Fardy v. Buckley

Pierce, J. This is an appeal from a final decree dismissing the plaintiff’s bill in equity seeking the cancellation of a promissory note given by the plaintiff to the defendants for $950 and of a mortgage to secure the payment thereof given on certain real estate. The bill also contained a prayer for general relief. The cause was referred to a master; his report was confirmed and no exceptions thereto are filed. He has found that at the time of the transaction in question, the plaintiff and the defendant Catherine were sisters; that Catherine was the wife of the defendant H. Augustine Buckley; that the husband, the wife assisting him, was and had been for years engaged in the real estate business; that the husband and wife by deed dated June 23, 1914, became the owners of the equity in the premises which they conveyed to the plaintiff on October 31, 1914; that at the time of their purchase and between that date and their sale of the property to the plaintiff the defendants paid for it $5,491.42; that the defendant Catherine, at the end of the summer of 1914, had an interview with the plaintiff at the plaintiff’s house while on a social visit; that at this interview Catherine told the plaintiff that if she had money to invest they had a new house which could be bought at a sacrifice; that if the plaintiff put her money in she would double it in three years provided “she left it in;” that a second interview took place at the house of the defendants and both defendants were present; that Catherine told the plaintiff that other parties were after the house, that it paid $64 or $65 per month, that it was a good investment; that she advised the plaintiff to take it; that the defendant husband told the plaintiff the price of the house was $6,500, that there were two mortgages then on the house — a first mortgage of $3,000, and a second mortgage of $1,550; that there was a talk that the plaintiff should invest $2,000 in cash; that the plaintiff finally said she would only put in $1,000; that Mrs. Buckley then told the plaintiff that there would have to be a third mortgage of $950; that it was understood nothing was to be done with the third mortgage until such time as the plaintiff was able to make payments on it; that it was to be laid one side; that she was not to be troubled about any payments on principal or interest until she was able to make them; that the parties came to an agreement on the above terms; that on October [380] 31, 1914, at the request of Mr. Buckley, the plaintiff met him at the registry of deeds and was there delivered a deed of the premises signed by the defendants, which was “Subject to a mortgage of $3,000 . . . [and] also one of fifteen hundred and fifty ($1,550) dollars;” that Mr. Buckley produced at the registry the mortgage note of $950, and the mortgage to the defendants; that the plaintiff read them in a hasty and perfunctory manner and signed them; that the transaction made little impression on the mind of the plaintiff; that Buckley took the plaintiff into the record hall, showed her some of the record books, then took her to his house to dinner, and then drove her to a bank where she drew $1,000, which she immediately paid over to him. The master further found that the plaintiff was then employed as a “forelady” in a laundry; that she had never bought any real estate before and had had no business experience outside of her position in the laundry; that she had not seen the interior of the house before she purchased it, nor did she see the interior until some months later; that Mr. Buckley told her that it might make some difference with the tenants if she went inside the house; that she placed entire confidence in her sister and brother-in-law, relied upon their judgment, and believed that they were looking out for her interest and would continue to do so; that the plaintiff did not know what the purchase price of the property was; that Mr. Buckley concealed, and Mrs. Buckley did not conceal, the amount of the purchase price; that neither defendant disclosed to the plaintiff the purchase price paid by them; that they did not fraudulently conceal any material fact from the plaintiff, and did not make any false or fraudulent statements to her. The master found as a fact, the bill charged and the answer admitted, that “the defendant H. Augustine Buckley, who was the brother-in-law of the plaintiff, with the knowledge of the defendant Catherine B. Buckley, who is his wife and the plaintiff’s sister, acted as the- plaintiff’s confidential adviser in the sale and management of said property and undertook and did collect the rents thereof for the plaintiff and take charge of and manage said property for her.” The sole question presented by the appeal is whether the nondisclosure by the defendants of the purchase price entitles the [381] plaintiff to relief in this bill. The relation of trust and confidence being established by the finding of the master and by the express admission of the defendants, the duty was upon the defendants to disclose every material fact which affected the value of the property which they sought to sell to the plaintiff, or which might to any substantial degree induce or determine her action. Fox v. Mackreth, 1 White & Tudor’s Lead. Cas. in Eq. (4th Eng. ed.) 115,171, note. Tate v. Williamson, L. R. 2 Ch. 55. Emma Silver Mining Co. v. Grant, 11 Ch. D. 918, 937. It is plain in such a suit as this the price which has been recently paid for property, especially that which has been paid for property which is offered for sale “ at a sacrifice,” is or may be a most cogent and persuasive material fact in the determination of the mind of the offeree to a course of action. Old Dominion Copper Mining & Smelting Co. v. Bigelow, 188 Mass. 315, 327. The finding of the master “that the defendants did not fraudulently conceal any material fact from the plaintiff and did not make any false or fraudulent statements to her,” in view of the other facts found, is an-immaterial and irrelevant finding, as the duty to disclose, where fiduciary relations exist, rests upon reasons which are not concerned with motives and intentions or with the personal dishonesty or other moral obliquity of the person who comes within the equitable rules. Bower on Actionable Non-Disclosure, § 461, and cases cited. It is equally irrelevant that the property for which the plaintiff paid $6,500 may have been worth at the date of sale $7,000, or any other sum which will show a gain to the plaintiff. Hamilton v. Wright, 9 Cl. & Fin. 111, 123. Parker v. McKenna, L. R. 10 Ch. 96, 118. Undoubtedly it was the right of the plaintiff at law to rescind the transaction or, retaining the property, seek damages for any fraudulent misrepresentation of fact. In the choice of remedies she also has the right to resort to equity for a rescission, or, if she shall elect to keep the property, to have the defendants account to her for their secret profit. In a word, the plaintiff is entitled to keep the property at the price which it had cost the defendants when it was conveyed to the plaintiff. Tyrrell v. Bank of London, 10 H. L. Cas. 26. Hichens v. Congreve, 4 Sim. 420, 428. Gluckstein v. Barnes, [1900] A. C. 240, 251. Old Dominion Copper Mining & Smelting Co. v. Bigelow, 188 Mass. 315, 320. Hawkes v. Lackey, 207 Mass. 424, 432, 433. [382] It follows that the decree of the Superior Court must be reversed, with costs, and a decree conformable to this opinion entered for the plaintiff; and it is So ordered.