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Page:Harvard Law Review Volume 1.djvu/222

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great uncertainty and confusion would attend business transactions Here the draft was genuine, addressed to the drawee, who had authorized it to be drawn, and it was held by the defendant, who could lawfully receive payment therefor. There was no mistake as to the intrinsic facts. The facts that the drawers had not acted in good faith with the drawees, or had placed the draft and its proceeds beyond their control, was too remote. The mistake of the drawers was rather as to the application of the money paid by them.”

The correct test seems to be suggested in this opinion, namely, the fact about which the mistake is made must not be as to a collateral or extrinsic fact, and the reason for adopting such a test is also suggested in the same opinion, viz., public policy. And public policy requires the adoption of this test, to avoid the uncertainty and confusion that would otherwise attend business transactions. And under this rule of public policy the one person loses and the other gains, not because of the defendant’s merits, or the want of merit in the plaintiff, but because to adopt a different rule would endanger business stability. It is because the mistake must not be as to extrinsic or collateral facts that it has been held[1] that if a bank pays, under a mistake as to the state of his account, a check drawn upon it by a depositor, there can be no recovery of the money so paid.

It is difficult to give a test of what is to be considered an intrinsic fact, it being a question which is to be governed by the facts of each case; but a test of this kind would seem to cover most cases. Was the making of the claim against the plaintiff in itself a representation that the party presenting the claim believed in the existence of those facts, about the existence of which the plaintiff was mistaken? If so, the mistake is as to an intrinsic fact.

The mistake must be one about which the plaintiff was not in doubt at the time of payment; for, if he regards the fact as a doubtful one at the time when the claim is made, he cannot be said to have paid under a mistake, but has either paid in settlement of a doubtful claim, or has paid with a view to appearing in litigation as a plaintiff rather than as a defendant, and the law properly says that it is not for him to choose the time for the beginning of litigation.[2]


  1. Chambers v. Miller, 13 C.B. N. S. 125. See contra, Merchants’ Nat. Bank v. National Eagle Bank, 101 Mass. 281. But compare Boylston Nat. Bank v. Richardson, 101 Mass. 287.
  2. McArthur v. Luce, 43 Mich. 435.