Summary of Sherwood v. Walker
S Ct MI 33 N W 919 [1887]

Avoidance of the K: Mutual Mistake

Relevant Facts: Pl is a banker and a farmer, Dfs are farmers with property and cattle in Ontario, Canada and outside of Detroit.  Dfs act as importers and breeders of Angus cattle.  Pl called upon the Dfs for the purchase of a cow.  After examining the cows that the Dfs stated were barren Pl selected one Rose 2d.  They agreed on the price which was conditioned upon the weight of the cow.  Dfs wrote a letter to Pl confirming the sale and instructed their vendor of the same in writing.  When Pl attempted to pick up the cow and attempted to tender payment of $80, he was informed neither was acceptable as the cow was with calf. After securing via Writ Pl had the cow weighed =1420.

Legal Issue(s): Whether a contract for sale of certain specified property, may be rescinded by the Df prior to passing of title after discovering a material part of acceptance was erroneous?

Court’s Holding: Depends on the intentions of the parties and therefor must be submitted to the jury.

Procedure: Replevin for a cow which Pl secured via Writ. Suit commenced in justice's court; judgment for Pl; Dfs appealed to circuit court of Wayne county, and verdict and judgment for Pl in that court. Dfs moved to strike, Denied and they appealed, S. Ct MI Reversed and new trial granted

Law or Rule(s): A party who has given an apparent consent to a K of sale may refuse to execute it, or he may avoid if after it has been completed, IF the assent was founded, or the K made, upon the mistake of a material fact -such as the subject matter of the sale, the price, or some collateral fact materially inducing the agreement; and this can be done when the mistake is mutual.

Court Rationale: If there is a difference or misapprehension as to the substance of the thing bargained for; if the thing actually delivered or received is different in substance from the thing bargained for, and intended to be sold, then there is no K. The K maybe rescinded UNLESS there is some warranty.

If the only difference is in some quality or accident, even though the mistake may have been the actuating motive to the purchaser or seller, or both, the K remains binding.  A barren cow is substantially a different creature than a breeding cow.  She was not the animal, or the kind of animal, the Dfs intended to sell or the Pl intended to buy. If the cow was a breeder she was worth $750 – $1000; if she was barren she was not worth over $80.  The Ct should have instructed the jury that if they found that the cow was sold upon the understanding of the parties that she was barren, and she was in fact not barren, the Dfs had a right to rescind, and refuse to deliver, and the verdict should be in their favor.

Plaintiff’s Argument: Pl and Df entered into a K memorialized by a memorandum, for the sale of a cow at 5 ½ cents per pound.  Df thought her barren, Pl thought she wasn’t.

Defendant’s Argument: The material fact that the cow was not barren, which was a material condition in determining the price and for the sale of the cow should allow the Df the right to rescind.

DISSENT: There is no pretense that the plaintiff bought the cow for beef, and there is nothing in the record indicating that he would have bought her at all only that he thought she might be made to breed. When a mistaken fact is relied upon as ground for rescinding, such fact must not only exist at the time the contract is made, but must have been known to one or both of the parties. Where there is no warranty, there can be no mistake of fact when no such fact exists, or, if in existence, neither party knew of it, or could know of it; and that is precisely this case. In this case neither party knew the actual quality and condition of this cow at the time of the sale. The defendants thought she would not, but the plaintiff says that he thought she could be made to breed, but believed she was not with calf. The defendants sold the cow for what they believed her to be, and the plaintiff bought her as he believed she was.