[Bank of the United States v. Daniel et al.] the state, and comes within the statute. Cited Wood v. The Farmers and Mechanics Bank of Lexington, 7 Monroe, 284; Clay v. Hopkins, 3 Marshall, 488. 2. The bank claims these damages independently of the Kentucky statute. It cannot be denied that this bill comes within the spirit, if, indeed, it be out of the letter of the statute. This was conceded in the case of Clay v. Hopkins. As we have before remarked, these statutory damages were given not as a penalty, but as compensation for real injury and loss sustained by the holder, from the non-payment of the bill at the place stipulated; and came in lieu of the damages given by the law merchant, in the form of re-exchange, commission, and expenses. It is presumable the legislature fixed a reasonable rate of compensation; and it would not be too much to say, the damages more frequently were below than above the real injury and loss. Now, it surely cannot be illegal for the parties to agree between themselves the amount of compensation for this injury; nor contrary to law to fix that amount at the same that the law has fixed for exactly similar injuries. In this case, the place of payment was at the extreme limit of the United States; and the injury the greatest that could occur under the statute. The complainants seem to have forgotten entirely the law merchant, and not to have remembered that there was real loss to be compensated. Under these circumstances, we conceive the standard fixed by law cannot be against law: and an agreement in pursuance of it, is, upon valuable consideration, fair and binding. 3. Their agreement, upon a full knowledge of all the facts, to pay these damages, is binding; and they cannot be relieved on account of their mistake of law. How far a mistake of law will invalidate a contract, and form a ground of relief in chancery, has never been very clearly settled. In Mr. Story's Commentaries on Equity, vol. i. 121 to 154, will be found an able and full discussion of the question. The English and American decisions are collated and examined, and the views of the civilians adverted to. The result of his researches and examinations was, that a mistake or ignorance of law, forms no ground of relief from contracts fairly entered into, with a full knowledge of all the facts. There may be some exceptions, but the cases are few, and generally stand upon some urgent pressure of circumstances. The same doctrine is expressed by the Supreme Court of the United States, in the case of Hunt v. Rousmanier, 1 Peters, 1 to 15, where the Court remarks: "We hold the general rule to be, that a mistake [Bank of the United States v. Daniel et al.] of this character (a mistake of law) is not a ground for reforming a deed founded on such mistake; and, whatever exceptions there may be to the rule, they will be found few in number, and to have something peculiar in their character." The few cases which form exceptions to the rule, will usually be found to contain some other ingredient than mere mistake or ignorance; such as surprise, undue influence, or oppression: and where such ingredient is wanting, the mistake has been one of a plain, wellsettled principle of law. Mr. Story well remarks, that it is difficult to define what are plain, acknowledged principles of law, and what will constitute a doubtful question. Yet it may be considered that a claim founded on a doubtful or doubted question of law, forms a good consideration for any contract concerning that claim; and that such a contract, if otherwise unobjectionable, will be upheld. Now, of all the questions and difficulties which the law presents, there is none of more admitted uncertainty than the construction of statutes. It is often impossible for the best lawyer, upon the calmest and most attentive investigation, to determine the extent to which judicial construction will carry them. Sometimes they are limited by the letter, at others extended by the spirit. For example: look to `the statute of frauds and perjuries; and to the statute of limitations. They are plain and simple in their language; yet it has cost millions to give them a judicial construction. And when books had been written upon them, and the British courts had exhausted their learning and refinement, one or two Kentucky decisions destroyed, in that state, the whole, or almost the whole fabric of their judicial construction. We presume, however, it must be conceded that the construction of this statute was at least a doubtful question of law. Of that there is abundant evidence in the opinion of the Chief justice of Kentucky, and in the legislative construction of the act. At this time, were the question raised in the Kentucky courts, we believe it more than probable the opinion of the chief justice would be considered law. Even there, at this time, it may be considered more than doubtful whether any mistake has been committed. But we do not consider this a case of ordinary mistake of a point of law. The agreement was in exact accordance with the general understanding of the law at the time it was made. Nine-tenths of the legal men in Kentucky would have pronounced the construction given by the parties correct. Two years afterwards, the court of appeals, in another case, gave a different construction. The commu [Bank of the United States v. Daniel et al.] nity would be in a miserable condition, if, at every change of opinion upon questions of law,, all their previous contracts and settlements were to be overturned. Men could never know the end of their controversies, were such a rule to prevail. Upon this subject, the remarks of Chancellor Kent, whose decisions are almost reverenced throughout the Union, are so pertinent and just, that we could not do better than make a short extract from them:-" A subsequent decision of a higher court, in a different case, giving a different exposition to a point of law from the one declared and known, when a settlement between parties takes place, cannot have a retrospective effect, and overturn such settlement. The courts do not undertake to relieve parties from their acts and deeds fairly done, on a full knowledge of facts, though under a mistake of law. Every man is to be charged at his peril with a knowledge of the law. There is no other principle which is safe and practicable, in the common intercourse of mankind. And to permit a subsequent judicial decision in any one case on a point of law to open and annul every thing that has been done in other cases of a like kind, for years before, under a different understanding of the law, would lead to the most mischievious consequences. Fortunately for the peace and happiness of mankind, no such pernicious precedent is to be found. The case is, therefore, to be decided according to the existing state of things, when the settlement in question took place." See Lyon v. Richmond, 2 John. Chan. Rep. 60. Had the opinion been delivered in this very case, it could not have been more directly applicable. This case is not cited, because there are but few on the same point, but to show that it is the understanding of the law prevailing at the time of the settlement or contract, even though it may have been erroneous, which is to govern; and that the subsequent settlement of a question of law, by judicial decisions, does not create a mistake of law which courts will ever rectify. As this Court is governed by correct chancery law, and not the decisions of the Kentucky courts; it would almost seem needless, after the thorough and able examination contained in Story's Commentaries above referred to, to cite further authorities. Yet it will be found that the Kentucky decisions, on this point, are in accordance with the principles laid down by Mr. Story. In the case of Patterson, &c. v. Hughes, &c., 2 Marshall, 331, it VOL. XII.-F [Bank of the United States v. Daniel et al.] is laid down that a mistake of law, with a full knowledge of the facts, is no ground of relief. In the case of Taylor v. Patrick,.1 Bibb, 168, it is held, that if the parties to a compromise understand the facts correctly, erroneous deductions of law from those facts by a party, would not be ground for the setting aside the settlement induced by those deductions. In .Tennessee, the same doctrine, as to mistakes of law, was established in the case of Lewis v. Cooper, Cooke, 467. In Virginia, it was established in the case of Brown v. Armstead, 6 Rand. 594. In a late case in Kentucky, (not yet reported,) the court held that relief for mistakes of law could only be granted under the following circumstances: 1st, The mistake must be of a plain, well-settled principle of law; and 2d, The mistake must go to the whole consideration of the agreement; or, in other words, there must be no other consideration than the mistaken legal liability. If this case be law, of which there may be some doubt, it still settles the question against the complainants in this case. There was no plain, wellsettled principle of law which was mistaken. Nor did the mistake, if any, go to the whole consideration. Besides the doubtfulness of the claim, which is a valuable consideration; see Taylor v. Patrick, 1 Bibb, 168; also, 2 Bibb, 450; 6 Monroe, 91; there was also the liability of complainants to damages by the law merchant, about which there could be no mistake. On the subject of consideration, it was held by the Supreme Court of the United States, in the case of Thornton v. Wynn, 12 Wheat. 183; 4 Cond. Rep. 508, that if an endorser of a bill who had been discharged from liability, by the laches of the holder in giving him notice, with a full knowledge of the facts, promises to pay the bill, his promise binds him. Here there was no legal liability, but perhaps a moral one, to save the holder from loss. In our case there was a legal and moral liability to compensate his loss. We contend the claim to relief is barred by lapse of time, although the statutes of limitations do not, in express terms, apply to suits in chancery; yet it is a well settled rule, that equity will follow them, and not decree relief when, in similar cases, the statutes would have barred at law. Could, then, a suit have been brought at law; and if so, what length of time would have barred? From the allegations of the complainants, it appears this bill of exchange, with the damages due upon it, were paid off, and the bill [Bank of the United States v. Daniel et al.] surrendered up in 1819. It is said paid off, because, by their own showing, it so appears. They did not pay part, and give their note for the balance; but they obtained a discount of a note executed to one Mr. Armstrong, and with the proceeds of the discount paid off the whole balance of the bill. By discount, we understand a purchase, so that this Armstrong's note was sold or assigned to the bank, and with the price they received for it the bill was paid. Now, if this be true, the parties could have brought an action of assumpsit against the bank for money paid to it by mistake. This action accrued in 1819; and this suit was not brought until 1827, more than eight years after the right to relief accrued: for all actions of assumpsit in Kentucky, the limitation is five years. That, by the indulgence of the bank, this note was not paid off, is neither a legal, equitable, nor moral answer to the statute. It began to run from the time the settlement took place, and the mistake, if any, happened., Then the right accrued, if it ever did. Perhaps, however, it may be said that the limitation should only run from the time of discovering the mistake. Admit it. The court of appeals gave their construction to the statute in 1821, six years before suit was brought. It is alleged, also, that there was an express agreement, by which the proceeds of the discount were to be applied to the payment of the bill. This agreement certainly does not prevent its being a payment. That it was agreed to be a payment, rather confirms than weakens the position that the bill was paid. On the subject of the jurisdiction of this Court, we would further remark, that the decree directs a thousand dollars, with interest, from the time of allowing damages to the date of the judgment, to be credited on the judgment. This judgment bore interest, as appears by the complainants' bill. The time of allowing damages was July, 1819, as appears by the bill, and the agreed facts. So that interest was compounded at the date of the judgment, which was erroneous. It should merely have been simple interest on the one thousand dollars to the date of the decrec. This latter mode of entering the decree would exceed two thousand dollars at the date of the decree; and the amount is increased by the compounding mode adopted by the court. For the appellees, it was stated, that the case is one over which this Court has no jurisdiction, and that the appeal should therefore be dismissed. The only matter in contest between the parties is the |