party should have relied on the former for information, and, so relying, was deceived either by words or conduct.27 But it is a clear case of fraud and imposition where one of the parties, being fully acquainted with the subject-matter and aware of what

23 Harris v. Hackley, 127 Mich. 46, 86 N. W. 389.

24 Bogardus v. Grace (C. C.) 78 Fed. 856; Jenkins v. German Lutheran Congregation, 58 Ga. 125; Stone v. Moody, 41 Wash. 680, 84 Pac. 617, 85 Pac. 346, 5 L. R. A. (N. S.) 799; Powell v. Plant (Miss.) 23 South. 399.

25 Dickson v. Lambert, 98 Ind. 487.

26 See, supra, §§ 58-63. And see Curry v. Greffet, 115 Mo. App. 364, 90 S. W. 1166.

27 Keith v. Brewster, 114 Ga. 176, 39 S. E. 850.

he is doing, induces or encourages the other to fall into a material mistake by taking advantage of his illiteracy, impaired physical or mental faculties, age, weakness, or confiding disposition.28

§ 130. Unilateral Mistake Known to and Taken Advantage of by Other Party.-Where one of the parties to a contract is laboring under a material mistake as to a matter of fact, and the other party is aware of the mistake, and seeks to take advantage of it, knowing that the enforcement of the contract as made will result in an unwarrantable advantage to himself, with corresponding loss to the other party, his conduct is so unconscionable as to justify the interference of a court of equity to rescind the contract or prevent its enforcement.29 As remarked in one of the cases, equity will sometimes relieve a person from the consequences of his unfortunate blunder, but will never enable another to take advantage of it.30 Where the party to whom an offer is made is fully aware that it has been made under a mistake, and would not have been made but for such mistake, he cannot, by accepting it with such knowledge, hold the other to a binding contract. Thus, where, by a clerical error, the price at which defendant offered to sell seed was a dollar per hundredweight too low, and the plaintiff accepted the offer knowing that it must have been a mistake, he cannot recover for defendant's failure to perform.31 So where a letter quoted flour for immediate acceptance at "$5.10 jute or $6.00 bulk," such quotation disclosed a mis

28 Brun v. Brun, 64 Neb. 782, 90 N. W. 860; Carbine v. McCoy, 85 Ga. 185, 11 S. E. 651; Tennelly v. Tennelly (Ky.) 7 S. W. 394. 29 Singer v. Grand Rapids Match Co., 117 Ga. 86, 43 S. E. 755; Wilson v. Wyoming Cattle & Investment Co., 129 Iowa, 16, 105 N. W. 338; Ison v. Wolf, 153 Ky. 650, 156 S. W. 129; Brown v. Geiger, 3 Ky. Law Rep. 239; C. H. Young Co. v. Springer, 113 Minn. 382, 129 N. W. 773; Murray v. Crooks, 79 Mo. App. 89; Scott v. Hall, 60 N. J. Eq. 451, 46 Atl. 611; Smith v. Mackin, 4 Lans. (N. Y.) 41; Rider v. Powell, 28 N. Y. 310; Altgelt v. Gerbic (Tex. Civ. App.) 149 S. W. 233; Webster v. Cecil, 30 Beav. 62. See Cunningham v. Atterbury, 166 Mo. App. 137, 148 S. W. 176; Toop v. Palmer, 97 Neb. 802, 151 N. W. 301.

30 Hayden v. Lauffenburger, 157 Mo. 88, 57 S. W. 721.

31 Barteldes Seed Co. v. Bennett-Sims Mill & Elevator Co. (Tex. Civ. App.) 161 S. W. 399.

33

take on its face as to flour in jute sacks, and the other party, an experienced flour buyer, could not create a binding contract by accepting the offer for delivery in sacks.32 So, where a note is given in settlement of a balance mistakenly supposed by the maker to exist in favor of the payee, when in fact nothing is due, this fact is a defense in an action on the note. In another case, a life insurance policy provided that, if any premium note should not be paid when due, the policy should be void without notice or action of the company. The insured gave his note for half the first premium, and declined to pay it, and in a suit thereon claimed that it had been procured by fraud, and recovered judgment for all that had not been earned by his insurance prior to repudiating the contract. The insurer by mistake continued the policy on its books, and sent the insured a formal notice indicating the date on which the next premium would be due. He was at that time dangerously ill, and sent a check for the second premium, which the insurance company received on the day he died. It was held that the insurer was not liable on the policy.34

§ 131. Mistake Attributable to Party's Own Negligence or Inattention.-A party cannot have relief against a contract or other obligation into which he has entered in ignorance of material facts, or under a mistake as to such facts, where no fraud or imposition was practised upon him, and his ignorance or mistake is entirely due to his own negligence or lack of proper attention, or to the failure to exercise such reasonable care and thoughtfulness as may be expected in business transactions from men of ordinary care. and prudence.35 Thus, for example, one who is too careless

32 Buckberg v. Washburn-Crosby Co., 115 Mo. App. 701, 92 S. W. 733.

33 Wildermann v. Donnelly, 86 Minn. 184, 90 N. W. 366. 34 Citizens' Life Ins. Co. v. Riley (Ky.) 124 S. W. 402.

35 Greenleaf v. Queen, 1 Pet. 138, 7 L. Ed. 85; Montgomery v. City Council of Charleston, 99 Fed. 825, 40 C. C. A. 108, 48 L. R. A. 503; Royston v. Miller (C. C.) 76 Fed. 50; Illingworth v. Spaulding (C. C.) 43 Fed. 827; Pittsburg Steel Co. v. Wood, 109 Ark. 537, 160 S. W. 519; United States Trust Co. v. David, 36 App. D. C. 549; Keith v. Brewster, 114 Ga. 176, 39 S. E. 850; National Union Fire Ins. Co. v. John Spry Lumber Co., 235 Ill. 98, 85 N. E. 256; Benting v.

or too confiding to acquaint himself with the contents of a written instrument presented to him for his signature, or to have it read aloud and explained to him if he cannot read it for himself, cannot ordinarily base a claim to relief in equity on the fact that he was mistaken as to its identity, terms, or purport. The rule is sometimes stated in this form: A party cannot rescind or repudiate a contract for a mistake which existed in his own mind alone, where no fraud was practised, and where each of the parties had equal and adequate means of information, and each is presumed to pay attention and exercise his own judgment on

36

Bell, 137 Ill. App. 600; Williamson v. Hitner, 79 Ind. 233; Robinson v. Glass, 94 Ind. 211; Wood v. Wack, 31 Ind. App. 252, 67 N. E. 562; Minneapolis & St. L. Ry. Co. v. Cox, 76 Iowa, 306, 41 N. W. 24, 14 Am. St. Rep. 216; Bevins v. J. A. Coates & Sons, 29 Ky. Law Rep. 978, 96 S. W. 585; Brown v. Geiger, 3 Ky. Law Rep. 239; Gougenheim's Heirs v. Ermann, 118 La. 577, 43 South. 170; Bibber v. Carville, 101 Me. 59, 63 Atl. 303, 115 Am. St. Rep. 303; Wood v. Patterson, 4 Md. Ch. 335; Nordyke & Marmon Co. v. Kehlor, 155 Mo. 643, 56 S. W. 287, 78 Am. St. Rep. 600; Donnelly v. Missouri-Lincoln Trust Co., 239 Mo. 370, 144 S. W. 388; Troll v. Sauerbrun, 114 Mo. App. 323, 89 S. W. 364; Farrell v. Bouck, 72 Neb. 875, 101 N. W. 1018; Byers v. Chapin, 28 Ohio St. 300; Hughey v. Smith, 65 Or. 323, 133 Pac. 68; Diman v. Providence, W. & B. R. Co., 5 R. I. 130; Dow v. Ker, Speers Eq. (S C.) 413; Heilbron v. Bissell, 1 Bailey Eq. (S. C.) 430; Ferrell v. Ferrell, 53 W. Va. 515, 44 S. E. 187; Taylor v. Godfrey, 62 W. Va. 677, 59 S. E. 631; Grant Marble Co. v. Abbot, 142 Wis. 279, 124 N. W. 264. Requirement of exercise of due care and diligence to detect and avoid fraud, see, supra, §§ 39, 40. Negligence of injured party as defense to charge of false and fraudulent representations, see, supra, §§ 113, 123.

36 Hickman v. Sawyer, 216 Fed. 281, 132 C. C. A. 425; Chicago, St. P., M. & O. Ry. Co. v. Belliwith, 83 Fed. 437, 28 C. C. A. 358; Robinson v. Glass, 94 Ind. 211; Constantine v. McDonald, 25 Idaho, 342, 137 Pac. 531; McCormack v. Molburg, 43 Iowa, 561; McKinney v. Boston & M. R. Co., 217 Mass. 274, 104 N. E. 446; Porter v. Woods, 138 Mo. 539, 39 S. W. 794; Ely v. Sutton, 177 Mo. App. 546, 162 S. W. 755; International Text-Book Co. v. Anderson, 179 Mo. App. 631, 162 S. W. 641; Ellis v. McCormick, 1 Hilt. (N. Y.) 313; McDonald v. McKinney Nursery Co., 44 Okl. 62, 143 Pac. 191; Berry v. Planters' Bank, 3 Tenn. Ch. 69; McMillen v. Strange, 159 Wis. 271, 150 N. W. 434; Ross v. Northrup, King & Co., 156 Wis. 327, 144 N. W. 1124. Compare Truax v. Estes (C. C.) 92 Fed. 529. And see Wirsching v. Grand Lodge, 67 N. J. Eq. 711, 56 Atl. 713, 63 Atl. 1119, 3 Ann. Cas. 442. For the general rules as to negligence in signing a contract or other written instrument without reading it or having it read, see, supra, §§ 52-56.