the same principle is found where parties enter into a contract to sell on the assumption that the goods to which the bargain relates are then in good condition. This matter is covered by special provisions in the Sales Act. 46 Where relief has been granted because a bid has been given under a miscalculation 47 the mistake is not only unilateral but is collateral. The bidder knows the sum of money he bids and the only mistake which he makes relates to its quality or characteristic its equality to the total of certain items the bidder intended to include. It may be urged that the bidder meant to bid this total, and that the sum he did bid was a different thing. But he was not asked to add up items or bid the total of items, he was asked for a bid in gross and made such a bid. 48 On the other hand, a mistake as to the book value of bank stock due to the fraudulent manipulation of the books by a bank clerk, so that the book value appeared to be more than twice what it was in reality, was held no ground for rescission. 49 § 1571. Mistake as to area of land. Another large group of cases should be noticed in connection with collateral mistake. Where a conveyance of land is for a gross price, though the land was supposed by the parties to contain a certain area, and this has been so stated, relief has generally been denied. 50 But if the difference is great and the court Vogt, 182 N. Y. App. D. 736, 169 40 Sections 7, 8. See supra, § 1560. 48 Cases may be added where it is more open to argument whether the mistake was collateral or went to the identity of the thing. One who bought land was allowed to recover his payment because a house supposed by both parties to be wholly on the granted premises, was partly on adjoining land. McKay v. Coleman, 85 Mich. 60, 48 N. W. 203. A contract for the sale of a life insurance policy was held voidable because both parties supposed that the insured was living at the time, whereas he was dead. Scott v. Coulson, [1903] 2 Ch. 249; Riegal v. American Life Ins. Co., 140 Pa. 193, 21 Atl. 392, 11 L. R. A. 857, 23 Am. St. Rep. 225. See also Fink v. Smith, 170 Pa. 124, 32 Atl. 566, 50 Am. St. Rep. 750. 49 Costello v. Sykes, (Minn. 1919), 172 N. W. 907, Hallam, J., diss. See also Kennedy v. Panama &c. Mail Co., L. R. 2 Q. B. 580; Otis v. Cullum, 92 U. S. 447, 23 L. Ed. 496. Cf. Emmerson's Case, L. R. 1 Ch. App. 433. 50 Capshaw v. Fennell, 12 Ala. 780; Frederick v. Youngblood, 19 Ala. 680, 54 Am. Dec. 209; Wright v. Wright, 34 Ala. 194; Wilson v. Browning, 61 Ala. 80; Young v. Craig, 2 Bibb, 270; Harrison v. Talbot, 2 Dana, 258; Innis v. McCrummin, 12 Mart. (La.) 425, is satisfied that the price was in fact influenced by the supposed area, relief has been allowed. 51 Obviously where land is contracted to be sold at a certain price an acre or a foot and settlement is made on the assumption that the tract contains a certain number of acres, if this assumption proves erroneous recovery may be had for the deficiency or excess by the party 13 Am. Dec. 379; Gormley v. Oakey, 7 La. 452; Stull v. Hurtt, 9 Gill, 446; Smallwood v. Hatton, 4 Md. Ch. 95, 100; Stebbins v. Eddy, 4 Mason, 414; Noble v. Googins, 99 Mass. 231; Frenche v. Chancellor, 51 N. J. Eq. 624, 27 Atl. 140, 40 Am. St. Rep. 548; Marvin v. Bennett, 8 Paige, 312; Morris Canal Co. v. Emmett, 9 Paige, 168; Ketchum v. Stout, 20 Oh. 453; Belknap v. Sealey, 14 N. Y. 143, 67 Am. Dec. 120; Stevens v. McKnight, 40 Ohio St. 341; Rodgers v. Olshoffsky, 110 Pa. 147, 2 Atl. 44; Rich v. Scales, 116 Tenn. 57, 91 S. W. 50; Smith v. Fly, 24 Tex. 345, 76 Am. Dec. 109; O'Connell v. Duke, 29 Tex. 299, 94 Am. Dec. 282; Darling v. Osborne, 51 Vt. 148; Yost v. Mallicote's Ad'm, 77 Va. 610. See also Painter v. Wilson, 197 Pa. 434, 47 Atl. 349; Smith v. Evans, 6 Binn. 102; Kreiter v. Bomberger, 82 Pa. 59, 22 Am. Rep. 750. 51 Thomas v. Perry, 1 Pet. C. C. 49; Mosher v. Lack (Cal. App.), 181 Pac. 813; Gardner v. Kiburg (Ia.), 168 N. W. 814; Biggs v. Lexington &c. R., 79 Ky. 470, 474; Miller v. Craig, 83 Ky. 623, 4 Am. St. Rep. 179; Nave v. Price, 108 Ky. 105, 55 S. W. 882; Newton v. Tolles, 66 N. H. 136, 19 Atl. 1092, 9 L. R. A. 50, 49 Am. St. Rep. 593; Couse v. Boyles, 4 N. J. Eq. (3 Green Ch.) 212, 38 Am. Dec. 514; Weart v. Rose, 16 N. J. Eq. 290; Straus v. Norris, 78 N. J. Eq. 488, 79 Atl. 611; Rich v. Scales, 116 Tenn. 57, 91 S. W. 50; Paine v. Upton, 87 N. Y. 327, 41 Am. Rep. 371; Ladd v. Pleasants, 39 Tex. 415; Yost v. Mallicote's Adm., 77 Va. 610; Wardell v. Birdsong, 115 Va. 294, 78 S. E. 564. See also Coppage v. Equitable &c. Trust Co. (Del. Ch.), 102 Atl. 788. But see Jolliffe v. Baker, 11 Q. B. D. 254; Palmer v. Johnson, 13 Q. B. D. 351. In McMahan v. Terkhorn (Ind. App.), 116 N. E. 327, 329, the court quoted with approval a classification in Harrison v. Talbot, 2 Dana, 258: "Sales in gross may be subdivided into various subordinate classifications: First, sales strictly and essentially by the tract, without reference, in the negotiation or in the consideration, to any estimated or designated quantity of acres; second, sales of like kind, in which, though a supposed quantity by estimation is mentioned or referred to in the contract, the reference was made only for the purpose of description, and under such circumstances or in such a manner as to show that the parties intended to risk the contingency of quantity, whatever it might be, or how much soever it might exceed, or fall short of that which was mentioned in the contract; third, sales in which it is evident from extraneous circumstances of locality, value, price, time, and the conduct and conversations of the parties that they did not contemplate or intend to risk more than the usual rates of excess or deficit in similar cases, or than such as might be reasonably calculated on as within the range of ordinary contingency; fourth, sales which, though technically deemed and denominated sales in gross, are, in fact, sales by the acre, and so understood by the parties." injured by the mistake. 52 Rescission of the whole contract will not generally be allowed. 53 § 1572. Mistake as to the character of money or securities. If payment is made in counterfeit money, the creditor may treat the payment as a nullity, and recover upon his original claim. 54 This is true of foreign money as well as domestic. 55 The counterfeit bills must be returned without unnecessary delay, however, as a condition of rescission, for though intrinsically worthless they may enable the debtor to recoup his loss from the person from whom he received them. 56 Rescission is also allowed of the transfer of securities other than money, which are forged or void for other reasons; 57 but where a bank takes 52 Shovel v. Bogan, 2 Eq. Abr. 688; Hays v. Hays, 126 Ind. 92, 25 N. E. 600, 11 L. R. A. 376; Wolcott v. Frick, 40 Ind. App. 236, 238, 81 N. E. 731; Henn v. McGinnis, 182 Ia. 131, 165 N. W. 406; Calhoun v. Teal, 106 La. 47, 30 So. 288; Tarbell v. Bowman, 103 Mass. 341; Wilson v. Randall, 67 N. Y. 338; Gallup v. Bernd, 132 N. Y. 370, 30 N. E. 743; Bailey v. Snyder, 13 S. & R. 160; Lawrence v. Staigg, 8 R. I. 256; Barnes v. Gregory, 1 Head, 230; Farenholt v. Perry, 29 Tex. 316; Ladd v. Pleasants, 39 Tex. 415; Western Mining, etc., Co. v. Peytona Co., 8 W. Va. 406. 53 Biggs v. Lexington &c. R., 79 Ky. 470, 476, and see cases in the preceding note. But see Coons v. North, 27 Mo. 73. 54 Jones v. Ryde, 5 Taunt. 487; United States Bank v. Georgia Bank, 10 Wheat. 333, 6 L. Ed. 334; United States v. Morgan, 11 How. 154, 13 L. Ed. 643; Wingate v. Neidlinger, 50 Ind. 520; Salem Bank v. Gloucester Bank, 17 Mass. 1, 9 Am. Dec. 111; Atwood v. Cornwall, 25 Mich. 142, 28 Mich. 336, 15 Am. Rep. 219; Markle v. Hatfield, 2 Johns. 455, 3 Am. Dec. 446; Burrill v. Watertown Bank, etc., Co., 51 Barb. 105; Bank v. Buchanan, 87 Tenn. 32, 9 S. W. 202, 1 L. R. A. 199, 10 Am. St. Rep. 617; Chalmers v. Harris, 22 Tex. 265; Pindall's Ex'rs v. Northwestern Bank, 7 Leigh, 617. 55 Young v. Adams, 6 Mass. 182. 56 Simms v. Clark, 11 Ill. 137; Atwood v. Cornwall, 28 Mich. 336, 15 Am. Rep. 219; Boyd v. Mexico Bank, 67 Mo. 537, 29 Am. Rep. 515; Thomas v. Todd, 6 Hill, 340; Raymond v. Baar, 13 S. & R. 318, 15 Am. Dec. 603; Pindall's Ex'rs v. Northwestern Bank, 7 Leigh, 617. But some authorities hold it unnecessary to return paper which is absolutely worthless. Snyder v. Reno, 38 Ia. 329; Smith v. McNair, 19 Kan. 330, 27 Am. Rep. 117; Brewster v. Burnett, 125 Mass. 68, 28 Am. Rep. 203. 57 Brown v. Watts, 1 Taunt. 353; Jones v. Ryde, 4 Taunt. 488; Phillips v. Cockayne, 3 Camp. 119; Young v. Cole, 3 Bing. N. C. 724; Westropp v. Solomon, 8 C. B. 345; Gompertz v. Bartlett, 2 E. & B. 849; Brewster v. Burnett, 125 Mass. 68, 28 Am. Rep. 203; Clark v. Young, 231 Mass. 156, 120 N. E. 397; McGoren v. Avery, 37 Mich. 120; Wood v. Sheldon, 42 N. J. Law, 421, 36 Am. Rep. 523; Webb v. Odell, 49 N. Y. 583; Leary v. Miller, 61 N. Y. 488; Paul v. Kenosha, 22 Wis. 266, 94 Am. Dec. 598; Maldaner v. Beurhaus, 108 Wis. 25, 84 N. W. 25. bills purporting to have been issued by itself it cannot rescind the transaction. 58 Nor can an individual who pays a note purporting to bear his own signature as maker or indorser. 59 It is doubtless the same reason, namely, a duty to discover and prevent the error, that has led to the universally prevailing rule that a drawee who pays a bill of exchange on which the drawer's name is forged, cannot recover the payment.60 It is generally held, however, that one who has thus received payment of a bill of exchange to which the drawer's name was forged, must restore the payment if guilty of negligence in failing to discover the forgery.61 And so if a bank pays a draft or check on the mistaken assumption that the drawer has sufficient funds to his credit to meet the instrument, no recovery of payment can be made if this assumption turns out to be an error.62 See also Hallett v. New England, etc., Co., 105 Fed. 217. Cf. Sample v. Bridgforth, 72 Miss. 293, 16 So. 876. 68 Cocks v. Masterman, 9 B. & C. 902; Simms v. Clark, 11 Ill. 137; Wingate v. Neidlinger, 50 Ind. 520; Atwood v. Cornwall, 25 Mich. 142, 28 Mich. 336, 15 Am. Rep. 219; Thomas v. Todd, 6 Hill, 340; McDonald v. Allen, 8 Baxt. 446; Pindall's Ex'rs v. Northwestern Bank, 7 Leigh, 617. 59 Mather v. Maidstone, 18 C. B. 273; Hubbard v. Southern Pac. Co., 256 Fed. 761 (C. C. A.); Tyler v. Bailey, 71 Ill. 34, 37; Jones v. Miners & Merchants Bank, 144 Mo. App. 428, 128 S. W. 829; Johnston v. Commercial Bank, 27 W. Va. 343, 55 Am. Rep. 315. But see contra Welch v. Goodwin, 123 Mass. 71, 25 Am. Rep. 24. 80 See supra, § 1160. 61 First Nat. Bank of Danvers v. First Nat. Bank of Salem, 151 Mass. 280, 24 N. E. 44, 21 Am. St. Rep. 450; State Bank v. First Nat. Bank, 87 Neb. 351, 127 N. W. 244, 29 L. R. A. (N. S.) 100; Williamsburgh Trust Co. v. Tum Suden, 120 N. Y. App. Div. 518, 105 N. Y. S. 335; Ellis v. Ohio Life Ins. Co., 4 Oh. St. 628, 64 Am. Dec. 610; Greenwald v. Ford, 21 S. Dak. 28, 109 N. W. 516; People's Bank v. Franklin Bank, 88 Tenn. 299, 12 S. W. 716, 6 L. R. A. 724, 17 Am. St. Rep. 884; Rouvant v. San Antonio Bank, 63 Tex. 610; Canadian Bank v. Bingham, 30 Wash. 484, 71 Pac. 43, 60 L. R. A. 955 (s. c. 46 Wash. 657, 91 Pac. 185). See also Bank of Williamson v. Williamson County Bank, 66 W. Va. 545, 66 S. E. 761, 36 L. R. A. (N. S.) 605; and cases decided under the Negotiable Instruments Law, cited supra, § 1160. 62 Chambers v. Miller, 13 C. B. (N. S.) 125; Pollard v. Bank of England, L. R. 6 Q. B. 623; National Bank v. Burkhardt, 100 U. S. 686, 25 L. Ed. 766; St. Louis, etc., Co. v. Johnston, 133 U. S. 566, 573, 33 L. Ed. 683, 10 Sup. Ct. 390; American Nat. Bank v. Miller, 185 Fed. 338, 107 C. C. A. 456; First Nat. Bank v. Devenish, 15 Colo. 229, 25 Pac. 177, 22 Am. St. Rep. 394; American Exchange Bank v. Gregg, 138 Ill. 596, 28 N. E. 839, 32 Am. St. Rep. 171; Wasson v. Lamb, 120 Ind. 514, 517, 22 N. E. 729, 6 L. R. A. 191, 16 Am. St. Rep. 342; Manufacturers' National Bank v. Swift, 70 Md. 515, 17 Atl. 336; National Exchange Bank v. Ginn & Co., 114 Md. 181, 78 Atl. 1026, 33 L. R. A. (N. S.) 963; First Nat. Bank v. Burkham, 32 Mich. 328; A drawee who pays a genuine bill of exchange to which invalid security, as a forged bill of lading, is attached, is likewise unable to recover the payment.63 If, however, one who receives payment from a drawee or maker is not the owner of the instrument, as if he claims through a forged indorsement, the payment may be reclaimed,64 Germania Bank v. Boutell, 60 Minn. 189, 193, 62 N. W. 327, 27 L. R. A. 635, 51 Am. St. Rep. 519; National Bank v. Berrall, 70 N. J. Law, 757, 58 Atl. 189, 66 L. R. A. 599, 103 Am. St. Rep. 821; Oddie v. National City Bank, 45 N. Y. 735, 6 Am. Rep. 160. Cf. Irving Bank v. Wetherald, 36 N. Y. 335); Whiting v. City Bank, 77 N. Y. 363; Hull v. Bank, Dudley (S. Car.), 259; Spokane & Eastern Trust Co. v. Huff, 63 Wash. 225, 115 Pac. 80, 33 L. R. A. (N. S.) 1023, Ann. Cas. 1912 D. 491. But see contra, Merchants' Bank v. National Eagle Bank, 101 Mass. 281, 100 Am. Dec. 120; Merchants' Bank v. National Bank, 139 Mass. 513, 2 N. E. 89 (cf. Boylston Bank v. Richardson, 101 Mass. 287). In Second Nat. Bank v. Western Nat. Bank, 51 Md. 128, 34 Am. Rep. 300, a bank which had certified a check under the mistaken belief that the drawer's account justified it, was allowed to rescind the certification, no change of position having taken place on the faith of it. In Kerrison v. Glyn, Mills & Co., 105 L. T. Rep. (N. S.) 721, the appellant who lived in England, had a standing arrangement with a firm of bankers in New York by virtue of which they were to honor the drafts up to £500 of a company carrying on business in Mexico, in which the appellant was interested, the appellant agreeing to put them in funds, by making needed deposits from time to time, to their credit at the respondents' bank in London. On the 21st of Oct., 1907, the New York firm wrote to the appellant informing him that the Mexican company had been credited with £500, and requesting him to pay that amount to their account with the respondents. On receipt of this letter on the 30th of Oct. the appellant paid £500 to the respondents to the credit of the New York firm. Earlier on the 30th of Oct. the New York firm became bankrupt, and the appellant on becoming aware of this fact on the 31st of Oct. immediately applied to the respondents for the repayment of the £500. The respondents claimed a right to retain it in reduction of the indebtedness of the New York firm to them. It was held that the money had been paid under a mistake of fact, and that the respondents were not entitled to retain it. 63 Thiedemann v. Goldschmidt, 1 DeG, F. & J. 4; Leather v. Simpson, L. R. 11 Eq. 398; Guaranty Trust Co. v. Hannay, 119 L. T. (N. S.) 321; Hoffman v. Bank of Milwaukee, 12 Wall. 181, 20 L. Ed. 366; Goetz v. Bank of Kansas City, 119 U. S. 551, 30 L. Ed. 515, 7 Sup. Ct. 318; Alton v. First Nat. Bank, 157 Mass. 341, 32 N. E. 228, 18 L. R. A. 144, 34 Am. St. Rep. 285; First Nat. Bank v. Burkham, 32 Mich. 328; Springs v. Hanover Nat. Bank, 145 N. Y. App. Div. 188, 130 N. Y. S. 87, 209 N. Y. 224, 103 N. E. 156, 52 L. R. A. (N. S.) 241; Craig v. Sibbett, 15 Pa. 238. Cf. Guaranty Trust Co. v. Grotrian, 114 Fed. 433, 52 C. C. A. 235, 57 L. R. A. 689; Hannay v. Guaranty Trust Co., 187 Fed. 686, rev'd 210 Fed. 810, 127 C. C. A. 360. 64 Esdaile v. La Nauze, 1 Y. & C. 394; Star Fire Ins. Co. v. New Hampshire Bank, 60 N. H. 442; Corn Exch. |