Moor, 283. He may fix a minimum price, or give notice of by-bids, and thus escape censure. Ross on Sales, 311; Howard v. Castle, 6 D. & 154*] Ε. 642. *But this shows that, without such notice, it is bad to resort to them. Crowder v. Austin, 3 Bingh. 368; 3 Younge & Jerv. 331. "The act itself is fraudulent," says Lord Tenterden. Wheeler v. Collier, 1 Moody & Malk. 126.

common.

The by-bidding deceives, and involves a falsehood, and is, therefore, bad. It violates, too, a leading condition of the contract of sales at auction, which is that the article shall be knocked off to the highest real bidder, without puffing. 2 Kent's Com. 538, 539. It does not answer to apologize and say that by-bidding is For, observed Lord Mansfield, "Gaming, stock-jobbing, and swindling frequent. But the law forbids them all." Cowp. 397. In Bexwell v. Christie, Cowp. 396, the pole star on this whole subject, it is said: "The basis of all dealings ought to be good faith. So more especially in these transactions, where the public are brought together in a confidence that the articles set up for sale will be disposed of to the highest real bidder."

Even in a court of law, Lord Kenyon has, with true regard to what is honorable and just, said: "All laws stand on the best and broadest basis, which go to enforce moral and social duties." Pasly v. Freeman, 3 D. & E. 64; see, also, Bruce v. Ruler, 2 Man. & Ryl. 3. And in Howard v. Castle, 6 D. & E. 642, he held that Lord Mansfield's doctrine, that all sham bidding at auctions is a fraud, was a doctrine founded "on the noblest principles of morality and justice."

Nor does it lessen the injury or the fraud if the by-bidding be by the auctioneer himself. He, being agent of the owner, is equally with him forbidden by sound principle to conduct clandestinely and falsely on this subject. Cowp. 397. All should be fair-above board.

Indeed, in point of principle, any fraud by auctioneers is more dangerous than by owners themselves. The sales through the former extend to many millions annually, and are distributed over the whole country, and the acts accompanying them are more confided in as honest and true than acts or statements made by owners themselves in their own behalf, and to advance their own interests. Great care is

willful lie, or the assertion of a falsehood knowingly, is certainly evidence of fraud." 1 Const. R., S. Car. 8. The following authorities support the views here laid down: 3 Younge & Jerv. 331; Moody & Malk. 123; 2 Carr. & Payne, 208; Bexwell v. Christie, Cowp. 395; Howard v. Castle, 6 D. & E. 642; 1 Hall, N. Y. 146; 1 Dev. (N. C.) 25; 6 Clark & Fin. 444, 329.

Some cases and some reasoning found in them, attempt to sanction a contrary doctrine, if the by-bids were made merely to prevent a sacrifice of the property-a "defensive precaution"-but not otherwise. Connolly v. Parsons, 3 Ves. 625, note; Smith v. Clarke, 12 Ves. 477; Steele v. Ellmaker, 11 Serg. & Rawle, 86; Woodward v. Miller, 1 Collier, 279; 5 Maddock,

These exceptions still concede that the bybidding, when an artifice to mislead the judgment and inflame the zeal of others-"to screw up and enhance the price," in the language of Sir William Grant-is fraudulent and makes the sale void. 12 Ves. 483; 25 Kent's Com. 537.

Some cases hold, too, that the by-bidding will not vitiate, if real bids beside those of the vendee occurred after. 3 Ves. 620. But neither of these excuses or apologies existed here. These by-bids were made after some thousands of dollars had been offered over the value of the mills, as estimated by the owners themselves, and were palpably made "to screw up," or enhance the price. Any other excuses, which have ever availed, either are anomalies, or rest on a false analogy. Thus, at one time in England duties on auctions were remitted, if the property was bought in by the owner. 3 Ves. Jun. 17, 621; 1 Fonbl. Eq. 226. This, however, was founded on the theory that no sale had taken place, and hence no duty should be paid, rather than that a sale under such circumstances was valid. It, therefore, strengthens rather than impairs the view taken of the present case.

It is no answer to this reasoning to say, as has been done, that Veazie bid voluntarily, or expressed satisfaction with his purchase, and was in haste to close it up. Because, in all this, he was laboring under a misapprehension that others *had honestly valued the prop- [*156 erty near the same price, and been in truth as anxious as himself to bid it off-and because he

and to discourage and repress the smallest deviations in them from rectitude.

Here the auctioneer virtually said to his hearers, when he made a fictitious bid: "I have been offered so much more for this property." But he said it falsely, and said it with a view to induce the hearers to offer still more. He averred it as a fact, and not an opinion; and as a fact peculiarly within his knowledge. Now if, under such an untrue and fraudulent asser155*] tion, *persons were persuaded to give more-relying, as they had a right to, on the truth of what was thus more within the personal knowledge of the auctioneer, and was publicly and expressly alleged by him, and being of course more willing to give higher for what others had offered more, who probably were acquainted with such property and had means to pay for it-they were imposed on and injured by the falsehood. It is said: "A naked,

real rival in securing the mills and some incidental advantages when in reality there had been no such honest bids over $20,000, and he had been contending against a man of straw falsely set up by the auctioneer. In short, he had been imposed on by the agent of the respondents; and that by virtual falsehood, and in a point material, and in a manner likely to mislead. He was not allowed to exercise his judgment, and bid higher or not on the truthon facts-but on falsehoods. 6 D. & E. 644. He was not the highest bidder at $40,000, except through deception wrought on him fraudulently. Ibid. Secrecy was practiced-privacy as to the real offers stratagem-which, as already seen, is in the teeth of the great principles of a valid public sale. Bexwell v. Christie, Cowp. 306; 2 Kent's Com. 539.

A technical objection to the quantity rather than weight of the evidence has been urged,

which it may be well to dispose of here. It is said that fraud is denied as to the defendants, and is not proved against them by two witnesses. It is conceded that the denials that the respondents were personally guilty of fraud, or expressly directed falsehood and fraud, are not overcome, nor are they in controversy. But it is the puffing or by-bidding of the auctioneer, their agent, which is in controversy as a fact. As to that they can make no denial from any personal knowledge pro or con-not having been present; and hence their answer furnishes no evidence in respect to it, as an independent fact. But this fact being substantiated by the agent, and the matter proved by others, as to no real bids being made over $20,000, and by various other circumstances in the case, the amount of evidence for it is ample. It is true, they deny that they ordered it. It is to be remembered, however, that they are not held liable here merely by declarations of their agent, when not ordered by them or perhaps known to them at the time-though it is a sound doctrine that the verbal declarations of an agent at a sale often bind the principal. 1 Ves. & Beames, 209; 6 Clark & Fin. 448, 449; Story on Agency, sec. 107. And that the agent is bound to disclose all and to act as the principal is when present, and selling. 1 Metcalf, 560; Hough v. Richardson, 3 Story's R. 698; 3 Hill, 260; 1 Wood. & M. 353. And that a principal so acting in person cannot be justified in asserting what is false, and by which another is injured. Pasly v. Freeman, 3 D. & E. 51; Vernon v. Keys, 12 East, 632; 2 East, 92. And 157*] that what the *vendor may not do in person, or may not employ others to do in his absence-that is, make by-bids to enhance the price-his agent, the auctioneer, cannot rightfully do.

But they are held liable on a ground beyond and apart from all this, and as well settled in England as here, that if a principal ratify a sale by his agent, and take the benefit of it, and it afterwards turn out that fraud or mis

hence, on account of the fraud involved in it, they should either restore the consideration, and take back the mills, or indemnify the purchaser to the extent of his suffering.

Some miscellaneous objections to these results are yet to be considered. It is said to be justly deemed an extraordinary power in a court of chancery to rescind contracts at all, instead of leaving parties to a suit at law for their damages. Sugden on Vendors, 392; 11 Peters, 248. And that a fraud or mistake must be very manifest to justify it. 10 Price, 117; 13 Price, 349; 7 Cranch, 368; 2 Johns. Ch. 603; 12 Ves. 477. And that the burden of proof to show these grounds for a rescission rests on the plaintiff, and not on the defendant. Grant this. Yet all requirements appear fulfilled here. On satisfactory proof, also, executed, as well as executory, contracts may in such cases be set aside. One case is reported of its being done after twenty years. 8 Price, 125. And a defendant is likely, in most cases, *to [*158 suffer no more by a rescission in chancery, than by damages adequate to the loss or injury.

There is next the objection, that too long a time had elapsed here before seeking redress. More force would attach to this if Veazie had discovered the imposition sooner. The sale happened January 1st, 1836; the discovery of the fraud was after January 1st, 1840, and this bill was filed July, 23d, 1841, after demanding redress of the respondents in January, 1841.

Having effected his object in the purchaseto obtain the property rather than let his rival get it, who, he doubtless supposed, was bidding against him-and being a man of ample means, Veazie submitted, as feeling bound, to the excess of price. Nor did he suspect any imposition till informed of it within a few years; and then he seasonably applied for relief, and should not be barred from obtaining it by any lapse of time while the fraud or mistake as to the bids not being real remained undiscovered. Doggett v. Emerson, 3 Story's R. 740; Daniels v. Warner,

nulled, and the parties placed in statu quo; or they may, where the case and the wrong are divisible, be at times relieved to the extent of the injury.

The principal in such case is profiting by the acts of the agent, and is hence answerable civiliter, for the acts of the agent, however innocent himself of any intent to defraud. 13 Wendell, 513; 1 Vt. 239; 1 Salk. 289; 7 Bingh. 543; Mason et al. v. Crosby et al. 1 Wood. & M. 342, and cases there cited; Doggett v. Emerson, 1 Ib. 1; Story on Agency, sec. 451; Doggett v. Emerson, 3 Story's R. 700; Olmsted et al. v. Hotailing, 1 Hill, 317; Taylor v. Green, 8 Carr. & Payne, 316. Whether the principal knew all those acts or not, is not the test in this case, as in 2 East, 92, notes, and 13 East, 634, note, though it may be in some others, as in 5 Bingh. 97; 6 Clark & Fin. 444.

But the test here is, Was the purchaser deceived, and has the vendor adopted the sale, made by deception, and received the benefits of it? For, if so, he takes the sale with all its burdens. Wilson v. Fuller, 3 Adolph. & Ell. N. S.

68.

The sale, thus made here, was adopted and carried into effect by the respondents; and

1; 8 Clark & Fin. 651; 1 Russ. & Milne, 236.

It is said that, after this lapse of time, the plaintiff is not in a proper condition to restore the mills. 16 Maine, 42. He is less likely to be, if they are ordered to be restored; but that is the fault of the fraud, and the concealment of it, rather than his fault. The defendant, too, if the property has deteriorated in value, is in no worse a condition that he would be where an avoidance of the sale takes place at law for fraud.

If the plaintiff has sold the property, or disabled himself from restoring it, when ordered by a decree, then the evil consequences will light on himself, and not the defendants. That is what is meant by inability to restore the property in 8 Cranch, 476. Nor is there any need he should aver substantively in his bill that he can restore it, this being presumed as a usual, if not necessary, consequence, when he applies to have the contract rescinded, and everything placed in statu quo.

The last exception to a recovery here by the plaintiff is, that the release to Head, the auctioneer, should be considered as discharging the respondents also. Neither the design of the parties to the release, nor the agreement or

justice demands." The Mechanics' Bank of Alexandria v. Lynn, 1 Peters, 384.

This court on its equity side, says Chief Justice Marshall, is "capable of imposing its own terms on the party to whom it grants relief." Mar. Ins. Co. v. Hodgson, 7 Cranch, 336, 337. And it will not grant relief even in fraud, unless the party "wishing it will do complete justice." Payne v. Dudly, 1 Wash. Va. 196; Semb. 1 Johns. Ch. 478; Scott v. Nesbit, 2 Cox, 183. Here, then, in the decree, we can set aside the whole sale and contract; but,

uitable terms imposed on the complainant, he is to let the sale stand for the sum of $20,000, fairly bid by him; and that the balance of the moneys paid by the complainant over and above the said $20,000 should be refunded to him by the defendants, with legal interest thereon, and that the notes and securities given for the payment of any part of such excess should be cancelled and given up by the defendants to the complainant; that the defendants should pay the costs in this court, upon this appeal, and all the costs which have ac

tiff should be required first to do equity, and to allow any countervailing equities on the part of the respondents which are, to let the sale itself stand at what was fairly bid for the property, and require only the residue of the consideration, being entirely fraudulent, to be restored. 1 Story's Eq. Jur. secs. 344, 599, and cases there cited; McDonald v. Neilson, 2 Cowen, 139, 192.

Thus, a borrower of money on usury will not be allowed relief in chancery, except on the payment of principal and legal interest. Scott v. Nesbit, 2 Cox, 183; 2 Bro. Ch. Cas. 649; 2 Story's Eq. Jur. sec. 696; Stanly v. Gadsby, 10 Peters, 521; Jordan v. Trumbo, 6 Gill & Johns. 106; 3 Ves. & Beames, 14; Fanning v. Dunham, 5 Johns. Ch. 143. Like terms are imposed on borrowers under void annuity bonds. See same cases. So, by analogy, the cases of specific performance frequently exhibit the enforcement of a part only, when just. Pratt et al. v. Law et al. 9 Cranch, 456; Hargrave v. Dyer, 10 Ves. 506; Harnett v. Yielding, 2 Sch. & Lefr. 553; 1 Maddock's Ch. 431. So, in respect to injunctions, one may issue against a judgment for land, and stay execution for a part, and allow it to stand for the residue. Dunlap et al. v. Stet162*] son, 4 Mason, C. C. *364. See other illustrations and cases, Com. Dig. Chancery, Appendix, 6 and 18; Fildes v. Hooker, 2 Meriv. 427, 14 Ves. 91; Wharton v. May, 5 Ves. 27. The form of a decree nearly adapted to this case may be seen in Fanning v. Dunham, 5 Johns. Ch. 146.

The last real bid here being in some doubt as to its amount, whether eighteen or twenty thousand dollars, we think the weight of evidence is in favor of the last sum, and the computations are therefore to be made on that basis. The judgment below must therefore be reversed, and a mandate sent down directing the proper decree, in conformity to these views, to be entered for the plaintiff.

Mr. Chief Justice Taney, Mr. Justice McLean, and Mr. Justice Grier dissented from this opinion.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Maine, and was argued by counsel; on consideration whereof, it is the opinion of this court, that the pretended sale of the two mill privileges, at and for the sum of $40,000, as set forth and described in the pleadings and proofs in this cause, was

which may accrue therein, in carrying out the decree of this court.

Whereupon, it is now here ordered, adjudged and decreed by this court, that the decree of the said Circuit Court dismissing the complainant's bill be, and the same is hereby reversed and annulled. And this court, proceeding to render such decree as the said Circuit Court ought to have rendered herein, doth now here order, adjudge and decree, that the aforesaid sale, as above set forth, be, and the same is hereby rescinded and set aside; that the said complainant shall, as equitable terms, retain the said property at and for the said sum of $20,000, part of the moneys paid by him to the said defendants, and that *the said [*163 defendants shall, on or before the third day of that term of the said Circuit Court next ensuing the filing the mandate of this court in said Circuit Court, refund and pay to the complainant all such sums of money over and above the said last mentioned sum of $20,000, as they or either of them shall have received from the said complainant on account of the purchase of said property, together with legal interest thereon from the time or times at which they were so received by the said defendants, and that the said defendants shall, on or before the same day of the same term of the said Circuit Court, cancel and deliver up the notes and securities given for the payment of any and every portion of the excess over and above the said $20,000. And this court doth further order, adjudge and decree, that the said defendants do pay the costs in this court upon this appeal, and all the costs which have accrued in this cause in the said Circuit Court, or which may accrue therein, in carrying out the decree of this court. And this court doth further order, adjudge and decree, that this cause be, and the same is hereby remanded to the said Circuit Court, with instructions to carry this decree into effect, and with power to make all such orders and decrees as may be necessary for that purpose.

JAMES PHALEN, Plaintiff in Error,

V.

THE COMMONWEALTH OF VIRGINIA.

Virginia statute limiting time of act authorizing turnpike company to raise money by lottery to repair road, constitutional.

In 1829 the Legislature of Virginia passed an act appointing five commissioners to raise by way of lottery or lotteries the sum of $30,000 for the 1850

1

163

Road Company. Two of the commissioners declined to act, and the remaining three took no steps to execute the power for a long time.

On the 25th of February, 1834, the Legislature passed an act for the suppression of lotteries, which prohibited all lotteries and sale of lottery tickets after the 1st of January, 1837, saving, however, contracts already made which were by their terms to extend beyond the 1st of January, 1837, or contracts hereafter to be made under any existing law, which were to extend beyond that day. These were permitted to go on until the 1st of January, 1840. On the 11th of March, 1834, the Legislature passed an act appointing two commissioners in the place of the two who had declined to act.

On the 19th of December, 1839, these commis

sioners entered into a contract with certain per

sons, authorizing these persons to draw as many lotteries as they might think proper, without limitation as to time, upon the payment of a certain sum per annum to the commissioners.

The right to draw lotteries under the Act of 1829 is not a contract the obligations of which were impaired by the Act of 1834.

It may be doubted whether it constitutes a contract at all. But if it was a contract, it was not unlimited as to time, and the Act of 1834, al164*] lowing the grant to continue *for a certain time, stands upon the same ground as acts of limi

tation and recording acts, which this court has said a State has a right to pass.

The privilege granted by the Act of 1829 had become obsolete from non-user, and the Act of 1834, appointing two commissioners, did not fully revive it, because the two acts of 1834 must be taken together; and the limitation contained in one must apply to the other.

The courts of Virginia have so construed these statutes, and this court adopts their construction.

HIS case was brought by a writ of error to the General Court of Virginia. The plaintiff in error had been convicted in the Superior Court for the County of Henrico and city of Richmond, on an indictment for selling lottery tickets contrary to the Act of Assembly of Virginia, passed on the 25th of February, 1834. The case was removed by writ of error to the General Court of Virginia, where the judgment was affirmed. That being the highest court of criminal jurisdiction in Virginia, the plaintiff in error brought his case into this court by a writ of error under the twenty-fifth section of the Judiciary Act; and now alleged that the Act of 25th February, 1834, under which he was convicted, is void, being contrary to the tenth section of the first article of the Constitution, which forbids a State to pass any "law impairing the obligation of contracts."

On the trial of the case below, the jury found a special verdict setting forth at length the several acts of Assembly of Virginia, and the contract under which the defendant in the enactment claimed a right to sell lottery tickets and to be exempted from the penalties of the Act of February, 1834, under which he was

indicted.

It appears that in December, 1828, the President and Directors of the Fauquier and Alexandria Turnpike Road presented a petition to the Legislature of Virginia, setting forth the importance and value of their road to the public; that by the exertions of the directors and a few of the stockholders, and on their responsibility, money had been raised, and the road put in excellent condition, except three miles, which required much repair; and asked a law authorizing a lottery to raise $30,000.

On the 30th of January, 1829, the Legislature passed an act appointing five commissioners, "whose duty it shall be to raise, by

for the purpose of improving the Fauquier and Alexandria Turnpike Road." After directing the commissioners to contract with fit persons for managing the lotteries, and to take bonds for the faithful performance of their duties, they are ordered to "pay over to the President and Directors of the said Fauquier *and Alexandria Turnpike Road Com- [*165 pany," the money raised by said lotteries, "to be by them appropriated in the improvement and repair of said road."

Two of the commissioners appointed by this act declined acting under it, and nothing was done under the license or authority granted therein during the five years which intervened between that time and the passage of the Act of the 25th of February, 1834, for the suppression of lotteries.

This act prohibits, under severe penalties, all lotteries and sale of lottery-tickets after the first day of January, 1837, with these provisos: Ist. "That nothing herein contained shall be

construed to extend to or interfere with contracts already made for the drawing of any lotteries, the drawing whereof, by the provisions of such contracts, shall extend to a period beyond said first day of January, 1837;" and 2d. "That nothing herein contained shall be construed to extend to or interfere with any contract which may hereafter be made under or by virtue of any existing law authorizing the same, for the drawing of any lottery, the drawing whereof shall not extend beyond the first day of January, 1840."

A few days after the passage of this act, on the 11th of March, 1834, an act was passed appointing two commissioners in place of those who had declined, "to carry into effect the Act of 30th of January, 1829."

Nothing was done under these acts till the 19th of December, 1839, when the commissioners entered into a contract with the plaintiff in error and another, authorizing them to draw as many lotteries as they think proper, paying to the commissioners the sum of $1,500 a year, with covenants to increase the consideration, provided the Legislature of Virginia should pass an act exempting these lotteries from the penalties of the Act of February, 1834, or if this court should pronounce the Act of 1834 unconstitutional.

It is by virtue of this contract with the commissioners, that the plaintiff in error claims immunity; contending, "that the Act of 1829 confers a valuable right or franchise on an existing corporation, without limitation of time; that it is a contract; and that the Act of 1834 has attempted to limit and curtail the previous grant, and injuriously to abridge it, and is therefore void, as impairing the obligation of a contract."

The case was argued by Mr. Z. Collins Lee for the plaintiff in error, no counsel appearing for the defendant.

The points made by him were the following: That this court has jurisdiction on this writ of error, because *the decision in the [*166 General Court involved the construction of a clause in the Constitution, and the decision was against the title or right specially set up or claimed under such clause of the Constitution.