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JULY 1829.

Ellis

v. Bibb.

edge of the law, no relief can be afforded on that ground. If the general rule to that effect, the existence of which I admit, be applied to this feature of the case, yet it must be remembered, as a rule of law equally established, that if any one, either with or without a correct knowledge of the law, enter into an'executory contract, without consideration; or, if the consideration fail, wholly or partially, defence at law may be made, or relief in Chancery may be had, according to the circumstances, and as the justice and equity of the case may require. The general proposition is also true, that if property be contracted at a fixed price, without warranty or deceit in the vendor, no ordinary inadequacy of price can entitle the vendee to relief; yet it may be so gross and unconscientious, as to exhibit internal evidence of unfairness, and vary the principle. And in cases where property has been sold, the chief objection to such relief is, that the owner of the property has a right to fix his price at discretion, and retain the ownership until another is willing to give it; and when this is promised, and the contract executed in good fuith, justice as well as law, forbids a reduction of the price according to the estimate of witnesses, or of any tribunal.

This case is so far different, that the object of the contract was to secure the payment of a prior debt, which the creditor demanded, and threatened to prosecute against one who had been bound merely as security, and afterwards discharged by the act of the payee. The amount of the debt to be secured has been ascertained, by subsequent judicial constructions in similar cases, to have been more than $2,000 less than the sum promised. This reduced amount was the extent of the defendant's legal demand on the old note. It is all the complainant could recover of Pettus, under the most favorable circumstances; and had this contract not been made, the defendant would have retained only the note and deed on Pettus, instead of the complainant's renewed engagement.-Hence it follows, that when the complainant shall have paid the amount that was legally due on the original note, he will have paid, and the defendant will have received, all that justice or equity demands.

But the effect of the mistake in law, as to the complainant's prior liability, under the influence of which he was induced to enter into this compromise, was discussed in the argument, and deserves a slight notice. I retain the opinion, which I have long held, that as a general rule,

JULY 1829.

relief cannot be had against mistakes in law, but that the

rule admits of exceptions. Such was my opinion in the Ellis

decision of January 1827, in a second class of cases involving Bibb. the "Penalty questions;” but for reasons I then expressed,

I considered those cases as not furnishing exceptions to the rule. I am free to admit that the cases are rare, and that the circumstances should be peculiar and extreme, to authorize the interference. Butan unqualified denial of the competency of chancery to relieve against mistakes in law, under any circumstances; and the idea on which it rests, that the responsibility is too great; the fact unsusceptible of proof; and the power of distinguishing cases of suliicient equity, from others, too delicate or difficult, is, I conceive, degrading to the judiciary of any government. Cases often occur in which it is impossible to separate the naked fact of mistake from other circumstances, either strengthening or diminishing the claim to relief; and the decisions have frequently been based mainly on the latter, allowing the mistake more or less influence in the decree. In other cases it may as often happen that the common presumption that the law was understood, cannot be suficiently disproven;orthat by varying the terms of the contract, the rights of indifferent persons may be affected, or that the equity on which the claim to relief is founded, may not be sufficient to authorize it. In cases of this kind, and many others, the maxim ignorantia juris non excusat, applies with great force and equal propriety. Some tribunals of respectable authority have adopted the maxim without qualification. But others of equal or higher authority, and I think with better reason, have admitted exceptions to the rule, in peculiar cascs as reported; and the imagination can easily suggest other cases equally strong.

The highest recent adjudications on this question have been in the case of Hunt 2. kousmanier's administrator,

which was twice before the Supreme Court of the United a8 Whent.174. States. That case is relied on in this, by the counsel on each 1 Poters 1.

side. The question was whether chancery would sustain a power of attorney, and set it up as a mortgage or deed of trust, after it had failed of its object by the death of the maker, and disappointed the intention of ihe parties to it. The circumstances were, that the intestate being debtor to Hunt, for money lent, and having, as the terms of obtaining the loan, agreed to prefer him to other creditors, and give him any kind of lien on his vessels that might be necessary to effect the object, they consulted an attorney, who advised

JULY 1829.

Ellis

V. Bibb.

a 2 Atk. 33.

227.

an irrevocable power of attorney, containing authority to sell the vessels, and pay the debt; and drew one accordingly, which he said would answer the purpose as well as any other instrument, and which was executed and accepted. On the first adjudication, C. J. Marshall, in delivering the opinion of the Court, examined the doctrine of mistakes in law at considerable length, and reviewed several decisions of other Courts upon it. He said, “in general, the mistakes against which a Court of equity relieves, are mistakes in fact. The decisions on this subject, though not always very distinctly stated, appear to be founded on some misconception of fact; yet some of them bear a considere able analogy to the one under consideration;" and which he regarded as a mistake in law. Among the cases relievable, he said, "were that class in which a joint obligation has been set up in equity against the representatives of a deceased obligor, who in his lifetime had received an advance of the money, and whose representatives were discharged at law. He mentions two decisions, Simpson v. Vaughan," and Underhill v, Howard, in which this kind of relief has been granted; but says the Judges seem 6 10 Ves. 209. to have placed them on mistake in fact, arising from the presumed ignorance of the draftsman; and that it was not until the case of Sumner v. Powell,c that any thing was said c2 Meriv. 36. in the decision favorable to relief on the ground of mistake in law. In that case the Court refused its aid, because there was no equity antecedent to the obligation; but intimated, that sufficient equity could have obtained the relief. The Chief Justice further remarks, “that the course of the Court seems to be uniform, to presume a mistake in point of fact in every case where a joint obligation has been given, and a benefit has been received by the deceased obligor. No proof of actual mistake is required. The existence of an antecedent equity is sufficient;” and that “the facts stated in some of the cases in which these dicisions have been made, would rather conduce to the opinion that the bond was made joint, from ignorance of the legal consequences of a joint obligation, than from any mistake in fact.” He also notices the old case, of Landsdownev. Landsdowne, in which d Reported in

Mosely. relief was given against a mistake in law; and says, as an authority on this point, it cannot be entirely disregarded. He furnishes the high authority of that Court, that this important principle yet remains in an essential degree unsettled. He observes, although we do not find the naked principle, that relief may be granted on account of ignorance of

JULY 1829.

Ellis

Bibb.

the law, asserted in the books, we find nocase in which it has been decided that a plain and acknowledged mistake in law is beyond the reach of equity.” Nor did that Court evince any terror at the idea of such competency. The opinion concludes thus: wwe find no case which we think precisely in point; and are unwilling, where the effect of the instrument is acknowledged to have been entirely misunderstood by both parties, to say, that a Court of equity is incapable of affording relief.”

On this point, the decree of the Circuit Court, denying relief, was reversed; but because the rights, of other creditors were involved, and the decree had been rendered on demurrer to the bill, the cause was remanded that the bill might be answered, and the equity of the claim ascertained.

On the latter adjudication of the same cause, the defendant having answered the bill, the state of the case was materially different; so that the effect of mistakes was not particularly considered. The Court remarked, that the question then was, ought the Court to grant the relief which was asked for, upon the ground of mistake arising from any ignorance of the law? We hold the general rule

to be, that a mistake of this character is not a ground for reforming a deed founded on such mistake; and whatever exceptions there may be to this rule, they are not only few in number, 'but they will be found to have something peculiar in their character.” This, as a general proposition, corresponds precisely with my idea of the true doctrine.

No dissatisfaction was intimated as to the principles of the former decision of the same Court; but as many additional facts were shewn on the second trial, and it

appeared that the intestate's estate was insolvent to a large amount, and under the failure of the power of attorney, rights had legally vested in the creditors generally; and as it also appeared that the power of attorney was the kind of instrument, and in the form the parties had ultimately agreed upon, and intended it should be, though its effect proved different from a subsequent event not anticipated; and because on a full view of the case, the complainant's equity was at least balanced, the Court refused relief.

I think it is sufficiently shewn, that on the question as to the effect of mistakes in law, exceptions are admitted to the general rule, in a few cases, attended with peculiar cirstances. In determining these exceptions, the chancellor can only be expected to exercise the same virtuous discrimination, sound legal judgment, and equitable discretion,

JULY 1829.

Ellis

V. Bibb.

which are due from him on various other occasions, which qualify him for his office, andare necessarily connected with his high responsibilities.

From the facts of the case before us, and from the intrinsic nature of the transaction, no doubt can þe entertained but that a two-fold mistake in law had a real existence;and that under its influence, the complainant was induced to enter into this contract, which he was not legally or morally bound to do, and otherwise would not have done. The extent of the moral obligation is already shewn to have been far short of the promise. And I think it has also been shewn from the facts of the case, that it is otherwise oppressive, and that one of greater peculiarity can hardly be imagined. Could even the complainant's mistake relative to the amount recoverable on the original note, and his promise to pay a larger sum on account of it, be considered as a legitimate subject for the compromise of a doubtful right, because the law governing the debt had not then been otherwise expounded, as was insisted on in argument, still the other mistake as respects his entire legal discharge, must stand on a different principle; for the law on this point is believed to have been uniform, and long understood in the same way. And though the simple fact of a mistake in law will not generally entitle a party to relief against it, I presume it has seldom been denied that such mistake, when established and connected with other equitable circumstances, does not strengthen and increase the equity, and render it more proper for relief. If, therefore, the other grounds relied on for the aid of chancery were insufficient in this case, I should be reluctant to deny its competency to relieve on the principles of the mistake, under all the circumstances of the case. And in the examination of the question next in order, I think it will be found, that the application of the maxim ignorantia juris non excusat, in the unqualified sense contended for by many, would have the effect to condemn this contract of compromise, and a variety of others perfectly innocent, as usurious; destroy their validity entirely, and subject the creditors to the penalty of usury.

4. The question alluded to is, was the latter contract usurious?

This is a subject which has several times been recently investigated before this Court; and particularly in the case of Thompson v. Jones,e to which it bears many marks of an Stewart's analogy; but this presents some apparent indications of usury which the other did not. In that case, Jones, who con

R. 556.

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