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will place both parties just where they intended to place themselves in their relations to each other."

There is therefore an insidious fallacy in the language of an early and much quoted decision 5 which places this doctrine upon the ground of enforcing specific performance of contracts, i. e. of assuming that there are two acts of contract, the prior one including by implication an oral agreement to reduce the oral transaction to written form. But written contracts are not necessarily preceded by oral ones; the moment of assent, and thus of the beginning of obligation, to the terms as finally settled upon may be the moment of signature of the writing, as in numerous negotiations by mail; and in such instances it is equally possible (though not common) for an erroneous term to be inserted in the draft at the last moment. The correction of erroneous instruments therefore does not rest necessarily upon any assumption that a prior completed oral contract is being enforced. This fallacious assumption has, however, led practically, in a few jurisdictions, to the anomalous doctrine that a term omitted from the writing by mutual mistake (as distinguished from a term inserted by mistake) cannot be inserted in amendment, if the contract is one required by the statute of frauds to be in writing. If it had been appreciated that the process of reformation consists in making the instrument state what the parties supposed that it represented -in short, in making it represent what they are doing, not what they have already agreed to do, this anomaly would not have been accepted. For example, if the parties, for the first and last time, met and signed a document in ink which proved to be a disappearing ink and became straightway in visible, the Court could undoubtedly cause the terms to be indelibly restored according to the parties' understanding of what the paper contained; here the process is in effect precisely the ordinary one known as “reformation,” and yet there is no writing as required by the statute. The theory of reformation is that the instrument already is subjectively i. e. to the parties - what they supposed it to be, and therefore that the statutory requirement of writing is, subjectively at least, satisfied; and that the "reformation" is needed only to make the instrument appear to all the rest of the world as it appeared (and therefore legally was) to the parties when they signed it.

The really complicated and troublesome questions concerning mutual mistake, as commonly so called, are those of the character first mentioned, namely, questions as to the materiality of some expressed term or unexpressed assumption. These are questions common to all contracts, written or unwritten, and involve the theory of avoidability (post, § 2423).

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§ 2418. Same: (a) Signing a Completed Document; (3) Mutual Mistake, as affecting Bona Fide Holders for Value. The theory of reformation is to make the instrument state, objectively and in appearance to others, what it did subjectively state to the parties themselves. The one party is not bound to the other by the purporting tenor of the act, because the other party shared the error. But as against third persons, who are not sharers of the same supposition, and who are authorized by the substantive law to rely upon the instrument as defining the rights acquired by it, the tenor of the instrument controls, as a necessary result of the general principle (ante, § 2413) that the actor is responsible for the reasonable consequences of his act. In other words, an instrument may be reformable as against one person, but not as against another; the only condition being, in the latter case, that the transaction is one by which subsequent transferees may acquire rights not wholly dependent on the title (i. e. the legal acts) of their transferors. This will of course be the case with commercial paper. It should also be recognized for deeds. The theory of the law is well illustrated in the circumstance that the same deed may at the same time be reformable as against one of the original parties to it, though not as against another.2

§ 2419. Same: (b) Signing a Document having Blanks, or capable of Alteration; Writing One's Name not as a Signature. (1) When a document as signed contains a blank space, and the blank is afterwards filled in by another person, the liability of the maker to be charged with the terms thus filled in is determined by the general principle of reasonable consequences (ante, § 2413). As against the person filling the blank, the maker is of course chargeable for such terms as accord with his own authority or consent,1 and is not chargeable with any other terms. But even against third persons who may by substantive law rely on the instrument as the foundation of their rights, the maker may be chargeable, by the test of reasonable consequences; because an improper insertion by the immediate transferee may be (in the circumstances) a consequence which a prudent man might well have apprehended. For negotiable instruments,2 as well as for deeds, this principle

1 1862, Garrard v. Frankel, 30 Beav. 445 (the plaintiff and the defendant agreed for a lease by the former to the latter at 2301., but the plaintiff, in filling out the blanks, wrote by mistake 1307. for 2301.; the defendant signed the lease with knowledge of the discrepancy; held, (1) that the defendant might give up the lease, but if she retained the lease, could do so only at a rent of 2307.; but (2) that B., who had advanced money to the defendant on an assignment of the lease, was to be treated as a purchaser for value without notice and have a lien on the house for the amount of the advances, whether the defendant retained or gave up the lease); 1891, Holmes, J., in Goode v. Riley, 153 Mass. 585, 28 N. E. 228 ("As things stand, a purchaser without notice could hold him to the words which he has used ").

2 1862, Garrard v. Frankel, supra; 1876, Wilcox v. Lucas, 121 Mass. 22 (W. sold his

share of mining land to L. and A., and, by mistake in supposing certain ore land not to be within the share, an intended reservation of rights was omitted; reformation was ordered as to L., who shared the mistake, "to prevent him from relying on the grant," but not as to A., who did not share the mistake).

1 1829, Hudson v. Revett, 5 Bing. 368 (quoted ante, § 2408).

2 1853, Montague v. Perkins, 22 L. J. C. P. 187 (defendant held liable on an acceptance in blank, filled up and negotiated by the payee twelve years later; "he must be taken to have intended the natural consequence of his act"); and cases cited in Ames' Cases on Bills and Notes, I, 526, note.

3 1890, State v. Matthews, 44 Kan. 596, 25 Pac. 36 (the grantor executed a deed with a blank for the grantee's name, and left it with M. to negotiate with a proposed grantee; M. filled

seems to have settled into a rule of thumb, where the blank is expressly left for the purpose of later completion and the document is handed away. But where the document, though expressly left incomplete, is retained by the maker and later leaves his custody without his consent, or where the blank is. a mere superfluous space left uncancelled in an otherwise complete instrument, the act is treated as not negligence per se, and the question turns upon the circumstances of each case.

(2) Where after execution a document has been altered and is acquired by a third person in its altered condition, the same principle serves as a test; 6 here the question seems always to be open upon the circumstances of each

case.

(3) Where the person charged had not signed any document at all, but had written his name alone, i. e. for some other purpose than as a signature to a preceding written statement, it is natural to find the Courts holding him not responsible, as a matter of law. Only rarely could the circumstances here justify leaving the question of negligence to the jury.

in his own name, and recorded the deed, then mortgaging the land to T., on the faith of the record; T. was held to obtain a good title); 1889, Dobbin v. Cordiner, 41 Minn. 165, 42 N. W. 870 (a deed executed by a married woman without reading it, on her husband's false representations, was left blank as to grantee and description of property, and the husband filled it with a grantee's name and a description of the wife's property; the bona fide grantee was held to obtain a good title, on the ground of the wife's "culpable negligence ").

1839, Van Amringe v. Morton, 4 Whart. 382 (a deed executed and acknowledged, with a blank for the grantee's name, locked by the grantor in a drawer of which the key was given to his brother, who abstracted the deed, filled out the name of a grantee and delivered it, was held not effective, there being no negligence or default in the maker).

51827, Young v. Grote, 4 Bing. 253 (defendant held liable for checks signed by him in blank, left in his wife's custody, and so filled out by her direction that a blank space before the amount could be filled in to make 50%. into 350l.; "we decide here on the ground that the banker has been misled by want of proper caution on the part of his customer"; "the checks, left by him to be filled up by his wife, when filled up by her become his genuine orders "); 1854, Barker v. Sterne, 9 Exch. 684 ("whether the better ground for supporting that decision is that the drawer is responsible for his negligence . . or that the rest of the world must judge of the authority to fill it up by the paper itself and not by any private instructions, it is unnecessary to inquire"); 1875, Halifax Union v. Wright, L. R. 10 Exch. 183 (the ruling in Young v. Grote approved, as "perhaps only an application of one of those general principles . . . that a man cannot complain of the consequences of his own default against a person who was misled by that default without any fault of his own ").

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Eng. 1859, Ingham v. Primrose, 7 C. B. N. S. 82 (defendant held liable on an acceptance delivered to M. without consideration to be discounted, returned to the defendant by M. after failing to obtain discount, then torn in two pieces by the defendant and thrown into the street, and picked up by M. in the defendant's presence, and afterwards negotiated by M.; "the case appears to turn on the question whether the act of tearing the bill in two pieces, being manifest on the face of it, is such an act as prima facie ought to have indicated to the plaintiff that it had been withheld or withdrawn from circulation; it was properly a question for the jury whether the bill exhibited appearances which would have led a man of ordinary intelligence to the conclusion that it had been torn for the latter purpose"); U. S.: 1870, Wait v. Pomeroy, 20 Mich. 576 (defendant held not liable on a note from which, before indorsement to the plaintiff, had been detached a memorandum at the foot, conditioning payment on delivery of a machine; no one is bound to guard against every possibility of felony "); 1870, Harvey v. Smith, 55 Ill. 224 (similar note, bearing the condition in pencil, which was erased before transfer; the defendant held guilty of "gross carelessness," and an instruction that he was liable if the erasure could have been made "without leaving any trace which could be detected by a prudent and careful man," held proper); 1875, Brown v. Reed, 79 Pa. 370 (defendant signed an agreement to pay over the proceeds of machines sold by him as agent, the words being so printed that, on separating the paper vertically, one half bore the signature and a form of promissory note; "whether there was negligence in the maker was clearly a question of fact for the jury ").

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71869, Foster v. Mackinnon, L. R. 4 C. P. 704 ("It was as if he had written his name on a sheet of paper for the purpose of franking a letter, or in a lady's album"); 1870, Caulkins v. Whisler, 29 Ia. 495 (the defendant wrote his

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§ 2420. (C) Delivery of a Document; Deed or Negotiable Instrument delivered to Bona Fide Holder contrary to Intent of Maker. The third element of every act, its finality of utterance (ante, § 2404, par. 1, c, § 2408) - usually marked by the delivery of the instrument is equally governed, in respect to the competition between intent and expression, by the principle of reasonable consequences (ante, § 2413). Whether the act has been completed, or delivered, is not to be determined by the actual intention of the actor, but by the inquiry whether his conduct produced as a reasonable consequence the appearance of finality to the other person.

Where the other person is an immediate party to the transaction, and the mutual understanding is that the document has not yet been finally issued and delivered, there is no difficulty; in such cases, the first party is of course not to be charged with the document. But where the other party is a subsequent transferee in good faith, and the document is of that sort which permits third persons to acquire independent rights under it, the conduct of the first party, in so dealing with it that as a reasonable consequence it appeared to have been delivered, may charge him, even when he has not actually intended to consummate its delivery. For commercial paper there is no doubt, whether the document has been manually handed away subject to a condition,2 or whether it has been retained after preparation but unlawfully abstracted. from the maker's custody; though in the latter case it would of course be rare that the conduct would be deemed negligent, while in the former case the manual transfer would as a rule be made at peril. For deeds, an escrow to the grantee would be treated as absolute, by the Courts accepting the modern doctrine (ante, § 2408), if the grantee was reasonably led to suppose that the delivery was absolute, in spite of the grantor's private intent to the contrary; and even in those Courts which preserve the traditional arbitrary name upon a blank piece of paper and gave it to S. to be sent to S's employer so as to identify the defendant's signature when orders for machines were sent to them bearing his name as salesagent; S. filled in with the words of a note; the defendant was held not liable, because not "so far in fault in the transaction that he ought to be required to bear the loss resulting from the crime").

1 The cases in §§ 2408-2410, ante, illustrate this.

2 1841, Marston v. Allen, 8 M. & W. 494 (indorsed bill placed in the custody of the indorser's agent and by him transferred in fraud, held binding); 1860, Fearing v. Clark, 16 Gray 74 (defendant held liable on a note wrongfully negotiated by the custodian in escrow; "it is essential that there should have been a delivery of the note by the maker, to take effect as a contract; but this rule is qualified and limited as between the maker and a bona fide holder"); and cases cited in Ames' Cases on Bills and Notes, I, 573, note.

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3 1878, Baxendale v. Bennett, 3 Q. B. 525 (the defendant held not liable on a bill of exchange, written by him, with an acceptance to his own order, but without a drawer's name,

this being then stolen from his desk and negotiated after filling in the drawer's name; Bramwell, L. J.: "The defendant here has not voluntarily put into any one's hands the means, or part of the means, for committing a crime; I confess I think he has been negligent,

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but then this negligence is not the proximate or necessary cause of the fraud; a crime was necessary for its completion"; Brett, L. J. : "It was not negligence, for two reasons, first, he did not owe any duty to any one, and, secondly, he did not act otherwise than in a way which an ordinary careful man would act"); 1870, Burson v. Huntington, 21 Mich. 415, 431 (holding invalid a note which had been signed by the maker, left on a table pending the obtaining of a surety and the delivery of the payee's deed, and thence taken forcibly by the payee and transferred to the plaintiff).

1856, L. C. J. Campbell, in Gudgen v. Besset, 6 E. & B. 986, 992 ("I should attach no weight whatever to what the grantor might think or intend when he delivered the instrument, unless I thought that it was intended and agreed by both parties that the delivery should operate only as the delivery of an escrow ").

rule making absolute an escrow to the grantee (ante, § 2408), there is a tendency to rest the result on the ground of negligence, where a bona fide third party's interests are involved.5 Where the escrow has been made to a third person, the principle of reasonable consequences, and the analogy of all the preceding rules, require that the grantor should be bound, to one subsequently holding it, by a delivery made without observance of the condition and contrary to his intent; and such is the rule of most Courts to-day. But the metaphysical error that a specific actual intent is an indispensable feature of every act (ante, § 2413), and the failure to perceive (what the foregoing topics amply illustrate) that the very same conduct may constitute. a valid legal act as against one person, though at the same time not as against another person, i. e., that nullity is a relative term only, has induced some Courts to refuse to accept this rule, and to deny title to the subsequent holder.7

§ 2421. Unilateral Acts; foregoing Principles applied to Wills and Ballots. (1) A will is a unilateral act, i. e. there is no second party who acts upon the faith of it as a part of the transaction. Is there then the same reason to require the enforcement, for wills, of the general principle of intent (ante, § 2413), namely, that the terms of the act shall be such as were by the actor caused to be expressed as a reasonable consequence to the other party dealing with him? It would seem not. (a) So far as the terms of the will are concerned, it is clear that the law does not attempt to apply that principle in its stringency. The signing of a specific document as a will does not, as it does with bilateral acts (ante, § 2415), conclude all consideration of the signer's intent to enact those terms into the will; the question of intent is still open. Nevertheless, since the maker is deceased, and the ascertainment of his actual intent is always an elusive and jeopardous inquiry, some practical rule of thumb must if possible be adopted, taking some tangible circumstance of outward conduct as the mark of intent. Such a circumstance, for one, is the

1879, Ordinary v. Thatcher, 41 N. J. L. 403 (guardian's bond delivered to the county surrogate as agent for the probate judge, the obligee; a delivery in escrow, conditionally on another surety's signature, held absolute; though the old doctrine was invoked, the opinion proceeded upon the ground that "if the matter is left in doubt as to the character of the delivery of this instrument, such doubt should be resolved in favor of the innocent person to secure whom the bond was given, rather than to the advantage of these defendants, whose carelessness has at all events produced this situation").

61849, Blight v. Schenck, 10 Pa. St. 285, 294 (escrow delivered by the third person without performance of conditions prescribed by the grantor, held effective in favor of a bona fide grantee, "who acts on the presumption that the records of the county are not intended to mislead, but speak the truth, that the acts and declarations of the grantor are such as they purport to be"); 1892, Hubbard v. Greeley, 84 Me. 40, 24 Atl. 799 ("Escrows are deceptive in

struments; they are not what they purport to be; they purport to be instruments which have been delivered, when in fact they have not been delivered; . . . they are capable of being used to deceive innocent purchasers, and the makers of such instruments cannot fail to foresee that they are liable to be so used; . . . [the maker] ought to be responsible for the use that may in fact be made of it ").

71903, Mays v. Shields, 117 Ga. 814, 45 S. E. 68 (yet modifying the doctrine to some extent on lines of negligence); 1859, Smith v. South Royalton Bank, 32 Vt. 341 (Bennett, J.: "The deed not having been delivered, it was a nullity and void, or, more properly speaking, never existed; . there is a radical distinction, as it respects the rights of a bona fide purchaser or assignee without notice, between a void and a voidable instrument; . . . let the principle be as it may in regard to commercial paper, no question can be made as to a void deed"). The authorities are collected in Jones, Real Property, §§ 1315 ff.

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