Court Opinion

ID: 3882005
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:13:11.814114+00
Date Added: 2024-06-11T13:51:49.761252
License: Public Domain

This action is for the rescission of a contract for the sale by the defendant to the plaintiffs of a body of timbered land in Colleton county. The purchase price was fifty-six thousand dollars and the defendant on June 13th, 1907, conveyed to plaintiffs the lands described in the deed as several different tracts aggregating *Page 151 
in area eight thousand and seven acres, more or less. The deed contained the clause, "The acreage of the above tracts of land is estimated and is not warranted by the grantor herein." The ground stated in the complaint upon which the plaintiff demanded rescission was that the defendant represented that seven hundred and fifty acres of heavily timbered land of great value, and constituting the chief inducement to the purchase, was included in the land to be conveyed, whereas upon a survey afterwards made it turned out that this land was not owned by the defendant and was not embraced in the deed of conveyance. The further allegation was made that the plaintiffs were strangers in the county where the land was situated and that they relied on the representations of the defendant in making the purchase. The basis of the action is mistake, the complaint containing no allegations that the untrue representations were intentionally made. The answer put in issue the allegations of untrue representations with respect to the land, alleging that the defendant made no representations that the seven hundred and fifty acres was included in its boundaries, but on the contrary expressly put the plaintiffs on notice that the defendant did not know the boundaries, and that they did not believe that the land referred to was owned by it. The further defenses are set up that the plaintiffs seek to throw the depreciation in value of the land due to market conditions on the defendant, that the plaintiffs exercised acts of ownership by efforts to sell and by other acts after the discovery of the alleged mistake; that there is an outstanding mortgage on the land for $40,000, executed by the plaintiffs.
The issues were referred to the master, who reported that the plaintiffs had not made out a case for rescission, but should be allowed abatement from the price to the amount of $16,305.30, with interest from date of the purchase, June 15, 1907. The Circuit Court held that the plaintiffs did not purchase in reliance on the statements of the defendant, *Page 152 
but exercised their own judgment as to the boundaries; and adjudged that the complaint be dismissed.
We consider first the rule which the Circuit Court seems to lay down that in an action for rescission the plaintiff can have no relief except rescission. This is not the correct rule. The purchaser is entitled to rescission only when the evidence shows that the thing purchased is so different from that which the seller, with better means of information, had induced the purchaser to believe it to be that the main object of the purchase would be defeated. But when the deficiency does not go to that extent, and yet materially affects the value of the property sold, the purchaser will be entitled to an abatement of the price. Gray v. Handkinson, 1 Bay 47; Adams v. Kibler, 7 S.C. 47; Martin v. S.A.L.Ry., 70 S.C. 8, 48 S.E. 616.
Even if the action be for rescission and the proof does not warrant that relief, the plaintiff may have the lesser relief of abatement of the price if the evidence is sufficient to show that relief to be equitable. The relief to be granted not being controlled by the prayer of the complaint, the Court may grant any relief less than that demanded in the complaint within the scope of the pleadings and warranted by the evidence. Miller v. Hughes, 33 S.C. 530,12 S.E. 419; Guerard v. Jenkins, 80 S.C. 223, 61 S.E. 258.
The principle that in an action for rescission, the plaintiff supposing himself to be entitled to that form of relief, the Court of Equity has jurisdiction to grant the lesser relief of abatement in price when the evidence does not warrant rescission but does require the relief of abatement seems to me to be essential to the complete administration of justice and to be established in this State by at least three cases the authority of which has never been questioned. Referring to the subject the Court says in Means v. Brickell, 2 Hill Co., 313: "Thus the law very clearly is, and it would seem unnecessary to multiply authorities on the point; but there are two cases which occurred in the Court of Chancery *Page 153 
in 1817 so directly analogous to this in point of principle, that I cannot forbear to mention them; and although they are not reported they were decided on full hearing in the Court of Appeals in Equity. One of these was the case ofCaldwell v. Briggs, where on a bill for the specific performance of an agreement for the sale of a tract of land, the defendant, the purchaser, was allowed an abatement in the price, because the complainant, the seller, had in the negotiation for the sale, misrepresented the quantity of timbered land contained in a certain section, although it was admitted that the misrepresentation was not wilful. The other case alluded to is the case of Macon v. Waites. That was a bill to foreclose a mortgage given as the price of a tract of land, and the defense set up was, that while examining the land with a view to the sale the defendant inquired of the seller what number of acres were contained in a certain body of woodland, which was a leading object in the purchase, who, after making some calculations, answered that he supposed that there were two hundred acres, but that he had made no survey of it; and that the whole quantity of high land amounted to 600 acres. There turned out to be a considerable deficiency in the quantity of woodland, and although the defendant distinctly admitted in his answer that there was no intention on the part of the seller to deceive, and that he really believed there were two hundred acres of the woodland, yet it was held that the defendant was entitled to an abatement in the price, on account of the deficiency." See also Hamilton v. McAlister, 49 S.C. 231.
I do not think the evidence sustains the conclusion laid down by Mr. Justice Gary that the plaintiffs have entered upon the seven hundred and fifty acres of land which they allege they erroneously supposed to be a part of the property to be acquired by their purchase from the defendant. On the contrary, this land was excluded in the survey made by the plaintiffs after their purchase, and the defendant admits that it had no title to 587 7-10 acres of it and could not *Page 154 
convey that part of it by its deed. Further, the action is not founded on any claim that the defendant's deed covered the seven hundred and fifty acres of land; on the contrary the allegation is that the defendant represented to the plaintiffs that this tract would be embraced in its deed, and that it was not in fact a part of any of the tracts conveyed. The question therefore is not one of deficiency of quantity, or of defect of title under a warranty in a deed embracing the land, but of an entire failure to convey the land which it is alleged the defendant by verbal representations led the plaintiffs to believe it could and would convey, and thus induced them to purchase at the price paid. The law as to breach of warranty is applicable only to a deficiency in area or defect of title of land which the deed purports to convey. It follows that as to the land which the deed here does not purport to convey, the law of warranty has no application. There is therefore no force in the objection that the plaintiffs can have no relief in this action without proof of entry and eviction. Certainly where the grantor has failed to convey land which it was agreed he could and would convey, it is not necessary to the grantee's right of relief that he should actually commit a trespass on the lands of another by entering upon them and suffering eviction.
There is no reason to doubt either on reason or authority that if a purchaser is induced by the representations of the seller, having better means of information, to buy one thing, when he supposes he is buying a different thing, he will be entitled to rescission or abatement, according to the circumstances, although the representations may have been due not to fraud but to hones mistake. Means v. Brickell, 2 Hill 657; Ruberg v. Brown, 50 S.C. 397.
The case then turns upon the issue of fact whether in the negotiations for the sale of the large body of land, containing in all more than eight thousand acres, the defendant with superior means of information induced the plaintiffs *Page 155 
to purchase by the misrepresentation that seven hundred and fifty acres of very valuable timbered land which it did not own would be conveyed by the deed. The rule is thus tersely stated by Judge Evans in Evans v. Dendy, 2 Speer 9: "Where the purchaser of land has been deceived by misrepresentation, whether intentional or not, that fact may be set up by way of defense to an action for the purchase money. If the object of his purchase has been defeated by reason of the misrepresentation, he may, according to the decided cases, be wholly discharged from the debt. If only partially defeated, he may be allowed an abatement in the price." The rule was stated again and applied inMeans v. Brickell, supra, which was also a suit at law to recover a debt, where the facts were very similar to those disclosed by the evidence in this case. In that case the caution to be observed in considering such applications for relief from contracts on the grounds of mistake or fraud is thus expressed by Judge Johnson: "I am aware that the principle is liable to abuse in its application, but that is not a sufficient reason for discarding altogether a principle which appears to me so necessary to the administration of justice. Great care should be taken that in its application it should be confined to its legitimate objects, and that trivial circumstances should not be allowed to set aside or derange written contracts which have been solemnly entered into between the parties; and some useful hints have been thrown out in Frazier v. Harvey, 2 Bailey 270. For example, where the misrepresentation complained of, is as to the quality of land sold, or the quantity when it has not been ascertained by admeasurement or some other certain rule, or the relative quantities of the different description of highland and swamp, and other matters founded merely on opinion; for a purchaser is not liable to be imposed on by the mere opinions of the seller, and if he is, when he has the same means of forming an opinion for himself, it is his own folly, from which he cannot and ought not to be relieved. *Page 156 
It ought to appear, also, that the manner of the misrepresentations was calculated to influence the party in concluding the contract, and that he acted upon them without examining for himself and exercising his own judgment. Proof of the misrepresentation or mistake ought to be full, clear and explicit. The indiscriminate application of the principle, without the most satisfactory evidence, would have a tendency to set afloat and derange all contracts."
The law with respect to misrepresentations is again thus set out in Ruberg v. Brown, supra: "Hence, to entitle one to relief for false representation, the misrepresentation must relate to some material fact, past or existing, concerning the subject of the contract, within the range of knowledge, as distinguished from matters of mere belief or opinion, uncertain and conjectural, upon which reliance has been placed with resulting damage, when the complaining party did not deal upon equal terms and with equal means of information. False expressions of opinion by one possessing special knowledge concerning the subject of the contract, which the other party, ignorant on the subject and with unequal means of information, relies on to his injury, may be actionable for fraud. If a party's situation with reference to property contracted for, is such that he cannot fairly and reasonably exercise his own judgment in reference thereto, he is not a dealer on equal terms, and he has a right to rely on the representations of value by the seller made to induce the purchase."
The questions of fact are to be considered in the light of these well established rules. An extended analysis of the irreconcilable and perplexing testimony on the subject would not be of value. Some inferences, however, may be stated with confidence. The defendant had purchased several parcels of timbered land and held them in one large body of more than eight thousand acres. "Social Hall Plantation" was a tract adjacent to defendant's land owned by Gonzales. The defendant had not had a survey made of *Page 157 
its land, but Morehead, a surveyor in the employment of the defendant, had borrowed a plat from J.I. Garvin which would have enabled him to discover the lines, and the defendant was in possession of another plat obtained from J.D. Warren, from which it could have ascertained the lines. The officers of the defendant company did not know the limits of their land on the side next to "Social Hall Plantation." Nevertheless, before the plaintiffs began to negotiate, the Burton Lumber Company had employed H. M. Tuten, as the person whom it supposed to be best informed, to show the property to those who wished to inspect it with a view of purchasing. Accordingly, when the plaintiffs opened negotiations, they were sent to Tuten as the person who would show the property for the defendant. This Tuten undertook to do, pointing out to Maynard, one of the plaintiffs, the general location and direction of the lines, as he supposed them to run. In doing so he represented to Maynard that a certain portion of very heavily timbered land was within the defendant's lines, when in fact it was a part of "Social Hall Plantation" belonging to Gonzales. It was not proved that Morehead himself joined in these representations, but he was present and it was obvious to him that Maynard was considering the purchase of the property as shown to him by Tuten, the agent of the defendant company. This piece of land afterwards turned out by survey to contain 587 7-10 acres; there is on it about five thousand feet of standing timber per acre, worth about $2.50 per thousand, and the land after the timber is cut will be worth about $4.50 per acre. The effort was made without success to find a marked line at the place pointed out by Tuten as the boundary; but I do not think that the circumstance that no marked line could be found should be held to protect the defendant when its agent was representing the land as part of its holdings offered by it for sale. The evidence is clear beyond controversy that the plaintiffs would have been foolish to pay $56,000.00 for *Page 158 
the land exclusive of the tract of 587 7-10 acres, and that they would not have done so. The defendant had been for some time owner of the land, and undertook to have its agent show it to the plaintiffs; and it had in its possession plats from which it could have ascertained that it had no title to the 587 7-10 acres. True, its officers testify that they did not know the boundaries and that the plaintiffs were put on notice both by their verbal statements before the sale, and by the expression in the deed, "The acreage of the above tracts of land is estimated and is not warranted by the grantor herein," that they would buy at their own risk in this respect; and the evidence does lead to the inference that both parties knew of a degree of uncertainty in the boundaries; but the facts are none the less significant that the plaintiffs paid and the defendant received the purchase money on the distinct representation and understanding that, notwithstanding such uncertainty about the exact boundaries, this very valuable timbered land would be embraced in the purchase, and that otherwise the plaintiffs would not have bought at the price paid. The evidence on this point is clear and convincing. Indeed, M.C. Burton, the secretary and treasurer of the defendant corporation, says in his testimony that but for the pressure of the panic of 1907, which followed the sale, he might as a matter of business have considered an abatement in the price.
It may be true that the plaintiffs should have exercised greater care in ascertaining the boundaries of the land; but relief against the defendant should not be refused for that reason, when the defendant, with plats in its hands which would have shown the true boundaries, showed this land as part of its holdings, well knowing that the plaintiffs were making an inspection to determine the value and decide whether they would make the purchase. Here, then, is an untrue statement as to a substantial fact falling clearly within the rule above quoted from Ruberg v. Brown. In that case and in State v. Gaillard, 2 Bay 11, relief was *Page 159 
granted where mistake was due to entire dependence on the representations of the seller, when the purchaser could easily have ascertained the facts by inspection.
The conclusion seems inevitable that unless some relief is granted, the plaintiffs will suffer grave injustice, and the defendant have an unconscionable advantage because of the serious and clearly proved mistake of supposing that the defendant owned and the plaintiffs would acquire by the purchase 587 7-10 acres of very valuable land which the defendant now admits that it did not own and did not embrace in its deed.
For the sake of clearness we have thus far considered the case as if only the tract of 587 7-10 acres was involved. The plaintiffs allege that the same mistake was made with respect to another portion of very heavily timbered land of 167 7-10 acres. The evidence, however, is very far from being clear and convincing that there was any mistake in supposing that this portion of the land fell within the boundaries of the land conveyed. The survey of Wilson, plaintiffs' surveyor, made after the purchase, excludes it from the land conveyed by defendant, but the testimony of this surveyor indicates that in excluding it he depended largely on verbal statements as to the lines, and that he would not have been able to survey it as land separate from the defendant's holdings but for reliance on statements of Maynard, one of the plaintiffs. What is still more important, if the surveyor had followed the older plat instead of a later one, this 167 7-10 acres would not have been embraced in the Gonzales land. No deeds were introduced showing that the land had been conveyed away from the tract owned by the defendant of which it was at one time a part, and a transfer cannot be presumed from the mere representations on a junior plat. Hence we think the plaintiffs have failed to show by the clear preponderance of the evidence, as they were bound to do, that there was a mistake *Page 160 
in supposing this land to belong to the defendant and to be conveyed by its deed.
The relief, therefore, which the Court can grant must be limited to that which flows from the mistake about the 587 7-10 acres of land. The next inquiry is, what should be the subject of the relief? Clearly, the case is not one for rescission. The plaintiffs treated the land as their own and attempted to sell it even at a profit, after the discovery of the mistake. The principle is well settled that a party to a contract cannot, after the discovery of mistake or fraud, act under the contract and then repudiate it. Rupart
v. Dunn, 1 Rich. 101; Shappirio v. Goldberg, 192 U.S. 232,48 L.Ed. 419. The relief then must be limited to abatement of the price. While absolute accuracy is not possible in fixing the amount to be allowed to the plaintiff, a computation substantially just in result may be made from undisputed estimates of the value of the timber and the land.
The proportion of the purchase money, $56,000, which the plaintiff should recover is represented by the proportion which the estimated value of the 587 7-10 acre tract bears to the estimated value of the whole tract which the plaintiff supposed they were buying. The evidence was full as to the amount of timber which could be cut per acre and its value per thousand feet on each of the three tracts, and also as to the value of the land after the timber should be cut off. Using these figures the value of the several tracts can be easily determined in the following way:

                        8007 Acre Tract.

Timber, per acre, 1,500 feet at $2.50
  per M. .................................... $ 3.75
Land, per acre ..............................   2.25
                                              ______
   8,007 acres at ........................... $ 6.00    $48,042.00
 *Page 161 
                      161 7-10 Acre Tract.

Timber, per acre, 6,500 feet at $2.50
  per M. .................................... $16.25
Land, per acre ..............................   4.50
                                              ------
    161 7-10 acres at ....................... $20.75    $ 3,355.27
                      587 7-10 Acre Tract.

Timber, per acre, 5,000 feet at $2.50
  per M. .................................... $12.50
Land, per acre ..............................   4.50
                                              ------
    587 7-10 acres at ....................... $17.00    $ 9,990.90
                                                        ----------
    Total estimated valuation of three tracts ......... $61,388.17

The value of the 587 7-10 acre tract was thus 16.27 + per cent. of the total valuation. In the same proportion finding 16.27+ per cent. of the purchase price, i. e., $56,000, we have $9,113.88, as the sum which should be recovered. The plaintiffs should therefore be entitled to recover of the defendant the sum of $9,113.88 with interest from the date of the conveyance to the defendant. The defendant, however, should be allowed to elect whether it will pay this sum or take a reconveyance, paying back the entire purchase money with interest less the profits from the land received by the plaintiffs and any damage done to the land by the plaintiffs.
The judgment of this Court should be that the judgment of the Circuit Court be modified, and that the cause be remanded to that Court for such further proceedings as may be necessary to enforce the rights of the parties as adjudged by the Court.
MR. CHIEF JUSTICE JONES concurs in this opinion.