Cunningham Manufacturing Co. v. Rotograph Co. ( 1908 )

Mr. Justice Van Orsdel

delivered the opinion of the Court:

Numerous technical errors are assigned, but, we think that the application of the law governing contracts of this kind will sufficiently dispose of this case, without considering separately the errors assigned. It is evident that there was not such a meeting of the minds of the parties in fixing the consideration as would constitute a contract. Before there can be a contract, the minds of the parties must meet honestly and fairly, withoxit mistake or mutual misunderstanding, upon all the essential points involved in the transaction composing the contract. If one of the parties, through mistake, names a consideration that is out of all proportion to the value of the subject of negotiation, and the other party, realizing that a mistake must have been committed, takes advantage of it, and refuses to let the mistake be corrected, when it is discovered, he cannot, under these conditions, claim an enforceable contract. The law is that, where there is a mistake that amounts to a mutual misunderstanding, or that on its face is so palpable as to place a person of reasonable intelligence upon his guard, there is not a meeting of the minds of the'parties, and consequently there can be no contract.

In the case at bar, it is no excuse that appellant had received the goods before the mistake was discovered. Assuming that the goods came by freight from New York in twenty-four hours, and reached appellant some hours in advance of the bill, which was mailed at the same time the goods were shipped, and assuming, also, that the goods were unpacked and placed npon appellant’s shelves within two hours after their arrival and one hour before the arrival of the bill, these nice and accurate distinctions of time will not relieve appellant from aiding in the correction of the mistake when it was discovered, either by returning the goods as requested by appellee, or paying the price named in the bill.

Appellant company, by its refusal to return the goods when the mistake was discovered, and its election to retain them, will be deemed to have accepted the goods at the price for which they were billed, thereby creating a new and enforceable contract, for which it must be held liable. This is not a case of incompetent parties, or where a party is seeking to urge his own carelessness as a valid excuse for his own mistake, or where one of two innocent parties is called upon to suffer loss after the goods have passed into the hands of innocent purchasers, or the transaction had passed beyond the control of the original parties. The ease before us turns upon the refusal of the appellant to return the goods when it was dicovered that, by reason of a palpable mistake, there had been no meeting of the minds of the parties, and no contract existed between them. Under these conditions, by appellant’s election to retain the goods it thereby created a valid contract, and bound itself to pay for the goods at the consideration named in the bill. .

A case closely analogous to the one at bar is cited in brief of counsel for appellee, — Mummenhoff v. Randall, 19 Ind. App. 44, 49 N. E. 40. In that case, plaintiff wrote defendant as follows:

Gentlemen:

Can we not get to doing some business? I quote you the following low price on potatoes, — 35 cts.

It appears that the letter was dictated to a stenographer. By mistake, the price was written at 35 cents a bushel, instead of 55 cents, as was dictated to her. Defendant answered:

Please ship us two or three cars at your earliest convenience, at price quoted.

Upon receipt of this, plaintiff shipped the potatoes, and sent a bill by mail, charging 55 cents per bushel. On receipt of the bill, defendant telegraphed back:

You offered potatoes at thirty-five, bill at fifty-five. Explain.

Plaintiff telegraphed it was a mistake. The defendant, however, accepted the potatoes, and refused to pay more than 35 cents. Thereupon plaintiff brought suit for the difference in price. The court held that there was no meeting of the minds of the parties, and no contract, for, “as mutual assent is necessary to the formation of a contract, * * * it follows that an error or mistake of fact in that whiah goes to the essence of the agreement, and therefore excludes such assent, prevents the formation of the contract, since each party is really agreeing to something different, notwithstanding the apparent mutual assent.” The court, considering the fact that the purchaser must have known of the mistake, said: “The minds of the contracting parties never met upon a proposition to sell potatoes at 35 cents per bushel, because it is alleged that the price was a mistake, and that it was so understood by appellant, to whom it was made. * * * He [the defendant] knew that appellee [plaintiff] had not, in fact, offered the potatoes at that price.” The court here expressed the law of this case. If the rule could be applied where the mistake consisted in quoting a price one third below the pi’ice intended, what can be said where the variance is so unconscionable as the one at bar? In Moffett, H. & C. Co. v. Rochester, 178 U. S. 373, 44 L. ed. 1108, 20 Sup. Ct. Rep. 957, the court, considering a case where a mistake had been made by a ■ bidder for the performance of public work, said: “If the defendants are correct in their contention, there is absolutely no redress for a bidder for public work, no matter how aggravated or palpable his blunder. The moment his proposal is opened by the executive board he is held as in a grasp of steel. There is no remedy, no escape. If, through an error of his clerk, he has agreed to do work worth a million dollars for $10, he must be held to the strict letter of his contract, while equity stands by with folded hands, and sees him driven to bankruptcy.”

It is charged that the court erred in its instructions to the jury. The conceded facts in this case would have justified a peremptory instruction for the appellee. It is therefore not clear just how the appellant could be prejudiced by the instructions given, where the verdict was for the amount warranted by the evidence.

The evidence resolves itself to a concession by appellant that, after notice of the mistake and the offer on the part of appellee to have the goods returned, it retained them. Having elected to pursue this course, appellant obligated itself to pay for them at the price called for in the bill.

The judgment is therefore affirmed, with costs, and the cause remanded, to be disposed of in accordance with the views expressed in this opinion.

Affirmed.