« ForrigeFortsett »
perty, by which means the purchaser was induced to buy, and was deceived as to the value, no relief was to be afforded; for the buyer should have informed himself from proper sources of the value, and it was his own folly to repose on such assertions, made by a person whose interest might so readily prompt him to invest the property with exaggerated value. Emptor emit quam minimo potest ; venditor vendit quam maximo potest, a
The same principle was laid down in a late case in the K. B., where it was held, b that a false representation by the buyer in a matter merely gratis dictum, in respect to which the buyer was under no legal pledge or obligation to the seller for the precise accuracy of his statement,
and upon which it was the seller's own indiscre*487 tion to rely, was no *ground of action. There was
no recognized principle of law which rendered a party legally bound to allege truly, if he stated at all, the motives and inducements to the purchase, or the chances of sale to the seller. The true rule was stated to be, that the seller was liable to an action of deceit, if he fraudulently misrepresent the quality of the thing sold, in some
• 1 Rol. Abr. 101. pl. 16. Saunders v. Halterman, 2 Iredell, N. C. Rep. 32. In the case of Eakins v. 'Tresham, 1 Sid. Rep. 146. 1 Lev. Rep. 102. the same law was declared ; but a distinction was there taken between the false assertion touching the value of the property, and touching the rate of the previous rent, and an action was held to lie in the latter case, for the rent was of a matter of fact resting in the private knowledge of the land lord and his tenants, and the tenants might refuse to inform the purchaser, or combine with the landlord to mislead him. The court, in Lysney v. Selby, 2 Lord Raym., 1118, followod the decision in Eakins v. Tresham, though they considered it to be questionable ; and the distinction seems to have been essentially disregarded in the Scotch case of Kinaird v. Lord Dean, cited by Mr. Sugden, from 1 Coll. of Decis. 332. The doctrine in the case of Rolle was adopted by the chief justice of Maine in the case of Cross v. Peters, 1 Greenleaf's Rep. 389; and by the chief justice of North Caro. lina, in the case of Fagan v. Newson, 1 Badg. f. Dev. 22. But in Bowring v. Stevens, 2 Carr. f. Payne, 337, on the sale of the lease of a public house, the seller falsely represented that his returns averaged so much a month; and it was held that an action lay for the deceit.
Vernon v. Keys, 12 East's Rep. 632.
particulars which the buyer has not equal means of knowledge with himself;a or if he do so in such a manner as to induce the buyer to forbear making the inquiries, which, for his own security and advantage, he would otherwise have made. b
The rule in equity is more rigid on this subject than it is at law. Lord Hardwicke held,c that where the seller had falsely affirmed a farm to have been valued by two persons at a certain price, and that assertion had induced the purchaser to contract, it was such a misrepresentation as would induce a court of equity to withhold a decree for a specific performance. But there is a settled distinction in equity between enforcing specifically and rescinding a contract; and an agreement may not be entitled to be enforced, and yet not be so objectionable as to call for the exercise of equity jurisdiction to rescind it. It does not follow that a contract of sale is void in law merely because equity will not decree a specific performance.d
- A false representation in a contract for the sale of fixtures and fittings of a public house as to the amount of business attached to the house, has been held sufficient to avoid the contract. Hutchinson v. Morley, 7 Scott, 341.
It is settled that a material misrepresentation of a fact by mistake, and upon which the other party is induced to act, is a ground for relief in equity, equally as if it had been a wilful and false assertion, for it operates with equal injury. Pearson v. Morgan, 3 Bro. 388. M‘Ferran v. Taylor, 3 Cranch, 270. Rosevelt v. Fulton, 2 Cowen, 134. Lewis v. M.Lemore, 10 Yerger, 206.
• Buxton v. Lister, 3 Atk. Rep. 386.
d Seymour v. Delancey, 6 Johns. Ch. Rep. 222. The cases on this point are there collected and reviewed. Though the decision in that case was afterwards reversed in thecourt of errors, the general doctrines in it were not affected, but admitted. Inadequacy of price is of itself a sufficient ground of defence to a bill in equity by a purchaser for a specific performance, when the party contracting to sell, was an expectant heir. Peacock v. Evans, 16 Vesey, 512. Ryle v. Brown, 13 Price's Exc. Rep. 758. On the other hand, a court of equity will rescind a contract for the sale of land when the intrinsic nature and subject of the bargain itself, or the attending circumstances, are clearly indicativo of fraud. King v. Co
*An action will lie against a person not interested in the property, for making a false and fraudulent represen
horn, 6 Yerger's Tenn. Rep. 75. So, a bill for the rescission of a contract for the purchase of land will be sustained, if the defendant fails at the hearing to show that he is then able to give a good title, or to give possession, and there be no adequate remedy at law for the breach of the contract. Hepburn v. Dunlap, 1 Wheaton, 179. Williams v. Carter, 3 Dana's Ken. Rep. 199. Seamore v. Harlan, Ibid. 412. In the case of King v. Hamilton, 4 Peters' U. S. Rep. 311, it was adjudged, that the equity power of decreeing a specific performance of contracts, was to be exercised in sound discretion, and with an eye to the substantial justice of the case, and never when the exercise of it would be inequitable and unjust. If damages would be an inadequate compensation for non-performance of a contract, equity will grant relief. Storer v. Great W.R. Road Co., 1842, V. Ch. Bruce, 2 N. Y. Legal Observer, 12.
The general rule is, that a court of chancery will not decree a specific performance of an agreement for the sale and purchase of stock or of chattels. But there are so many exceptions and qualifications attending the rule, that its force is greatly impaired, and more recent and better authority would seem to be, that when justice requires it, chancery will, in such cases, decreo a specific performance. For the general rule, see Cudd v. Rutter, 1 P. Wms. 570. S. C. 5 Viner's Abr. 558. Capper v. Harris, Bunb. Rep. 135. Dorison v. Westbrook, 5 Viner's Abr. 540. Nuthrown v. Thornton, 10 Vesey, 159. For exceptions to it, and in favour of specific performance, see Colt v. Netterville, 2 P. Wms. 304. Duke of Somerset v. Cookson, Id. 390. Buxton y. Lister, 3 Atk. Rep. 383. Taylor v. Neville, Ibid. 384. Lord Eldon, in Lady Arundel v. Phipps, 10 Vesey, 148. Wright v. Bell, 5 Price's Exc. Rep. 325. Adderley v. Dixon, 1 Simons & Stewart, 607. Lynn v. Chaters, 2 Keene, 521. Wiltry v. Cottle, 1 Ibid. 174. Clark v. Flint, 22 Pick. Rep. 231. The true principle in equity is, that specific performance of an agreement relating to chat. tels, ought to be decreed, when equity and conscience require it, as in the case of pictures and other things of peculiar value and attachment, and when the remedy by action at law for damages would be inadequate and no competent and just relief could otherwise be afforded. Mitford on Pleadings in Chancery, 168, edit. N. Y. 1833. Story's Comm.on Eq. Jurisprudence, vol. ii. 18.26–48, where the English chancery cases on the subject, are critically examined. In Sarter v. Gordon, and Young v. Burton, domestic slaves brought up in the family are declared to come within the reason of the exception. 2 Hill's S. C. Ch. Rep. 126, 127. 1 M Mullen's S. C. Rep. 255. As to the specific performance of contracts for the sale of lands, see supra, p. 470—-476, and more particularly, infra, vol. iv. p. 451. With respect to contracts entered into for fraudulent or illegal purposes, the law refusos its aid to enable either party to disturb such parts of it as have
tation *to the seller, whereby he sustained damage by trusting the purchaser on credit of such misrepresentation. This principle was first established in England,
been executed, and as to such parts as remain executory, it leaves the parties where it finds them. Nellis v. Clark, 20 Wendell, 24. S.C. 4 Hill, 429. Mellin, Ch. J., in Smith v. Hubbs, 1 Fairfield, 71. M.Kinnell v. Robinson, 3 Mees. 9. Wels. 434.
The case of marine insurance is different from the ordinary contract of sale, and rests on a different principle. The parties do not deal in that instance on the presumption of equal knowledge and vigilance as to the subject matter of the contract, and hence a different rule of law prevails. The insurer is essentially passive, and is known to act, and professes to act, upon the information of the assured. In an insurance contract, the special facts, as Lord Mansfield has observed, (Carter y. Boehm, 3 Burr. Rep. 1905,) upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only. " The underwriter trusts to his representation," and proceeds upon confidence that he does not keep back any circumstance in his knowledge. Lindenau v. Desbo. rough, 8 Barnw. g Cress. 386. Though the suppression should happen through mistake, without any fraudulent intention, the policy is void. The contract of insurance is formed upon principles peculiar to itself; and the common law maxim of caveat emptor has no application, and professes to have none. So, in the case of work done and articles made by a mechanic, the buyer professes to repose upon the superior knowledge and skill of the mechanic in his trade, and to know nothing of the mystery of the art ; and if the latter does not furnish his work done in a workmanlike manner, he is guilty of a breach of an implied contract; spondet peritiam artis. Jones v. Bright, cited in Dawson of Lloyd, 304. Leflore v. Justice, 1 Smedes 4 Marshall, Miss. Rep. 381. See, also, infra, p. 588. The reaBon of the distinction between these cases and the ordinary contract of salo, is very apparent; and the common law has carried the doctrine of disclosures by each party in the formation of the contract of sale, to overy reasonable and practicable extent that is consistent with tho interests of society. The maxim of caveat emptor, and that other maxim, vigilantibus et non dormientibus jura subveniunt, when discreetly applied, as in the English law, are replete with sound and practical wisdom.
• Upton v. Vail, 6 Johns. Rep. 181. Bean v. Herrick, 3 Fairfield, 262. In the caso in 6 Johns. Rep., the doctrine in the case of Pasloy v. Free. man, was recognized, discussed, and settled, in the supreme court of NewYork. It was again recognized, discussed, and settled, in Gallagher v Brunel, 6 Cowen's Rep. 346 ; and once more recognized, discussed, and settled, in Benton v. Pratt, 2 Wendell'8 Rep. 385; and again, and very elaborately and powerfully enforced, in Allen v. Addington, 7 Wendell'. Rep. 1. S. C. 11 Ibid. 374. This is a striking sample of what are
after great discussion and opposition in the case of Pasley v. Freeman ;a and though that case met with powerful resistance it has been repeatedly recognized, and the doctrine of it is now well settled, both in the English and American jurisprudence.b The principle is, that fraud,
accompanied with damage, is a good cause of ac*490 tion ;c and the solidity of the principle was *felt
termed the homonymia of the civil law. But the statute of 6 Geo. IV. ch. 14, commonly called Lord Tenterden's act, has done away the application of the doctrine of Pasley v. Freeman to English cases. That act extends the statute of frauds, by requiring a memorandum in writing signed by the party to be charged, of representations of another's character and ability, with a view to credit to be given him. It equally applies to cases of verbal acknowledgments of debts barred by the statutes of limitations; and it wonderfully relieves the courts, the profession, and the country, from the evils of fluctuating and contradictory decisions. These provisions of the English statute were adopted in the Massachusetts Revised Statutes for 1835, and in the Revised Statutes of Vermont, 1839, p. 317. See Lyde v. Barnard, 1 Mees. of W. 101, on the doubtful construction of Lord Tenterden's act.
• 3 Term Rep. 51.
6 Eyre v. Dunsford, 1 East's Rep.318. Haycraft v. Creasy, 2 Ibid. 92. Carr, ex parte, 3 Ves. of Bea. 110. Harner v. Alexander, 5 Bos. of Pull. 241. Wise v. Wilcox, 1 Day's Rep. 22. Russell v. Clarke, 7 Cranch's Rep. 92. Munro v. Gardner, 1 M. Con. Rep. S. C. 328. Hart v. Tallmadge, 2 Day's Rep. 381. Patten v. Gurney, 17 Mass. Rep. 182. See, also, 7 Vermont R. 67. 79.
• Fraud without damage, or damage without fraud, says Croke, J., in 3 Bulstrode's Rep. 95, gives no cause of action : but where these two do concur and meet together, there an action lieth. By fraud, Le Blanc, J., said, in 2 East's Rep. 108, he understood an intention to deceive, whether from an expectation of advantage to the party himself, or from ill-will towards the other. Both of these propositions contain true doctrine on the point. If the false representation be made, knowing it to be false, and injury follows, the law infers a fraudulent intent, and the person who makes it is responsible for the consequences. Tindal, Ch. J., in Foster v. Charles, 6 Bingham, 396. 7 Ib. 105. But it is not requisite to show that the defendant knew the representation to be untrue. It is sufficient if the representation be untrue and made for a fraudulent purpose, and to induce the plaintiff to do what he does do to his prejudice. Taylor v. Ashton, 11 Meeson of Welsby, 401. Malice and want of reasonable cause is a ground for damages. De Medina v. Grove, Q. B. Easter Term, 1846. N. Y. Legal Observer for August, 1846. This appears to be the sound doctrine and the wholesome discipline of the law on the point.