Appeal of Lynch

Mr. Justice Gordon delivered the opinion of the court, March 21st 1881. This is a case where the court below, in the exercise of its equity powers, has undertaken to rescind a contract under seal between the defendants, Lynch, Miles and Miller, of the one part, and the plaintiff, Victor Koch, of the other part, for the sale of all the coal lying under one hundred acres of land therein described. This could be done only on the ground of mutual mistake, or misrepresentation and fraud, and of these the evidence should be so clear as to leave no room for hesitation or doubt in the mind of the court. If there be any such hesitation or doubt the bill ought to be dismissed, and the parties turned over to their legal remedies. Herein it is, that we think both the master and the court below fell into a mistake. The decree was based on certain representations, alleged to have been made by W. H. Stanton, who, as the master found, was acting as the agent of the defendants in the sale to Koch, but he has not found that these representations were, at that time, known by either Stanton or his principals to be misrepresentation. The master says: “ Arrived upon the ground, Stanton, claiming to be familiar with coal lands, asserted that there were three underlying veins of coal, though it was apparent there was no development of the land, or evidence of its having been subjected to any test to determine the existence or non-existence of coal. Koch, however, was evidently impressed with Stanton’s sagacity, and put entire faith in the latter’s opinion.” It'is thus quite obvious that Stanton’s representations were not and did not profess to be of known facts, but were expressions of opinion only. It is true he may have impressed Koch with the idea that he was an expert, and thus may have given to his opinions a weight which they otherwise would not have had, nevertheless they were but opinions, and were not represented as facts. Indeed such could not well be, for Koch was upon the land, and could, and did see for himself, that the land was not developed. He, therefore, knew certainly that Stanton’s representations were merely the expressions of his opinions. Then, when he met with the defendants in person, they dealt with him at arms’ length; they made no representations whatever; they had what they believed to be a coal reservation to sell; to them Koch professed to be utterly indifferent whether it contained coal or not, representing that his object was to acquire their right for the purpose of reliev [353] ing the surface, which be alleged he was about to buy, from intrusion by those who otherwise might enter to prospect a mine. Under such circumstances as these a chancellor might well hesitate about the rescission of a solemn contract of the parties. It may he admitted that the agent of the defendants did attempt to impose on the plaintiff by representations which he ought to have known to be false, and which he certainly did not know to be true; on the other hand it is an uncontroverted fact, that,the plaintiff'approached the defendants with a falsehood in his mouth in order to conceal his true purpose, and get their claim for as low a price as possible. Here then is more than doubt; neither of the parties is acting fairly with the other, hence a chancellor will interfere for neither. Under such conditions he wdll interpose neither to execute nor rescind their contract, but will leave them to their legal remedies, if any such they have. But there is another principle involved in this case which seems to have been overlooked by both master and court, and that is the wide difference between the facts and circumstances necessary to move a chancellor to refuse the execution of a contract, and those necessary to induce him to rescind it. In the one case interposition will be refused on the ground of improvidence, surprise or even mere hardship; in the other a court will act only on the ground of fraud, illegality or mistake; Graham v. Pancoast, 6 Casey 89; Edmonds’s Appeal, 9 P. F. Smith 220; Yard v. Patton, 1 Harris 278; Stewart’s Appeal, 28 P. F. Smith 88; Rockafellow v. Baker, 5 Wright 319. The master confesses “ that during the whole progress of the case, his impressions on this point were all against the plaintiff, and with the defendants, and that the rule of caveat emptor applied.” He, furthermore says, that he reached the conclusion that the plaintiff had a right to rely on the statements made by Stanton, as to the existence of coal, with much hesitation. This hesitation was overcome by what he supposed the binding authority of Fisher v. Worrall, 5 W. & S. 478, and Smith v. Richards, 13 Pet. 26. But the former was a case of specific execution, and the latter one of plain misrepresentation and fraud, so that neither was in point. On all authority then this very hesitation should have led him to a different result. It might well be, especially if the testimony of Vanhooser is to be believed, that neither a chancellor nor a court and jury would enforce this contract against Koch, but under all the circumstances, especially in view of the fact that Koch himself approached the defendants with falsehood and misrepresentation, though perhaps they were not deceived thereby, yet as it may have induced them to deal with him differently from what they would otherwise have done, a chancellor will refuse his interposition to relieve him by the rescission of his contract. The decree is reversed, and the bill dismissed at the costs of the appellee.