Source: https://supreme.justia.com/cases/federal/us/93/55/
Timestamp: 2019-04-19 08:22:52+00:00

Document:
1. A mistake as to a matter of fact, to warrant relief in equity, must be material, and the fact must be such that it animated and controlled the conduct of the party. It must go to the essence of the object in view, and not be merely incidental. The court must be satisfied that but for the mistake, the complainant would not have assumed the obligation from which he seeks to be relieved.
2. Mistake, to be available in equity, must not have arisen from negligence where the means of knowledge were easily accessible. The party complaining must have exercised at least the degree of diligence "which may be fairly expected from a reasonable person."
3. Where a party desires to rescind upon the ground of mistake or fraud, he must, upon the discovery of the facts, at once announce his purpose, and adhere to it. If he be silent, and continue to treat the property as his own, he will be held to have waived the objection, and will be as conclusively bound by the contract as if the mistake or fraud had not occurred. This applies peculiarly to speculative property which is liable to large and constant fluctuations in value.
4. A court of equity is always reluctant to rescind unless the parties can be put back in statu quo. If this cannot be done, it will give such relief only where the clearest and strongest equity imperatively demands it.
The appellant was the defendant in the court below. The record discloses no ground for any imputation against him. It was not claimed in the discussion at the bar, nor is it insisted in the printed arguments submitted by the counsel for the appellees, that there was on his part any misrepresentation, intentional or otherwise, or any indirection whatsoever. Nor has it been alleged that there was any intentional misrepresentation or purpose to deceive on the part of others.
The case rests entirely upon the ground of mistake. The question presented for our determination is whether that mistake was of such a character and attended with such circumstances as entitle the appellees to the relief sought by their bill and decreed to them by the court below.
"that there was no shaft on the land he had sold to Repplier and Lanagan, and that he had never represented to anyone that there was a shaft on the land, and that he had never authorized anyone to make such a representation, nor did he know or have reason to believe that any such representation had in fact been made by anyone."
It does not appear that his attention had before been called to the subject, or that he was before advised that any mistake as to the shaft had occurred. Bowman spent some days upon the land and made a number of cuts, all of which were shallow. The deepest was only fifteen feet in depth. It was made under the direction of Embry and Johnson, two experienced miners living in the neighborhood. It reached a vein of quartz, but penetrated only a little way into it. They thought the prospect very encouraging, and urged that the cut should be made deeper.
He considered Bowman's examination "imperfect and insufficient." He had had "twenty-three years' experience in mining for gold."
"At the place I showed him where to cut, he struck a vein, but just cut into the top of it; he did not go down through it or across it. From the appearance of the vein, I was very certain that he would find gold ore if he would cut across it and go deep into it, and I told him so at the time, but he said that they had sent for him to return home, and he couldn't stay longer to make the examination, and went off, leaving the cut as it was, and the exploration to this day has never been renewed. I am still satisfied that whenever a proper examination is made, gold, and a great deal of it, will be found in that vein, for it is the same vein which passes through the Greenwood Mine, which was struck last spring, and yielded $500 to the ton. His examination in other respects as well as this was imperfect and insufficient. I don't think he did anything like making a proper exploration for gold. I don't think he had more than three or four hands, and they were not engaged more than eight or ten days at the utmost."
had been paid. In the spring of 1867, Lanagan, upon the same ground, made the same demand in person. The appellant replied that he had parted with the money. He promised to reflect on the subject and address Lanagan by letter. He did write accordingly, but the appellees have not produced the letter. This bill was filed on the 21st of March, 1868.
A mistake as to a matter of fact, to warrant relief in equity, must be material, and the fact must be such that it animated and controlled the conduct of the party. It must go to the essence of the object in view, and not be merely incidental. The court must be satisfied that but for the mistake, the complainant would not have assumed the obligation from which he seeks to be relieved. Kerr on Mistake and Fraud 408; Trigg v. Read, 5 Humph. 529; Jennings v. Broughton, 17 Beav. 541; Thompson v. Jackson, 3 Rand. 507; Harrod's Heirs v. Cowan, Hardin 543; Hill v. Bush, 19 Barb. (Ark.) 522; Jouzan v. Toulmin, 9 Ala. 662.
Does the case in hand come within this category?
"I cannot recollect all that was said in those conversations, but I do know that nothing was said about the shaft and that he said nothing to produce the impression that he was dissatisfied or disappointed in any respect with the property after the examination that he had made of it."
Lanagan's conversation with Houseworth was to the same effect.
The subsequent conduct of the appellees shows that the mistake had no effect upon their minds for a considerable period after its discovery, and then it seems to have been rather a pretext than a cause.
Mistake, to be available in equity, must not have arisen from negligence, where the means of knowledge were easily accessible. The party complaining must have exercised at least the degree of diligence "which may be fairly expected from a reasonable person." Kerr on Fraud and Mistake 407.
proper diligence. See also Seton v. Slade, 7 Ves. 269; 2 Kent's Com. 485; 1 Story's Eq., secs. 146, 147; Atwood v. Small, 6 Cl. & Fin. 338; Jennings v. Broughton, 17 Beav. 141; Campbell v. Ingilby, 1 De G. & J. 405; Garrett v. Burleson, 25 Tex. 44; Warner v. Daniels, 1 Woodb. & M. 91; Ferson v. Sanger, id., 139; Lamb v. Harris, 8 Ga. 546; Trigg v. Read, 5 Humph. 529; Haywood v. Cope, 25 Beav. 143.
Where a party desires to rescind upon the ground of mistake or fraud, he must, upon the discovery of the facts, at once announce his purpose and adhere to it. If he be silent and continue to treat the property as his own, he will be held to have waived the objection and will be conclusively bound by the contract as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsisted. These remarks are peculiarly applicable to speculative property like that here in question, which is liable to large and constant fluctuations in value. Thomas v. Bartow, 48 N.Y. 200; Flint v. Wood, 9 Hare 622; Jennings v. Broughton, 5 De G., M. & G. 139; Lloyd v. Brewster, 4 Paige 537; Saratoga & S. R. Co. v. Rowe, 24 Wend. 74; Minturn v. Main, 3 Seld. 220; 7 Rob.Prac., c. 25, sec. 2, p. 432; Campbell v. Fleming, 1 Ad. & El. 41; Sugd.Vend. (14th ed.) 335; Diman v. Providence, W. & B. R. Co., 5 R.I. 130.
B. 37; Skyring v. Greenwood, 4 Barn. & C. 289; Jennings v. Broughton, 5 De G., M. & G. 139.
The parties, in dealing with the property in question, stood upon a footing of equality. They judged and acted respectively for themselves. The contract was deliberately entered into on both sides. The appellant guaranteed the title, and nothing more. The appellees assumed the payment of the purchase money. They assumed no other liability. There was neither obligation nor liability on either side beyond what was expressly stipulated. If the property had proved unexpectedly to be of inestimable value, the appellant could have no further or other claim. If entirely worthless, the appellees assumed the risk, and must take the consequences. Segur v. Tingley, 11 Conn. 142; Haywood v. Cope, 25 Beav. 140; Jennings v. Broughton, 17 id. 232; Atwood v. Small, 6 Cl. & Fin. 497; Marvin v. Bennett, 8 Paige 321; Thomas v. Bartow, 48 N.Y. 198; Hunter v. Goudy, 1 Ham. 451; Halls v. Thompson, 1 Sm. & M. 481.
The bill, we have shown, cannot be maintained.
In our examination of the case, we have assumed that those who are alleged to have spoken to the agent of the appellees upon the subject of the shaft, before the sale, had the requisite authority from the appellant.
Considering this to be as claimed by the appellees, our views are as we have expressed them. We have not, therefore, found it necessary to consider the question of such authority, and hence have said nothing upon that subject, and nothing as to the aspect the case would present if that question were resolved in the negative.
Decree reversed, and case remanded with directions to dismiss the bill.

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