Case ID: nc_26/html/0093-01.html
Source: Caselaw Access Project
Author: {"author": "DaNiel, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM CASE vs. MARVILL M. EDNEY & AL.
    Where one has given a deed of trust on his property, to be sold for the fit of his creditors, and they have neither released their claim on him nor assented to the deed, he has such an interest in the sale of the property, that if, at a sale made_ by his trustee, he stands by and sees property sold in which he knows there is a latent defect and does not disclose it, he makes himself liable to the purchaser in an action for deceit.
    Appeal from the Superior Court of Law of Buncombe County, at an extra session in August, 1843, his Honor Judge Pearson presiding.
    This was an action on the case in the nature of an action of deceit for a fraud in the sale of a mare. • It was proved on the trial, that in November, 1839, the defendant, Marvill Edney, being much indebted, executed to the defendant, Rufus Edney, a deed of trust, which was duly proved and registered, for his real and personal estate, including several tracts oí land and many articles of personal property, among others the mare in question, in trust to sell and apply the proceeds to the payment of the debts specified — that in December, 1839, the said Rufus-the trustee, sold all the property at public sale — that the plaintiff attended and bought the mare at $75, for wich he gave his note and surety to the trustee according to the terms of the sale — that Mar-vill Edney was present at the sale, but took no part in it and said nothing one way or the other to the property. It was also in evidence, that in the spring of 1839 the mare had a colt and soon afterwards was discovered to be very lame in her left fore-leg — that she continued lame during the summer, but, early in the fall after the‘colt was taken from her, she got in good order and was to all appearance well. One of the witnesses said that, although when standing or walking nothing seemed to be wrong, yet when put in a trot he could perceive she was a little stiff. As to this, the evidence was contradictory. On the day of sale sheappeared to be well. gome weeiIS aftev the sa]ej the plaintiff, although he had been told, soon after he purchased that the mare had been lame the spring before, said he was well pleased withjher. About the first of February, 1840, the mare became very stiff in all her joints and died soon afterwards. There was other evidence which it is not material-to.state.
    The Court charged the jury, that there was no evidence that the defendant Marvill had sold the mare to the plaintiff, or had made any misrepresentation, or done any act to assist the defendant Rufus in practising a fraud, supposingthelatter to have been guilty of a fraudand, inasmuch as the legal title had passed out-of Marvill and was vested in Rufus, he was not accountable as an owner would be, who procured an auctioneer to cry-his property, merely as his agent, and ■stood by in silence. As to the defendant Rufus, the Court charged, that although he acted as trustee in making the sale, yet, like all other persons who sold, he was bound to act honestly and to disclose defects if he believed them to exist. It was then left to the jury, whether the mare was unsound at the time of the sale, and whether the defendant Rufus knew or had reason to believe that she was unsound —if so, as he failed to state the circumstances, he was liable in damages. The jury found a verdict in favor of the defendants. A new trial was moved for, on the ground of error in the charge of the Court as to the defendant Marvill .and refused — and judgment being rendered pursuant to the verdict, the plaintiff appealed.
    No counsel for the plaintiff.
    
      Soke for the defendant.
   DaNiel, J.

The Court said to the jury, that, inasmuch as the legal title to the mare had passed out of Marvill Edney, and vested by the deed of trust in Rufus Edney, the trustee, he was not accountable as one would be, who procured an auctioneer to cry his propery, merely as his agent, and he stood by in silence. Was this part of the charge correct ? If the seller of an article is aware that there is any defect in it, and he fraudulently conceals it, and it be such a defect as the buyer hath not the means of discover- ,. ing by the exercise of ordinary diligence, the purchaser may maintain an action of deceit in the sale. If the owner had procured an auctioneer to sell, it is admitted, that, if the thing so sold had been defective, and the owner, knowing of the defect, stood by and failed to disclose it, he would be liable. Babbington on auctions,. 164. Jones v Borden; 4 Taunt. 847. The legal title in- the mare was transferred by the deed to Rufus Edney to sell her.. And the stipulation-in the deed was, that he' should'apply the proceeds of the sale to satisfy certain creditors of Marvill Edney. There is nothing in the case to shew us, that the creditors had released the debtor in consideration of the assignment of this property for their benefit — -nor that .they in fact had ever- agreed to accept of the said property for their benefit. If therefore-the creditors were not fo release, Marvill Edney had an interest in.the price the mare might bring, either as constituting-a fund for the payment of his debts, or as resulting to his use. Although a Court of Law may not be able to enforce? such rights, yet it is obliged to take notice of them as valuable interests. They affect the competence of witnesses, and, iti some instances,.may be sold underexecution. It seems to us, therefore, that the maker of the deed was materially concerned in raising up the fund by the said sale to the highest amount; and it also appears to us, that Kufus, in the receipt and application of the money, is to be looked' upon as the agent of Marvill Edney. We, therefore, are of opinion, that the aforesaid part of his Honoris charge was erroneous, and-that there must be a new trial as to-Marv-ill Edney.; but the verdict and judgment in favor of Rufus Edney are not disturbed.

It will not be understood from this-, that we think mere silence of the debtor as to defects in his property, when he is present at a sale under execution, would amount to a fraud;: for that is a proceeding in invitum, in which the sale is exclusively the act of the law, and the rule of caveat empior applies.

Per Curiam, New trial awarded.