Alton v. First National Bank

Holmes, J. Lord Westbury sometimes is supposed to have taken a distinction as to the effect of a mistake of law according to whether the mistaken principle is general or special. Cooper v. Phibbs, L. R. 2 H. L. 149, 170. But in the often quoted passage of his judgment he only meant that certain words, such as ownership, marriage, settlement, etc., import both a conclusion of law and facts justifying it, so that, when asserted without explanation of what the facts relied on are, they assert the existence of facts sufficient to justify the conclusion, and a mistake induced by such an assertion is a mistake of fact. In the case before him the mistake was one concerning the ownership of a fishery, and was induced by a general statement of a certain person that he owned it. L. R. 2 H. L. 164. Windram v. French, 151 Mass. 547, 551. We will assume, merely for the purposes of this case, without expressing any opinion upon it either way, that a mistake of law of any kind, when the mistaken notion is made the avowed basis of a transaction, may be a ground of relief under some circumstances. We take it that the money sought to be recovered was understood by the plaintiff and the defendant to be paid and — 344 — received under the belief that the plaintiff was bound to pay it by his indorsement of the instrument set out in the agreed facts, and we also will assume that this belief was erroneous, as has been decided in Connecticut. First National Bank of Webster v. Alton, 60 Conn. 402. See Sloan v. McCarty, 134 Mass. 245. But the plaintiff meant to bind himself in the way in which he supposed he had done, and must be taken to have known that the defendant meant to have the security of his obligation before advancing, as it did, on the strength of it. If the case stopped there, the plaintiff hardly would have the boldness to contend that he could recover back what he had paid, and what he had meant to be understood and had been understood to promise, simply because, if he had found out the law soon enough, he might have backed out of his undertaking, and of what he was bound in honor to do. The plaintiff says that the case does not stop there, because, if the parties had been right in their view of the law, the plaintiff would have had the benefit of the security mentioned in the instrument, whereas now he has not. If it be true that the plaintiff was not subrogated to the security upon payment, we are of opinion that it makes no difference as between the plaintiff and the defendant. The right of a surety to subrogation, like his right to contribution, is a collateral matter, and no part of his principal contract by which he makes himself surety. The existence of that right is not the implied foundation of the principal contract. The defendant was not concerned or bound to inquire what the expectations of the plaintiff might be as against a third person. It was for the plaintiff to obtain or preserve his rights as best he might. Aiken v. Short, 1 H. & N. 210, 215. So far as this case is concerned it does not matter whether the mistake was a mistake of fact or one of law. For even a common mistake as to a fact, but for the supposed existence of which the plaintiff would not have come into the transaction, as the defendant knew, would not warrant a recovery, when, as here, the fact was a matter equally open for the inquiry and judgment of both parties, and the defendant had a right to assume that the plaintiff relied wholly on his own means of information. Hecht v. Batcheller, 147 Mass. 335. Carter v. Boehm, 3 Burr. 1905 1910. Smith v. Hughes, L. R. 6 Q. B. 597. — 345 — There is no ground, however, for the suggestion that this was a mistake of fact in such a sense as to help the plaintiff. The plaintiff’s indorsement was in the hands of the accommodated party until delivered in Massachusetts, and the payment was made in Massachusetts, so that the transaction was a Massachusetts transaction throughout. The plaintiff’s obligation to know the Massachusetts law, whatever the measure of that obligation may be, was not affected by the accident of his being personally out of the jurisdiction. See Hill v. Chase, 143 Mass. 129. Probably the measure of the plaintiff’s obligation would be the same in the case of a contract made in Connecticut, if, on any ground, its validity or effect depended on the law of Massachusetts. Cambioso v. Maffett, 2 Wash. C. C. 98, 104. Merchants’ Bank v. Spalding, 5 Selden, 53, 62. Graves v. Johnson., 156 Mass. 211. Judgment for defendant affirmed.