Middleton v. Hoge

JUDGE ROBERTSON delivered the opinion of the court, Oiiief Justice WILLIAMS and Judge HARDIN concurring, Judge PETERS dissenting: W. McKay Hoge, born November 14, 1844, in Wheeling, Virginia, without patrimonial estate or expectancy, was engaged as a clerk in the Quarter-Master’s Department at Nashville, in the spring and early summer of the year 1864, and threatening to expose extensive swindling against the Federal Government, received for “ hush money” as much probably as twenty thousand dollars in United States Treasury notes. — 483 — About that time Henry Cl Middleton, then owning and residing on a rich farm of about six hundred acres, expensively and tastefully improved, on the road from Pleasureville to Newcastle, in Henry county, Kentucky, visited Nashville and became acquainted with Hoge, who told him that he desired to invest his “greenbacks” in a mercantile firm in Louisville, and was advised by him to do so. Early in August, 1864, Hoge, having come to Louisville for that ostensible purpose, was invited to Middleton’s about the 13th of that month, and while there as his guest bought one hundred acres of his farm, including the improvements, all near the center of the tract, for twenty-two thousand dollars, advancing fifteen thousand dollars in the paper currency, and giving his note for seven thousand dollai’s, payable in six years, with interest; and also bought, for two thousand dollars, advanced in the like currency, about forty-two and a half acres of growing corn. The bargain, was concluded, the seventeen thousand dollars paid, and Middleton’s bond for a title to the land executed on the 20th of August, 1864; but Hoge then being a minor, Middleton seems to have considered the .sale incomplete and precarious unless Hoge’s mother, then a widow, should approve the arrangement and become a substituted party, and whom they visited ip September, 1864, and then consulted. Middleton told her that he had sold the land to her son for thirteen thousand dollars, of which six thousand dollars were paid in cash, and seven thousand dollars secured by note, on six years’ credit. On her expression of surprise that her son could pay so much, Middleton told her how, as before suggested, he had gotten the money, and Hoge tacitly concurred, and thus confirmed that statement; whereupon, his mother seemed to approve the contract, — 484 — and agreed to be substituted as the ostensible purchaser, and to give her note for the unpaid consideration; but whether any written memorial of that agreement was then made, does not appear. At that time, fifteen thousand dollars in the paper currency, as advanced, were worth only six thousand dollars in money; and, therefore, in the essential sense, Middleton had received only six thousand dollars on account of the land; and, as proved by her deposition, Mrs. Hoge was acquainted with the literal fact that the actual advance was nominally fifteen thousand dollars in paper; so that she was not deceived by the statement that six thousand dollars “in cash” had been paid. Middleton gathered and cribbed the corn for Hoge, and saved and shocked the fodder on the ground; and about the 1st of January, 1865, he delivered possession of all the property sold to Hoge, whose mother came and occupied the premises with him April the 1st, 186j>, when Middleton delivered a conveyance of the legal title to her, and which, either then or afterwards, was ante-dated, so as to synchronize with the date of the initial agreement between him and her son; but an obvious erasure rather indicates that the substituted date was inserted after the delivery; and if so, the presumption would be that the alteration was made by her son as an expedient for protecting the property in her name as original and sole purchaser, so as to secure to himself the beneficial use against his creditors, and against the government if it should seek reclamation. He was then still a minor; but on the 8th day of January, 1866, after he had attained majority, :he executed and had recorded a deed recognizing his mother’s title, and declaring himself her agent, manager, and co-occupant only. — 485 — Not long before he became twenty-one years old, he rejected an offer by Middleton to rescind the contract for the land. And although, after he was sui juris, he made repeated efforts to sell it, yet he often declared that Middleton should not have it back for less ' than thirty-five thousand dollars. He and his mother, after cultivating two crops on it, sold and she conveyed it to John Middleton, a son of H. C. Middleton, for thirteen thousand dollars, paid in money, and her note to his father, which he bought from him. And John Middleton took possession of the farm, and has ever since lived on it, and cultivated it as his own. On the 4th of March, 1867, W. McKay Hoge filed a petition ordinary against H. C. Middleton, alleging that when he bought the land it was not worth more than about half of the price extorted for it — charging that Middleton knew that fact, and fraudulently affirmed that it. was worth twenty-two thousand dollars, and seeking judgment jor damages for the imputed fraud. That petition virtually waived an avoidance of sale on the ground of infancy. An amended petition, more minute in the detail of facts, alleged the infancy, not for avoidance, but only as an evidence of imposition and fraud. And Middleton’s answer controverted all the material allegations conducing to show undue advantage or fraudulent misrepresentation. A second amended petition, substantially like the first in its charges, sought a rescission on the ground of infancy ; and the case being transferred to equity, was heard Without any other reply to that amendment than what was contained in the answer to the same allegations, in effect, in the first amendment, including the — 486 — charge that the land was bought for the appellant by his son John. John Middleton was finally made a party, and charged with buying the land with his father’s means, and as his agent; all of which he traversed by his answer. And the facts in relation to that matter conduce to show that John Middleton, against his father’s will, bought the land for his own use and with his own funds, which were, and had long been, on deposit in his own name, and were ample for that end; and every semblance to the contrary is sufficiently denied and explained. A careful analysis of the multifarious pleadings, voluminous depositions, and all the exhibits, judicially establishes the foregoing as the essential facts of the case. The chancellor, assuming that the conveyance to John Middleton operated as a rescission of the sale by H. C. Middleton, adjudged against said H. C. Middleton, in favor of W. McKay Hoge, eleven thousand six hundred and seven dollar’s, the balance of the seventeen thousand dollars advanced for the land and corn, after deducting rents and the five thousand dollars paid by John Middleton, and two hundred and eighty dollars, at which he estimated the corn, delivered. As John Middleton’s title is unaffected by the decree, and he may, therefore, and propably will, hold the land, his father, by this decree, gets only five thousand dollars, instead of twenty-two thousand dollars, for it; and,if — as he might and probably would — Hoge should enforce his judgment by the exaction of its amount in money, H. C. Middleton might lose his land, and get nothing for it. This seems to be improvident and inequitable. On the face of the record, W. McKay Hoge, invoicing the aid of a court of equity", certainly stands, with such a decree in his hands, in an unbecoming and graceless — 487 — attitude, exposed to a retorted charge of fraud on hia creditor, whose judgment General Whitaker, as counsel, was trying to enforce; and of meditated fraud on the Government, and also on the vendor he charged with a fraud, which may seem to recoil, on himself. Why else was the title made to his mother? and why else, after rejecting an overture for rescission, and after becoming twenty-one years old, did he write and record a false documents intended to show that he had no beneficial interest in the land? And why else, after publishing that he would not resell to his vendor for less than thirty-five thousand dollars, did he sell to his son for only thirteen thousand dollars ? Such is, but too often, the result of an adventurous and perverted spirit of litigation; and a thorough analysis of the facts exhibited in this large record strongly inclines to the conclusion, that whatever semblance of cause there may be for the outcry of fraud raised against the appellant, the appellee himself is apparently more obnoxious to the same imputation, and ought not to have gone into equity for an investigation of the conduct of the parties, or for unconscientious relief. Waiving several preliminary objections to the decree sought to be reversed by this appeal, we shall consider, in reference to the land, only the questions of fraud, of infancy, and of confirmation. 1. Fraud, as charged, has not been established as between competent parties to a contract. A mere misrepresentation of value is not, under ordinary circumsta.nces, a vitiating fraud in the judgment of remedial law. But to protect inexperienced and confiding infancy against unjust advantage, often taken of such immaturity, the law not only allows infants to avoid most of their contracts, but assumes that contracts, not equal — 488 — and beneficial to them, were procured by the fraud of the adult parties; and this is constructive fraud, whether there was a fraudulent intent or not. But this prima ;facie imputation of fraud may in this, as in other classes of cases of constructive fraud, be repelled by proof of reciprocity and commensurable consideration, and by the absence of any false suggestion or delusive suppression. In this case, according to the legal test, actual fraud is not established, and constructive fraud is disproved, so far as the land is concerned. It is evident that the parties intended that the note for seven thousand dollars should be payable in paper currency, like that with which the fifteen thousand dollars were paid; and, in that character, it was transferred by the appellant to his son John, and by him canceled by its exchange with the appellee and his mother for the land they sold to him. We shall, therefore, consider the whole consideration of twenty-two thousand dollars as depreciated paper currency, which, on the 20th of August, 1864, was as low as two hundred and fifty dollars in Treasury notes for one hundred dollars in coin. The fifteen thousand dollars advanced on that day were then worth only six thousand dollars in gold. At the date of the sale to John Middleton, that currency had risen to one hundred and forty dollars for one hundred dollars in gold. So that, if the note be considered, the appellee got more of gold value for the land, by about twenty-five hundred dollars, than he gave. Before he bought he seemed apprehensive of continuing depreciation indefinitely; and was, therefore, anxious to convert what he had into something safer and less liable to fluctuation; and, had he not invested it in land, he would probably have exchanged it for gold. Had he made that exchange, he would have gotten no more for his fifteen — 489 — thousand dollars than six thousand dollars in money, and that fund yielded him more than six thousand dollars of money value in the sale to John Middleton. He therefore lost nothing by the acts of„the appellant, and if he did, it was his own fault,- and not appellant’s. Fourteen witnesses testified as to the vendible value of the land in August, 1864; and nine of them, who were respectable and intelligent neighbors, concurred in the opinion that it was worth, at least, twenty-two thousand dollars; and the other five, apparently not duly appreciating the accessory value of such improvements, estimated the value of the land, as sold, at from eight thousand dollars to fifteen thousand dollars. A proper analysis of the facts and reasons disclosed by all the fourteen witnesses, shows a decided preponderance, intrinsic as well as numerical, in favor of twenty-two thousand dollars as the value, and especially to the appellant, who, by such a sale, dislocated his entire tract, and divided the unsold portion into two unimproved fragments. It thus sufficiently appears, that, in representing the land as worth twenty-two thousand dollars, the appellant had good reason to believe, and should be presumed to have believed, that the representation was true; and, consequently, that statement cannot be deemed a fraud on infancy; and that being the only imputed fraud, the charge of fraud is not sustained. 2. Infancy cannot entitle the appellee to an avoidance of the contract with the appellant for the land — 1st. Because, long after his majority, he put it out of his power to restore the title; and 2d. Because he confirmed the purchase from the appellant — 1st. By his recorded deed, proclaiming his mother as the true and only owner of the land; 2d. By his continued use of it as her prop — 490 — erty, held for his benefit; 3d. By never offering an avoidance or rescission, and instead of ever intimating to the appellant any such purpose or wish, striving repeatedly to sell to some other person; 4th. By his sale to John Middleton for thirteen thousand dollars, after declaring that his father should not have it for less than thirty-five thousand dollars; and 5th. By suing for damages for an alleged fraud, and therefore waiving an avoidance on the plea of infancy. All these cumulative evidences of confirmation cannot be eluded by the pretense that the appellee was ignorant of his right to avoid. He certainly knew all the facts, and must be presumed to have known that his purchase was, by law, voidable; and, instead of implying his ignorance of his rights, his suggestion to Gen. Whitaker that the appellant had been advised by counsel that'the contract could not then be avoided, imports that he also had considered that question and consulted about it; and it is quite manifest, that as Whitaker’s object was to find an interest which he might subject to his client’s execution against the appellee, the object of the latter was to convince him that he had no available interest in the land, and that the whole interest, legal and beneficial, in the land, was, in good faith, irrevocably in his mother; and this shows how ingenuously he had managed the whole affair, and how wmll he understood the entire subject, and all his rights. A voidable purchase of property by an infant may be confirmed by acts which might not confirm a sale by him; and a sale might be confirmed by acts which wmuld not confirm a promise; and, for obvious reasons, less will be required for the confirmation of executed than executoi’y contracts by infants. All this is established by abundant authority and palpable reason, as — 491 — a careful collation and analysis of the following authorities will show: 1 Story’s Equity Jar., secs. 195, 196, 200; 2 Kent’s Com., pp. 645, 273; Reeve’s Dom. Rel., 240; Comstock’s Digest, title “Infancy”; Parsons on Con., 322-25; Breckinridge vs. Ormsby, 1 J. J. Mar., 255; Delano vs. Blake, 11 Wendell, 85; Henry vs. Roat, 33 N. Y. R., 526; Hally vs. Wharton, 11 Adal. & Ellis, 934; Philips vs. Green, 5 Mon., 353 ; Deacon vs. Boyd, &c., 1 Dana, 45; Sanford vs. Farmers’ Bank, 1 Bush, 336; Pepper 41 Watson vs. Aiken, 2 Bush, 252; Wharton, vs. East, 5 Yager’s Tennessee Reports. And if, according to these texts, the sale of the land to the appellee was not understaixlingly and conclusively confirmed by his conduct after he was twenty-one years old, we could scarcely imagine -what, other facts would presumptively amount to such confirmation of such a purchase. We therefore adjudge that the locus poenitentia} has been supplanted by confirmation, and that, as to the land, the chancellor’s decree is erroneous, and must be reversed. But as to the corn, which was probably consumed during infancy, and respecting which there may not have been any binding confirmation, the judgment of this court is essentially different. The corn, when sold, was not worth two thousand dollars, according to the testimony, carefully analysed and weighed. It was worth to the appellee only about one thousand two hundred dollars; and if infancy and exorbitance of price should avoid the sale as constructively fraudulent, the appellee should be charged with the value of the corn which he consumed; and, therefore, he is not entitled to restitution of more than eight hundred dollars in the currency in which he paid the two thousand dollars for the corn. And to that extent he is apparently entitled to equitable relief. — 492 — We therefore adjudge that the appellant make restitution to the appellee of eight hundred dollars in treasury notes of the United States, as paid for the corn, and legal interest thereon from the 20th of August,. 1864, when the corn was paid for. Wherefore, Judge Peters dissenting, the chancellor’s decree is reversed, and the case remanded, with instructions to decree the restitution of the eight hundred dollars, and interest in kind, as just indicated, and then to dismiss the appellees’ petition.