Court Opinion

ID: 6415928
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:56:10.256302+00
Date Added: 2024-06-11T15:51:33.209982
License: Public Domain

Colt, J.
The defence relied on in this case is fraud, and the conversation had at the time the lease was executed- was admissible upon the issue raised.
The jury have found that the defendants were induced to sign the lease by a false representation, made by the plaintiff, of a material fact, which he either knew was false when he made it, or positively affirmed as of his own knowledge. It is objected that the evidence did not justify this finding, because it is apparent, from the subject matter, that the representation made was intended, and should have been understood by the defendants, as only an expression of strong belief. If a statement is honestly made as a matter of opinion, judgment or estimate, it is not in law a false representation, although the matter thus stated should turn out to be untrue. But if a fact which is susceptible of knowledge is stated by a party as of his own knowledge, and such representation is relied upon as the basis of a contract, and damage results to the party deceived, it is a legal fraud, the consequences of which must be borne by him who makes the statement. The representation in this case was of the latter description. It was of a fact, the existence of which was not open and visible, of which the plaintiff had superior means of knowledge, and the language in which it was made contained no words of qualification or doubt. The evidence fully warranted the verdict of the jury. Page v. Bent, 2 Met. 371, 374.
The plaintiff further claims, in his argument, that the defendants cannot set up this defence in an action for rent due by the covenants in the lease; that the remedy is by action of deceit, to recover damages for the one month’s time during which they were prevented from occupying the warehouse; that the lease was a good lease until avoided by the lessees, and the contract was an executed one.
The defence goes to the original execution and validity of the lease containing the covenants to pay rent. If consent to it was obtained from the defendants by fraud, then it was not such real and free consent as gives it validity. The false state» *386ment by which it was procured must, indeed, be of some matter which is an essential element in the agreement, which goes to the substance of it, and upon which the consent was based. If it be of this material character, then there is no mutual assent to the contract, and the party deceived may rescind, provided he does it on discovery of the fraud, and returns to the other party everything of value which he has received under it. If the contract has been wholly executed on both sides, and the party injured cannot restore the other to his previous condition, the only remedy at law is by action for the deceit, or by recoupment of damages. But the mere possession of property which was the subject matter of the contract will not take away the right of rescission, if possession is surrendered as soon as the fraud is discovered. These familiar rules are equally applicable, whether the contract relates to real or personal property. Whitney v. Allaire, 4 Denio, 554.
It was held by this court, where a sale of certain lands in Maine was effected by false representations, and a deed taken, under which the vendees took possession, that they might rescind the sale, within a reasonable time, by an offer to release to the grantors; and that an offer to release, made after the occupation of the land nearly four years, and the enjoyment of certain benefits therefrom, and after a suit for the purchase money had been commenced, was made in time, and would vest in the plaintiffs their original title substantially as it was before. Holbrook v. Burt, 22 Pick. 546.
In an action to recover rent upon a written lease for three years, when the defendant had occupied the premises for'about a year, paying something towards the rent, and then removed, and in which the defence was that the lease was obtained by false representations, it was held in Maine that, although a party may not be able to rescind a contract partly executed, and recover back what he has paid under it, yet the defence was good to an action to compel the further execution of such contract. Irving v. Thomas, 18 Maine, 418.
The case of Feret v. Hill, 15 C. B. 207, cited by the plaintiff, contains nothing at variance with these decisions. That was *387an action of ejectment, to obtain possession of rooms which had been leased by Hill to Feret, and of which, as lessee, he had been dispossessed by Hill; and the defence was that Feret had obtained the lease by a false representation that he intended to carry on a lawful trade therein, but had converted the premises into a brothel. It is carefully distinguished, in the decision, from a case where the plaintiff is seeking to enforce the stipulations of a contract; and at most it only decided that no intention, existing in the mind of the plaintiff, which could have been repented of in time, and which therefore did not affect the original validity of the instrument, would prevent the demise from taking effect, or give the defendant Hill a right forcibly to expel the lessee for using the premises for an unlawful purpose. The alleged fraud, if any, is admitted to have been collateral, and not of such a character as to defeat the title under the lease.

Exceptions overruled.