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 (p).72

*We may add a like example from the Digest. A. agrees with [489 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 (q).

Same principle applied to sale of shares. 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 (r). But the ignorance of the buyer 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 (s). 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 (t).

To annuities and life interests. c. A. being entitled to an estate for the life of B. agrees to sell it to C. B. was dead at the time of the agreement, but both parties were ignorant of the fact. The agreement is void.

(p) Pothier, Contrat de Vente, § 4, cited 5 H. L. C. 678, says: "Si donc, ignorant que mon cheval est mort, je le vends à quelqu'um, 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"; and so Italian Code, 1461.

(q) 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. Papinian, eod. tit. 58. Arboribus quoque vento defectis vel absumptis igne dictum est emptionem fundi non videri esse contractam si contempla

tione illarum arborum, veluti oliveti, fundus comparabatur, sive sciente sive ignorante venditore.

(r) Emmerson's case (1866) L. R. 1 Ch. 433, expld. L. R. 3 Ch. 391, per Page Wood L.J.

(s) Rudge v. Bowman (1868) 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.

(t) Bank of Hindustan v. Alison (1870) L. R. 6 C. P. 54, in Ex. Ch. ib. 222, 40 L. J. C. P. 1, 117; Ex parte Alison (1874) L. R. 15 Eq. 394, 9 Ch. 1, 24; Ex parte Campbell (1873) L. R. 16 Eq. 417, L. R. 9 Ch. 1, 12, 42 L. J. Ch. 771.

parties are in error as to the extent or value of that title or interest, or even if in fact the seller has no right." Sears v. Leland, 145 Mass. 277, 278.

72" Where there is a contract for the sale of specific goods, and the goods without the knowledge of the seller have perished at the time when the contract is made, the contract is void." Sale of Goods Act, § 6.

66

This was so held at law in Strickland v. Turner (u).73 There, at the date when the sale of a life annuity was completed, the life had 490] 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 (x) 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 defendant had not to give?" (y). More recently, in Cochrane v. Willis (z), 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 (a).74

(u) (1852) 7 Ex. 208, 22 L. J. Ex. 115.

(x) (1817) 4 Pri. (Ex. in Eq.) 135, and better in Dan. 1, 18 R. R. 725.

(y) Dan. at p. 7, 18 R. R. 729. (2) (1865) L. R. 1 Ch. 58, 35 L. J. Ch. 36.

(a) Pritchard v. Merchants' Life

Insurance Society (1858) 3 C. B. N. S. 622, 27 L. J. C. P. 169. For the somewhat different treatment of the contract of marine insurance, where at the date of effecting the policy the risk has been determined without the knowledge of the parties, see Bradford v. Symondson (1881) 7 Q. B. Div. 456, 50 L. J. Q. B. 582.

73 Allen r. Hammond, 11 Pet. 63, 71. If the seller had known that the life had dropped, the sale would have been fraudulent. Thayer v. Knote, 59 Kan. 181; Haviland v. Willets, 141 N. Y. 35.

74 See Bennecke r. Insurance Co., 105 U. S. 355; Misselhorn v. Mutual Assoc., 30 Fed. Rep. 545; Insurance Co. r. Ruse, 8 Ga. 534, 545; Miller v. Insurance Co.,

*Purchase of property already one's own. The case of Bingham v. [491 Bingham (b), which was relied on in the argument of Cochrane v. Willis, and in the judgment of Turner L.J. must be considered as belonging 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 (c), 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 subject-matter 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 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" (d). 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 (e). Such an agreement is naught both *at law and in equity, without reference to the belief or [492 motive which determined it.

Moreover the difficulty

Agreement to pay rent for one's own property. was cleared up by Lord Westbury, though not quite on this broad ground, in a case exactly similar in principle. In Cooper v. Phibbs (f) A. agreed to take a lease of a fishery from B., on the assumption that A. had no estate and B. was tenant in 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.

(b) (1748) 1 Ves. Sr. 126, Belt's Supp. 79.

(c) Eq. Jurisp. § 124.

(d) The case is considered, among other authorities, and upheld on the true ground, in Stewart v. Stewart (1839) 6 Cl. & F. at p. 968; cp. the remarks of Hall V.-C. in Jones v. Clifford (1876) 3 Ch. D. 779, 790, 45 L. J. Ch. 809, and of Lindley L.J. in

Huddersfield Banking Co. v. H. Lister & Son, Ltd. [1895] 2 Ch. 273, 281.

(e) Gaius in D. 4. 7. de. obl. et act. 1 § 10. Suae rei emptio non valet, sive sciens, sive ignorans emi; sed si ignorans emi, quod solvero repetere potero, quia nulla obligatio fuit: Pomponius, D. 18. 1. de cont. empt. 16 pr.

(f) (1867) L. R. 2 H. L. 149.

110 Ill. 102; Riegel r. American Ins. Co., 140 Pa. 193. Cp. Sears v. Grand Lodge, 163 N. Y. 374.

Lord Westbury's explanation of ignorantia iuris. Lord Westbury stated the ground of the decision as follows:-" The result therefore is that at the time of the agreement for the lease which it is the object of this petition (g) to set aside, the parties dealt with one another under a mutual mistake as 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 to them. In such a state of things there can be no doubt of the rule of a court of equity with regard to the dealing with that agreement. It is said 'Ignorantia iuris haud excusat'; but in that maxim the word 'ius' is used in the sense of denoting general law, the ordinary law of the country. But when the word 'ius' 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. Now that was the case with these parties-the respondents believed 493] themselves to be entitled to the property, the petitioner believed that he was a stranger to it, the mistake is discovered, and the agreement cannot stand" (h).75

Broughton v. Hutt. The principle here laid down also covers Broughton v. Hutt (i). There the heir-at-law of a shareholder in a com

(g) A Cause Petition in the Irish Court of Chancery.

(h) L. R. 2 H. L. 170.
(i) (1858) 3 De G. & J. 501.

75 In Martin v. McCormick, 8 N. Y. 331, the plaintiff was the owner in fee simple of a house and lot; both he and defendant supposed, however, that plaintiff's title was subject to a term for a hundred years in the defendant. Plaintiff paid defendant $1,800 for an assignment of the supposed term. Held, that he could recover the money as paid by mistake. See also O'Neal v. Phillips, 83 Ga. 556; Phillips r. O'Neal, 85 Ga. 142, 87 Ga. 727; Jordan v. Stevens, 51 Me. 78; Berry v. American Ins. Co., 132 N. Y. 49; Lawrence v. Beaubien, 2 Bailey, 623; Harlan v. Central Phosphate Co., 62 S. W. Rep. 614. But cp. Hamblin v. Bishop, 41 Fed. Rep. 74; Leal v. Terbush, 52 Mich. 100; Clapp v. Hoffmann, 159 Pa. 531.

In Alton . First Bank, 157 Mass. 341, 343, Holmes, J., in delivering the opinion of the court, said: "Lord Westbury sometimes is supposed to have taken a distinction as to the effect of a mistake of law according to whether the mistaken principle is general or special. Cooper v. Phibbs, L. R. 2 H. L. 149, 170. But in the often quoted passage of his judgment he only meant that certain words, such as ownership, marriage, settlement, etc., import both a conclusion of law and facts justifying it, so that when asserted without explanation of what the facts relied on are, they assert the existence of facts sufficient to justify the conclusion, and a mistake induced by such assertion is a mistake of fact."

pany joined with several other shareholders in giving a deed of indemnity to the directors, believing that the shares had descended to him as real estate, whereas they were personal estate. The deed was held to be void as against him in equity at all events, and probably at law.76 "The plaintiff never intended to be bound unless he was a shareholder, and the defendants never intended him to be bound unless he was so." Here the mistake was plainly one of fact within Lord Westbury's definition, namely as to the character of the shares by the constitution of the particular company. It is submitted, however, that an erroneous fundamental assumption made by both parties even as to a general rule of law might well prevent any valid agreement from being formed.

Assignment of lease for lives. In the same way an agreement to assign a lease for lives would be inoperative if all the lives had dropped unknown to the parties. But the only thing which the parties can here be supposed, in the absence of expressed condition or warranty, to assume as essential is that the lease is subsisting, that is, that at least one of the lives is, not that they all are still in existence. Where the assignor of a lease for the lives of A., B., and C., expressly covenanted with the assignee that the lease was a subsisting lease for the lives of A., B., and C., and the survivors and survivor of them, this was held to be only a covenant that the lease was subsisting, and not that all the lives were in being at the date of the assignment (k). That is, his contract was interpreted, according to the general practice and understanding of conveyancers, as a contract to transfer an *existing lease for three lives, not necessarily a lease for three [494 lives all existing.

Results where only one party is ignorant of the material fact. If in any state of things otherwise resembling those just now discussed we find, instead of ignorance of the material fact on both sides, ignorance on the one side and knowledge on the other, then the matter has to be treated differently. Suppose A. and B. are the contracting parties; and let us denote by X. a fact or state of facts materially connected with the subject-matter of the contract, which is supposed by A. to

(k) Coates v. Collins (1871) L. R. 6 Q. B. 469, in Ex. Ch. 7 Q. B. 144, 41 L. J. Q. B. 90.

76 In Gross v. Leber, 47 Pa. 520, the sons and administrators of one who had been a trustee, supposing that because they were his administrators, they were also trustees in the place of their father, executed a bond for the payment of a debt due by the cestui que trust as they supposed was their duty as such trustees; it was held that equity would relieve against the enforcement of the bond. And see Wilson v. Insurance Co., 60 Md. 150.