In England the distinction is taken between a case where the price for the conveyance has been paid (where no recovery is allowed), 26 and a case where mistake is urged as a defence to an obligation to pay the price or as a reason for cancelling it (where relief is allowed).27 But the distinction is worthless. The conveyance has been given in both cases. If the grantee has got what the parties intended he should have-namely, just what the conveyance gives him he can neither recover the price if he has paid it, nor, if he has not, defend against his contract to pay it. On the other hand, if the contract was made on the mistaken assumption of an essential fact of which the grantee did not take the risk, he should have as complete a right to recover a price which he has paid as to defeat the recovery of a price which he has not paid. 1567. Mistake as to the existence of ore. In mining leases the lessee commonly agrees to pay a royalty varying with the amount of ore mined and also agrees to mine annually at least a certain quantity. It is a question of construction whether such a lease is made on the assumption by both parties that ore exists in such quality that it is commercially possible to extract the agreed amount; or whether the lessee takes the risk of this and binds himself to perform in any event.28 If the lessee's agreement is in terms rather to pay a 26 Clare v. Lamb, L. R. 10 C. P. 334. 27 Hitchcock v. Giddings, 4 Price, 135. This decision is distinguished on this ground in Clare v. Lamb, L. R. 10 C. P. 334. 28 Cases of the latter sort are: Bute v. Thompson, 13 M. & W. 487; Lehigh Zinc Co. v. Bamford, 150 U. S. 665, 37 L. Ed. 1215; McDowell v. Hendrix, 67 Ind. 513; Valley City Milling Co. v. Prange, 123 Mich. 211, 81 N. W. 1074; Wharton v. Stoutenburgh, 46 N. J. L. 151; Timlin v. Brown, 158 Pa. 606, 28 Atl. 236; Corona Coal & Coke Co. v. Dickinson, 261 Pa. 589, 104 Atl. 741. Cf. Monnett v. Potts, 10 Ind. App. 191, 37 N. E. 729. Cases of the former sort are: Clifford v. Watts, L. R. 5 C. P. 577; Ridgely v. Conewago Iron Co., 53 Fed. 988; Brooks v. Cook, 135 Ala. 219, 34 So. 960; Mineral Park Land Co. v. Howard, 172 Cal. 289, 156 Pac. 458, L. R. A. 1916, F. 1; Fritzler v. Robinson, 70 Ia. 500, 31 N. W. 61; Gribben v. Atkinson, 64 Mich. 651, 31 N. W. 570; Blake v. Lobb's Estate, 110 Mich. 608, 68 N. W. 427; Hewitt Iron Min. Co. v. Dessau Co., 129 Mich. 590, 89 N. W. 365; Diamond Iron Min. Co. v. Buckeye Iron Min. Co., 70 Minn. 500, 73 N. W. 507; Buchanan v. Layne, 95 Mo. App. 148, 68 S. W. 952; Cook v. Andrews, 36 Ohio St. 174; Brick Co. v. Pond, 38 Ohio St. 65; Muhlenberg v. Henning, 116 Pa. 138, 9 Atl. 144; Boyer v. Fulmer, 176 Pa. 282, 35 Atl. 235; Bannan v. Graeff, 186 Pa. 648, 40 Atl. 805; Virginia Iron &c. Co. v. minimum sum than to mine a minimum quantity, it is natural to infer that he agreed to take the risk of the existence of the ore, but if the agreement in terms is to mine a certain quantity, the surrounding circumstances may indicate that in making the agreement, the parties assumed the existence of the ore as a matter of course, rather than imposed the risk of possibility on the lessee; and in case of doubt the modern tendency seems rather to favor this construction. 29 § 1568. Mistake as to insurance risk. 31 As an insurance premium is paid on the assumption that the insurer is assuming a risk, the premium may be recovered if no risk attached, as where in marine insurance the plaintiff had no goods on board the ship to which the insurance could apply; 30 or where a voyage insured was not entered upon; or where, under any contract of insurance, the property to which the insurance related, had been destroyed prior to the contract of insurance, 31 or for any other reason, not involving fraud of the insured, the risk did not attach.32 § 1569. Collateral mistake generally immaterial. It is generally said that mistake as to a collateral matter has no effect upon a contract. The boundaries of such a rule are not very exactly fixed, but it means that where the persons and things to which the contract relates are the very persons and things the parties had in mind, and the transaction is the kind of transaction they had in mind, mistakes as to other facts are unimportant. There is considerable opportunity for casuistry in a discussion whether a mistake relates to the very object of the contract or only to its inducement or to some quality Graham (Va.), 98 S. E. 659. See also Nordyke, etc., Co. v. Kehlor, 155 Mo. 643, 56 S. W. 287, 78 Am. St. Rep. 600. "See, e. g., the discussion in Virginia Iron &c. Co. v. Graham (Va.), 98 S. E. 659. 30 Martin v. Sitwell, 1 Show. 156; Toppan v. Atkinson, 2 Mass. 365; Steinback v. Rhinelander, 3 Johns. 31 Stevenson v. Snow, 3 Burr. 1237. 314 Hallock v. Commercial Insurance Co., 26 N. J. L. 268; Hughes v. Mercantile, etc., Insurance Co., 44 How. Pr. 351. 32 Jones v. Insurance Co., 90 Tenn. 604, 18 S. W. 260, 25 Am. St. 706. See further, supra, § 757. thereof; 33 and if whatever facts are assumed by the parties as the fundamental basis of their bargain are said to go to the identity or existence of the subject-matter of the contract, and all other facts are said to be collateral, mistake as to a collateral fact is merely another name for immaterial mistake. But it is not satisfactory terminology to use collateral in this sense, since a mistake may not so far affect the identity of the subjectmatter (e. g., of a sale) as to prevent the property from passing, and yet may make the transaction voidable. Nomenclature should distinguish between these two kinds of mistake. Undoubtedly it is true that in contracts to buy or sell with no warranty goods specified or particularly described, the fact that the goods are better or worse than supposed or possess different qualities not affecting identity will ordinarily be immaterial,34 and the same principle is applicable to other contracts 34 Kennedy v. Panama &c. Mail Co., L. R. 2 Q. B. 580; Otis v. Cullum, 92 U. S. 447, 23 L. Ed. 496; Dortic v. Dugas, 55 Ga. 484; McCobb v. Richardson, 24 Me. 82, 41 Am. Dec. 374; Stewart v. Bank, 104 Me. 578, 72 Atl. 741; Wheat v. Cross, 31 Md. 99, 1 Am. Rep. 28; Bridgewater Iron Co. v. Enterprise Ins. Co., 134 Mass. 433; Hecht v. Batcheller, 147 Mass. 335, 17 N. E. 651, 9 Am. St. 708; Cavanagh v. Tyson, 227 Mass. 437, 116 N. E. 818; Costello v. Sykes, (Minn. 1919), 172 N. W. 907; Sample v. Bridgforth, 72 Miss. 293, 16 So. 876; Brown v. Fagan, 71 Mo. 563; Moore v. Scott, 47 Neb. 346, 66 N. W. 441; Dambmann v. Schulting, 75 N. Y. 55; Sankey's Exr's v. First Nat. Bank, 78 Pa. 48; Pearce v. Suggs, 85 Tenn. 724, 4 S. W. 526; Wood v. Boynton, 64 Wis. 265, 25 N. W. 42, 54 Am. Rep. 610. In Smith v. Becker, [1916] 2 Ch. 86, 100, the court seems to have assumed that unless the mistake in question involved impossibility of performance a contract was enforceable. Phillimore, L. J., said: "The parties contracted on August 1, odd as it may be, without knowledge of the embargo which had taken place on July 31. If, instead of the embargo, there had been a conflagration at Hamburg, and all the crop of sugar had been at Hamburg, and all of it had been destroyed, then I think the contract of August 1 would have been no contract, and no proceedings could have been taken for arbitration under it. But I do not think that it is made out by the plaintiffs, and I do not think it is at all likely that they could make out, that the embargo has that effect. As has been pointed out by other members of the Court, there are two ways in which the purchaser can take delivery here. He can take delivery on ship or he can take delivery into a named than those of purchase and sale, where the nature or quality of some object is involved.35 For the same reason no right to recover money paid will lie because of a mistake which merely affects the desirability of making the payment, when there is warehouse or lagerhaus. Dealing with the embargo only as made on July 31 -and that is what we have to deal with, regardless altogether of the war between Germany and Russia, which began probably on August 2, and regardless of the war between Great Britain and Germany, which began at 11 o'clock on the evening of August 4, all of which are events which happened after the contract, and which are provided for by the war clause-one sees no reason why on July 31 or August 1, the purchaser should not have named a warehouse into which the sugar, if not already there, could have been delivered without any interference by the German Government and without any violation of such embargo as we have had suggested. Perhaps it is always unwise to use words which have a technical meaning in a not strictly technical sense, and I prefer to substitute for the word 'embargo' the words 'prohibition of export,' and I see no reason why prohibition of export should have prevented a transfer from one warehouse to another, or a notional transfer of property in the warehouse from seller to buyer. Therefore it does not seem to me that the plaintiffs have made out that the contract was void or even voidable as entered into under a common mistake of fact. Therefore I think that their application for an injunction fails." 35 In Cavanagh v. Tyson, etc., Co., 227 Mass. 437, 116 N. E. 818, a contractor sought to be relieved of a contract because of the unexpectedly difficult soil in which the contract must be performed. The court said (p. 820): "The question presented is whether the erroneous belief of the plaintiff and defendant is a mutual mistake of fact of sufficient importance to make the contracts void. Such result can follow only when the mistake relates to a fact which is of the very essence of the contract, the material element in the minds of both parties, and material in the sense that it is one of the things contracted about. Long v. Athol, 196 Mass. 497, 82 N. E. 665, 17 L. R. A. (N. S.) 96; Winston v. Pittsfield, 221 Mass. 356, 108 N. E. 1038; Miles v. Stevens, 3 Pa. 21, 45 Am. Dec. 621, note; Steinmeyer v. Schroeppel, 226 Ill. 9, 80 N. E. 564, 10 L. R. A. (N. S.) 114, 117 Am. St. Rep. 233, note. "In the case at bar the character of the fill through which the piles were to be driven was of importance only in the determination of the price to be demanded and paid for the performance of the work. Had the burden of performance proved less than anticipated it will scarcely be claimed that the defendant could in an appropriate action have had relief from the contract through rescission or to recover any excess in payment over reasonable compensation. Yet, such would be the defendant's right if the contract were void ab initio. Sherwood v. Walker, 66 Mich. 568, 33 N. W. 919, 11 Am. St. Rep. 531. In the case at bar the mistake of fact is collateral to the essential thing contracted about, and therefore does not invalidate the contract. Hecht v. Batcheller, 147 Mass. 335, 17 N. E. 651, 9 Am. St. Rep. 708. See Long v. Athol, supra; Rowe v. Peabody, 207 Mass. 226, 93 N. E. 604; Winston v. Pittsfield, supra; Young v. Holyoke, 225 Mass. 140, 114 N. E. 62." no mistake as to what the money is paid for, or the facts giving rise to the supposed obligation to pay it.36 1570. When collateral mistake is material. Mistake concerning collateral matters may sometimes, however, afford ground for relief. Where a mistake as to the quantity, quality, or characteristics of the subject of a bargain is due to a mutual mistake regarding some means or measure which the parties took for fixing the quantity, quality, or value of the performance rendered by one party, it seems clear that there may be rescission. 37 In some cases, moreover, the difference between the real and supposed quality or nature of the thing is so extreme that without any preliminary error as to the means of determining these matters, a contract based on a mutual mistake in regard to quality or characteristics has been rightly held voidable. As an illustration of this it may be supposed that a bargain is made for the sale of a specific bar of metal understood to contain a certain proportion of silver. Through some mistake the understanding of the parties may be erroneous, and the bar may be base metal instead of gold or silver as supposed. 38 It will be noticed that there is an actual sale of the bar in question. There was a clear expression of assent to the sale of that particular bar. The case, therefore, is one of rescission of 36 Harris v. Loyd, 5 M. & W. 432; Aiken v. Short, 1 H. & N. 210; Cleveland Cliffs Iron Co. v. East Itasca, etc., Co., 146 Fed. 232, 237–238, 76 C. C. A. 598; Brooks v. Hall, 36 Kans. 697, 14 Pac. 236; First Nat. Bank v. Burkham, 32 Mich. 328; Langevin v. St. Paul, 49 Minn. 189, 196, 51 N. W. 817, 15 L. R. A. 766; Southwick v. First Nat. Bank, 84 N. Y. 420, 434; Youmans v. Edgerton, 91 N. Y. 403, 411. And see Holt v. Thomas, 105 Cal. 273, 38 Pac. 891. 37 E. g., where a survey (McMahan v. Terkhorn, (Ind. App. 1917), 116 N. E. 327; Gilroy v. Alis, 22 Ia. 174; Coon v. Smith, 29 N. Y. 392; Jenks v. Fritz, 7 W. & S. 201, 42 Am. Dec. 227); appraisement (Freeman v. Jeffries, L. R. 4 Ex. 189), inventory (Sheffield v. Hamlin, 26 Hun, 237), or assay (Cox v. Prentice, 3 M. & S. 344), is made the basis of the bargain. See also Nordyke, etc., Co. v. Kehlor, 155 Mo. 643, 56 S. W. 287, 78 Am. St. Rep. 600; Wheadon v. Olds, 20 Wend. 174. Cf. Buffalo v. O'Malley, 61 Wis. 255, 20 N. W. 913, 50 Am. Rep. 137. 38 The supposition is based on Cox v. Prentice, 3 M. & S. 344. In that case there was an error in the assay and the case therefore belongs with those in the preceding note; but at least if the difference in value was extreme, it may be supposed that even though there had been no assay, relief would have been given. See also Terry v. Bissell, 26 Conn. 23, 32. |