Case ID: ky_45/html/0630-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Judge Marshall", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Latham’s Executors and Heirs vs Morrow, et al.
    
    Appeal from the Botjrbon Circuit.
    Chancery.
    
      Case 145.
    l'he employment Of, and bidding by a by-bidder, is not always a Sufficient ground to rescind^ the contract; it is entitled to but little weight where the price is not exhorbitant, and there has been, a long acquiescence by the purchaser.
    
      Vendors and purchaser. Rescission of contracts.
    
    
      May 2.
   Judge Marshall

delivered the opinion of the Court.

We do not concur in the opinion of the Circuit Court, that the contract in this case should be rescinded, on the ground of fraud in the sale, alledgedto have consisted in the secret employment by Latham, of a by-bidder, who is charged to have run up the land higher than it would otherwise have gone, and to an exhorbitant price.- The price bid, although high, was not exhorbitant, nor as we feel authorized by (lie facts to assume,, was., it above the fair value of the land, as estimated at tlie.'time, -by the purchasers themselves, as well as by others; and-if the employment of a single by-bidder, or rather the acceptance of the services of one who voluntarily and at his own instance, offered himself, for the purpose of preventing the land from selling at a lower price, should be deemed a fraud, which gave the right of rescission on that ground, we are of opinion that under the circumstances of this case, the right must b,e considered as lost or waived; and at any rate, is not so presented as to be available. It does not appear that there was any writing by which either Latham or the purchasers were bound, until the day after the auction sale,, when by the hesitation and temporary refusal of Latham to enter into a written contract, the purchasers had a fair opportunity of retracting on their part, as it may be presumed they would have done, or at least suggested, even if then ignorant of the by-bidding, if they had then considered their bid as ex-horbitant, or as being above the fair value of the land. But instead of this, they rather urged the completion of the contract, which was in fact written and executed as soon as Latham became willing. If they had not an opportunity of discovering that they had been cheated in the price of the land, before they entered into the written contract, surely they ought to have discovered the fact, and might have discovered the means by which it was accomplished, before they had been five years in possession. During all that time, w'e hear of no complaint as to the price of the land. But in an answer filed more than three years after the purchasers had possession, in which they object to the title exhibited by the complain, ants, and pray for a rescission for want of title, they avow that they had always been willing to complete the payments if a title could be made; and it is not until two years after, when the estimated value of land in the county had depreciated fifty per cent, since their first answer, ■that they file an amendment, suggesting for the first time, the alledged fraud and the exhorbitance of the price; and they do not, either by this answer or otherwise, show or even ailedge that they bad recently discovered the fact complained of, or when they had discovered it, or that they were, in fact, ignorant of it either on the day of saje or on the next day after, and before the writings were executed. They were not cheated in the price of the land. They were not cheated even out of their own judgment as to its valuó; but at most; they were cheated into giving or agreeing to give, what in their own judgment was a fair price, and were thus deprived of a profit which otherwise, they might perhaps have made at the loss of the vendor. Surely such a complaint is not entitled to any peculiar favor in a Court of Equity. Even in cases of gross fraud and palpable injury, promptness in disavowing the contract on that ground, is required from the defrauded party, as being essential to the ends of justice. The law protects even the fraudulent'party from the injury and oppression which might ensue, if the other party were allowed, with the means of avoiding the contract for fraud completely in his powe.r, to choose his own time for so doing.

The question whether it is a ground in any case, to rescind because one by-bidder was employed to prevent a sacrifice, left undecided.

The derivation of title made out by vendor not good.

In view of these principles, and of the doubtful nature of the enquiry complained of, taken in connection with the evidence of long acquiescence and satisfaction wdth the contract, and the suspicion fairly arising, that the complaint of fraud would never have been Urged but for the general depreciation in the price of land, and the fact that there is not even an allegation of recent discovery, when the complaint is at last made, we conclude, without deciding the abstract question as to the right of the vendor at auction, to employ a single by-bidder to prevent a sacrifice below a fair and fixed price, that this contract should not be rescinded on the sole ground of fraud.

There are however objections to the derivation of title as attempted to be made out by the complainants, which are sufficient until removed, to prohibit the enforcement of the conlracfagainst the will of the purchasers, and if not removed to require a rescisión on their prayer. As to 50 acres of the land conveyed to Latham by'Sodusky, and for which the purchasers agreed to take a quit claim deed, there is no difficulty. .But as to the remaining 1314 acres, the complainants have no legal title. That part of the land-is covered by a patent for 1000 acres grantde to Peter Casey in 1785. Shortly after the grant, Casey sold the whole tract to I'siah Hite, and in 1787, Hite sold it to Neale by a written executory contract, which is exhibited. In 1794, Neale gave his bond to Conway for 75 acres, and lo N. D. Amos for 125 acres, and under theselwo'bonds, possession has been held for more than fifty yéars. The complainants alledge that Conway sold 100 acres to J. J. Amos, who sold the sarao ..(together with the 50 acres «above mentioned) to Latham. .But while it is-clearly established that the .possession has been accordant «with -those alledged transfers of the equity, the-re is no written •evidence in this record, of the transfer from .Conway to .Amos, nor«is the date-of .the transfer, either of title or -possession alledged or proved. There is no doubt, .however,-from the proof, that Conway did sell to Amos.; and that the equity to this.100 acres is as against-Conway’s-heirs complete. But the bill gi-ves no account ofthe manner-in which Conway, who had a bond from Neal for 75 acres, ‘became entitled to 100 acres, and it is only from the oral testimony'that we may assume that Conway -made up the additional 25 acresout of three shares in the 125 acres, which Neal had sold to N..D. Amos. .He died in 1815, ■leaving fourteen heirs, between whom t-he tract of 125 •acres was informally devided about the year 1821 or 1822. Assuming that Conway had possession of three of these fourteen shares, as -early ¡as 1821, of which however there is no direct evidence, still we should also assume •that one -of these shares was that of his wife who was «a daughter of Arnos, and it is intimated in the evidence that one of these shares purchased by' him, was .sold by the husband of another female heir. And the question «is whether a possession of -25 years up to the date of the trial, -is sufficient to raise the presumption of ■a valid transfer of the equities of these femes cmtrl or to -extinguish them in favor of the possessor. To this question, based upon assumptions probably true, but certainly the most favorable to the complainants which the facts will authorize, we are not prepared to give an affirmative answer. All that can be said is, that considering the smallness of the share of each heir in the 125 acres, de■scendéd from N. D, Amos, the consequent probability •of a sale, the fact that thefemes through whom these 25 -acres are claimed, are no longer in the State, but theyor ■their descendants have probably long been enjoying the ¡advantage in other States, oflarger possessions purchased! ¡n part by the proceeds of these minute- parcels, it is higbly probable that the transfers of the interests of these femes ^ough made by the husbands alone, have been constantly approved and will never be questioned either by the femes of their heirs. As to eighteen acres of the twenty five, or perhaps as to the whole twenty five acres, this is the best foundation on which we can place (he claim of the-complainants. It does not. in our opinion, amount toan enforcible equity against the femes or their heirs. And the complainants having so far failed in showing themselves able to coerce a conveyance at the rendition of the decree, were so far unprepared for executing the contract on their part, or demanding its enforcement against the purchasers.

The remaining 31% acres are claimed under Nicholas D. Amos, through Daniel Thomas, who, in 1821, undertook to transfer six of the fourteen shares to John Parker, from whom, by various mesne assignments, Latham acquired an interest to the extent of 29i, or perhaps 31% acres. Thomas probably had possession of these six shares, when he sold in 1821; and as to four of them, claimed as the shares of male heirs, transferred by themselves, the equity of the complainants may be regarded as complete; though as to one of the shares, no written transfer is produced. But one of the six shares which Thomas professed to sell, was that of his wife, a daughter of N. D. Amos, and another was that of E. Parker, then deceased, whose children, nine or ten in number, were all either/emes covert or infants, at the date of their transfer to Thomas. Conceding that the lapse of time furnishes sufficient evidence of confirmation by the infants, who were not married women, still there are the shares of four married women, .who joined in this transfer, and the share of-Mrs. Thomas, which stand substantially on the same fooling as those of the femes covert, whose interest Conway probably undertook' to transfer; except that the share of E. Parker being subdivided among her heirs, gave not more than one acre each, and that the loss, if any should occur by the assertion of these claims against the transfer by Thomas, would be divided •between Latham and the other party holding under that transfer, so that not more than seven or eight acres could, , . p T I J • ’ t on this account, be lost out or Latham s interest, in ■the whole quantity of 131 £ acres, there is hazard of loss ■only to the extentof about twenty five of thirty two acres; •and this hazard is not only to be considered small in consequence of the lapse of time, during which there has been an entire acquiescence in the possession held under Thomas and Conway, but is greatly diminished by the descents which have probably occurred during the interval, whereby the several adverse interests, originally small, have become more minute and. less valuable. It is to be added too. as a circumstance tending, not only to diminish the hazard of any future disturbance from these interests', but also to show that the claim of Latham, though technically defective, is good in conscience, even ■against these adverse equities, that there is no reason to doubt that fair equivalents were given at the time of their transfer, and have been enjoyed by the femes and their children since, and that these equivalents.are probably at least, equal in value to the interests which might have been asserted in this land, and may present substantial obstacles to the assertion of claims in this land, in opposition to the sales of the male vendors in right of their wives.

If, as the complainants seem to have supposed, when their bill was filed, their ancestor had obtained the legal title by the conveyance from the executors of Abraham Hite, who was one of the executors of Isaac Hite, there could have been little doubt of their right to enforce the contract, notwithstanding the defects which have been noticed in the chain of equitable title. The most that could have been required of them, would have been sufficient security against the future assertion of these adverse equities, or a proportional suspension of the collection of so much of the purchase money, until all doubt as to disturbance of the purchasers might be removed. And although mistaken with regard to the legal title, still if they had shown, what though quite probable, is not proved, and cannot, upon the lapse of twenty five years, be presumed, that these adverse equities have, been barred by lapse of time, since they might have been asserted- by thff femes or (heir heirs, independently of the husband! we* should regard the case as sufficiently made out for e®-forcing a’specific performance. As the case'is, we are not satisfied that under a contract which, in view, proba-bly, of thewery difficulties which have occurred, contemplates delay in procuring the legal title, and provides for it by authorizing the purchasers to retain the second instalment, being one half of the purchase money, until the vendor shall" procure and convey the title, the vendeesare entitled to-a rescission because the- title is not yet procured, and the complainants- were not prepared, ora the hearing of the- cause, to coerce it.

It is true the complainants came into-equity io enforce the contract, and should have been prepared at the hearing, to-com ply on-their part. Rut except the executor, they are all infants, and as already intimated, they filed their bill under the- mistaken supposition that they had the legal'title; and a perfect equity. It is also- true, that by agreement appearing.in the record, the cause was submitted" for decree upon' the question of rescission or specific performance, the purchasers admitting that the title might be coerced from the-patentee down to Neal, upon proper preparation, which m ease a specific performance should be decreed, was to be made, but reserving other objections to the title and the sale. But as these complainants could not coerce the title from the patentee tcrNeal, unless they were prepared to coerce it from Neal to themselves,-there isa difficulty in determining the precise effect which this-partial submission should'have upon the preparation of the case a-s between the complainants-and the heirs of Neal and other intermediate parties connected with their derivation of title-. Suppose there wefe sufficient allegations in the bill, but proper parties were not made for the coercion of this part of the title, or that without sufficient allegations or parties, the proof authorized'the inference that upon proper allegations, and with the proper parties before the Court, the title might be coerced, these cases are not provided for by the agreement: and yet in either of them there could not properly be a decree independently of the agreement, either for a specific performance or for a resfcission, But time should have been allowed for. further' pieparation.

The Court below having decided, the case'expresslv on the alledgged fraud and not on the validity of the title offered ; the cause is reversed and sent back forfutrher preparation on that point, and fo* final decree.

If the effect of the agreement is that in either of these cases the contract must be rescinded, because it cannot be at once enforced, it is unequal and gives an improper advantage to the purchasers. The Chancellor, so far as the case depended upon the question of title, might well .have refused to take it on the submission, or might have disregarded the restrictions upon his equitable discretion. And as he did in fact decide the cause upon the question of fraud,and without referrence to the title or to the preparation of the suit, with regard to the numerous parties who appear tó be necessary as heirs of Neal and Conway, and N. D. Amos, and as moreover the facts already referred to create a strong probability that upon proper allegations and preparation as to parties, the title may be procured, we feel authorized to send the cause back for such additional pleadings and proof, as may enable the Court to determine satisfactorily how far the complainants have an enforcible equity to the land, and whether if there be any defect, it is sufficient to justify a rescission of the contract. There might have been good reason for hearing the cause on the question of fraud alone, leaving the question as to title, for furtberpreparation, or future adjudication. But there could not well be a partial hearing as to the title, before a full preparation on that point; and as the Court below decided merely on the fraud, we reverse the ■ decree without deciding the case, as it now stands, on the question of title. This conclusion'will of course, suspend all proceeding founded on the decree of rescission ; as well those for adjusting the equitable rights of the parties to the contract, as those which relate to the dower of Latham’s widow. And upon these proceedings' we make no other remark than to say, that we do not perceive why the lien of Joseph J. Amos, for the unpaid portion of the purchase money for the 150 acres sold by him to Latham, should be restricted to the 50 acres conveyed by Sodusky, and in which the widow’s right of dower is'superior to the lien of the purchasers from her husband, incase of a rescission. Indeed we are not sure upon the facts appearing, that Amos has any lien upon Ihe 50 acres, after he parted-with his equity and the legal title was conveyed to his vendee, and there seems to be no reason for confining his lien to the residue of the 150 acres, since the equity to that is still claimed through him. But it is unnecessary now to decide these points.

Hawes and Williams for appellants: Robinson & Johnson and Thornton ¡or appellees.

The decree rescinding the contract is reversed and the cause remanded for further proceedings consistent with this opinion.