sense a mistake of law, is one that a court of equity will correct.' 47 A bond executed in conformity with a statute thereafter held unconstitutional is executed under a mistake of law, though it has not always been appreciated that in so far as the instrument would be a valid contract at common law, any relief from it must be based on mistake of law. Whether such a bond is void, it is held, depends upon the consideration of the bond and public policy. If there is no infringement of policy and the obligor gave the bond under no sense of compulsion and received consideration, the contract is upheld generally on the ground of a so-called estoppel. 48 § 1589. Mistake as to antecedent private rights. An exception has been made to the rule denying relief for mistake of the law governing a situation prior to the bargain, where the mistake relates to the private rights of the parties as distinguished from a mistake as to the general law. Lord Westbury, in a leading English case, 49 took this distinction. "It is said, 'Ignorantia juris haud excusat;' but in that maxim the "Quoted with approval in the dissenting opinion in Atherton v. Roche, 192 III. 252, 265, 61 N. E. 357, 55 L. R. A. 591, with the further citation to the same effect of Coleman v. Coleman, 153 Ia. 543, 133 N. W. 755; Wisconsin Marine, etc., Bank v. Mann, 100 Wis. 596, 76 N. W. 777. In the latter case the court said at p. 619: "Many cases may be cited to support the contention made by appellant's counsel, that a mistake of law is not remediable in equity, but they do not fit this case. They refer to a mistake of law in the making of the verbal contract as distinguished from a mere mistake in reducing the contract to writing through some misapprehension of the legal meaning of the language used. The rule applies where the contract is written so as to express the agreement as understood, though the understanding were wrong through ignorance of law; it does not apply where the contract is fully understood but is incorrectly expressed in the writing through ignorance as to the legal import of the language selected by the parties for that purpose." 48 Daniels v. Tearney, 102 U. S. 415, 26 L. Ed. 187; People's Lumber Co. v. Gillard, 136 Cal. 55, 68 Pac. 576; State ex rel. Cantwell v. Stark, 75 Mo. 566; United States Fidelity, etc., Co. v. Ettenheimer, 70 Neb. 144, 147, 97 N. W. 227, 99 N. W. 652, 113 Am. St. Rep. 783. See also Boese v. King, 108 U. S. 379, 27 L. Ed. 760, 2 Sup. Ct. 765. Cf. Shaughnessy v. American Surety Co., 138 Cal. 543, 69 Pac. 250, 71 Pac. 701; Cassel v. Scott, 17 Ind. 514; Brookman v. Hamill, 43 N. Y. 554, 3 Am. Rep. 731; Poole v. Kermit, 59 N. Y. 554; Love v. McCoy, 81 W. Va. 478, 94 S. E. 954. 49 Cooper v. Phibbs, L. R. 2 H. L. 149. word 'jus' is used in the sense of denoting general law, the ordinary law of the country. But when the word 'jus' is used in the sense of denoting a private right, that maxim has no application. Private right of ownership is a matter of fact; it may be the result also of matter of law; but if parties contract under a mutual mistake and misapprehension as to their relative and respective rights, the result is, that that agreement is liable to be set aside as having proceeded upon a common mistake."50 50 See also to similar effect, Beauchamp v. Winn, L. R. 6 H. L. 223, 234; In re Oliver's Settlement, [1905] 1Ch. 191; State v. Paup, 13 Ark. 129, 56 Am. Dec. 303; Hannah v. Steinman, 159 Cal. 142, 112 Pac. 1094; Stoeckle v. Rosenheim, 10 Del. Ch. 195, 87 Atl. 1006; Gefken v. Graef, 77 Ga. 340; Bonney v. Stoughton, 122 Ill. 536, 544, 13 N. E. 833; Baker v. Massey, 50 Ia. 399; Lewis v. Mote, 140 Ia. 698, 119 N. W. 152; Livingstone v. Murphy, 187 Mass. 315, 72 N. E. 1012; Reggio v. Warren, 207 Mass. 525, 534, 93 N. E. 805, 32 L. R. A. (N. S) 340; Renard v. Clink, 91 Mich. 1, 51 N. W. 692, 30 Am. St. Rep. 458; Alabama, etc., Ry. Co. v. Jones, 73 Miss. 110, 19 So. 105, 55 Am. St. Rep. 488; Hoy v. Hoy, 93 Miss. 732, 48 So. 903, 25 L. R. A. (N. S.) 182; Griffith v. Townley, 69 Mo. 13, 33 Am. Rep. 476; Blair v. Chicago, etc., R. Co., 89 Mo. 383, 1 S. W. 350; McIntyre v. Casey (Mo.), 182 S. W. 966; Williams v. Union Bank, 9 Heisk. 441; Cook v. Sumner Spinning, etc., Co., 1 Sneed, 698; Toland v. Corey, 6 Utah, 392, 24 Pac. 190; Burton v. Haden, 108 Va. 51, 60 S. E. 736, 15 L. R. A. (N. S.) 1038; Waggoner v. Waggoner, 111 Va. 325, 68 S. E. 990, 30 L. R. A. (N. S.) 644. See also Tarbox v. Tarbox, 111 Me. 374, 89 Atl. 194. But see Thomas v. Chicago, 55 Ill. 403; Kirkland v. Edenborn, 140 La. 669, 73 So. 719; Clark v. Lehigh, etc., Coal Co., 250 Pa. 304, 312, 95 Atl. 462. In the case last cited the court said: "It is conceded that if the lessee was induced to enter into the lease by a mistake it was one of law and not of fact. The land in question is what was known as a 'Commissioner's Road,' and the alleged mistake was in construing the defendant's title to the adjacent land as extending to the edge of the road and not to its center. As pointed out above, there could not have been a mistake of fact, as the title of each party was of record and hence the parties had all the facts before them when the lease was made. It is not alleged that the lessee was induced to enter into the lease by any fraud, misrepresentation, concealment of facts, or other inequitable conduct on the part of the lessor. There are no special circumstances or facts in the case, disclosed by the record, to induce a chancellor to give relief to the complaining party. As suggested above, the contract may have been advantageous to the lessee company notwithstanding it was the owner of the fourth piece of coal. We are, therefore, dealing here with a mistake of law, pure and simple, unaided by any equitable consideration which should move a chancellor to grant relief. Under these circumstances, it is settled that equity will not relieve against a mistake of law." Citing earlier Pennsylvania cases and Utermehle v. Norment, 197 U. S. 40, 49 L. Ed. 655; Midland Great Western Ry. Co. v. Johnson, 6 H. L. Cas. 798. The only merit of this distinction between private right and general law is that it enables a court of equity to give relief in a majority of cases where the parties to a transaction assumed as a basis for it a certain legal situation. Almost always such an assumption is based on a rule of law affecting the relative rights of the parties. Their mistake may be ignorance of a most fundamental principle of general law, but if the effect of that general rule is to vary their private rights, they come within the exception. In England at least, and perhaps in the United States, this exception of mistake as to private rights, though available in equitable proceedings, is not made to the general denial of the right to recover money paid under a mistake of law. 51 There 51 In Stanley Bros., Ltd., v. Corporation of Nuneaton, 108 Law Times (N. S.) 986, 992, it was said: "I think, however, as Bailhache, J., decided otherwise, and decided upon the ground that in his view it was a mistake of fact and not of law, that I ought to say a word upon that. His attention was directed to Earl Beauchamp's case (Earl Beauchamp v. Winn, 6 E. & I. App. 234), which is a case in which the claimant was ordered relief from the obligation of an agreement upon the ground that the specific private rights affecting the subjectmatter of that agreement had been mistakenly construed by the plaintiff in the action. His attention was not drawn to the proposition laid down in Rogers v. Ingham, by Lord Mellish (35 L. T. Rep. 677, 3 Ch. Div. 357), that such a doctrine has never been applied to a claim for the return of money paid under a mistake of fact. The equity in the latter case is the supposed equity that it is unusual for the defendant to keep money which the plaintiff voluntarily gave him, but under a mistake which was not common to the two; the equity, whatever else may be said of it, is at any rate not the same equity as that which is put into force when the relief by way of rescis sion by the act of the court of an obligation which is entered into is sought upon the ground that the contract had been entered into or the conveyance executed under a misapprehension as to one of the parties existing private rights. Even so a passage in the case of Midland Great Western Railway v. Johnson (6 H. L. Cas. 811), and in this court in Wilding v. Sanderson (77 L. T. Rep. 57; (1897) 2 Ch. at p. 550), ought to be borne in mind. The passage by Lord Chelmsford in the former case is: 'It must be a mistake not in matter of law, but a mistake of facts. The construction of a contract is clearly matter of law; and if a party acts upon a mistaken view of his rights under a contract, he is no more entitled to relief in equity than he would be in law.' The passage in the other judgment is: 'A written contract cannot be impeached simply because one of the parties to it put an erroneous construction on the words in which the contract is expressed.' There must be some case either of error induced by misrepresentation of the opposite party or error as to the subject-matter with which the contract purports to deal. I think, therefore, the mistake in question was not a mistake of fact but of law." seems no logical reason for distinguishing in this particular between a bill to reform or rescind and an action for money had and received. § 1590. Money paid under a mistake of law by a public officer or to an officer of the court. Payments of public money made by officials made under a mistake of law may be recovered. 52 Though no such broad principle is applicable conversely where money is paid to a public officer, a court will not permit one of its own officers to retain moneys paid to him under a mistake of law where there is failure of consideration. This principle has been applied to various court officers, receivers, trustees or assignees in bankruptcy, and even attorneys, although it may be doubted whether it is of universal application in the last case. 53 52 Wisconsin, etc., R. Co. v. United States, 164 U. S. 190, 17 Sup. Ct. 45, 41 L. Ed. 399 (cf. Badeau v. United States, 130 U. S. 439, 32 L. Ed. 997, 9 Sup. Ct. 579); McElrath v. United States, 12 Ct. Cl. 201; Barnes v. Dist. of Col., 22 Ct. Cl. 366; Ada County v. Gess, 4 Idaho, 611, 43 Pac. 71; Board of Com'rs v. Heaston, 144 Ind. 583, 41 N. E. 457, 43 N. E. 651, 55 Am. St. Rep. 192; Heath v. Albrook, 123 Ia. 559, 98 N. W. 619; State v. Young, 134 Ia. 505, 110 N. W. 292; Jones County v. Arnold, 134 Ia. 580, 111 N. W. 973; Board of Commissioners v. Patrick, 12 Kan. 605; Ellis v. Board of Auditors, 107 Mich. 528, 65 N. W. 577; Lamar Township v. City of Lamar, 261 Mo. 171, 169 S. W. 12; Board of Supervisors v. Ellis, 59 N. Y. 620; Allegheny County v. Grier, 179 Pa. St. 639, 36 Atl. 353; Commonwealth v. Field, 84 Va. 26, 3 S. E. 882; Douglas County v. Sommer, 120 Wis. 424, 98 N. W. 249. See also Kerr v. Regester, 42 Ind. App. 375, 85 N. E. 790. Contrary decisions, however, are Jefferson County v. Hawkins, 23 Fla. 223, 2 So. 362, 365; People v. Foster, 133 Ill. 496, 23 N. E. 615 (cf. Moffett v. People, 134 Ill. App. 550); Wayne County v. Randall, 43 Mich. 137, 5 N. W. 75; State v. Ewing, 116 Mo. 129, 22 S. W. 476; Heald v. Polk County, 46 Neb. 28, 64 N. W. 376; Territory v. Newhall, 15 N. M. 141, 103 Pac. 982; Richland County v. Miller, 16 S. C. 236. See also Morgan Park v. Knopf, 199 Ill. 444, 65 N. E. 322; Board of Highway Commrs. v. Bloomington, 253 Ill. 164, 97 N. E. 280, Ann. Cas. 1913 A. 471. 53 Ex parte James, 9 Ch. App. 609 (trustee in bankruptcy); Ex parte Simmonds, 16 Q. B. D. 308 (trustee in bankruptcy); Gillig v. Grant, 23 N. Y. App. Div. 596, 49 N. Y. S. 78 (receivers); Moulton v. Bennett, 18 Wend. 586 (attorney). In Ex parte Simmonds, L. R. 16, Q. B. D. 308, 312, Lord Esher said: "A rule has been adopted by courts of law for the purpose of putting an end to litigation, that, if one litigant party has obtained money from the other erroneously, under a mistake of law, the party who has paid it cannot afterwards recover it. But the court has never intimated that it is a highminded thing to keep money obtained in this way; the court allows the party who has obtained it to do a shabby § 1591. Mistake of law induced by the other party. If a mistake of law is induced or encouraged by the misrepresentation of the other party or even if it is perceived by the other party and taken advantage of by him, it is in equity, at least, justification of rescission. 54 And where one of the parties is in a position of authority which enables him to exert pressure upon the other who in ignorance of his legal rights makes a thing in order to avoid a greater evil, in order that is, to put an end to litigation. But James, L. J., laid it down in Ex parte James, L. R. 9 Ch. 609, that, although the court will not prevent a litigant party from acting in this way, it will not act so itself, and it will not allow its own officer to act so. It will direct its officer to do that which any high-minded man would do, viz., not to take advantage of the mistake of law. This rule is not confined to the Court of Bankruptcy. If money had by a mistake of law come into the hands of an officer of a Court of Common Law, the court would order him to repay it so soon as the mistake was discovered. Of course, as between litigant parties, even a Court of Equity would not prevent a litigant from doing a shabby thing. But I cannot help thinking that, if money had come into the hands of a receiver appointed by a Court of Equity through a mistake of law, the court would, when the mistake was discovered, order him to repay it. A trustee in bankruptcy has always been treated as an officer of the Court of Bankruptcy, and the court will order him to act in an honorable and highminded way, and so it was laid down by James and Mellish, L. JJ., in Ex parte James, L. R. 9 Ch. 609. It is true that in that case the money in question had not been divided among the creditors, but was still in the hands of the trustee, and we are about to carry the principle of this decision somewhat further. But, though the money has been divided among the creditors, the court sees that other moneys, which would be applicable to the payment of dividends to the creditors, are about to come into the hands of the trustee, and it has not been shown that any injury will be done to any one by ordering the trustee to apply this money which is coming to him to replace the other money which was paid to him in error." 64 In Haviland v. Willets, 141 N. Y. 35, 50, 35 N. E. 958, the court said: "Assuming, as counsel for the appellants contends, that Barclay's mistake was one of law, and that the general rule excludes equitable relief for such a mistake, when it is one of law pure and simple, and no other elements are present, it is still obvious that the doctrine does not cover the entire array of facts here disclosed. It is equally well settled that where there is a mistake of law on one side, and either positive fraud on the other, or inequitable, unfair and deceptive conduct, which tends to confirm the mistake and conceal the truth, it is the right and duty of equity to award relief." See also Hansford v. Freeman, 99 Ga. 376, 27 S. E. 706; Montgomery &c. Co. v. Atlantic Lumber Co., 206 Mass. 144, 92 N. E. 71; Chelsea Nat. Bank v. Smith, 74 N. J. Eq. 275, 69 Atl. 533; Hellebust v. Bonde, (N. Dak. 1919), 172 N. W. 812; Tolley v. Poteet, 62 W. Va. 231, 57 S. E. 811. Cf. supra, § 1495, concerning a misrepresentation of law as the basis for a claim of fraud. |