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reformation to accord with the view of the party in error, for this would be forcing upon the other a contract which he never agreed to make." Where the mistake of the one is induced by the fraud or misrepresentation of the other, it seems clear that the latter should not be allowed to take advantage of the formal contract. Hence not only will the party deceived have a valid defense to any action on the contract,10 but a cancellation of the instrument may be decreed in equity.11 In such a case the subject of the mistake must be material,12 and the party's conduct must be determined by it; yet it may relate either to the motive, or to the object of the agreement itself.13 Further it is not a conclusive bar to relief that the agreement has been partially executed, unless such performance was made with knowledge of the mistake.14
If the mistake was unilateral, and of such a nature that the other party knew or should have known of it, he should not be permitted to take advantage of it, even though he was in no way responsible for the error; it is inequitable for one to treat as an agreement that to which he knew or should have known the other never intended to agree. 15 But, in such a case, the mistake must have been as to the essence of the agreement, the very object, as distinguished from a motive or inducement of its execution.16 It is submitted that the same principles should apply where, as in a recent Minnesota case, 17 the unilateral mistake in an offer was unknown to the offeree at the time of acceptance. It is true that the latter was not guilty of any inequitable conduct during the inception of the contract. Accordingly, if he has changed his position, so that he could not be put in statu quo, the court should afford rescission “only when the clearest and strongest equity imperatively demands it," 18 for he should not be affirmatively prejudiced by the mistake, however honest, of the offeror.'' But if he has not changed his position, he will be prejudiced only to the extent that he loses the benefit of the apparent contract. It would be unjust for him to take that which he now knows the other never intended bound by their agreement before it is put into a formal writing. See Edge Moore Bridge Works v. Bristol County, 170 Mass. 528, 49 N. E. 918.
• Diman v. Providence, W. & B. R. Co., 5 R. I. 130.
10 Roebuck v. Wick, 98 Minn. 130, 107 N. W. 1054. See Vail v. Reynolds, 118 N. Y. 297, 23 N. E. 301. 11 Adam v. Newbigging, 13 App. Cas. 308; Brewer v. Brown, 28 Ch. Div. 309. 12 Smith v. Kay, 7 H. L. Č. 750, 775; Flight v. Booth, 1 Bing. N. C. 370, 377.
13 Brown v. Search, 131 Wis. 109, 111 N. W. 210; Pratt u. Darling, 125 Wis. 93, 103 N. W. 229; Wagner v. Nat'l Ins. Co., 90 Fed. 395.
14 Butler v. Prentiss, 158 N. Y. 49, 64, 52 N. E. 652; Mason v. Bovet, 1 Denio (N. Y.) 69. But if a party, after discovering the misrepresentation, performs his part, he may be precluded thereby from rescission, though not from the legal remedy of damages. Whitney v. Allaire, 4 Denio (N. Y.) 554, aff’d 1 N. Y. 305.
16 Webster v. Cecil, 30 Beav. 62. See Neill v. Midland R. Co., 20 L. T. (N. S.) 864.
16 Mistake as to a collateral matter or mistake in a party's motive for entering the contract, or in his expectation respecting it, is not sufficient. Fehlberg 0. Cosine, 16 R. I. 162, 13 Atl. 110. See Chanteur v. Hopkins, 4 M. & W. 399.
17 St. Nicholas Church v. Kropp, 160 N. W. 500. For a full statement of the facts see infra, p. 649.
18 Grymes v. Sanders, 93 U. S. 62. 19 Young v. Springer, 113 Minn. 382, 129 N. W. 773; Tatum v. Lumber Co., 16 Idaho 471, 101 Pac. 957. Cf. Goodrich v. Lathrop, 94 Cal. 56, 29 Pac. 329, where depreciation in the value of the property was held not to be a “change of position,” and Werner v. Rawson, 89 Ga. 619, 15 S. E. 813, where rescission was allowed for a unilateral mistake in respect to the purchase price, though the contract had been executed. 20 Brown v. Levy, 29 Tex. Civ. App. 389, 69 S. W. 255; Moffett, etc. Co. v. Rochester, 91 Fed. 28 (reversed in 178 U. S. 373); Steinmeyer v. Schroeppell, 226 II. 9, 80 N. E. 564.
to give. Rescission or cancellation in such a case does not, as has been contended,20 impair the stability of contractual transactions. Equity will not cancel the contract unless it appears affirmatively that there was a genuine mistake which went to the essence of the contract, and not merely to the motive.21 The evidence to sustain the claim of mistake must be clear and convincing, and not merely a preponderance.22 Under such requirements, there is little danger that any real agreements will be fraudulently invalidated; and the alternative to such relief is an unjust enforcement of apparent contracts in many cases where there has been no real agreement.
The language in many cases suggests that "negligence" is a bar to equitable redress in these cases.23 But unless the other party has been led thereby to change his position, negligence is immaterial,24 except in so far as it may tend to show that there was no honest mistake. Almost every mistake involves lack of proper diligence; hence such a rule would bar equitable relief in most cases of mistake. In the analogous legal action of quasi-contract for money paid under mistake, it is well settled that negligence is not of itself a bar to recovery; 25 surely equity should not be less slow to apply its own principles. The other party's stand is just as inequitable whether the mistake was made through negligence or through inadvertence.26 In either case, it would be unjust for him to enrich himself at the other's expense by taking advantage of his formal rights. He cannot complain of the other's carelessness if he has not been prejudiced by it. Equity merely requires that neither party shall be prejudiced where there has not been in fact a meeting of the minds upon the essence of the contract. Accordingly, it would seem that the principal case is consonant with sound equitable principles in looking beyond the formal appearance to the true intent of the parties, where the underlying reasons for the observance of the formalities will not be prejudiced.27
21 See note 16, supra.
22 Crilly v. Board of Education, 54 Ill. App. 371; Nevius v. Dunlap, 33 N. Y. 676.
23 See Grant Marble Co. v. Abbott, 142 Wis. 279, 124 N. W. 264; Bonney o. Stoughton, 122 Ill. 536, 13 N. E. 833; Steinmeyer v. Schroeppell, supra. But an examination of these and similar cases discloses that negligence was but one ground upon which relief was denied; either it was considered that there was not an honest material mistake, or else there had been such performance that the parties could not be placed in statu quo.
24 Snyder v. Ives, 42 Ia. 157, 162; Harris v. Pepperell, L. R. 5 Eq. I. 25 Kelly v. Solari, 9 M. & W. 54. See KEENER, QUASI-CONTRACTS, 70-72. 26 “The ground on which the rule rests is, that money paid through misapprehension of facts, in equity and good conscience belongs to the party who paid it; and cannot be retained by the party receiving it, consistently with a true application of the real facts to the legal rights of the parties. The cause of the mistake therefore is wholly immaterial. The money is none the less due to the plaintiffs, because their negligence caused the mistake under which the payment was made.” Bigelow, J., in Appleton Bank v. McGilvray, 4 Gray (Mass.) 518, 522.
27 See Board v. Bender, 36 Ind. App. 164, 72 N. E. 154; Harper v. Newburgh, 159 App. Div. 695, 145 N. Y. Supp. 59; Moffett, etc. Co. v. Rochester, 178 U. S. 373; Scott o. Hall, 58 N. J. Eq. 42, 43 Atl. 50; Werner v. Rawson, supra, accord. Cf. Steinmeyer v. Schroeppell, supra; Brown v. Levy, supra.
COLLATERAL ATTACK UPON ADJUDICATIONS OF JURISDICTIONAL Facts. - Under the full faith and credit clause of the Constitution of the United States, a problem frequently recurs as to a court's power to inquire into certain facts, previously adjudicated by another court, which were conditions precedent to the power of that court to take some ultimate action in the suit.1
It is well established that full faith and credit must be given to every judicial act which a court does within its jurisdiction. And that inquiry into the jurisdiction of the court to do the particular act, in our case to make a finding of fact, is always permitted. This involves the questions of jurisdiction of the sovereign, delegation of the jurisdiction by the sovereign to its courts, and the performance by the court of the requisite formalities preliminary to acquiring jurisdiction. If the fact, for the adjudication of which credit is claimed, is one of these conditions precedent to the jurisdiction of the court to make that adjudication, it can of course be inquired into by the forum, so that a finding of such a fact practically does not receive full faith and credit. So much for the naked statement of the principles involved. They are clear and present no difficulty. It is with the application of these principles, more especially with the question as to what facts are requisite to jurisdiction to make the finding, that the problem becomes troublesome.
In the first place, it is not always sufficiently emphasized, if apprehended at all, that, as regards the question of jurisdiction, a finding of fact must be looked at as a separate and distinct act of the court, having its own separate and distinct requirements for jurisdiction. For instance, in a proceeding in personam between two parties, the court in making a finding of fact is really declaring divisibly that, as to each party, in connection with the subject matter of the suit, this fact is so. In order to do this, jurisdiction of the respective party is all that is necessary. Again, if the proceeding is in rem, the court is saying that as regards the res, as to all the world, this fact is so. If the court had jurisdiction of the res here, it had jurisdiction to make the finding as to every one: but if there was no jurisdiction of the res, the court had jurisdiction to make the finding as to any parties before it and it would be binding as to them.“
1 The problem arises also in intra-jurisdictional cases under the doctrine of “res judicata."
? Miller Brewing Co. o. Capital Ins. Co., 111 Ia. 590, 82 N. W. 1023; Harris . Balk, 198 U. S. 215.
3 In re Norton's Estate, 32 N. Y. Misc. 224, 66 N. Y. Supp. 317; Thum o. Pyke, 8 Idaho 11, 66 Pac. 157; Field v. Field, 117 I. App. 307; Marshall 0. Owen & Co., 171 Mich. 232, 137 N. W. 204.
4 See Baker v. Baker, Eccles & Co., U. S. Sup. Ct., Oct. Term, 1916, No. 115. The results of this proposition, though at first glance they appear unfortunate, upon reflection prove perfectly just. For instance, in a divorce suit the fact of domicil to found jurisdiction over the status is adjudicated by a court to be within its jurisdiction. Both parties are before the court. Such a finding, it would seem, should be binding upon these parties, and as a result of this the decree of divorce is binding upon them. When it is remembered that it is only binding as to the parties over whom the court making the adjudication had jurisdiction, that they have had their day in court, this appears perfectly proper.
"The authorities in the matter of divorce appear to take a contrary position on the grounds that it would be inexpedient to have parties divorced as to themselves and not as to others. Andrews v. Andrews, 176 Mass. 92; affirmed 188 U. S. 14. It is clear that, so far as the parties themselves are concerned, there is no principle of ex
The courts, though generally reaching a sound result on this matter, have apparently failed as far as expressed opinions are concerned to rest the matter on its proper theoretical basis.5
Assuming the proper approach to the problem, it is often somewhat difficult to determine exactly what facts are conditions precedent to jurisdiction to make the particular finding. As to facts going to the jurisdiction of the sovereign matters required by doctrines of conflict of laws — there is little trouble. But it is otherwise where the requirements of the sovereign in delegating jurisdiction are in question. A recent federal court case 7 furnishes a good example. The United States bankruptcy laws declare that a United States District Court shall have jurisdiction to adjudge a person bankrupt who has had his principal place of business for the preceding six months within its district. A district court upon a voluntary petition in bankruptcy makes a finding that the last principal place of business of a corporation is within its district. This finding is offered as binding in later proceedings in another court, and the question arises: is the existence of this fact one of the conditions precedent to the court's jurisdiction to adjudicate this fact? The proceeding in bankruptcy is in rem, the "res," so to speak, apparently, being the question whether or not the petitioner is in such a situation that he should be declared a bankrupt. So that the finding which the court made was, that as to this question, as against the world, the last place of business of the corporation was in the district in question. Such a finding necessitates jurisdiction of the res, - the question of bankruptcy.10 The question now comes, does the enactment that the court shall have jurisdiction to adjudicate bankrupt, persons who have had their last place of business within the district of the court, mean that unless this is so the court shall not have jurisdiction of the question for any purpose, or does it mean that though other courts also have jurisdiction of the question, for reasons of local convenience, only this court shall be authorized to do the final act. The court in the principal case found that the enactment meant the latter. 11 The result of such a conpediency or justice upon which a denial of jurisdiction to the court making the finding could be based. As the policy upon which the Massachusetts case goes seems more apparent than real, it would seem to be the better rule to hold the adjudication binding. See Peaslee, “Ex parte Divorce,” 28 Harv. L. REV. 457, particularly at 471.
6 The courts in working out the question seem in their language to confuse the question of jurisdiction to adjudicate the particular fact with that of general jurisdiction of the subject matter and the parties, and sometimes with jurisdiction to take ultimate action in the case. See Noble v. Union River Logging R. Co., 147 U. S. 165, 173, 174; Roszell Bros. o. Continental Coal Corporation, 38 Am. B. Rep. 31,34.
• E. g., it is generally fairly clear whether or not the fact of jurisdiction of a res or of certain parties is necessary to the jurisdiction of a court to make an adjudication of that fact. 7 Roszell Bros. v. Continental Coal Corporation, supra, n. 5.
8 Act of July 1, 1898, c. 541, ch. 2, § 2, 30 Stat. At L. 544.
• See In re Hintze, 134 Fed. 141, 142; Roszell Bros. v. Continental Coal Corporation, 38 Am. B. Rep. 31, 36.
10 Such a finding would be binding against any parties who were before the court although there was no jurisdiction of the res, but here the finding is set up as binding against all creditors, and it does not appear that any creditors were before the court, so that jurisdiction of the res is necessary.
11 The only other ground upon which the case could go is that there was jurisdiction of all the creditors in the prior suit. But there was no mention of this in the opinion, and it seems clear that was not the fact, so that the court must be taken to mean that the adjudging court had jurisdiction of the res.
struction appears to be that under the bankruptcy laws any United States District Court has jurisdiction of the question of bankruptcy in the case of a voluntary petition.2 This would mean that any federal court can make adjudication binding against all creditors, though there is no personal jurisdiction over the creditors, and further, as a consequence of this, the court's ultimate declaration of bankruptcy cannot be questioned. The correctness of a construction reaching such a result is at least arguable.
RECENT CASES ADOPTION RIGHTS OF CHILD UNDER UNEXECUTED CONTRACT OF ADOPTION. One Cameron contracted to adopt the plaintiff, who therefore lived in his family as a daughter until his death. There was no actual adoption. The plaintiff now claims an interest in the estate of Cameron's son, who died intestate survived only by a brother. Held, that the plaintiff may not recover. Malaney v. Cameron, 161 Pac. 1180 (Kan.).
To take by inheritance, a foster child must be adopted in the manner provided by statute. See Chehak v. Battles, 133 Ia. 107, 114-115, 110 N. W. 330, 333. But when the foster parent has died without performing a contract to adopt, equity will generally grant relief, although the adoption itself cannot actually be carried out at law after the adoptive parent's death. Starnes v. Hatcher, 121 Tenn. 330, 117 S. W. 219. If the contract contains an express provision to leave property, this will be specifically enforced. Pemberton v. Pemberton's Heirs, 76 Neb. 669, 107 N. W. 996. But cf. Jaffee v. Jacobson, 48 Fed. 21. In the absence of an express provision, the contract may also be specifically enforced as an agreement to give such property as a natural child would have received. Lynn v. Hockaday, 162 Mo. 111, 61 S. W. 885; contra, Renz v. Drury, 57 Kan. 84, 45 Pac. 71. This is sound, since the chief remaining incident of a legal adoption is the right of inheritance. There is, however, no obligation on the parent not to dispose of his property to others. Austin v. Davis, 128 Ind. 472, 26 N. E. 890. That the child be made an heir is thus the substance of the contract to adopt. It may therefore be said that as a consequence of the right of specific performance the child is regarded in equity as adopted. See Lynn v. Hockaday, supra. But this equitable relation, arising solely from the contract, can give the child rights only against the parent or his property. There is thus no way to reach the property of relatives. Even when an adoption is legally completed, inheritance from collateral relatives must be specifically provided for by statute. Wallace v. Noland, 246 Ill. 535, 92 N. E. 956.
ATTORNEYS - DUTY TO THE COURT - DUTY TO DISCLOSE TRUTH IN A CRIMINAL CASE. – An experienced attorney defending a criminal, permitted a witness to testify falsely upon a collateral matter affecting the witness's credibility, and though he knew it to be false, he adopted the testimony as true in his summing up. There was no evidence that the attorney instigated the false testimony. Held, that he be disbarred. In re Palmieri, 162 N. Y. Supp. 799 (App. Div.).
By rule five of the Canons of Ethics of the American Bar Association, a lawyer who has undertaken to defend a criminal “is bound by all fair and honorable
12 The facts of the case go no further than a voluntary petition, but on principle there would seem to be no distinction between a voluntary and an involuntary pro ceeding as to this question, provided that the court had jurisdiction of the bankrupt in the latter case.