Calkins v. Griswold

Smith, J.: It is an elementary principle of law, as well as of the plainest equity, that where money is erroneously paid by one person to another, in consequence of a mutual ignorance as to facts, which, if known, would have prevented the payment, the money so paid may be recovered back. (Burr v. Veeder, 3 Wend., 412.) An error of fact takes place, either when some fact which really exists is unknown, or some fact is supposed to exist which really does not exist. (Mowatt v. Wright, 1 id., 355, 360.) A contract made upon an assumed state of facts, as to which there is a mutual mistake, may be rescinded on discovering the mistake, and the party paying money upon it may recover it back. This principle applies to every form of contract, express or implied, including an account stated, and an accord and satisfaction. The principle of an accord and satisfaction is, that a party who has a legal right of action against another may accept of some other legal thing in discharge of his claim. JBut if the parties to an accord and satisfaction, in settling a claim, act under a mutual mistake of facts, there is nothing in the nature of the transaction which prevents a court of law from correcting the mistake or relieving from its consequences, in a proper action for that purpose. In Wheadon v. Olds (20 Wend., 174), the prinmple was applied to a case somewhat analagous to this. There, the defendant agreed to sell to the plaintiff from sixteen to twenty hundred bushels of oats, at forty-nine cents per bushel. The delivery of the oats was com [211] menced by removing them from a store-bouse to a canal boat; tallies were kept, and when the tallies amounted to 500, it was proposed to guess at the remainder; and after a while it was agreed to call the whole quantity 1,900 bushels, and the plaintiff accordingly paid for that quantity at the stipulated price. When the oats came to be measured it was ascertained that there were only 1,488 bushels delivered. It was then found that the mistake had happened by both parties assuming as the basis of the negotiation fixing the quantity of 1,900 bushels, that 500 bushels had been loaded in the boat at the time when they undertook to guess at the residue, whereas, in fact, only 250 bushels had been loaded — the tallies representing half bushels and not bushels — and that the parties supposed that the quantity loaded was not a gucurter of the whole. The action was for money had and received, to recover back the excess paid by mistake. On the trial, the defendant proved by one witness that the plaintiff said that he would take the oats at 1,900 bushels, hit or miss, and by another that he had acknowledged that he took the oats at that quantity at his own risk. He further proved that before the boat left the store-house, on dissatisfaction being expressed by a friend of the plaintiff who was to advance the money for him, as to the mode of ascertaining the quantity, he told them if they were dissatisfied with the quantity, to put the oats back into the store-house and pay him for his trouble. The plaintiff recovered a verdict, and the defendant moved for a new trial, which was denied. Cowen, J., delivering the opinion of the court, said that the mistake, as proved, went not only to the quantity measured, but the jur-y found, under the charge, that relatively it influenced the entire agreement to take the oats at 1,900 bushels; and that being the case, the learned judge said he was not aware of any case or dAdmm, that, because part of the agreement was to take at the party’s own risk, or, as the parties expressed it, hit or miss, it therefore formed an exception to the general rule. The agreement to risk was, fro tcmto, annulled by the error. The foundation of the arrangement to take the plaintiff’s risk was a misreckoning, one number being put instead of another, “ which,” says Domat (pi. 12), “is a kind of error, in fact different from all other errors, in that it is always repaired.” In the present case the referee has not found, indeed, in terms, [212] that the parties acted under a mutual mistake, but he has found that, at the time of the accounting, they did not know or recollect accurately the weight of the grapes or the crates ; that they agreed to call the crates 600 pounds, and the grapes, after deducting the crates, 65,000 pounds, and that in fact the whole quantity of grapes delivered was 55,959 pounds. lie has not found that there was any dispute as to the quantity of grapes, and the uncontradicted testimony shows there was no dispute on that subject, the plaintiff having suggested the quantity, and the defendant having agreed to it without question. There was a difference between them as to the weight of the crates, but the defendant compromised nothing in that respect, as his claim was acceded to by the plaintiff. There is no finding inconsistent with the fact of a mutual mistake, and we are therefore to look into the evidence to see what it establishes in that respect. There is uncontradicted evidence in the case, which leaves no doubt that Caulkins, at least, acted under a mistake as to the weight of the grapes. He so testifies, and upon no other reasonable theory can his proposal be accounted for to pay for several thousand pounds more than had been delivered. It is equally manifest from the evidence that the defendant also was mistaken as to the quantity of the grapes, unless he was practicing a fraud upon Caulkins. There is no ground for the suggestion that he merely kept silence on the subject. Caulkins testified that the defendant said he thought the figures were about right, as they were about as he had them at home. The defendant did not deny the statement, and he himself testified that when the plaintiff announced, after figuring a long time, that he made the defendant’s account to be 65,600 and some pounds, the defendant replied that “ may be that was right,” although proposing at the same time to examine the matter before settling. If he Tm&w the correct amount at that time, his own account of the conversation shows that he was not acting in good faith. There is some evidence of his subsequent declarations, tending to show that he did know the true amount at the time of the accounting and that he took advantage of the mistake of Caulkins, but as the report of the referee is silent upon the question of fraud, it is to be implied that his decision upon that issue was adverse to the plaintiffs, and there is not such a decided preponderance of evidence the other way as to lead to the conclusion that the implied finding is against the [213] weight of evidence. The only other conclusion, then, warranted by the. evidence, is that the defendant particpated -in the mistake of the plaintiff as to the quantity of grapes. The mistake was mutual, and it entered into the accord and satisfaction. The parties “ jumped accounts ” as the defendant expressed it, upon the mistaken assumption that the quantity of grapes delivered was 65,000 pounds. But for that mistake, the sum fixed upon would not have been agreed to. And as there was no dispute about price or quality, it is apparent that if the parties had known the correct quantity at the time, they would have agreed on the sum which it now appears was the true amount owing upon the contract. The accord is not a bar to the correcting of a mistake by which the accord was induced. The referee very properly held the plaintiffs entitled to recover the money paid, in consequence of the mistake made in computing the amount'due upon the basis of the accord. He should have gone further and allowed to the plaintiffs the money paid by mistake for grapes in excess of the quantity delivered. The same principle which corrects the one mistake will correct the other. In either case it is unconseientious that the defendant should retain the money ; it equitably belongs to the plaintiffs, and no rule of law stands in the way of their recovering it. Judgment reversed and new trial ordered before another referee, costs to abide event. Present — Mullin, P. J., Talcott and Smith JJ. Judgment reversed and new trial ordered before another referee, with costs to abide event.