Case ID: va_20/html/0691-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Snelson and Co. v. Franklin.
    Decided, Oct. 30, 1818.
    i. Sale of Lease of House — Concealment—What Constitutes. — in the sale of a lease of a house and tenement in a town, if the -vendor fail to shew the lease to the vendee, and do not inform him of a Covenant therein, that, in case of destruction of the house hy lire, the lease shall terminate and become void; this is such a concealment as vitiates the contract, and, if the house be destroyed by fire in a short time, Equity will relieve the vendee by injoining the Vendor from collecting the purchase money, and by directing his notes for the same to be given up and cancelled.
    Franklin exhibited his Bill against Snel-son & Co. in the Superior Court of Chancery for the Richmond District, setting forth, that, on the ISth of March 1811, Doctor John IS. Archer leased a house and tenement in Petersburg to Snelson & Co. for the term of eight years and five months, to commence on the first of May in that year, and to determine on the 1st of October 1819, at the annual rent of $200, and, for the last five months, at the rent of $83 33 1-3 cents; with a covenant that losses by fire, lightening and tempest, were excepted; and that, in case of destruction by such accidents, the lease should terminate, and become void, but Snelson & Co. should pay the rent up to the time of such destruction: — -that, on the ISth of July 1815, a contract was made between the complainant and defendants, whereby the former was to take the lease of a moiety of the premises, from that day to the end of the term, to pay them $1500 for the same, by instalments, and moreover to pay half the rent per annum to Doctor Archer: — that articles were drawn on the same day, which state that Franklin had taken the lease; (without adding that possession was to be delivered to him on the Monday following, as was in truth the agreement;) and that, in point of fact, possession was never delivered: that he gave his notes negotiable at Bank for the three instalments of the $1500; that he had never seen Archer’s lease, and was utterly ignorant of the covenant for termination of the lease in case of destruction by fire, &c.; that, on the night of Sunday, July 16th, the whole house was destroyed by the great fire at Petersburg; yet, notwithstanding such destruction, whereby the lease was terminated, the defendants insisted on payment of the said three notes negotiable at Bank. The Bill prayed therefore, that they be enjoined from depositing the said notes in Bank for collection; that the notes be delivered up to be cancelled; and for general relief.
    The Injunction was awarded. Snelson & Co. answered, *that, having built a new house on the premises, they sold to the plaintiff their unexpired term in a moiety of the tenement; that it was the intention of the bargain that, as to that moiety, he should stand in all respects in the same situation they stood in; and that he was to pay them the purchase money at all events. They admitted that they did not show him their lease from Archer, nor mention to him the covenant therein for the termination thereof in case of destruction by fire &c. They denied the alledged agreement that possession should be delivered on Monday July iVth ; insisting that he took the lease on and from July 15th.
    The Complainant replied generally; and commissions were awarded. Depositions were taken, on one side, to prove that, in truth, possession was delivered on the 15th of July 1815; and, on the other, that it was not delivered, nor was to have been delivered, until Monday, July 17th. A witness swore that, on the said 15th of July, the Complainant, in conversation with him, agreed that, if the house should be burnt on the next day, it would be his loss. It was also proved that Archer had re-entered on the premises since the fire, and leased the ground to Hector McNeil, the chief acting partner of the firm of Snelson & Co., for a term of twenty two years.
    At June Term 1816, Chancellor Taylor perpetuated the Injunction, and decreed that the defendants should deliver up to Franklin his negotiable notes, to be can-celled; whereupon the defendants appealed.
    May for the appellants.
    This is a contract under seal; from which the Court will not infer any thing more than it expresses. There is no warranty in it. Could an action at law have been maintained upon it by the Complainant against McNeil and Snelson? They merely sold their lease as they held it. Shall the mere circumstance of his coming into equity to obtain an Injunction, to prevent their collecting the money, give him a right which he had not at law?
    Heigh for the appellee.
    The important circumstance, that the lease was to terminate in case of destruction of the house by fire, was *concealed. — Such concealment is constructive fraud; and, whether so designed or not, it had all the effect of a fraud on us. If the money had been paid, it might have been recovered by assumpsit for money had and received, the consideration having failed. The Court of Equity, then, may exert it’s preventive power.
    The statements in the answer are not reconcileable with each other. It is there acknowledged that this circumstance was concealed; yet it is also said that the purchaser of the lease was lo stand in all respects in the same situation with the original lessees I He took upon him indeed the risk of loss by fire, so far that he supposed he was to pay the rent though the house should be burnt; but he did not suppose that, in such event, he was to lose the lease altogether: he knew nothing of that stipulation.
    There is a representation in the articles of agreement that the lease was to continue four years: which representation amounted toa covenant to that effect: but all the benefit that, at the utmost, passed to the purchaser was two days possession of the premises.
    
      
      See principal case cited with approval in M’Niel v. Baird, 6 Munf. 317.
    
   October 30th, 1818, the Court affirmed the Decree.