Wood v. Boynton
64 Wis. 265, 25 N.W. 42 (1885)
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Rule of Law:
A contract for the sale of an item cannot be rescinded due to a mutual mistake about the item's quality or value, as long as there was no fraud and the parties correctly identified the specific item being sold.
Facts:
- The plaintiff, Wood, owned a small stone but was unaware of its identity or value.
- Wood took the stone to Samuel B. Boynton, a partner in a jewelry business, to inquire about its nature.
- Boynton examined the stone, stated he did not know what it was, and offered to buy it for one dollar to keep as a specimen.
- Wood initially declined the offer but returned later when she needed money.
- On December 28, 1883, Wood sold the stone to Boynton for the previously offered price of one dollar.
- At the time of the sale, both Wood and Boynton were ignorant of the stone's true character; Boynton testified he had never seen an uncut diamond before.
- The stone was later discovered to be a rough diamond worth approximately $700.
- Upon learning its true value, Wood tendered $1.10 to Boynton and demanded the return of the diamond, which Boynton refused.
Procedural Posture:
- Wood (plaintiff) brought an action against Boynton (defendant) in the circuit court for Milwaukee county to recover possession of a stone.
- At trial, the circuit judge directed the jury to find a verdict in favor of the defendants.
- The plaintiff moved for a new trial, but the motion was denied by the trial court.
- A final judgment was entered in favor of the defendants.
- The plaintiff (appellant) appealed the judgment to the Supreme Court of Wisconsin.
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Issue:
Does a mutual mistake by both seller and buyer as to the true nature and value of a sold item constitute a legal basis for the seller to rescind the sale?
Opinions:
Majority - Tatlor, J.
No, a mutual mistake as to the true nature and value of a sold item does not constitute a legal basis for rescission. A sale can only be rescinded at law if there was fraud in the procurement of the sale or a mistake as to the actual identity of the item being sold. In this case, there was no evidence of fraud, as both parties were admittedly ignorant of the stone's character and value. Furthermore, there was no mistake as to the identity of the object; Wood presented a specific stone for sale, and Boynton agreed to purchase that exact stone. Because the sale was for a specific, identified item without fraud or mistake of identity, the subsequent discovery of its high value does not provide grounds for repudiating the contract, even if the price was inadequate.
Analysis:
This case establishes a foundational distinction in contract law between a mistake of fact concerning the 'substance' or 'identity' of an item and a mistake concerning its 'quality' or 'value'. The court's refusal to allow rescission for a mistake of quality reinforces the legal principle of caveat venditor (let the seller beware) in situations of mutual ignorance, promoting the finality of contracts. This precedent holds that parties who are uncertain about an item's value assume the risk that their judgment may be incorrect, and courts will not intervene to correct a 'bad bargain' made in the absence of fraud or misrepresentation. The decision limits the scope of the mutual mistake doctrine, ensuring it is not used to unwind transactions simply because of a subsequent, unexpected discovery about an asset's worth.
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