of mistake, in that the instrument is different from what he supposed it was, where the mortgagee was not guilty of any fraud or deception.219 So where the vendors under a contract for the sale of land had no definite understanding as to the precise form of the documents they were to execute, but were willing to sign any papers which their attorney advised, instruments conveying the land to the United States, and authorizing the grantee to select lieu lands, were held to be neither forgeries nor void for fraud.220

221

But on the other hand, if a written instrument is just what the paries intended it to be, and expresses the intention which they had in mind at the time, so that there is no mistake as to its purport, it cannot be rescinded, nor can other equitable relief be given against it, because of a mistake or misunderstanding of one or both of the parties concerning the legal consequences or effects of the writing.2 For instance, where the grantor in a deed of trust or settlement understands its purport and voluntarily executes it, without any fraud or undue influence, he cannot have it set aside because he did not fully understand its legal effect.222 So if the grantee understands that a deed absolute on its face is to operate as an absolute conveyance, and is not guilty of any fraud in procuring it, it cannot be set

219 Snelgrove v. Earl, 17 Utah, 321, 53 Pac. 1017. As to negligence precluding relief, in signing an instrument without reading it, see, supra, §§ 52-57.

220 United States v. Conklin (C. C.) 169 Fed. 177.

221 Seeley v. Reed (C. C.) 25 Fed. 361; First Nat. Bank v. Shank, 53 Colo. 446, 128 Pac. 56; De Give v. Healey, 60 Ga. 391; Carter v. Love, 206 Ill. 310, 69 N. E. 85; Tilton v. Fairmount Lodge, 149 Ill. App. 530; Ruby v. Ewing, 49 Ind. App. 520, 97 N. E. 798; Grant v. Isett, 81 Kan. 246, 105 Pac. 1021; Talbott's Devisees v. Hooser, 12 Bush (Ky.) 408; Euler v. Schroeder, 112 Md. 155, 76 Atl. 164; Atlas Shoe Co. v. Bloom, 209 Mass. 563, 95 N. E. 952; McGraw v. Muma, 164 Mich. 117, 129 N. W. 20; Corrigan v. Tiernay, 100 Mo. 276, 13 S. W. 401; Hinchman v. Emans, 1 N. J. Eq. 100; Leszynsky v. Ross, 35 Misc. Rep. 652, 72 N. Y. Supp. 352; Ames v. Moore, 54 Or. 274, 101 Pac. 769; McAninch v. Laughlin, 13 Pa. 371; Moore v. Studebaker Bros. Mfg. Co. (Tex. Civ. App.) 136 S. W. 570. Compare Sandlin v. Ward, 94 N. C. 490.

222 Coleman v. Fidelity Trust & Safety Vault Co., 28 Ky. Law Rep. 1263, 91 S. W. 716; Lawrence v. Lawrence, 181 Ill. 248, 54 N. E. 918; Taylor v. Buttrick, 165 Mass. 547, 43 N. E. 507, 52 Am. St. Rep. 530; Wright v. Tallmadge, 15 N. Y. 307.

aside because the grantor understood that it was intended as a mortgage.223 And so a license to use a patented article cannot be rescinded on the ground of a mistake as to its legal effect, as, in supposing that it applied only to the use of the article in connection with one particular machine then in existence, whereas legally it gave the licensee the right to apply it to all machines of that kind thereafter made or used by him.224

But even in this modified form, the rule against granting relief on account of mistakes of law has been subject to some qualifications and exceptions. In Georgia, it is provided by statute that "an honest mistake of law as to the effect of an instrument, on the part of both contracting parties, when such mistake operates as a gross injustice to one, and gives an unconscientious advantage to the other, may be relieved in equity." 225 So, in Texas, it is said that the fact that a person did not understand what he was doing when he executed a mortgage, and that the officer taking the acknowledgment did not explain it to him, will not defeat the mortgage, unless these facts are brought to the knowledge of the mortgagee.226 Also it appears that, in cases where great hardship or injustice is likely to result, equity will be quick to lay hold on any attending circumstance which indicates fraud, undue influence, or imposition on the part of the person benefiting by the transaction, as, for instance, where the mental condition of the other party is such as to impose the duty of making a full and clear explanation.227 And it has been thought that relief in equity should be granted where a mistake was made, not as to the existence or non-existence of a certain statute, but as to its legal effects on the rights of the parties.228

§ 150. Same; Mistake of Law Induced by Other Party. A mistake of law, existing in the mind of one of the parties to a contract, will be remediable in a court of equity when

223 Irvin v. Johnson, 56 Tex. Civ. App. 492, 120 S. W. 1085. 224 Illingworth v. Spaulding (C. C.) 43 Fed. 827.

225 Civ. Code Ga., 1910, § 4576. And see Dolvin v. American Harrow Co., 125 Ga. 699, 54 S. E. 706, 28 L. R. A. (N. S.) 785.

226 Beattie v. Keller (Tex. Civ. App.) 49 S. W. 408. 227 McGraw v. Muma, 164 Mich. 117, 129 N. W. 20. 228 State v. Paup, 13 Ark. 129, 56 Am. Dec. 303.

it was induced or brought about by false representations made by the other party, or by such conduct on his part as makes it inequitable for him to take advantage of it.229 "There are cases in which this court will interfere upon the ground of such mistake [of law] to relieve a party from the effect of his contract, as, for instance, if one is ignorant of a matter of law involved in the transaction, and the other, knowing him to be so, takes advantage of that circumstance to make the contract, there the court will relieve, though perhaps more properly on account of fraud in the one party than of ignorance of the law in the other." 230 Thus, where a vendor is induced by fraudulent representations to sign a contract under which the purchaser buys the property "subject to" and not "assuming" a certain debt, the courts will refuse enforcement of the contract, even though the vendor read the contract, if he did not understand its legal effect.281 This rule applies with special force where the personal or business relations of the two parties are such that one naturally places reliance upon the information or advice which the other gives him. Where one has the right to rely upon another and does so rely, and the latter omits to state a most material legal consideration within his knowledge and affecting the other's rights, but of which that other is ignorant, and acts under this misplaced confidence and is misled by it, a court of equity will afford relief, especially if such action inures to the advantage of the person whose advice is taken, even though no fraud was intended.232 But it is not so clear that relief should be given where one party does nothing to induce the mistake of law in the mind of the other, but merely, being aware that it exists, keeps silent and does nothing to enlighten him. In a case in Maine, it is said that

229 Medical Society of South Carolina v. Gilbreth (D. C.) 208 Fed. 899; Dill v. Shahan, 25 Ala. 694, 60 Am. Dec. 540; Carr v. Dickson, 58 Ga. 144; Montgomery Door & Sash Co. v. Atlantic Lumber Co., 206 Mass. 144, 92 N. E. 71; Gunter v. Thomas, 1 Ired. Eq. (36 N. C.) 199; Drew v. Clarke, 3 Tenn. (Cooke) 374, 5 Am. Dec. 698; Tolley v. Poteet, 62 W. Va. 231, 57 S. E. 811.

230 Champlin v. Laytin, 6 Paige (N. Y.) 189.

231 Parker v. Naylor (Tex. Civ. App.) 151 S. W. 1096. 232 Tompkins v. Hollister, 60 Mich. 470, 27 N. W. 651.

if equity will ever relieve one who has entered into a transaction under a misapprehension of its effect, when the other party merely failed to correct such misapprehension, there being no such peculiar relation between the parties as to place the one who remains silent under any unusual obligation, such party must himself have appreciated the legal effect of the transaction, and must have known that the other was acting in ignorance of such effect.233

§ 151. Same; Mistake of Law as Element of Fraud.The doctrine which makes parties bear the consequences of mistakes of law is often productive of hardship, and can be maintained only on grounds of general policy. It is not so universal as to exclude relief in cases where mistake of law is only one element of the case presented to a court of equity, and is combined with the fraud or misconduct of the other party.234 "Ignorance of the law may be one of the ingredients of fraud on which the court will act, for when there is gross ignorance or a plain and palpable mistake of a plain and familiar principle of law, it may well give rise to a presumption, with the admixture of other and even slight circumstances, that there has been undue influence, imposition, mental imbecility, surprise, or that the confidence of the party has been abused." 235 Hence it may be stated in general that mistake of law may be ground for relief against a contract, conveyance, or other act, when it is shown to have been accompanied by fraud in any form, such as misrepresentation or concealment of facts, duress, imposition, undue influence, surprise, or misplaced confidence, or when advantage has been in any way taken of one's ignorance of the law to mislead him, or where there is a relation of trust and confidence which has been abused.286

233 Eldridge v. Dexter & P. R. Co., 88 Me. 191, 33 Atl. 974. And see Outcult Advertising Co. v. Barnes, 176 Mo. App. 307, 162 S. W. 631.

234 Tabor v. Michigan Mut. Life Ins. Co., 44 Mich. 324, 6 N. W. 830; Bank of United States v. Daniel, 12 Pet. 32, 9 L. Ed. 989; Graham v. Billings (Tex. Civ. App.) 51 S. W. 645; Lawrence v. Beaubien, 2 Bailey (S. C.) 623, 23 Am. Dec. 155.

235 Rankin v, Mortimere, 7 Watts (Pa.) 372.

236 Schuttler v. Brandfass, 41 W. Va. 201, 23 S. E. 808.

§ 152. Same; Mutual Mistake of Law.-A mutual mistake of law occurs where both the parties to a transaction act under a misapprehension of the law as applied to the transaction or to a particular circumstance material to it, both supposing that they know and understand the law, and both making the same mistake. When this occurs, it is ground for the intervention of equity to accord relief against the consequences of the mistake.237 Thus it is said: "If both parties should be ignorant of a matter of law and should enter into a contract for a particular object, the result whereof would by law be different from what they mutually intended, here, on account of the surprise or immediate result of the mistake of both, there can be no reason why the court should not interfere in order to prevent the enforcement of the contract and relieve from the unexpected consequences of it. To refuse would be to permit one party to take an unconscientious advantage of the other, and derive a benefit from a contract which neither of them intended it should produce." 238 For instance, the rule against relieving on account of mere mistakes of law has no application to a case where, on account of the common mistake of both parties, one buys from the other property which he already owns.239 So, where one has undertaken to give a mortgage on certain of his property, and accordingly an instrument is drawn up and executed which both the parties suppose to be good and sufficient in the character of a mortgage, but which really is invalid as a matter of law, it makes a proper case for the intervention of equity.240 So a petition for the rescission of a lease of real property should be granted where it appears that the property was leased for the purpose of conducting a meat mar

287 Medical Society of South Carolina v. Gilbreth (D. C.) 208 Fed. 899; McCord v. Bright, 44 Ind. App. 275, 87 N. E. 654; Silander v. Gronna, 15 N. D. 552, 108 N. W. 544, 125 Am. St. Rep. 616; Northwest Thresher Co. v. McNinch, 42 Okl. 155, 140 Pac. 1170. Compare Clark v. Carter, 234 Mo. 90, 136 S. W. 310; In re Mulholland's Estate, 224 Pa. 536, 73 Atl. 932, 132 Am. St. Rep. 791.

238 State v. Paup, 13 Ark. 129, 56 Am. Dec. 303.

239 Houston v. Northern Pac. Ry. Co., 109 Minn. 273, 123 N. W. 922, 18 Ann. Cas. 325.

240 Remington v. Higgins, 54 Cal. 620.