Case ID: scl_2/html/0011-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice BuiHcu", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The State against Theodore Gaillard, John Bull and John Bryant.
    
      Charleston District,
    
    1796.
    Misrepresentations on the plat of lands tlie^tíme and ]fc ° s ”/e,a Paré f™<Ia8™e^'M1g3 siorl of the contraet. As where a fine tei. ‘ ¡s ^id goodiniu-seat 'of^a tract of tim-her land, fit only for lum-her,and which upon exami-out to be only Siree^uftlui without uny running water in^ it. Such misrepresentation may bo given in evidence against a bond given for the consideration money, by way of discount, under the terms of the discount act, in a court of common law.
    DEBT on bond for 4,4-41/. 7s. currency, equal to 634/. Sterling.
    The bond, on which this suit was commenced, was given for a tract of land purchased at a public sale, made by the commissioners of forfeited estates, under the confiscation act. At this sale a very handsome plat of the land was pro- , • i io , duced, representing the quality of the land, &c. taken, as alleged, from actual observation and measurement, and containing 2,533 acres. On this plat a fine copious stream of water was laid down as running nearly through its centre, with a mill-seat represented on it, which was the principal r inducement of the defendants to make the purchase ; as the . . land was valuable only on account of the timber growing on it, and this stream of water and mill-seat, which were represented on the plat, containing notes and memorandums ex-pianatory of these natural advantages.
    The defence set up against this bond was misrepresentation or deception, at the time and place of sale. That the defendants had been deceived by this plat representing a bold stream of water, sufficient to turn a mill the whole year round, with a good mill-seat upon it; whereas, in truth and in fact, it was found upon examination that this supposed stream was a mere gully, which was dry three-fourths of the year, and contained running water only in wet seasons, or after heavy falls of rain. That by this failure of water, their plan of erecting a saw-mill was entirely defeated, as the great object they had in view having been the sawing of lumber for the market. Moreover, that there was a deficiency of 555 acres in the quantity of land. This deficiency, however, was not so much relied on, for a rescission of the contract or sale in toto, as an abatement of price might have an-? swered the ends of justice to all parties j but what the rie-fendants relied on, was the fraud or imposition practised upon them, by this false representation on the plat produced at sale, and which deceived them in making the purchase.
    The defendants then called two surveyors who had resurveyed this land, and several other witnesses, who all proved substantially, the facts stated in the defence, as well with regard to the total failure in the stream of water, as to the deficiency in the quantity of land sold. The cause then went to the jury, who, under the direction of the judge, and on the authority of Gray andHandkinsods case, tried in October term, 1792,
      
       brought in a verdict for defendant; ’w ° whereby the whole contract was rescinded. Thereupon the counsel for the state gave notice of a motion for a new trial, to be made at the next meeting of the constitutional court of appeals, on the ground of misdirection of the presiding judge ; and that the Ending of the jury was against-law. At the meeting of the constitutional court of appeals, |n January, 1796, the abóve motion was brought forward, and in support of it, the following grounds were submitted to the court.
    1. That a common law court could not rescind a contract, and that a court of equity only was competent thereto.
    2. That one Archibald bid off the land at the salé, and there was no proof that he haji a mill-seat in view ; and if he was not deceived, no one coming in under him had a right to complain,
    3. That the Commissioners of forfeited estates did not warrant the mill-seat and stream of water, as being- good and proper for a saw-mill; they only sold from the plat made by the surveyor, on behalf of the public; and,
    Lastly, that this sale having been made by the state, it- • was not to be governed by the same rules as private sales.
    This motion was argued by Ford and Trezevant in behalf of the state, and by General Pinckney for defendants.
    
      For the state it was contended, that the court of chan-eery was the proper tribunal for investigating all matters of fraud, accident and trust, and was the only one competent to do full and complete justice in all such cases. And it was their peculiar province to determine, when, or in what cases contracts were or were not to be set aside on the ground of fraud or misrepresentation. That in our state three chancellors presided in the court of equity, who were men of great legal knowledge and integrity, and who would exercise their powers as to the dissolution of contracts, with all the requisite discretion and caution. That they would never rescind a contract until after the fullest examination, of which the nature of the thing was capable. That in such hands, contracts were safe and stable ; the principles well ascertained by authorities and adjudications ; and the rules of law and equity form their steady guide in determining cases of this sort. That while this v/as the case, men in their mutual contracts and bargains, and all their various transactions, might have a confident and safe reliance. But on the contrary, to make jurors the judges of the rescission and dissolution of solemn agreements, entered into with due solemnity and caution, would introduce all that fluctuation and uncertainty, which for ages past it had been the wisdom of the law to guard against. Jurors were often composed of unlearned men, often biased on one side or the other, and too frequently carrying their prejudices into the jury box. That in cases of this nature they had no fixed rules or principles to govern their verdict; that one jury would do on one day, what another would undo the next; nothing like certainty could be expected, and every thing might be set afloat and unhinged, by committing so great and so extensive an office to such unskilful hands.
    On the second ground it was contended, that one George Archibald was the purchaser at the sale. The land v/as knocked off to him by the cryer, and there was no evidence offered to the jury who tried the cause, to shew that he was deceived by this plat or the declarations of the commissioners, but admitting that the plat might have bad that tendency, that was a matter between him and the commissioners, and not one of which the defendants could avail themselves in order to get rid of their contract, and set aside their bond.
    That there was no warranty on the part of the commissioners, that the stream laid down on the plat was a never-failing stream, or that it would turn a saw-mill all the year - round. They offered the land for sale, such as it was, with all its advantages and disadvantages attached to it, and the plat produced was more for the purpose of shewing the metes and bounds of the land, and the quantity contained within the lines, than for any other purposes whatever.
    And finally, it was urged in support of the motion, that this sale was a public sale made by the state, a corporate body, which could not mate, nor was it bound to make, the representations of the good or bad qualities of the land offered for sale, which a private individual is bound to do in his contracts with another. Caveat emptor was a good rule in such case ; the defendants should have taken care to have informed themselves fully on all these points, before they made the purchase.
    Pinckney, for defendants,
    against the motion, admitted that the law had formerly been as his opponents had stated : that this power of setting aside or rescinding contracts, once belonged exclusively to a court of equity ; but that modern improvements had been made in almost every branch of our jurisprudence, for wise and judicious purposes ; and amongst others, that of a common law court taking cognisance of such cases, as the present one, as well as an equity court.
    That the great point here was fraud, or no fraud ? That fraud might either be the result of deliberate design, or it might arise from circumstances, resulting from the nature of the transaction itself, where none was intended. But that from whatever cause it arose, if it could be traced out and established, by common law rules of evidence, it was as much within the jurisdiction of a common law court of judicature, as within that of a court of chancery— That in a great variety of cases, it was usual and customary for tbe courts of chancery to send down issues, to be tried at common law, to enable the chancellors to proceed finally to da-termine on the justice of the case. Now if it was right and just for the courts of common law to try collateral points, arising in the course of a cause depending in equity, it was surely right and proper for them to try the whole of a cause, where the whole of the merits could be brought fairly before them in the first instance. That a jury was as much under the control of the court, and subject to its direction In the one case as in the other, and the court would see that justice was done in cases originating at common law, as well as on issues directed by a court of equity ; and if they erred, or deviated either in point of law or fact, the constitutional court would always grant a new trial toties quoli.es, See. And this power in the common law courts would always be an effectual security to all kinds of contracts which were fair and lawful, and would be a sufficient check against all the inconveniences so much apprehended by the gentlemen on the other side of the question. Besides, the remedy in a court of common law, was much speedier and attended with less expense, than in a court of equity. Our discount law, he next contended, expressly allowed such a defence as the present one. It enacts, “ that “ in all actions whatever, brought for the recovery of any “ debt, it shall and may be lawful, for the defendant, if he a have any account, reckoning, demand, cause, matter or “ things against the plaintiff, to give the same in evidence, “ by way of discount, regard always being had, to the cause “ of action, so that such demands, causes, matters and u things, &c. relating to defendant in his own right, shall “ only be given in evidence by defendant, in a suit brought “ against him in his own right,” &c. He then quoted the case of Cooke v. Rhine,
      
       tried in 3 783, which was the first case in this country in which a common law court, under a fair construction of our discount law, permitted this kind of equitable defence to be set up, as springing out of the transaction itself. That suit was for a workman’s bill in builds }ng a house : the discount was the loss of rent occasioned. by unreasonable' delay, and for sundry deficiencies in the building and unfaithful workmanship, in which the jury, under the direction of the court, allowed a discount to the amount of 220/. sterling. The next case was that of Mills v. Dewees, which was a suit for the price of a negro sold with a good character, who was proved to have been a drunkard, a thief, and runaway: the discount was to the amount of the full value of the. negro; and the jury found for defendant. The case of Gray v. Handkinson, the next in order of time, was very similar ta the present one ; where a mill-seat on a good stream of water, was the object of the purchase, but as it was taken away by an older grant, in an action on the bond for the consideration money, a verdict was given for defendant; by which means the contract in that case was rescinded in toto. All these cases, and a great many determined since, upon the same principles, vindicated and justified the courts of common law in this state, in opening the door for the admission of these kind of equitable defences ; which prevented a multiplicity of actions, and went at once to the real merits of the case.
    
      See Public Laws> P-2iG"
    
      That in answering to the second ground taken in support of the motion, he said, Archibald, by whom the land was bid off, was only the mere agent of the defendants on the occasion: that the entry in the commissioners’ books of sales was to them, and not to Archibald; the deeds of conveyance were to them ; and they gave the bond to the commissioners, on which the present suit was brought. All this proved him to have been a mere agent. But supposing he had not been their agent, and they were to be considered as his assignees, they would then stand exactly in his shoes, and had a right to avail themselves of any ground of fraud of which he himself could have taken the advantage.
    That although the commissioners did not in express words declare that this was a constant and never-failing stream of water, which ran through this tract, yet such a representation on the plat by the surveyor-general, an officer of high trust, or his deputies employed on the part of the state, was as much calculated to impose upon an unwary and unsuspecting purchaser, as any parol declarations of the commissioners ; nay, more so, as it held out the idea of actual observation and examination of the premises, by such officer, which by most men, would be much more regarded than the loose, random declarations of the commissioners themselves at the sale.
    1 Domat. 80, 81.
    As to the last ground urged in support of the motion, he observed, that although the sale was made under a public law of the state, and by public authority, no good reason could be assigned, why the state as a public body, should be protected in a fraud committed (though unintentionally) by any person acting under its authority, any more than an individual citizen under similar circumstances. Good faith ought to be observed by public bodies, as well as by private citizens; and if any one is injured by such corporate body, or its agents, the party injured is entitled to redress, as well as from a man in his private capacity.
    
      
       See -Bay’s JSep. vol. 1. p, 2"8. liileifs
      
    
    
      
      
         Bay's *5. edit*
    
   Mr. Justice BuiHcu

delivered the - opinion of the judges, who were unanimously with the defendant on every ground. He observed, that the governing principles by which this case, and all others of the like kind had been, and were to be decided, were borrowed from the civil law, and incorporated into, and now made a part of the common law of this country, viz. “ that a sound price deserves a sound “ commodity,” and that wherever there is “ a failure of “ consideration, a misrepresentation, or concealment of mate- rial circumstances,” it vitiates the contract in toio ; or entitles the party injured to such a reasonable abatement in the price of the thing sold or demanded, as would make him full reparation for any injury sustained by reason of such unsoundness, failure, misrepresentation or concealment, according to the nature and circumstances of every such case. Of all such circumstances and injuries, whatever their extent might be, the juries of this country, under the direction of the common law courts, were as competent to determine', wherever they could be traced out and established by legal testimony, as a court of equity. That in the exercise of this power, the courts of common law, always had been and ever would be extremely cautious in charging juries, so as to guard against the too easy and frequent admission of testimony, which might go to render contracts insecure. That good faith and confidence ought to be maintained by men in their mutual dealings and transactions with each other. That men were free to contract and make bargains, or to let them alone, as they thought proper ; but when once made, they were binding, and the contractors ought to be held to them, in all cases, unless they came fairly within the above exceptions ; and then it was proper and just, for juries to interfere and do substantial justice between the parties, by giving such verdicts as would place both of them in their original situation, or give partial satisfaction for partial injuries.

A court of common law jg equally competent with a court of equity, to rescind and get aside contracts on the grounds of fraud, where such grounds can he traced out by common law rules of evidence.

J3onUtt. 81.

Public Laws, 5546,

That the principles of our discount act of the legislature, passed in 1759, and made perpetual by the act of 1783, coincided with the rules of the civil law, by permitting a defendant to set off by way of discount against the plaintiff’s demand, any cause, matter, or thing in his own right, and springing out of the same transaction, which went either to defeat the plaintiff’s right, or to require an abatement in his demand; which renders it highly presumable, that the legislators of tbat day, had the principles of the civil law ia View, when they passed that act.

In comparing this case with the foregoing rules, he said, there could be little doubt, but that this contract ought to be set aside on the ground of fraud or misrepresentation. The object the defendants had in view, was the sawing of lumber for the Charleston market. The land, it was^ admitted, was of little or no value, but for the timber growing on it. A good stream of water, and a mill-seat, therefore, were essentially ntcessary for carrying into effect, the object the purchasers had in contemplation, and without these, their ends never could have been answered. The plat produced at the sale, represented upon the face of it, these essential requisites. It carried, therefore, fa lshood and misrepresentation in its front; well calculated to take in, and deceive unwary men, who were likely to trust to such representations made by public men in the execution of a public trust. There was nothing better calculated to impose upon a purchaser, than a plat which had the appearance of an actual survey and observation, with explanatory notes made upon it. Many an unfortunate European had been deceived by the American land speculators, in the same manner ; and unfortunately, too many of the purchasers had been ruined by fit. It was said the commissioners were ignorant of it ; they did not know that there was no such stream. But that made no sort of difference, as to the real existent facts ; for it was the same thing to the purchaser, whether they knew, or did not know, there was this stream ; for it is a well known rule of the civil law, that where the defects ,of a thing sold were unknown to the seller, he shall be bound not only to take it back, but to indemnify the purchaser or buyer, as to all the charges the sale has put him to. The receipt of a full or valuable consideration in lazu, raises an implied -warranty, against all faults, known and unknown to the seller ; with this difference, that in cases of wilful concealment, the party guilty of the fraud, is liable for damages, in addition to all legal and just charges.

1 Domat. 8i„

a sound price sound^com-uierknownor unknown t#

As to the other grounds taken in support of the motion for a new trial, they all follow the main or principal one, already discussed. A fraud practised upon the agent, was a fraud through him on the principals, and went radically to the dissolution of the sale. Any misrepresentation calculated to deceive, went to impair a contract, as much as parol declarations by the sellers, to that effect. And as to the effect of sales in general, there was no difference between public and private ones, as to defects in the thing itself sold, except as to incumbrances, which might be well ascertained by due diligence. Holding out false representations therefore by any of the public agents, went as effectually to render a sale invalid with the state, as if it had been practised by an individual citizen.

Rule for new trial discharged.

Present, Burke, Grimice, Waties and Bay.