Case ID: va_30/html/0764-01.html
Source: Caselaw Access Project
Author: {"author": "CARR, J. TUCKER, P.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Robertson v. Hogsheads.
    March, 1832.
    Chancery Practice — Contract—Rescission—Fraud—Case at Bar. — upon a hill in chancery by vendee against vendor of land, after the contract fully executed by conveyance of the land and securities given for the purchase monej', alleging fraud practised by vendor’s agents on the vendee, in the original agreement, and praying that the contract may be rescinded for the fraud, and general relief; the court having held, that plaintiff, under the circumstances of the case, was not entitled to a rescission of the contract, held further, that he was not entitled to ask, that the damages he had sustained by reason of the alleged fraud, should be ascertained by the court of chancery, and decreed to him, in abatement from the purchase money.
    Same — Same—Jui isdiction to Decree for Breach. — A bill, in any form, claiming damages for breach of contract, cannot be entertained in equity; neither can unliquidated damages be set-off in equity.
    In March 1824, James Robertson exhibited a bill against Thomas Hogshead, John Hogshead and James Cochran, in the supe-riour court of chancery of Staunton, setting forth, that in the year 1817, Robertson made a contract with Thomas and John Hogshead, for the purchase of a parcel of 424 acres of land in Augusta, then belonging to their father, Michael Hogshead, for 6360 dollars, which was a high price,— Thomas and John, the sons, being the agents of Michael, the father, in making the sale. That Michael Hogshead, executed a conveyance of the land to Robertson, *in December 1817, and very shortly afterwards died, having by his will, made in 1810, directed this same parcel of land to be sold, and appointed his sons, Thomas and John, his executors. That, after the death of Michael, the father, Robertson paid Thomas and John Hogshead 3000 dollars of the purchase money; and in May 1818, gave them his bonds for the balance, 3360 dollars, payable in long instalments, and executed a deed conveying the land to James Cochran, in trust, to secure the payment thereof. That Robertson had paid off some of the instalments, but a considerable balance was still due, and Thomas and John Hogshead were about to coerce the payment thereof, by a sale of the trust subject under the deed of trust. That before the contract for the sale and purchase of the land was concluded, Robertson made inquiries of Thomas and John Hogshead, to ascertain whether there was a sufficient supply of water upon it, for the use of a family, and of stock upon the farm, and as the only running water upon it flowed from a single spring, he inquired, particularly, whether that was a never failing spring, affording a sufficient supply of water at all seasons, declaring that he would not purchase any land which had not the advantage of such a supply of water; upon which the3r assured him, .that the spring was a never failing one, and furnished a plentiful supply of water, and that there was besides another smaller spring on the land, that contributed an additional supply, and rarely failed. That this was a wilful and fraudulent misrepresentation on their part, designed to induce him to make the purchase at a high price. That Eobertson, having taken possession of the land, ascertained in the summer of 1818, that the water flowing from the larger spring was very much diminished, and that the smaller one afforded little or no water; and about the year 1819, the larger spring also failed almost intirely; and then he ascertained, that it had often failed in former years, before his purchase, and that Thomas and John Hogshead were well apprised of this fact, when they so positive^' and confidently assured '"'him of the contrary, in order to induce him to make the purchase. And for this fraud practised upon him by them, Eobertson prayed, that his contract for the purchase of the land should be rescinded ; that Thomas and John Hogshead should be compelled to refund him so much of the purchase money as he had already paid them, arid to surrender his bonds for the balance, to be cancelled; that the trustee Cochran should beinjoined from proceeding to sell the land for the balance of the purchase money, under the deed of trust of May 1818; and general relief.
    The defendants Thomas and John Hogshead, in their answer, denied the fraud imputed to them: they denied, that they made any such representation with respect to the springs, as that charged in the bill: they denied, that they were aware of the failure of the springs to furnish a sufficient supply of water, at any time previous to the sale: they denied that the springs had failed since the sale, in the manner, or in any thing like the degree, stated in the bill: and they imputed the bill to the depreciation of the value of the land, and of all other real property in that country, which alone, they said, rendered Eobertson desirous to avoid his contract, and suggested to him the complaint of fraud alleged in the bill, as a pretext for rescinding it.
    There was a great deal of evidence upon the contested questions of fact: what was the representation in fact made by the Hogsheads to Eobertson, with respect to the springs? and what was the real state of them, in dry seasons, both before and after the contract? But whatever was the true state of the springs, it appeared in proof, that Eobertson was fully apprised of it, partly by experience and partly by information from others, as early as 1819 or 1820, some four years before his bill was filed: and that in the course of that time, there was a great, general and continuing depreciation of landed property in that country. It also appeared, that Eobertson, in 1819, sold and conveyed about an acre of the land.
    *The chancellor, upon the hearing, dismissed the bill, without prejudice to any action at law which the plaintiff might institute, to recover damages for the fraud therein complained of. Eobert-son appealed to this court.
    Johnson for the appellant,
    insisted, that the fraud complained of in the bill, was proved to have been practised by the Hogsheads upon Eobertson; and that, considering the known scarcity of water in the particular tract of country where the land in question lies, and the importance universally and justly attached to an abundant or even a sufficient supply of water, this was such a fraud as ought to be redressed by rescinding the contract. either was the time which elapsed from the date of the contract till the filing of the bill, any sufficient reason for withholding such relief: for it was impossible for the purchaser, in one or two years, whch might be years of peculiar drought, to know the permanent character of the springs: the experience of a course of years was necessary to ascertain, that the water always ceased to flow in the dry seasons of the year. But if the purchaser was not entitled to a decree rescinding the contract, he was entitled to damages for the injury he had sustained from the deceit practised upon him; he was entitled to an abatement of the price, proportioned to the diminution of the value of the land resulting from the defect of the supply of water. And the chancellor ought to have given him this relief, by directing an issue to ascertain the amount of injury,, instead of turning him round to an action at law for redress, where he might encounter the bar of the statute of limitations.
    Leigh, for the appellees,
    said, that supposing the allegations of the bill exactly and fully proved (which, however, he denied) it seemed to him impossible, without an utter disregard of the leading circumstances of the case, to listen to the claim to rescind the contract; and, in truth, the appellant had not so shaped his case, that such relief could be ^decreed to-him — -he had not made the heirs of the vendor parties. The contract was completely executed in the winter of 1817-18; the purchaser received his conveyance, took possession, paid near half the purchase money, and gave his bonds for the deferred payments, and a deed of trust of the properl3T to secure them: in 1819 and 1820, according to his own shewing, he became apprised of the fraud practised upon him by the Hogsheads: yet he continued to pay the deferred instalments of the purchase money, without a breath of complaint, and to pay them to Thomas and John Hogshead, who (as he must have understood) were bound to dispose of the money as part of their father’s estate. And then he waited till the property had depreciated to a fourth, perhaps a tythe, of its value at the time of the contract, or probably even at the time he discovered the fraud now complained of, before he preferred his bill to rescind the contract. As to the claim for the damages he has sustained by reason of the alleged misrepresentation with respect to the sufficiency of the springs, and their actual deficiency, he could only ask that relief, under the pra3,fer for general relief; but if there had been a particular pra3>er for such relief, in the alternative, the court of chancery could not have given it; for a bill in equity would not lie for damages in such case, or, indeed, in any case.
    
      
      Chancery Practice — Jurisdiction to Decree Damages. —In the principal case, in which a bill was filed by a vendee alleging fraud in the original agreement and praying that such agreement be rescinded for the fraud, the court held that the bill, so far as it related to the rescission, was never sustainable, and taking away that ground, there could be no propriety in filing a bill in equity for the purpose of obtaining compensation of damages. For this proposition, the principal case is cited in Campbell v. Rust, 85 Va. 668, 8 S. E. Rep. 664; Washington City Savings Bank v. Thornton, 83 Va. 165, 2 S. E. Rep. 193; Cleaver v. Matthews, 83 Va. 804, 3 S. E. Rep. 439; Rice v. Hartman, 84 Va. 253, 4 S. E. Rep. 621; Koger v. Kane, 5 Leigh 608, 610; Morgan v. Carson, 7 Leigh 241; Nagle v. Newton, 22 Gratt. 823, 824; Rosenberger v. Keller. 33 Gratt. 494, 495; Crislip v. Cain, 19 W. Va. 520; Kelly v. Riley, 22 W. Va. 249, 250; Laidley v. Laidley, 25 W. Va. 528.
      Specific Performance — Laches.—The principal case is cited in foot-note to Paroll v. McKinley, 9 Gratt. 1; Rison v. Newberry, 90 Va. 520, 18 S. E. Rep. 916; Ferry v. Clarke, 77 Va. 408.
      See monographic note on “Specific Performance” appended to Hanna v. Wilson, 3 Gratt. 243.
    
   CARR, J.

X think the decree in this case intirely correct. Taking up the case, either upon the bilí and answer, or upon the whole evidence, there is no ground furnished for a rescission of the contract, in any stage; but after it was executed by the giving and receiving a deed, taking possession, paying good part of the purchase money, executing bonds for the balance, and a deed of trust to secure the payment, there is not the shadow of a cause for rescission ; more especially as the purchaser acquiesced upwards of four years after the fraud (if there was one) was known to him, during which time a great change had taken place throughout the country, affecting deeply the value of lands; and most *especially, after he had sold part of the land. The bill, then, so far as it related to the main end of it, was never sustainable; and taking away that ground, there could be no propriety in filing a bill in equity, for the sole purpose of obtaining compensation in damages for an alleged fraud, and to tie up a part of the purchase money until these damages were liquidated. This is law too well settled to require that I should cite cases to support it. Upon the subject of the fraud charged, I do not choose to pronounce an opinion. The appellant having a right to sue at law for if, ought to go before that tribunal, without prejudice from an intimation of opinion by this court; and the appellees have an equal right not to be prejudged on that point.

CABELL, J. I intirely approve the decree.

TUCKER, P.

It is obvious, that no rescission of the contract could have been decreed, or properly asked for, in this case. If the conduct of the purchaser — his delay, his acquiescence, and his sale of part of the land — were not conclusive against the right to rescind in any form in which the bill might have been filed, it is certain, no such right could have been enforced in the form in which this bill has been framed. In the question of rescission, the heirs of Michael Hogshead, the actual vendor, have a. deep interest. Whether Thomas and John Hogshead are the heirs and the only heirs of their father, does not appear. Even if they be, they are not made parties in that character. Had the facts of the case justified a rescission, a re-conveyance by the purchaser to Michael’s heirs must have been decreed. But as the court knows not who they are, and as they are not before it, this could not have been done: for, peradventure, they7 might have been interested in resisting the rescission, and might have been more fortunate in combating the pretensions on which it was asked.

As the form of the proceeding, then, excludes the possibility of rescission, the bill can only be looked on as a bill *for an injunction to restrain the payment of an unpaid balance of purchase money, until a claim for unliquidated 'damages for the alleged fraud shall have been settled by an issue to be directed by the court. But it has been long settled that unliquidated damages cannot be set-off in equity. Duncan v. Lyon, 3 Johns. C. R. 351; Livingston v. Livingston, 4 Id. 287; Webster v. Couch, 6 Rand. 519. The party aggrieved should have instituted the proper proceedings and ascertained his damages, before he attempted to arrest the payment of the instalment of the purchase money remaining due. Were a > contrary practice allowed, an instalment of 3000 might be tied up, though the damages might eventually be only as many cents, or nothing.

Moreover, I take it, a bill for damages only will not lie in equity. The court could only ascertain those damages by sending the case to a court of law. To that court, therefore, the party should apply, instead of clogging the litigation by a suit in equity, which could only end where he ought to have begun. Would it be just (even though the fraud be established) that the defendants should be charged with the costs of this unnecessary proceeding? I think not. Had an issue been directed, and found for the plaintiff, surely the plaintiff ought to be charged with the additional costs unnecessarily incurred by going through the court of chancery to get into the court of law; since he might at once have got into the court of law by issuing his writ for the deceit.

It is no answer to this view of the case, that the answer of the defendant might have been important: the case is not placed on that ground, nor do the facts justify its being now assumed; for there seems to be no deficiency of evidence as to the facts that really occurred in the transaction.

Whether the statute of limitations will bar any action at law which the appellant may now bring, it would be premature to say. But, though this inconvenience should follow, it ought not to lead the court to establish a precedent sustaining a mere action for damages in equity. Such a proceeding has been questioned even in a suit for specific performance, where the defendant, after the bill was filed, had disabled himself to perform, and has been distinctly reprobated, where he had so. disabled himself before filing the bill, and the plaintiff knew of the fact before he commenced the suit; for, says chancellor Kent, “the case is then reduced to that of a bill filed for the sole purpose of assessing damages for a breach of contract, which is a matter strictly legal and not of equitable jurisdiction’’ — “If this court is to sustain such a bill, I do not see why it might not equally sustain one in every other case sounding in damages and cognizable at la-w." Kempshall v. Stone, 5 Johns. C. R. 193. In Gwillim v. Stone, 14 Ves. 128, the bill as to the damages was dismissed, though the court exercised its jurisdiction in directing the contract to be delivered up. In the case at bar, as I have already shewn, the bill is, in effect, a bill for damages only. See also the commentary in Todd v. Gee, 17 Ves. 273, upon the case of Denton v. Stewart, Id. 276, in notis.

Decree affirmed.