the sounder view where applicable) (a) are cases where the contract is rather broken than dissolved. A man is not bound to take a house or land not corresponding to the description by which he bought it any more than he is bound to accept goods of a different denomination from what he ordered, or of a different quality from the sample. Mistake or no mistake, the vendor has failed to perform his contract. The purchaser inay say: "You offered to sell me a freehold: that means an unincumbered freehold, and I am not bound to take a title subject to covenants” (b): or, "You offered to sell an absolute reversion in fee simple: I am not to be put off with an equity of redemption and two or three Chancery suits (c). I rescind the contract and claim back my deposit." Cases of this kind, therefore, are put aside for the present. matter not Again, an agreement is void if it relates to a subject- Subjectmatter (whether a material subject of ownership or in existparticular title or right) contemplated by the parties as ence. existing but which in fact does not exist. Herein, as before, everything depends on the intention of the parties, and the question is whether the existence of the thing contracted for or the state of things contemplated was or was not presupposed as essential to the agreement. Such is presumed to be the understanding in the case of sale. The Indian Contract Act, s. 20, gives the rule in rather wide language: Where both the parties to an agreement are under a Indian mistake as to a matter of fact essential to the agreement, the agreement is void. (a) The difference is purely theoretical; for if it be an actual breach of contract the purchaser can recover only nominal damages: Bain v. Fothergill, L. R. 7 H. L. 158, confirming Flureau v. Thornhill, 2 W. Bl. 1078. The analogy sug gested in the text should perhaps be confined to cases where the misdescription goes to matter of title. One cannot compare a specific sale : (b) Phillips v. Caldcleugh, L. R. 4 Q. B. 159. (c) Torrance v. Bolton, 8 Ch. 118: see at p. 124. Contract Illustrations. Couturier v. Hastie. Same principle applied to sale of shares. The illustrations are these:- a. A. agrees to sell to B. a specific cargo of goods supposed to be on its way from England to Bombay. It turns out that, before the day of the bargain, the ship conveying the cargo had been cast away and the goods lost. Neither party was aware of these facts. The agree ment is void. This was assumed in the House of Lords and by all the judges in Couturier v. Hastie (a), where the only question in dispute was on the effect of the special terms of the contract. b. A. agrees to buy from B. a certain horse. It turns out that the horse was dead at the time of the bargain, though neither party was aware of the fact. The agreement is void (b). We may add a like example from the Digest. A. agrees with B. to buy a house belonging to B. The house has been burnt down, but neither A. nor B. knows it. Here there is not a contract for the sale of the land on which the house stood, with compensation or otherwise, but the sale is void (c). In like manner a sale of shares in a company will not be enforced if at the date of the sale a petition for winding up has been presented of which neither the vendor nor the purchaser knew (d). But the ignorance of the buyer (a) 5 H. L. C. 673. For a fuller account of the case, and the relation of this class of cases to the doctrine of impossibility of performance, see p. 387, above. (b) Pothier, Contrat de Vente, § 4, cited 5 H. L. C. 678, says: Si done, ignorant que mon cheval est mort, je le vends à quelqu'un, il n'y aura pas un contrat de vente, faute d'une chose qui en soit l'objet." Cp. Code Civ. 1601. "Si au moment de la vente la chose vendue était périe en totalité, la vente serait nulle:"= Italian Code, 1461. (c) Paulus in D. 18. 1. de cont. empt. 57, pr. Domum emi cum eam et ego et venditor combustam ignoremus; Nerva, Sabinus, Cassius, nihil venisse quamvis area maneat, pecuniamque solutam condici posse aiunt. Cp. P'apinian, eod. tit. 58. Arboribus quoque vento deiectis vel absumptis igne dictum est emptionem fundi non videri esse contractam si contemplatione illarum arborum, veluti oliveti, fundus comparabatur, sive sciente sive ignorante venditore. (d) Emmerson's ca. 1 Ch. 433, expld. 3 Ch. 391, per Page Wood, L. J. only in similar circumstances does not of itself invalidate the sale. It seems however that the sale would be voidable on the ground of fraud if the seller knew of the buyer's ignorance, but that such knowledge should be distinctly and completely alleged (a). An agreement to take new shares in a company which the company has no power to issue is also void, and money paid under it can be recovered back (b). ties and c. A. being entitled to an estate for the life of B. agrees To annuito sell it to C. B. was dead at the time of the agreement, life inbut both parties were ignorant of the fact. The agreement tere-ts. is void. This was so held at law in Strickland v. Turner (c). There, at the date when the sale of a life annuity was completed, the life had dropped unknown to both vendor and purchaser: it was held that the purchase money might be recovered back as on a total failure of consideration. So in Hitchcock v. Giddings (d) a remainderman in fee expectant on an estate tail had sold his interest, a recovery having been already suffered unknown to the parties: a bond given to secure the purchase money was set aside. Here is an estate which if no recovery had been suffered was a good one. Both parties, being equally ignorant that a recovery had been suffered, agree for the sale and purchase of the estate, and the purchaser is content to abide the risk of a recovery being subsequently suffered. He conceives however he is purchasing something, that he is purchasing a vested interest. He is not aware that such interest has already been defeated. [The defendant] has sold that which he had not-and shall the plaintiff be compelled to pay for that which the (a) Bowman v. Rudge, L. R. 3 Q. B. 689, 697. The Roman lawyers seem to have treated the presumption of dolus as absolute if the seller knew the facts. See the continuation of the passages above cited. (b) Bank of Hindustan v. Alison, L. R. 6 C. P. 54, in Ex. Ch. ib. 222; (c) 7 Ex. 208, 22 L. J. Ex. 115. Purchase of property already Bingham v. defendant had not to give?" (a). More recently, in Cochrane v. Willis (b), an agreement had been made. between a remainderman and the assignee of a tenant for life of a settled estate, founded on the assignee's supposed right to cut the timber. The tenant for life was in fact dead at the date of the agreement. The Court refused to enforce it, as having been entered into on the supposition that the tenant for life was alive, and only intended to take effect on that assumption. So a life insurance cannot be revived by the payment of a premium within the time allowed for that purpose by the original contract, but after the life has dropped unknown to both insurers and assured, although it was in existence when the premium became due, and although the insurers have waived proof of the party's health, which by the terms of renewal they might have required: the waiver applies to the proof of health of a man assumed to be alive, not to the fact of his being alive (c). The case of Bingham v. Bingham (d), which was relied on in the argument of Cochrane v. Willis and in the one's own. judgment of Turner, L. J. must be considered as belonging Bingham. to this class. As in Cochrane v. Willis, the substance of the facts was that a purchaser was dealing with his own property, not knowing that it was his. This consideration seems to remove the doubt expressed by Story (e), who criticizes it as a case in which relief was given against a mere mistake of law. But, with all respect for that eminent writer, his objection is inapplicable. For the case does not rest on mistake as a ground of special relief at all. There was a total failure of the supposed subjectmatter of the transaction, or perhaps we should rather say it was legally impossible. We have already pointed out the resemblance of this class of cases to some of those considered in the last chapter. The one party could not (a) Dan. at p. 7. (b) 1 Ch. 58. (c) Pritchard v. Merchants' Life Assurance Society, 3 C. B. N. S. 622, 27 L. J. C. P. 169. (d) 1 Ves. Sr. 126, Belt's supp. 79. (e) Eq. Jurisp. § 124. buy what was his own already, nor could the other (in the words of the judgment as reported) be allowed "to run away with the money in consideration of the sale of an estate to which he had no right" (a). So we find it treated in the Roman law quite apart from any question of mistake, except as to the right of recovering back money paid under the agreement. A stipulation to purchase one's own property is "naturali ratione inutilis" as much as if the thing was destroyed, or not capable of being private property (b). Such an agreement is nought both at law and in equity, without reference to the belief or motive which determined it. ment to pay rent own pro Phibbs. Moreover the difficulty was cleared up by Lord West- Agreebury, though not quite on this broad ground, in a recent case exactly similar in principle. In Cooper v. Phibbs (c) for one's A. agreed to take a lease of a fishery from B., on the perty: assumption that A. had no estate and B. was tenant in Cooper v. fee. Both parties were mistaken at the time as to the effect of a previous settlement; and in truth A. was tenant for life and B. had no estate at all. It was held that this agreement was invalid. Lord Westbury stated the ground of the decision as follows:-"The result there- Lord fore is that at the time of the agreement for the lease bury's which it is the object of this petition (d) to set aside, the explanaparties dealt with one another under a mutual mistake as ignorantia to their respective rights. The petitioner did not suppose that he was, what in truth he was, tenant for life of the fishery. The other parties acted under the impression given to them by their father that he (their father) was the owner of the fishery and that the fishery had descended (a) The case is considered, among other authorities, and upheld on the true ground, in Stewart v. Stewart, 6 Cl. & F. at p. 968; cp. the remarks of Hall, V.-C. in Jones v. Clifford, 3 Ch. D. 779, 790. (b) Gaius in D. 44. 7. de. obl. et act. 1 §10. Suae rei emptio non valet, sive sciens, sive ignorans emi; sed si (d) A Cause Petition in the Irish West tion of iuris. |