Ketchum v. Catlin

The opinion of the court was delivered by Bennett, J. The only question in this case arises upon the facts found by the bill of exceptions; and the only point, on which I have been led to doubt, is, whether, in a court of law, they were sufficient to invalidate the contract and enable the plaintiff to recover back the money, which he had paid to the defendant towards the produce, which he had contracted to purchase. It seems to be well settled in chancery, that if a contract is made in mutual error of material facts, which have induced the contract, it is invalid, and may be set aside. This is upon the principle, mainly, that, when the parties are under a mutual mistake as to material facts, affecting the subject matter of the contract, there is a want of a binding assent; and we think a contract so made may be avoided in a court of law. In Flight v. Booth, 1 Bing. N. C. 370, [27 E. C. L. 421,] Tindal, Ch. J., lays the rule down thus, “ When the misrepresentations are in a material and substantial point, so far affecting the subject matter of the contract, that it may be supposed, that, but for the misrepresentations, the purchaser would not have entered into the contract at all, the contract is avoided altogether, though the misrepresentations did not proceed from fraud,.” In Mowatt v. Wright, 1 Wend. 362, Savage, Ch. J., thus sums up the law on this subject; “ If,”-he says, “ the parties to a contract, believing that a certain state of facts exists, come to an agreement, with such belief for its basis, on discovering their mutual error they are remitted to their original rights.” The case of Case v. Prentice, 3 M. & S. 344, is decided upon the same principle. In Wheadon v. Olds, 20 Wend. 174, the agreement as to a quantity of oats, sold in a certain bin, was made upon a mistaken basis; and the contract, so far as it fixed the quantity of oats, was set aside. The parties supposed, that five hundred bushels of oats had been measured out of the bin, and, upon such supposition, the amount remaining in the bin was agreed upon, when in fact but two hundred and fifty bushels had been measured out. [195] The plaintiff, in this case, wanted the property he contracted for at Whitehall, and not at Boston; and it was upon the supposition, that he was to receive the property at Whitehall, that he entered into the contract. We think this was material; and that without it the contract would not have been made; and if so, the right of property did not pass from Catlin to the plaintiff. When it was discovered, that the parties, in making this contract, had proceeded upon a mutual mistake as to the situs of the property, they mutually had the privilege of being remitted to their original rights; and Catlin, having notice of this mistake, must be liable to refund what he had received, — especially on demand ; and the case show's, that a demand was made, before the action was brought. The fact, that Catlin supposed, from the representations of the agent of the plait}’ tiff, that the property was at Whitehall, can make no difference. Both parties acted bona fide, but none the less upon a mistaken basis. It is claimed in argument, that the plaintiff has made the property his own, by reason of his own laches. But we think not. He was under no obligation to go to Boston for the property ; and at the time the contract was made, the property, instead of being at Whitehall, was on its way to Boston, where in due time it was received by the consignees of the defendant, as his property, and became so commingled with his other property, of the like kind, as to render it undistinguishable. The consignees sold the whole property; and the entire avails of this and the other property were credited to the defendant, without distinction, or the means of distinction. It does not appear, at what precise time the defendant had notice, that the property had never been landed at Whitehall; but on the twenty fifth day of December he wrote to his consignees, at Boston, that he had sold the property shipped on the twenty-second of November, but he did not then direct the consignees not to sell the property on his account. After this the consignees did sell the property, and the avails were by them credited to Catlin. There has been no laches on the part of the plaintiff, which have operated to the injury of Catlin ; and certainly there is no reason, why the defendant should claim, that the plaintiff has made the property his own on any such ground. The judgment of the county court is affirmed.