Case ID: scl_30/html/0101-01.html
Source: Caselaw Access Project
Author: {"author": "Waejdlaw, J. Evans, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

J. C. Rupart vs. H. C. Dunn.
    
    The civil law rule that a sound pnce raises an implied warranty, does not apply to a sale of land.
    To entitle a party to rescind a contract for the sale of lands, on the grounds of misrepresentation or mistake, the proof must be full, clear and explicit.
    The mere concealment of a material fact, by the seller, will not vitiate such a contract, where the buyer examines for himself, and has an opportunity of judging as to the existence of the fact.
    Falsehood, by the seller, in matters of opinion, will not vitiate such a contract, and falsehood, in matters of fact, will only vitiate it where the buyer had no fair opportunity of judging for himself, and relied upon the representations of the seller,'or where the fact was peculiarly within the knowledge of the seller.
    
      Before Evans, J. at Union, Fall Term, 1844.
    This was an action on a promissory note, to which the defence was failure of consideration.
    It appeared from the evidence, that in the year 1837, the defendant, and one Gadberry, purchased from James Gillespie a tract of land containing 380 acres, in the State of Mississippi, at the price of $8000, payable in three instal-ments of $2,666 66 2-3. Three notes were given, each for the said sum, and upon one vf these notes this action was brought. The land was pine land, and of little value, except for a mill seat supposed to be on it.
    Four .witnesses were examined, by commission, for the defendant. The first testified that Gillespie represented the land as having a favorable site for a mill, which was defendant’s object in making the purchase. That one thousand dollars was a good price for the land at the time of the sale. Defendant and Gadberry told witness they had examined the mill seat. They built a mill, which was leased out; but the dam was washed away, and they never received any rent.
    The second testified that the mill seat was the main object of defendant in buying. Defendant and Gadberry were induced to make the purchase by the representations of Gillespie about the site for a mill. Gillespie gave a great account. of the mill seat.
    Thomas Hinson testified that his land lies on the creek, and begins about two hundred yards above the place represented as a mill seat. There is, in fact, no mill seat on the land. Before the sale, Gillespie spoke of building a mill himself. The witness objected, because it would overflow his lands and spring. After the sale, he asked Gillespie why he had not informed defendant and Gadberry that the water would flow back on his land ; he replied, he was not bound to tell every thing ; advised the witness to hold on upon his land, and when they got able, they would have to buy him out — to which the witness replied, he did not wish to sell. No dam could be raised, without flowing back the water upon the lands of the witness and Bird, and covering his spring with water. When the purchasers built their dam, the water did overflow his land and spring, and Bird’s land. He threatened to sue them, and they agreed to pay him $400. Gillespie had offered to sell him the tract of land for 4 or $500 — would not give a chew of tobacco for it. Defendant and Gadberry built a mill, and the dam was washed away in a week. They rebuilt it, and it broke again. They leased it for a year, and agreed to rebuild, and it was washed away again.
    William Bird testified that he owned land on the creek, above the mill seat. Never thought it a good one. Objected to the making of the dam; it overflowed his land, and if the dam had stood, he would have sued them. The defendant and Gadberry were not competent judgbs of a mill seat.
    For the plaintiff four witnesses, examined by commission, testified that they knew the land. The place was suitable for a mill site. The banks were not good, but the fall was good. That defendant and Gadberry built a mill, but it was carried off soon after, and that a good mill might have been erected, if more precaution, and sufficient work and labor, had been used in building it.
    His Honor thought, and so said to the jury, that independent of the mill seat, the land was of but little value, and the main object of the purchase was the mill seat. As it regarded the suitableness of the place for a mill, the nature of the banks, and the sufficiency of the fall of water, these were matters of skill and judgment, in which, so far as appeared, the parties were equal, and had the same means of judging correctly. The defendant had not relied on Gillespie’s representations, but had examined for himself, and could not be discharged from his contract, because he had been mistaken in these particulars.
    He also instructed the jury, that the concealment of an important fact by the seller, the existence of which went to defeat the object of the purchase, and render it of little or no value, was a fraud, which entitled the purchaser to rescission of the contract. That a mill seat, without a pond to contain water to propel the mill, was of no value, and if Gillespie knew that no mill-dam could be made without flowing back the water upon the land of others, and concealed this fact, as would appear from the evidence of Hin-son, from the defendant, it was such a fraud as discharged the purchaser from performance.
    It was objected, that the purchaser could be entitled to nothing more than an abatement in the price, and if a title had been made, or even a bond for titles had been given, and the purchaser was in possession, he should have concurred in this view, but the witness, Ruth, spoke of nothing, more than an agreement, and the evidence all led to the conclusion that, after the mill dam was washed away, the possession had been abandoned. The defendant had returned to this State. Under these circumstances he thought the jury might, if they were satisfied of the fraudulent concealment, discharge the defendant from the payment of the money, and in this view of the case, he said that he saw no difficulty in their discharging the defendant from the contract. The verdict was for the defendant.
    The plaintiff appealed, on the following grounds.
    1. Because the Court charged "the jury, that if they believed James Gillespie, the payee of the note, knew at the time of the sale that if, from erecting a dam of sufficient height to propel the mill, the water would overflow the lands of others, and did not inform the defendant of the fact, he was guilty gf such a fraud as would vitiate the contract, and the jury ought to find for the defendant, when, from the proof,^the defendant and his partner had the same means, of knowing as he did, and there was no proof that Gillespie did know, and the purchasers, with proper prudence and precaution, had the means of fully informing themselves on that point.
    2. Because the Court of Law cannot rescind the contract in this case, as the purchasers were in possession of the land.
    3. Because this is no such misrepresentation or concealment as will authorize a rescission of the contract.
    Herndon, for the motion.
    Dawkins, contra.
   Curia, per

Waejdlaw, J.

In this case the testimony is all in writing, given by witnesses residing in Mississippi, who have been examined by commission, and were unknown to the jury, as they are to this court.

Besides the facts stated in the report, it may be observed that the plaintiff has the rights of Gillespie, and no more; that the land was examined by the parties to the contract before the bargain was made; that when the notes were signed, Gillespie, who was entitl ed to a patent for the land, but had not received it, executed to Dunn and Gadberry, '.(as it would appear, according to the laws of Mississippi, in some office of record,) what is called an agreement of bargain and sale, stipulating for further assurance by him, and quiet enjoyment by them; and that Hinson’s spring is half a mile from the mill seat, and his line was within two hundred yards of the seat.

If the defence set up can prevail, no stronger authority for it can be found than the case of the State vs. Gaillard, 2 Bay, 11. But in that case the purchaser, without examination of the land, bought in entire reliance upon a plat exhibited by the seller, which contained a misrepresentation of the material object of the purchaser. Although the decision itself has often been cited and approved, the application to sales of land which, in the opinion pronounced in it, was made of the civil law rule, that a sound price raises an implied warranty, has not received sanction for many years, and was expressly overruled in the late case of Evans vs. Dendy, 2 Spears, 11. The case of Means vs. Brickell, 2 Hill, 657, relied on by the defendant, in fact only decided that a new trial should be had, because the presiding Judge had held that no misrepresentation\ however injurious and however much the defendant may have been misled by it, should avail, even to procure an abatement of price, if it was made through mistake and not with fraudulent intention. In the opinion pronounced, the distinctions» between matters of fact and matters of opinion, and that between matters peculiarly within the knowledge of the seller, and those upon which the buyer has the means of exercising his judgment, are recognized and enforced; and it is held that proof of the misrepresentation or mistake ought to be full, clear and explicit.”

It appears to this court that, in the present case, the attention of the jury has not been directed sufficiently to the distinctions above mentioned. The law abhors fraud, but it enforces contracts against those who lose by them, no less than against those who gain. It expects care and prudence from contracting parties, and has regard to the selfish nature of man, which prompts the seller to praise and the buyer to depreciate the subject of bargain. It would itself become the instrument of fraud if it • should permit a party, who has been disappointed of his anticipated profits, to evade the performance of his agreement upon trivial excuses and slight proof.

When the buyer, without adequate means for forming his own judgment,, relies upon the representations of the seller, then these representations must be fair and full. Where material facts are such as, from his situation, may well be presumed to be within the knowledge of the seller, then, misrepresentations of such facts, through fraud or mistake, by which the buyer is misled, will form just grounds of complaint by the buyer. But as to matters of opinion, upon which a prudent man does not take the opinion of the seller, even falsehood spoken by the seller will not vitiate a contract; nor will such falsehood, as to matters of fact not presumed to be peculiarly known to the seller, upon which the buyer has the means of exercising his own judgment, unless it be such as is calculated to lull the suspicions of a careful man. Suppression of truth may be often ungenerous and immoral, and yet violate no perfect obligation of which the law can take notice. Where the buyer examines for himself and has the means of forming .his own judgment, he cannot be permitted to resist the obligation of his contract, because the seller did not disclose what he himself might have discovered, and what a prudent man would have discovered. He cannot complain because in the trial of judgment and contest of puffing and cheating which has resulted in a bargain, the seller, making no misrepresentation of matters peculiarly within his knowledge, and using no unfair artifices, has taken care of one side and left the other to the buyer.

If, then, Gillespie knew that no mill dam could be made without overflowing the lands of Hinson and Bird, and made no mention of the matter, this concealment, alone, was not of itself a fraud such as discharged the purchaser from performance. Farther inquiries should have been made. Had the purchasers the opportunity of discovering this matter? Did they regard it as material? Did they rely on Gillespie for information concerning it? Did he use any artifice to prevent their discovery of the truth ? Were they deceived by his silence ? Can it be supposed that they examined the land, and did not enquire where the lines ran? that they judged of a mill seat and could not perceive whether the dam would throw the water back two hundred yards ? that they looked and talked about the site and risked so large a sum in the purchase of it, yet had no thought about the pond ? It was their duty, if they had been imposed upon, to relinquish the bargain as soon as they discovered the imposition ; but instead of that, they built the mill and dam with their own hands, in sight of the lands to be overflowed, repaired over and over again after floods, rebuilt once themselves, leased to a tenant who rebuilt again, bargained with Hinson about the damages done to him, and in all this time, so far as the testimony shows, made no complaint about the pond. These acts amount to a waiver of all right now to urge a rescission upon the ground of deception, as to a material circumstance, which seems, for a long time, to have been deemed of so small an account.

A bargain solemnly expressed in writing should not be lightly set aside for alleged misrepresentation as to a matter not contained in the writing. The whole testimony here, of concealment, is that given by Hinson, and consists of his exact remembrance of words used by Gillespie in a casual conversation. No species of testimony is so easily fabricated, none is so liable to unintentional errors, as the declarations of parties thus established. A slight misrepresentation of what was said, or minute variation of phrase in repeating it, will often seriously affect the meaning. Such evidence, when depending upon a single instance, proved by a single witness, seems not to be the “full, clear and explicit proof,” required in the case of Means and Brickell.

Upon these considerations it then seems, to a majority of this court, proper to send the case back for another trial, upon further directions.

The motion is therefore granted.

Richardson, Butler and Frost, JJ. concurred.

Evans, J.

dissenting. I dissent from the opinion of a majority of the court, and will state concisely my reasons. As no deed has been executed in this case, or any written contract proved) we are not incumbered by the difficulty which was presented in the cases heretofore decided, of looking behind the deed for the parol representations which, before the case of Gray vs. Hankinson, 1 Bay, 278, it was supposed was a defence which could avail only in Equity, and which, so far as reported cases go-, was admitted in a law court for the first time in that case. I take it to be clearly settled by that case, and the case of the State vs. Gaillard, and the other cases which have been decided since, that where there is a false representation in relation to the thing sold, whereby the great object of the purchase has been defeated, the purchaser is entitled to be relieved. So that the first question is whether there was a false representation made by Gillespie, the seller, in this case.

I admit the rule to be that, if the purchaser knew of the objection, or that his attention was called to the matter so as to set him on inquiry, or if he had equal means of information, and the representation was only matter of opinion, then the rule of caveat emptor applies.

The witnesses say that Gillespie represented that he was selling a mill seat, and that the purchaser’s object in buying was the mill seat. If a man buy land for a mill seat, and his object be the erection of a mill, does he get what he supposed he was buying, and what the seller represented he was selling, unless he gets also a mill pond, or a space to contain water, to propel his mill when erected? The idea of a pond is inseparably connected with a mill. It was an incident to, and inseparable from it; without it the purchase was valueless ; it was not what was sold by one party and purchased by the other. I think there can be no doubt that, in this particular, there was a misrepresentation, and on this ground alone the purchaser is not bound to pay the purchase money. He has not yet what, according to all the evidence, was the inducement to give $8000 for what Hin-son, who knew no mill could be erected on the place, was unwilling to give $500, and which none of the witnesses supposed was worth more than $1000. In Gray vs. Hankinson and the other cases, such a mistake was held sufficient to avoid the contract, although there was no intention to deceive on the part of the seller, and that principle is fully recognized in the case of Means vs. Brickell. Between the cases of Gray vs. Hankinson, the State vs. Gaillard, and this case, there is a remarkable resemblance in every particular. In the first case the mill seat was taken away by an older grant; in the second case,' there was a mill seat and pond, but the stream was a dry gully affording no water for a mill; and in this case, there was a place whereon to build a mill house, but not space enough for a mill pond. In all of these there was a representation of a mill seat, and the great object of the purchase was wholly defeated, because the representation about the mill seat turned out to be untrue. Unless these cases are to be overruled, I do not perceive how Dunn is to be compelled to perform his contract.

Independent of this ground, there was clear evidence of wilful concealment, by Gillespie, in relation to the mill pond; and, besides the evidence as reported, the jury have expressly found that fact. The proposition submitted to the jury was this, if Gillespie knew that no mill dam could be made without backing the water upon the land of others, and concealed this fact from the defendant, it was such a fraud as discharged the purchaser from the performance.” The jury have found both the knowledge and concealment; and if.this does not establish fraud, I am at a loss to conceive what can. This sort of concealment, in relation to personal property, is the foundation of the action of deceit. The case of Johnson vs. Wideman, and many others in our own courts, sustain the position that, if the seller knowingly conceal an important fact, against which there is no warranty express or implied, the purchaser shall, nevertheless, be discharged from the contract, or recover damages to the extent of the injury. The case of Johnson vs. Wideman turned upon whether the seller did not knowingly conceal from the purchaser that the negro was of bad character. The principle is the same, whether it relate to land or ne-groes ; common honesty requires that everything which enters into consideration in estimating the value of the thing sold, should be disclosed, and the concealment is a fraud ; and if it .affects, as in this case, the main object of the purchase, the contract should be set aside altogether. There is no difficulty here in doing it in a law court. No deed has been executed ; the defendant has nó legal title, and can only demand one when he pays the money; until that is paid the land is Gillespie’s.

Our law, it is conceded, does not go as far as the civil law in relieving against contracts. By that law the utmost degree of fairness was required. But I presume it will be difficult to find a case where mistake and concealment has not been relieved against where they related to that which was the main object of the purchaser ; unless in those cases where the purchaser knew the fact, or had such information as should have led him to enquire farther into the matter, or did not rely on what was said by the seller, but on his own presumptuous opinion, and cases of that description, all of which are well stated by Chancellor Kent in his 39th lecture, and by Story in his work on Equity Jurisdiction. That Dunn and Gadberry were ignorant of the fact that the water could not be raised without overflowing the land of others, is manifest from the price paid, and is a fair inference from the verdict. The jury have found that there was a wilful concealment, and there can be no concealment of what is already known. There is no evidence that the lines of the adjoining lands were shown so as to enable the purchaser to exercise his judgment whether the water, when raised by the dam, would flow back upon the land of others ; so far as the evidence goes, no intimation was given on this subject. Gillespie himself, when asked why he did not inform the purchasers, did not pretend he had done so, but admitted he had not, nor did he pretend that he had given such information as to enable them to judge correctly. To my mind it is so clear that Dunn has been overreached, cheated and defrauded, by the wilful and fraudulent concealment of what, in common honesty, the seller was bound to disclose, that to enforce this contract against him would be to give legal sanction to Gillespie’s notions of morality, and to enable him to enforce a contract made under the representation, on his part, and the expectation on the other, that a mill could be erected and enjoyed on the land, at a price eight times the highest value set on the land itself by any of the witnesses.

O’Neall, J. concurred with EvaNs, J.