
    Irwin v. Wilson.
    
      Contracts — Rescission—Mutual mistake.
    
    The plaintiff owned a house and lot in Kenton, Hardin County, this state, of the value of $1,700, and the defendant owned 80 acres in the state of Iowa, supposed to be good, dry, tillable land near a county seat, worth at least $10 an acre, but in fact worth not more than $3 an acre, being wet, marshy and unfitforcultivation. The defendant by his agent proposed to exchange with the plaintiff; and, as neither was acquainted with the land in Iowa, the defendant by his agent furnished a conveyance and, at his suggestion, both went to see one Pugh residing in Hardin county, though a stranger to both of them, for the purpose of getting information as to the land, the agent saying he understood that P. had seen the land and knew its character. P. informed them that he had seen the land the year before, that it was good, dry, tillable land near a county seat, and worth, when he saw it, $10 an acre, and would then be worth more. Both parties believed the information given by P. in regard to the land of the defendant to be accurate; and, in a few days thereafter, acting upon the information so obtained, entered into an agreement for an exchange, which was executed by the mutual delivery of deeds, the defendant in addition, executing and delivering two notes amounting to $700, secured by mortgage on the house and lot conveyed to him, as the equivalent of the supposed difference in the value of the lands exchanged by the parties. It turned out that P. was mistaken in his statement, the land he saw, though of the character and value of the land described by him, was not the land of the defendant; It was of the character and value before stated and had not been seen by P. In a few months after the exchange the plaintiff learned of the mistake as to the character of the land in Iowa; and at once re-executed a deed for it, and offered to deliver it, and return the notes and mortgage he had received, to the defendant, and demanded a reconveyance of his house and lot, which was refused. Held: That there was a mutual mistake as to a material part of the subject of the exchange; that, under the circumstances, a want of reasonable care cannot be imputed to the plaintiff in relying on the statements of P. as to the character and value of the land in Iowa, and that he is entitled to a rescission of the exchange. Crist v. Dice, 18 Ohio St. 536, distinguished.
    (Decided November 22, 1887.)
    Error to tbe Circuit Court of Hardin County.
    Tbe original suit was begun in tbe common pleas to obtain tbe rescission of an exchange of lands tbat bad been made between tbe parties, on tbe ground tbat tbe defendant bad made fraudulent representations as to the location, character and value of the lands given by him in exchange for those of the plaintiff. Judgment was rendered in favor of the defendant on the issue as to fraud, and the plaintiff appealed to the district court, then in existence. The plaintiff, by leave of court, then amended his petition, so as to aver that there was a mutual mistake as to the location, character and value of the lands exchanged by the defendant for those of the plaintiff. On the issues made as to this, the case was subsequently heard and determined by the circuit court as the successor of the district court. It made, at the request of the plaintiff, a special finding of facts, and rendered judgment thereon in favor of the defendant, dismissing the action of the plaintiff. The plaintiff moved the court to set aside its finding and judgment as not supported by the evidence, and, also, as not supported by law. The motion was overruled; and the rulings of the court in this, regard are assigned for error here. The facts as found by the court are as follows:
    
      “ 1. That on the 14th day of December, 1881, the plaintiff, "William S. Irwin, was the owner of the house and lot in Kenton, Ohio, in the petition described, which was worth $1700. 2. That the defendant, Joseph H. Wilson, was at said date, the owner of the land described in the petition, being 80 acres of land situate in the county of Monona, in the state of Iowa. 3. That-on the said date one Isaac H. Wilson, who was the father and agent of the defendant, proposed to sell and exchange said 80 acres of land in Iowa, to, and with plaintiff, for said house and lot of plaintiff, which said 80 acres of land, said Isaac H. Wilson then stated had been taken by defendant in a trade of lands at $1200; that he had never been in Iowa, and had not seen the land, and knew nothing of it, but that one Henry Pugh, he was informed, had been to see the land, and Pugh, he was informed, said it was good, dry land, and within three or four miles of the county seat of said county of Monona, in the state of Iowa, and that said Henry Pugh lived near Ada, in said Hardin county; that on the 17th day of December, 1881, said agent proposed to said plaintiff to go and see and inquire of said Henry Pugh as to the location and quality of said land in Monona county, Iowa, and said Isaac H. Wilson, did, on the 19th day of December, 1881, furnish a conveyance for that purpose, and he and plaintiff did go to the house of said Henry Pugh and said plaintiff did then, in the presence of said Isaac H. Wilson, make inquiries of and concerning said land in Monona county, Iowa, and on said day the said Henry Pugh stated to the said plaintiff in the presence and hearing of said Isaac H. Wilson, that he had seen and been upon the said lands of defendant in Monona county, Iowa, in the month of October, 1879; that the same were about four miles from the county seat of Monona county, Iowa; that the said lands were good, dry, tillable lands; that there was improved land, and corn growing within thirty rods of the same; that the said land was worth $10 per acre and would be worth more now; that he had gone to see said lands for Nicholas High, who was a former owner of a tract of which this was a part, and he had never seen the plaintiff and had never spoken to said agent, Isaac H. Wilson, previous to the interview; that said plaintiff relied upon the statements made by Pugh; that the said plaintiff, the said defendant and the said Isaac H. Wilson, agent, were entire strangers to the said Henry Pugh. 4. That neither said plaintiff, said defendant, nor said Isaac H. Wilson, ever saw said lands in Monona county, Iowa, prior to the date of said exchange, and never since that date except that said plaintiff went to see the same in May, 1882, after the commencement of this suit. 5. That on the 21st day of December, 1881, the said plaintiff and defendant entered into a contract in writing for the exchange of said lands, of which contract the following is a copy.
    “ ‘’December 21st, 1881. Article of agreement between W. 5. Irwin, of the first part, and J. H. Wilson, of the second part, wherein said Irwin of the first part agrees to sell and has sold to J. H. Wilson, of the second part, the property lie now lives in, being the east half of a part of out lot number six, in the eastern addition to the town of Kenton, Ohio, for, and in the consideration of nineteen hundred dollars ($1900) paid as follows, to-wit; Twelve hundred in hand, in 80 acres of land in Iowa, and three hundred and fifty dollars ($350) payable April 1, 1883, with one year’s interest at six per cent., and three hundred and fifty dollars ($350) payable April 1, 1884, with two years’ interest at six per cent. Said Wilson to have possession of said property on or before the 1st day of April, 1882, said property to be left in good condition.
    Wm. S. Irwin,
    J. H. Wilson,
    Isaac H. Wilson, Agent.’
    
      “ Thereafter on said 21st day of December 1881, said defendant, Joseph H. Wilson, executed and delivered to plaintiff a deed of conveyance in fee simple for said 80 acres of land in Monona county, Iowa, naming in said deed the sum of $1,200 as the consideration therefor, and also made and delivered to plaintiff his two notes for $350, each payable, respectively, April 1, 1883, and April 1, 1884, with interest thereon at six per cent, per annum, secured by mortgage on said Kenton property, and at the same time said plaintiff executed and delivered to said defendant a deed of conveyance for said house and lot in Kenton, the consideration named in said deed being $1,900.
    
      “ 6th. That said Henry Pugh did not see and was not on the lands so conveyed, by said defendant to plaintiff when in Monona county, Iowa, in 1879, or at any other time; that the land seen by said Pugh in said county of Monona, Iowa, was prairie, and dry, tillable land, and within 20 to 30 rods of growing corn in October, 1879, and that the land so conveyed by defendant to said plaintiff in Monona county, Iowa, was wet, marshy land unfit for cultivation and was not worth at said time to exceed three dollars per acre; that on the 25th day of March, 1882, the said plaintiff tendered to said defendant a deed of conveyance duly executed for said 80 acres of land-in Iowa, being the same real estate before that time conveyed to him by defendant; also tendered to defendant the said notes and mortgages so executed by defendant to plaintiff and demanded a deed of conveyance for said house and lot in Kenton, Ohio, so conveyed by plaintiff to defendant, which tender by said plaintiff and conveyance by said defendant were then refused by said defendant, to all of which the said plaintiff then and there excepted.”
    The answer of the defendant among other things contains the following denials:
    
      “ Defendant denies the averment of said amended petition that said Pugh by mistake or design had not seen the lands described in defendant’s deed. And denies that the description given by said Pugh was erroneous and untrue; and denies that there was any mistake as to the identity of said lands on the part of said Pugh.”
    
      William Lawrence, for plaintiff in error.
    I. A court of equity will rescind a contract when: (1) the parties thereto acted under a mutual mistake, (2) of a material fact, (3) when the party asking the rescission used reasonable care to avail himself of the means of information easily accessible, (4) has used reasonable diligence in discovering aud giving notice to the adverse party of the intention to rescind, and (5) when the parties can be put in statu quo, or (6) where a refusal to rescind would give such adverse party an unconscionable advantage:
    1. Material fact. M’Ferran v. Taylor, 3 Cranch, 279:
    2. Mutual mistake. Belief without knowledge is mistake. Kerr on Fraud & Mistake, 406; Colyer v. Clay, 7 Beav. 188; Hastie v. Couturier, 9 Exch. 102; 5 H. L. 673; Strickland v. Turner, 7 Exch. 208; Cochrane v. Willis, L. R., 1 Ch. App. 58; Story Eq. Jurisp. 140-143-151; Sufficient if purchaser believe, even though vendor have neither knowledge nor belief. 1 Story Eq. 151; Wheadon v. Olds, 20 Wend. 176; Mowatt v. Wriyht, 1 Wend. 360:
    3. Reasonable care to know facts; Grymes v. Sanders, 93 U. S. 62; exists if no “ culpable negligence.” Jenks v. Fritz, 7 Watts & Serg. 201:
    4. Reasonable diligence as to notice of rescission. Grymes v. Sanders, 93 U. S. 62; Parmlee v. Adolph, 28 Ohio St. 17; Champlin v. Layton, 18 Wend. 408:
    5. Parties put in statu quo. Grymes v. Sanders, 93 U. S. 64.
    
      6. Unconscionable advantage. 1 Story Eq., 147, 151; Wheadon v. Olds, 20 Wend. 176; Kerr on Fraud and Mistake, 53, 54, 57, 409; 1 Fonbl. Eq. B., 1 C. 2; Warner v. Daniels, 1 Wood. & Minot, 90; McCobb v. Richardson, 24 Maine, 82; Crowder v. Langdon, 3 Ired. Eq. 476; Smout v. Ilbery, 10 M. & W. 10; Bennett v. Judson, 21 N. Y. 238; Harding v. Randall, 15 Maine, 332; Stone v. Denny, 4 Metc. 151; Buford v. Caldwell, 3 Mo. 477.
    II. If an owner of land pending, negotiation for its purchase, refers the purchaser for information as to its character and value to a third person, who erroneously, but in good faith, informs the purchaser that the land is good and valuable, and the purchaser, relying on this, buys the land, the vendor knowing that the purchaser received and acted on such information, he is estopped from denying that - he also believed, and acted on, the same representation, although he had no knowledge as to the character or value of the land. Wharton Agency, §§ 177, 584, 673; Smith v. Richards, 13 Pet. 26; Herman Estoppel, § 323; Broom’s Legal Max. 266; Pickard v. Sears, 6 Ad. & El. 464; Freeman v. Cooke, 2 Exch. 663; Bigelow Estoppel (3d ed.) 492, 542; Niven v. Belknap, 2 John. 589; Dickerson v. Colgrove, 100 U. S. 578.
    III. Equity will rescind a contract for the sale of property, the enforcement of which would secure to one party an unconscionable advantage, whether it was entered into by reason of (1) mutual mistake, or (2) mutual ignorance of material facts, (which may exist without any belief on the subject), where the party asking rescission has been guilty of no laches, unless, as held in Ohio, the parties have expressly and distinctly agreed that the purchaser shall take all risks, and that the vendor shall, in no event, be liable for unknown or unexpected defects:
    1. Mutual mistake : Authorities passim.
    
    2. Mutual ignorance: Authorities ante.
    
    3. Express agreement that buyer take all risks. Crist 
      v. Dice, 18 Ohio St. 536. This case elsewhere in principle not adopted. Wheadon v. Olds, 20 Wendell, 176.
    IV. When a party has been induced to purchase land on a representation, even made in good faith, that it was located in one place, when in fact it is in another materially variant, equity will rescind the contract of purchase, if the purchaser is guilty of no laches. Such a rescission is required, both on the ground, (1) that the purchaser is bound to make his representation good, and (2) that in legal contemplation there is in such ease no contract.
    
    1. Purchaser bound to make representation good. M’Ferran v. Taylor, 3 Cranch, 270; Allen v. Hammond, 11 Pet. 72; Hitchcock v. Giddings, Daniel’s Exchequer, R. 1; s. c., 4 Price Exch. 55.
    2. In such case no contract. 1 Fonblank Eq. 114; Puffendorff’s Law of Nature & Nations, b 1, ch. 3, sec. 12; 1 Parsons Cont. 475; Sheldon v. Capron, 3 R. I. 171; Shirley v. Davis, cited 6 Ves. Jr. 678.
    
      Howenstine & Sweet, for defendant in error.-
    It clearly appears that the defendant knew nothing about the land conveyed to plaintiff; he made no representation in regard to it and he did not procure any one to make any representations. There is no fraud charged against the defendant, and he was not laboring under any mistake in regard to the land in any particular. Without one ortho other of these elements, the relief cannot be granted. 1 Story Eq. Jur. secs. 147, 148, 149.
    Mere mistake of one party, in reference to a contract reduced to writing, is not sufficient to avoid it. State v. Perry, Wright, 662-669.
    There was no confidential relation existing between the parties. They dealt as strangers; the facts were equally known to both parties; and they had equal and adequate means of information. There was no bad faith. Under such circumstances equity will not interfere. 1 Story Eq. Jur., secs. 150, 151; Grymes v. Sanders, 93 U. S. 55.
    
      The plaintiff was actually upon inquiry as to the value, location and quality of the land. By reasonable diligence he could have obtained true information. He was guilty of negligence. 1 Story Eq. Jur., secs. 146, 149, 150; Warner v. Daniels, 1 Woodb. & M. 90, 101; Ferson v. Sanger, 1 Woodb. & M., 138; Grymes v. Sanders, supra; Crist v. Dice, 18 Ohio St. 536.
    The original contract was in writing and must be presumed to embody the real intention and full understanding of the parties.
    “ In such case, courts ought not to proceed on the ground of mistake without very clear and satisfactory proof of its existence.” Davenport v. Sovil, 6 Ohio St. 459; Potter v. Potter, 27 Ohio St. 84.
   Minshall, J.

The exchange in this case was conducted on behalf of the defendant by his father acting as his agent. But this can make no difference as to the rights of the plaintiff, if the knowledge and acts of the agent were such that the plaintiff would be entitled to a rescission had the party acting as agent been the owner of the land, and acted for himself in effecting the exchange, instead of an agent. For in such case the agent personates the principal, and, as to third persons, his knowledge and acts must be regarded as those of the principal. Dunl. Paley Ag. 259, and eases cited in note 4. Any other rule would make it utterly unsafe to deal with one acting as the agent of another.

From the facts found by the court it appears that the defendant, being the owner of a tract of land in the state of Iowa, proposed by his agent to exchange it for the house and lot of the plaintiff in the town of Kenton. Both were well acquainted with the property of the plaintiff, but being uninformed as to the land in Iowa, the agent of the defendant procured a conveyance and, at his suggestion, he and the plaintiff went to see one Pugh, though a stranger to both of them, residing in the county where they did, the agent saying that he understood that Pugh was acquainted with the land. On arriving at Pugh’s he informed them that he had seen the land, that he had been on it the year before, and that it was good, dry, tillable land near the county seat, that it was worth $10 an acre when he saw it, and would then be worth more. In a few days afterward, the agreement for the exchange was made and executed, by the plaintiff conveying his house and lot to the defendant who conveyed to the plaintiff his land in Iowa containing 80 acres, and also made and delivered to the plaintiff two notes amounting to $700, secured by mortgage on "the house and lot convoyed by the plaintiff, as the equivalent of the supposed difference in the value of the lands exchanged.' In a few months afterward the plaintiff discovered that the land in Iowa was not such as it had been described by Pugh; that it was unfit for cultivation, being wet and marshy, and worth not more than $3 an acre. ' The error arose from the fact that Pugh was mistaken in the ownership of the land he had seen; the land he had seen and described to the plaintiff and the agent of the defendant, was such as he had described it to be, but was not the land of the defendant, though he thought it was. The mistake was in the identity of the land seen and'described-by Pugh. Thereupon the plaintiff offered to rescind which was refused by the defendant. The refusal is placed, not upon the ground that he cannot be restored to his former condition by the plaintiff, but that upon the facts as found, there is no ground for rescission, there being, as claimed, no mutual mistake, and no fraud found by the court. Whilst no fraud is found by the court, does i't not however clearly, if not necessarily, follow from the circumstances under which the exchange was made, that there was a mutual mistake of the parties as to the character and value of the lands'in Iowa? We think it does. Both parties were in ignorance as to the true character of the land of the defendant. If it had been otherwise the cou.rt could not have found that there was no fraud. It found that the plaintiff believed and relied on the information given by Pugh, and if the defendant by his agent was acting in good faith, he must have done the same thing; for it will hardly be affirmed by any one that, under the circumstances of this ease, he could without fraud have concluded the exchange, knowing that the land was not such as it had been described by Pugh, for he must have known, if he knew any thing, that the plaintiff believed what was said to him by the person to whom he had taken him for information. He knew it from the fact that the plaintiff concluded the agreement for an exchange on the basis of that information. So that under the circumstances, it would be perilous for the defendant to claim that neither he nor his agent believed the statements of Pugh as to the character of the Iowa land, for if that had been the fact, he could not have concluded the exchange on the basis of the information being true, without perpetrating a fraud on the plaintiff, whether he made any positive representations or not. Poll. Cont. (Wald’s Ed.) 429.

But his belief or disbelief as to this is not a matter of mere argument, for, while there is no specific finding on the question, it is made certain by the pleadings. In answering the averments of the petition the defendant affirms in his pleading that the description given of the land by Pugh was not untrue, and that there was no mistake in the identity of the land seen by him. Therefore, unless we may conclude that he had one belief as to the matter when he concluded the exchange and another when he filed his answer, a thing quite impossible if not absurd, we may safely conclude that as a fact apparent on the record, he had the same belief as to the accuracy of the statements made by Pugh that the plaintiff had. But the positive findings of the court are that Pugh was mistaken as to the identity of the land, and that that owned by the defendant was not of the description given by him. So that the only question that remains is, not whether there was a mutual mistake in regard to the land, but whether it is such a one as under the circumstances entitles the plaintiff to a rescission.

Here we must observe that the mistake arose not from a mistaken opinion of Pugh as to the character of the defendant’s lands; for if he had in fact seen the land and simply erred in his opinion as to its character and value, a different question might have been presented. It is a matter of common knowledge that opinions will differ in this regard, and the plaintiff in relying on the statements of Pugh as to the quality of the defendant’s land, might be held as assuming the possibility of a mistake in his judgment as to this. But Pugh did not see the land of the defendant; he was mistaken in its identity. Such errors are less frequent than the former; and a fault could hardly be imputed to any one in not anticipating an error of this kind. 2 Pom. Eq. § 852. It is against mistakes of this character that courts have been most prompt to relieve; and not only for the reason that they may happen where the greatest caution is observed, but, also, that as a matter of law, where they do occur, no real contract is formed. Thus in Wheadon v. Olds, 20 Wend. 174, a sale had been made of a quantity of oats in bulk, upon an estimate of the quantity, after a portion had been measured. The estimate of the quantity unmeasured was made by a comparison of the measured with the unmeasured pile, and the purchaser agreed to take them at the estimate, hit or miss ” as to quantity, and paid for them at the estimated quantity. The oats did not hold out within about 300 bushels of the quantity estimated and paid for. It was afterwards discovered that a mistake had been made in regard to the quantity measured, which formed the basis of the estimate, in counting the tallies as bushels, instead of half-bushels as they were in fact. Upon these facts the plaintiff was allowed to recover back the money paid for the entire quantity which he did not receive. The case was followed in Coon v. Smith, 29 N. Y. 392, where it was cited as showing the length courts will go in disregard of contracts founded in a mistake of material facts and in the protection of rights prejudiced thereby.” There an agreement between adjoining landowners by which a corner had been erroneously fixed by reason of a miscount of the chain-men, was held not to be binding, although it had been acted on by both parties before the mistake was discovered. The error of the chain-men being unknown to the parties invalidated the agreement fixing the corner.

So in Gardner v. Lane, 9 Allen 492, W. had agreed to sell G. 135 barrels of No. 1 mackerel. By mistake of the parties in making the delivery, some two months afterwards, part of the barrels marked to indicate delivery, were No. 3 mackerel and part were salt. In replevin by tbe purchaser against a creditor of the seller who had levied on the property, it was held that no property passed in the barrels so marked by mistake, even as to those containing No. 3 mackerel, the court saying, They are not included within the contract of sale; the vendor has not agreed to sell nor the vendee to purchase them; the subject-matter of the contract has been mistaken, and neither party can be held to an execution of the contract to which he has not given his assent. It is a case where, through mutual misapprehension, the contract of sale is incomplete.” See, also, the same case, 12 Allen, 39, where the ruling, when it was again brought before the court, was adhered to.

The principle of these cases is quite as applicable to contracts for the sale and conveyance of land, induced by the mutual mistake of the parties, as to contracts concerning personalty ; and the equitable relief of rescission will be granted, where such mistakes have intervened, quite as readily in the on ease as in the other, if not more so. Poll. Cont. (Wald’s Ed.) 430, and cases cited in the notes; Pom. Eq., § 869; Crowe v. Lewin, 95 N. Y. 426; Lawrence v. Staigg, 8 R. I. 256; Gilroy v. Alis, 22 Iowa. 174; Iric kv. Fulton, 3 Gratt. 193; Barfield v. Price, 40 Cal. 535; Knapp v. Fowler, 30 Hun. 513; Rhode Island v. Massachusetts, 13 Pet. 23; and Mulvey v. King 39 Ohio St. 491, Upson, J., 495.

In the case presented by the record before us, the mistake was in the identity of the land that had been seen and described by Pugh. He supposed it to be the land about which the parties were contracting and desired information; the error was in this and not in the description of the land he had seen; hence the parties, in acting upon his information, acted upon the same error of fact; and, upon principle, the case is not different from what it would have been, had they gone to see the land described by Pugh, supposing it to be the land of the defendant; and that such an error would, on the ground of mutual mistake, have avoided the contract, is, we think, too plain to admit of a question.

In treating of the subject of mistake, Mr. Pollock in his work on contracts, observes: It may happen that there does exist a common intention, which however is founded on an assumption made by both parties as to some matter of fact essential to the agreement. In this case the common intention must stand of fall with the assumption on which it is founded. If the assumption is wrong, the intention of the parties is from the outset incapable of taking effect. But for their common 'error it would never have been formed, and it is treated as non-existent. Here there is in some sense an agreement; but it is nullified in its inception by the nullity of the thing agreed upon. And it seems hardly too artificial to say that there is no real agreement. The result is the same as if the parties had made an agreement expressly conditional on the existence at the time of the supposed state of facts: which state of facts not existing, the agreement destroys itself.” Pol. Cont. 412; see, also, Fonbl. Eq. marg. 120; Kerr on Fraud and Mistake, 431.

The case of Crist v. Dice, 18 Ohio St. 536, on which much reliance is placed by counsel for defendant in error, is plainly distinguishable from this one. It was an action for rescission on the ground of fraud. The defendant claimed and introduced evidence, that, though he had exhibited to the plaintiff a letter from a stranger, representing the land as favorably situated and of good quality, and stated to the. plaintiff that he had bought the land on the strength of this description, he refused to vouch for its truth, and advised the plaintiff io go and see for himself. The plaintiff declined to take the trouble and agreed to make the exchange at his own risk. There was no finding of facts, and the case was disposed of on the assumption, that the court below may have believed the defendant’s version; and, adopting it, the plaintiff had of course no ground for relief. This sufficiently distinguishes the case from the one presented by this record.

We are unable to perceive upon what principle of justice the plaintiff should be denied the relief he asks. The information upon which he acted had not been obtained in a casual meeting with Mr. Pugh. The defendant by his agent having suggested that Pugh was acquainted with the land, and taken the plaintiff to inquire of him about it, is estopped from saying, that Pugh was a stranger and he had no right to rely on what he said. Moreover, the error did not occur from any bad faith in Pugh, but from a mistake that may happen to the most careful of men. As the mistake arose from an innocent error in all the parties, natural justice forbids that- the loss of one arising out of it, should be the gain of the other.

Judgment reversed, and judgment rendered for the plaintiff in error, rescinding the exchange made by the parties.  