Court Opinion

ID: 6807889
Source: CourtListenerOpinion
Date Created: 2022-07-23 18:49:40.083541+00
Date Added: 2024-06-11T16:03:17.106250
License: Public Domain

Lewis, P.,
(after stating the case) delivered the opinion of the court. -
1. Upon the theory that the appellants acted merely as agents in the transactions mentioned in the bill, it is very clear that the suit cannot be maintained. For if this theory be founded upon fact (and the bill alleges that it is), and if it also be true, as alleged, that at the time the writing upon which the judgment is founded was executed, the understanding between the parties was that it *508was to liave no validity as an obligation, but was to be used merely as a blind, or, in the language of one of the appellants in his deposition, as “a sham,” by which to induce others to buy patent-rights, then a palpable fraud was attempted to be perpetrated upon innocent strangers to the transaction, which cannot be countenanced or upheld in a court of equity. In such a case, the parties being in pari delicto, the complainants are not entitled to relief; for potior est condMio defendentis.
Moreover, since the appellants cannot be heard to allege their own wrong, the case falls within the ancient and well settled rule of evidence, which declares that a written contract cannot be contradicted or varied by parol evidence of what occurred between the parties previously thereto or contemporaneously therewith. And the rule is the same in equity as at common law. 1 Greenl. Ev., sec. 275; Watson v. Hurt, 6 Gratt. 633; Towner v. Lucas’ Ex’or, 13 Id. 705. In the last mentioned case, the rule and its exceptions were very clearly stated in the opinion of the court, and the question decided was, that, in the absence of fraud, parol eyidence was not admissible to show that the obligee contemporaneously with the execution of a bond promised not to enforce it as against one of the parties who executed it.
2. These principles, however, are not controverted by the appellants in this court. In their petition for appeal they chiefly rely on the ground that they were purchasers, and that the bond upon which the judgment is based, was procured by the fraudulent misrepresentations of the obligee, John W. Barnett. And if this allegation be true, then undoubtedly the case is within the jurisdiction of a court of equity, there having been no defense in the action at law. For the statute, which gives to a defendant, in an action on contract, the right to file a plea, alleging fraud in the procurement of the contract, or any other matter *509which would entitle him to relief in equity, further provides that if a defendant entitled to such plea shall not tender it, or though he tender it, if it be rejected for not being offered in due time, he shall not be precluded from such relief in equity as he would have been entitled to if the statute had not been enacted. Code 1873, ch. 168, §§ 5 and 6; 1 Bart. Ch. Pr., p. 40.
But is the allegation that the bond was procured by fraud sustained by the proofs? We are of opinion that it is not. The rule is that a misrepresentation which will entitle the party misled to a rescission of a contract must have been made as part of the same transaction. And the effect of the rule, says a learned author, is that the untruth of a representation made to the party on some former occasion, and for a different purpose, cannot be relied on as a ground either for rescinding a contract or for maintaining an action of deceit. Poll. Cont. 504.
In the present case, it appears from the record that when the appellee employed the appellants as his agents, in the early part of the year 1879, he furnished them with a number of certificates in writing signed by various persons who had used his patented process for curing tobacco, in which the supposed merits of that process were set forth in strong terms of commendation. And he himself represented to them at the same time that the process was far superior to the ordinary process theretofore used in curing tobacco. But there is no evidence whatever that these representations were afterwards repeated on the third of June, 1879, when the sale to the appellants was made and the bond was executed. On the contrary, the appellants themselves—both of whom were examined as witnesses in the case—testify that they were not, and that the trade-was made and the bond was executed on the faith of representations made previous to its date—that is, while they were acting as agents, and before a sale was contemplated».
*510It is unnecessary, therefore, to decide whether the allegations of the bill, which are denied in the answer, that the representations made by the appellee were untrue, and that the appellants were misled thereby, are or are not sustained by the evidence. It is sufficient to say that the contract in question was not procured by those representations, or, at all events, that they were made in a different transaction and for a different purpose.
Besides, even if the charge of fraud were established, it is by no means clear that the appellants would not be precluded from relief because of their delay. The rule is that where a party has the right to rescind a contract on the ground of fraud, he must rescind at once on discovering the fraud, or as soon thereafter as circumstances will permit; for he is not bound to rescind, and any unreasonable delay, especially if it be inj urious to the other party, will be regarded as a waiver of his right. This is well settled. Grymes v. Sanders, 93 U. S. 55, and cases cited. Yet in the present case the bill was not filed until April, 1885, though the contract was made in June, 1879, and no -explanation is given in the bill for the complainants’ delay in applying for a rescission of the contract. Terry v. Fontiane, ante, p. 451.
3. It is also contended by the appellants that the circuit court erred in not directing an issue to try whether or not the bond had been discharged according to its tenor and effect. But this contention is not supported by anything in the record. The bill alleges that all the bonds taken by the appellants for the sales of patent-rights made by them, with certain named exceptions, were turned over to The appellee; but it is not alleged that the bonds so turned over were intended or accepted as a satisfaction of the bond, and the answer distinctly denies that they were. Besides, if the bond has been discharged, as now contended, that was a legal defense, which could have been *511made in the action at law, and cannot now be set np in a court of equity. Marine Ins. Co. v. Hodgson, 7 Cranch, 336; Hudson v. Kline, 9 Gratt. 379; Goolsby v. St. John, 25 Id. 146; Dey v. Martin, 78 Va. 1.
4. The only remaining assignment of error is, that a settlement of the partnership accounts between the parties ■ought to have been directed. A conclusive answer, how•ever, to this position is that there were no partnership accounts to settle. It is nowhere alleged in the bill that a partnership at any time existed between the parties, and nothing of the kind is established by the evidence. The :bill, on the contrary, repeatedly alleges that the appellants in all the transactions therein mentioned “ were acting as agents ” for the appellee, and the allegation of a ■partnership is for the first time distinctly made in the petition for appeal. No accounts of any sort are asked for in the bill, and to have ordered an account would have been inconsistent with the case made by the bill. The sole object of the suit was to vacate and annul the judgment, and, as we have already seen, the consideration for the bond, upon which the judgment is founded, was wholly independent of and unconnected with the transactions of •the appellants as agents. It is very clear, therefore, that the circuit court did not err in not directing an account to •be taken, and that the decree must be affirmed.
Decree affirmed.