Sidebilder
PDF

and acknowledged by the writers on the civil law.a Misrepresentation, without design, is not sufficient for an tiction. But, if recommendation of a purchaser, as of good credit, to the seller, be made in bad faith, and with knowledge that he was not of good credit, and the seller sustains damage thereby, the person who made the representation, is bound to indemnify the seller.b It is a very old head of equity, said Lord Eldon,c that if a representation be made to another person, going to deal in a matter of interest upon the faith of that representation, the former must make the representation good if he knew it to be false.

Lord Thurlow, in Fox v. MackrethA allowed of much latitude of concealment on the part of the purchaser. The latter, according to his opinion would not be bound, in negotiating for the purchase of an estate, to disclose to the seller his knowledge of the existence of a mine on the land, of which he knew the seller was ignorant. If the estate was purchased for a price of which the mine formed no ingredient, he held, that a court of equity could not set aside the sale because there was no fraud in the case, and the rule of nice honour must not be drawn so strictly as to affect the general transactions of mankind. From this and other cases it would appear, that human laws are not so perfect as the dictates of conscience, and the sphere of morality is more enlarged than the limits of civil jurisdiction. There are many duties that belong to the class of imperfect obligations, which are binding on conscience, but which human laws do not, and cannot undertake directly to enforce. But when the aid of a court of equity is sought, to carry into execution such a contract, then the principles of ethics have a more exten

* Dig. 50. 17. 47.

» Pothier Traite du Contrat de Manilat, art. 21. « Evans v. Bicknell, 6 Vesey, 182.

* 2 Bro. C. C. 420. Lord Eldon to the same point, in Turner v. Harvey, Jacob's Rep. 178.

sive sway; and a purchase, made with such a reservation of superior knowledge, would be of too sharp a character to be aided and forwarded in its execution by the powers of the court of chancery.* In Turntr v. Harvey,11 relief was given in equity against a contract, where the purchaser knew that the vendors (who were assignees of a bankrupt) were ignorant of a circumstance considerably increasing the value of the property. And while it was admitted to be the general rule that the purchaser was not bound to give the vendor information as to the value of the property, yet it was said that very little was sufficient to affect the application of the principle, as if a single word be dropped tending to mislead the vendor. And though there be cases in which a contract improvidently entered into by a trustee will not be cancelled by the court, yet they will not lend the aid of the court to execute it. But if a person stands in the relation of trustee or quasi trustee to another, as agent, factor, steward, attorhey, or the like, if he would purchase of his principal or employer, any property committed to his care, he must deal with the utmost fairness, and conceal nothing within his own knowledge which may affect the price or value; and if he does, the bargain may be set aside.0 Bargains between trustee and cestui que trust are viewed with great jealousy, and they will not be sustained, unless under very unexceptionable circumstances.11 It is a rule

in equity," that all the material facts must be *491 known to both *parties, to render the agreement

fair and just in all its parts; and it is against all the principles of equity, that one party, knowing a mate

[ocr errors]

rial ingredient in an agreement, should be permitted to suppress it, and still call for a specific performance.1 1

Pothierb contends, that good faith and justice require that neither party to the contract of sale should conceal facts within his own knowledge, which the other has no means at the time of knowing, if the facts would materially affect the value of the commodity. But he concludes, in conformity with the doctrine of Lord Thurlow, that though misrepresentation or fraud will invalidate the contract of sale, the mere concealment of material knowledge which the one party has touching the things sold, and which the other does not possess, may affect the conscience, but will not destroy the contract; for that would unduly restrict the freedom of commerce; and parties must, at their own risk, inform themselves of the value of the commodities they deal in.0 He refers to the rules of morality laid down by Cicero; and he justly considers some of them as being of too severe and elevated a character for practical application, or the cognizance of human tribunals.11 The general rule on this subject

* There is a valuable reference to, and criticism on the cases in illustration of the maxim caveat emptor, in Broom's selection of Legal Maxims, p. 354, London Edit.

» Traile du Contrat ds Vente, n. 233—241.

< Pothier, Ibid. No. 298.

s Cicero, de Officiis, lib. 3. sec. 12—17, states the case of a corn-merchant of Alexandria arriving at Rhodes in a time of great scarcity, with a cargo of grain, and with knowledge that a number of other vessels, with similar cargoes, had already sailed from Alexandria for Rhodes, and which he had passed on the voyage. Ha then puts the question, whether the Alexandrian merchant was bound in conscience to inform the buyers of that fact, or to keep silence, and sell his wheat for an extravagant price; and he answers it by saying, that, in his opinion, good faith would require of a just and candid man, a frank disclosure of the fact. Ad fidem bonam statuit pertinerc notum esse emptori vitinm quod nosset venditor. Ratio postulat ne quid insidiose, ne quid simulate. Grotins, (b. 2. c. 12. sec. 9.) and Puffendorf, (Droit de la Nature, liv. 5. c. 3. sec. 4,) as well as Pothier and others, dissent from the opinion of Cicero, and hold that the one party is only bound not to suffer the other to be deceived as to circumstance* relating intrinsically to the substance of the article sold. Rutherford, on the other hand, in his Institutes, vol. i. p. 226, coincides with Cicero as to (though it has its exceptions, like other general rules) is, that ignorance of the law, with a full knowledge of the facts and under circumstances repelling all presumption of fraud and imposition, furnishes no ground, either in law or equity, to rescind agreements, or reclaim money paid voluntarily under a claim of right, or set aside solemn acts of the parties.11 Another rule of equal validi

the case of the merchant at Rhodes, and disagrees with Grotins, on whom he comments. It is a little singular, however, that some of the best ethical writers under the Christian dispensation, should complain of the moral lessons of Cicero, as being too austere in their texture, and too sublime in speculation, for actual use. There is not, indeed, a passage in all Greek and Roman antiquity, equal in moral dignity and grandenr, to that in which Cicero lays it down as a fixed principle, that we ought to do nothing that is avaricious, nothing that is dishonest, nothing that is lascivious, even though we could escape the observation of gods and men. (De Off. 3. 8.) How must the accomplished author, even of so exalted a sentiment, have been struck with awe, humiliation and reverence, if he had known that there then existed in the province of Judea, the records of suslimer doctrines; in which were taught the existence, the unity, the power, the wisdom, the justice, the benevolence, and all-pervading presence of that high and lofty One that inhabiteih eternity, and eearcheth all hearts, and undentandeth all the imaginations of the thoughts of the children of men.

* Doctor Student, dial. 2. ch. 46. Bilbie v. Lumley, 2 East, 469. Shotwell v. Murray, 1 Johns. Ch. Rep. 512. Lyon v. Richmond, 2 Ibid. p. 51. 60. Storrs v. Barker, 6 Ibid. 166. Brisbane v. Dacres, 5 Taunt. Rep. 143. Milnes v. Duncan, 6 Barnw. <J- Cress. 671. Goodman v. Say res, 2 Jack. «j- Walk. 262, 263. Story's Comm.on Eq. Jurisprudence, 129. 151. Marshall v. Collett, 1 Younge $ Coll., 238. Rankin v. Mortimere, 7 Watts, 372. Good v. Herr, 7 Watts $ Serg. 253, 6, 8. Clarke v. Dutcher, 9 Covoen, 674. Bronson Ch. J. 2 Denio R. 40. Norton v. Marden, 3 Shepley's Rep. 45. Norris v. Blethen, 19 Maine, 348. In Underwood v. Brockman, 4 Dana, 314—318, and Ray & Thornton v. Bank of Kentucky, 3 B. Monroe, 510, the court of appeals in Kentucky ably and fairly discussed the question, whether relief ought to be granted on a contract made, or payment made, with full knowledge of all the facts, but through mistake as to the law, and the conclusion was, that relief might be granted, when the contract was entered into, or payment made in consideration of a mistaken belief of a legal liability. But the court said, that a fair compromise would not be disturbed on account of any mistake as to the law of the case. See also Gratz v. Redd, 4 B. Monroe, 190, money paid by mistake either of law or fact may be recovered back. In the case of Elliot v. Swartwout, 10 Peters R. 137, it was held that if an ty is, that acts done, and contracts made, under mistake or ignorance of a material fact, are voidable and relieva

agent pays over to his principal, after notice not to pay moneya illegally demanded and received by him, he remains personally liable. The same rule was adopted in Ohio, holding that a mistake of the parties in point of law might be corrected in Equity. M'Naughten v. Partridge, 11 Ohio Rep. 223. Evants v. Strode, Id. 480. On the other hand, in Cadaval v. Collins, 4 Adolph. # Ellis, 858, and in Clark v. Dutcher, 9 Cowen, 674, it was declared that money paid bona fide and with full knowledge of the fact, cannot be recovered back, though there was no debt, and that the case of Marriott v. Hampton, 7 Term, 269, was rightfully decided where it was held, that money recovered by due process of law without fraud or undue compulsion, ought not to be recovered back. The text of the Roman law contained propositions seemingly contradictory on the point, whether a payment of money made under a mistake of the law could be reclaimed. See Dig. 22. 6. 1. 7, 8, and Code, 1. 18. 10. Vinnins & D'Aguessean, contended that the money might be recovered back. unless the person making the payment was under a natural or moral obligation to make it. Voet and Pothier were of a contrary opinion, and the French civil code followed the former authorities, and made no distinction whether it be error of law or of fact. The question has become exceedingly perplexed by contradictory opinions and decisions. In Surge's Commentaries on Colonial and Foreign Laws, vol. iii. 727—739, there is a review of the authorities in the civil and English law on the question. An able writer in the American Jurist for April and July, 1840, has also examined very critically, and at large, all the cases, decisions, and dicta, and he concludes that there is no solid ground for the distinction between mistakes of law and mistakes of fact, as to the right to relief, and that the preponderance of authority is unequivocally on that side. It would be inadmissible in a work so general and comprehensive as the present one, to enter into the discussion. I have no doubt that injustice may sometimes result from a strict adherence to the rule refusing relief where the contract is founded on a mistake in law. But I incline to the opinion that true policy dictates that we take the law according to what I understand to be the more prevalent doctrine in the English and American courts; and that the contracts and acts of competent parties, when free from fraud of every kind, and made or done with full knowledge of all the facts, ought not to be disturbed on the allegation of ignorance of the law. It strikes my mind that such investigations as the relaxation of the rale would lead to, must be hazardous to the conscience and pernicious as precedents. In the Spanish law the rule is explicitly laid down that what is paid through ignorance of law cannot be recovered back, because, says the text, we are all obliged to know the laws of the kingdom ; though payments through error, mistake, or ignoranco of facts of what was not due, may be recovered back.

« ForrigeFortsett »