McGhee v. Bell

In Division Two. GANTT, J. This is a snit in equity to enjoin the sale of plaintiffs’ land under a certain deed of trust alleged to have been procured by fraud, and for the cancellation of the same, and for general relief. The petition, omitting the caption, is as follows i “Plaintiffs for their cause of action against defendants, state that on the-day of March, 1896, they purchased from defendant, Samuel Bell, a certain tract of land in Benton county, Missouri, described as follows, to-wit: the south part of the northwest fractional quarter of section three in township forty of range twenty-three, lying in the following metes and bounds: commencing at the southeast corner of said 'quarter section running on the half-mile line north to a point opposite the fence between J ames Neece and Adam J. Neece, and west with said fence to the slough, and down the slough to Grand river, and up Grand river to James Foster’s land, and from thence east to place of beginning, containing eighty acres more or less; that at the time of said purchase and conveyance, defendant, Samuel Bell, represented to plaintiffs that said tract contained not less than eighty acres of land; that defendant showed and pointed out the boundary lines of said tracts of land to plaintiff and stated to plaintiff that a certain fence was on said land, and was the property of defendant; that the well on said premises afforded an abundance of water for house use; that plaintiff had no knowledge of the number of acres contained in said tract, nor — 128 — as to the area or boundaries thereof; that they were ignorant as .to the capacity of said well to afford water for family use, but wholly, and entirely relied on the statements and representations made at the time by defendant, and so relying on said representations of de„-fendant that said tract did contain eighty or more acres, and that the well was as represented by defendant, plaintiffs were induced to and did purchase said tract of land at the sum and price of six hundred dollars, three hundred and eighty-five dollars of which they paid at the time, and for the two hundred and fifteen dollars balance of the purchase price of said land plaintiffs executed and delivered, to defendant, Samuel Bell, their promissory note, and secured the same by making, executing, acknowledging and delivering to defendant a deed of trust conveying to defendant, James E. Jones, trustee, for the purpose aforesaid, which said deed of trust is dated the 16th of March, 1896, and recorded in the recorder’s office of Benton county, at deed book, 67, page 188. “The plaintiffs say that the tract of land so sold and purchased contained only fifty acres of land; that the lines of boundary as pointed out by defendant includes lands owned by others and not by defendant, and that said well has absolutely failed to furnish water as represented, and plaintiffs have been compelled to haul water for house use, and that the representations of defendant made to plaintiffs were false and fraudulent, all of which was well known to defendant at the time, and were made for the purpose of deceiving and defrauding plaintiffs; that plaintiffs discovered the fraud some time after said purchase, and after they had greatly improved and added to the value of said property. ‘ ‘ Plaintiffs say that they are uneducated and wholly incompetent to understand or comprehend a description of land by metes and bounds, and that defendant brought to them the deed, made, executed and acknowledged, and told them that said deed contained a description of eighty or more acres of land, and that they accepted said deed and paid said sum of $385, and exe — 129 — cuted; said note for $215 and-the deed of trust, on account of defendant’s representations, and relied wholly thereon, and hut for said representations by defendant, Samuel Bell, plaintiffs woul,d not have purchased said tract. “Wherefore plaintiffs say they have already paid full value for the land actually conveyed to them by defendant, and ask that defendant be required to bring said note and deed of trust into court, that the note be cancelled and held for nought; that the deed of trust be declared fully satisfied, and that defendants or either of them be forever enjoined from collecting said note by sale under said deed of trust,-or otherwise, and for such other relief as to the court may seem just and proper.” 1 The answer of defendant Bell admits the execution of the deeds as alleged in the petition 'and that the deed of trust and note were given to secure part of the purchase price of the land described in the petition, but denies all the other allegations in the petition. For further answer it alleges default in the payment of the note secured by the deed of trust, and an advertisement and sale by defendant Jones, the trustee therein, under the provisions of the deed of trust on July 3, 1897, at which defendant Bell became the'purchaser for $250 and the execution of a trustee’s deed to defendant Bell, and then concludes with a count in ejectment and prayer for possession. The reply admits the sale by the trustee and that he made defendant Bell a deed as alleged in the answer and denies all the other new matter set up in the answer. The cause was tried as a suit in equity and the court found that defendant Bell represented the tract of land as containing at least eighty acres, and nearer ninety or one hundred; that his representations were false and fraudulent and that plaintiffs were wholly ignorant of the number of acres in said tract; that plaintiffs paid $385 on the purchase price and gave a deed of trust on the same land to secure the balance of $215; that the contract price was $600, or at a rate — 130 — of $7.50 per acre; that in fact the tract only contained sixty-one acres and plaintiffs were damaged to the amount of $142.50 on the price of nineteen acres at $7.50; that pending the action the trustee sold the whole tract under the deed of trust and defendant Bell purchased the same and received a trustee’s deed therefor. By its decree the court set aside the deed of trust and trustee’s deed and upon an accounting decreed that plaintiff was indebted to defendant Bell in the sum of $72.50 asi and for the balance of the purphase money and decreed defendant a lien on said tract of land for that sum, and required plaintiff to pay the same in ninety days with eight per cent interest from March 16, 1896, and upon his failure to do so, awarded special execution against said lands to satisfy said judgment and divided the unadjudged costs between the parties. I. The decree is assailed on the ground that the bill states no equity; that on the facts stated plaintiffs’ only remedy was an action at law for damages. The petition states a clear case of actual fraud whereby plaintiffs, the purchasers, were induced to accept a deed from defendant to a tract of land, represented by defendant to contain at least eighty acres when it in fact only contained sixty-one acres, and to pay the larger part of the purchase money cash, and to execute a deed of- trust on the same land for the balance of the purchase money; that the plaintiffs were ignorant and uneducated people and wholly incompetent to understand or comprehend a description of land 'by metes and bounds and that to cover up the fraud and allay any suspicion of plaintiffs the defendant caused the deed to be prepared, executed, and acknowledged -and brought to plaintiffs and represented to them that the deed contained the description of eighty or more acres and was the same as in his deed to said land, and that being ignorant of the number of acres in said tract, they relied entirely upon defendant’s representations and paid their money and executed their note and deed of trust to secure the balance, when in — 131 — fact the tract only contained sixty-one acres -/that plaintiffs greatly improved the land and added to the value thereof, and only discovered the fraud sometime thereafter. The court found all these allegations were true, and the evidence was ample to sustain that finding.' The testimony disclosed that plaintiffs were very ignorant,-the husband being' barely able to write his name; that the defendant told them the land w#s irregular and fractional and while he would warrant them eighty acres, it contained nearer ninety or one hundred acres. It further appeared that defendant pretended to show them the lines and fences, and falsely and fraudulently showed them land and fences as a part of said tract which belonged to other adjoining owners. It was further developed by the testimony of the justice of the peace- who wrote the deed and took defendant’s •acknowledgment, and of Mrs. Foster, and not denied by defendant, that defendant took the deed by which he acquired the land from Davis, his grantor, and which described the land as “fifty acres more or less” and directed the justice to write eighty acres instead of fifty acres in the description of the tract, and when •asked by Mr. Wheeler the justice, why he wanted that ■description changed, he answered that he knew there was eighty acres in the tract. It also appeared that one of the plaintiffs, the husband, offered to go with •defendant to the justice, but defendant told him it was not necessary, that he (defendant) would go and see first if the Squire was at home. It further appears that plaintiffs went into possession after paying about two-thirds of the purchase money, and giving a deed of trust on the land to secure the balancé) and cleared up about four acres, and put out an orchard of 175 trees, and never discovered the fraud until after they had put out their crop, and the assessor came to assess the land the next year when the assessor told them the tract contained about fifty acres only. After this a survey was made by which it was shown that the tract contained sixty-one acres. It also appeared that defendant prom — 132 — ised to bring tbe plaintiffs bis old deed, but never did so; that plaintiff’s family were all sick after tbis, and be waited to see defendant, wbo bad moved into an adjoining county. Few cases bave ever been presented to tbis court in wbicb tbe fraud alleged bas been more fully sustained by tbe proofs. Tbe plaintiffs told defendant that they would not buy less than eighty acres and thereupon defendant, with bis deed in bis pocket calling for only fifty acres, deliberately concealed that fact from plaintiffs wbo were ignorant, uneducated people and prevented plaintiffs from being present when tbe deed was drawn, lest perchance they should make some embarrassing inquiries of tbe justice as to' tbe old deed and thereby discover tbe falsity of bis representations to them. Nor are plaintiffs chargeable with negligence in relying on tbe representations of defendant. Tbe land was a fractional pie.ce lying on tbe breaks of Grand river, bounded partly by tbe river and a slough, and when defendant showed tbe plaintiffs tbe land, be fraudulently represented to them tbe boundaries of tbe land and told them certain fences belonged to it, wbicb were on a neighbor’s lands. Under such circumstances it ill becomes defendant to complain that these ignorant old people confided in bis representations instead of insisting upon a new survey. Such shrewdness and precaution are not to be .expected from people in their station of life, after such positive representations. Having discovered tbe fraud they found their whole tract covered by a deed of trust, procured as part of this fraudulent scheme, on tbe lands wbicb they supposed they bad bought, but wbicb in fact fell short nearly a fourth of tbe number of acres for wbicb they bad bound themselves to pay, and liable to be foreclosed without an opportunity in a court of law to show tbe breach of tbe covenants as to tbe quantity they were to receive. Under such circumstances is an action at law for damages their only remedy? It is clear that upon equitable principles plaintiffs — 133 — were not bound to rescind the whole contract and take back their purchase money and have their note and deed of trust cancelled. In Hill v. Buckley, 17 Vesey 395, Sir William Grant, the master of rolls, stated the general rule to be: “Where a misrepresentation is made as to quantity, though innocently, the purchaser is entitled to have .what the vendor can give, with an abatement out of the purchase money for so much as the quantity fafls short of the representation.” In that case the contract of sale called for “217 acres more or less, and ten perches,” whereas in fact it lacked twenty-six acres of bqing that much. In that case it was conceded by defendants’ counsel that the words “more or less” would not cover the deficit of twenty-six acres, but they sought to defend on the ground that they were trustees of minors and that as the mistake was innocent and without fraud a court of equity would not cancel the agreement, but the master of the rolls decreed an abatement of the purchase money pro tanto. In Graham v. Oliver, 3 Beavan 124, Lord Langdale, master of the rolls, stated the general rule to be: “Where a party has entered into a contract for the sale of more than he has, the purchaser, if he sees fit to accept that which it is in the power of the vendor to give, is entitled to a performance to that extent.” And such was the unanimous opinion of the Supreme Court of New York, in Waters v. Travis, 9 Johnson’s Reports 464. [2 Minor’s Insts. 92-3; 2 Lomax Dig., 82-3; Triplett v. Allen, 26 Gratt. 722.] And so the doctrine is laid down by Adams on Equity (8 Ed.), mar. page 91, and Story’s Equity, sec. 779, and in Morss v. Elmendorf, 11 Paige, 288, Chancellor Walworth went to the extent of saying that where the vendor never had it in his power to perform at all, if the complainant had filed his bill in good faith, supposing at the time he instituted his suit in equity that a. specific performance of the contract could be obtained under a decree of court, a court of equity might retain his suit and award him compensation in damages, — 134 — but it is unnecessary for us to go tbat far in this case. The general rule above laid down is fully and ably discussed and maintained both on principle, and in the light of the authorities in England and in this country, in Erwin v. Myers, 46 Pa. St. 96. Can it be said that in a court of conscience a vendee in possession under an executory contract to convey can insist upon a part performance with an abatement of a part of the purchase money pro tanto, but that if ignorant of the deficit in the quantity of the land sold and relying upon the false representations of the vendor he takes a warranty deed, and gives a deed of trust back to secure the purchase money, and before paying discovers the deficit and the fraud he can not, in a court of equity, have the same abatement and retain that which the vendor could sell and convey to him? We hold that a court of equity, which looks at the substance rather than the semblance of things, will treat the vendee in each case on the same principles and will adjust, on equitable grounds, in a proceeding analogous to a bill for specific performance, the compensation he is to receive for the deficit in quantity and while preserving the lien of the vendor for the balance, predicated on what he actually owned and sold, will enjoin him from enforcing a mortgage lien for that which in equity he has no right or title to. We hold that the positive and actual fraud by which plaintiffs were overreached and induced to make a deed of trust on their lands, entitles them to the protection of a court of equity, and to a remedial decree which a court of law could not give them under the circumstances, to adjust the equitable compensation for defects and remove the cloud of the fraudulently acquired mortgage. We have no hesitancy in saying that the fraud of defendant and the entanglements of plaintiff resulting therefrom fully justified the circuit court in retaining the bill and adjusting the equities between the parties. The fraud of defendant is one of the recognized heads of equity jurisdiction, and the specific redress to which plaintiffs are entitled by the setting aside of the deed of trust and adjusting the balance actually due — 135 — plaintiffs, ánd removing the clóud of the fraudulent deed of trust was and is not attainable in a simple action at law for damages since in a court of law rescission pro tanto and equitable compensation are not recognized and hence there is a prerogative jurisdiction in equity to relieve them, and a court of equity having once acquired jurisdiction will retain it to do complete justice. [Holland v. Anderson, 38 Mo. 55; Real Estate Sav. Inst. v. Collonious, 63 Mo. 290, and cases cited.] As to the complaint that the court cancelled the deed of trust while conceding that a part of the purchase money was still due, it is apparent no injury resulted from this part of the decree because the court expressly decreed a vendor’s lien on all of the land for the ascertained balance of the purchase money, thus fully securing and protecting every equitable and just claim of defendant. The contention that plaintiffs can not complain of the deceit practiced upon them and the wrongs resulting' therefrom because they had the means to ascertain the true quantity of the land, will not be countenanced in a court of conscience. As was said in Starkweather v. Benjamin, 32 Mich. 305: “It can not be generally true that persons can judge of the contents of a parcel of land by the eye. When a positive assurance of the area of a parcel of land is made by the vendor to the vendee, with the design of making the vendee believe it, that assurance is very material and equivalent to an assurance of measurement.” The defense rested mainly'on the ground that the purchaser saw the land and was as able to judge of its size as Starkweather. It was held in that case that the doctrine invoked did not apply to the facts of the case. And so we say here. Having by fraud and suppression of the old deed deceived these ignorant plaintiffs and induced them to rely upon his fraudulent statements, defendant is in no position to invoke his own fraudulent conduct as a defense to the just claim of the plaintiffs resulting from that fraud. The parties did not — 136 — stand on an equal footing. [Caldwell v. Henry, 76 Mo. 260; Raley v. Williams, 73 Mo. 310.] Neither can his positive statements as to the number of acres he treated as mere opinions. They were representations of facts as of his own knowledge and were false and constituted fraud. [Coon v. Atwell, 46 N. H. 510; Langdon v.Green, 49 Mo. 363; Dunn v. White, 63 Mo. 181.] There was ample evidence of actual fraud in showing the boundaries and in suppressing the title deed and that plaintiffs relied upon the false representations of defendant. Finally, it is urged that the court adopted a wrong standard of damages; that in compensating plaintiffs for their loss of the nineteen acres of land for which they gave their notes and deed of trust and which owing to the fraudulent representations of defendant they did npt get by his deed to them, the court erroneously fixed the compensation at the amount per acre for which the whole tract sold; that he should have awarded them the difference between the value of the land as it was represented and its value as it actually was at the time of the sale. There was no evidence tending tó show that one part of the land was more valuable than another. It was represented at eighty acres, and the circuit court took the view most favorable to the defendant under these circumstances, and estimated the land as represented to be eighty acres, and the whole price at $600 and reached the conclusion that the defendanthad agreed to purchase at the price of $7.50 per acre and as the deficit was nineteen acres he allowed plaintiffs in the proportion of nineteen to eighty or $142.50. In so ruling the court was not without precedent. In Gass v. Sanger (Texas), 30 S. W. 502, it was ruled in an action to recover for land lost because of conflict of the boundaries, that in the absence of any proof to the contrary, the measure of recovery was to be such a portion of the entire price as the amount lost is to the entire tract. And to the same effect is “Skinner v. Walker, 98 Ky. 729. — 137 — In Logan’s Admr. v. Bryant, 44 S. W. 435, the vender represented the boundary as containing forty acres when in fact it only contained seventeen acres, and it was ruled by the Court of Appeals that tbe purchaser was entitled to a credit on the price for the deficiency estimated at the contract price. Now under the evidence in this case it is plain that plaintiffs stipulated for eighty acres and the defendant positively represented the quantity as eighty acres and it is clear that in the absence of any proof to the contrary it was favorable to the defendant to estimate the deficit at $7.50 an acre ,that being the value according to the contract price. Because, though the land was neither bought nor sold professedly by the acre, the presumption is that in fixing the price regard was had on both sides to the quantity which both supposed the estate consists of. [Hill v. Buckley, 17 Vesey 401.] .There is no evidence as to what the land would have been worth had it contained eighty acres as it was represented, and we see no ground for reversal because the court adopted this measure of compensation. The contention that plaintiffs were bound to rescind in foto does not apply to a case like this. When this same proposition was urged in Waters v. Travis, 9 Johns. 459, Chancellor Keítt answered: “The doctrine that a contract enforced specifically must be so in its entirety, appears to me solid; but where the right of one party is sustained, and the other can only shelter himself by the allegation that part of the property sought is not in his power, and so placed by his own act, from a complete compliance with it, the rule of equity as to the entirety must be strangely misapplied if it could possibly prevent the party injured by the alienation froin saying, ‘true it is, I am entitled to the whole, but under all the circumstances I am content to accept what is in the power of the defendant to give, and relinquish my right to the remainder.’ ” And on appeal in the same case, Judge SpeNCer said: “It is against all my notions of justice to allow the appellant to excuse himself from performing so much of the contract — 138 — as he can yet perform, because he has seen fit wrongfully to abridge himself of the power of performing the whole. And I again recur to the observation, that the converse of this proposition would not be just or true. The respondent might insist on having all the land or none, or he may elect to consider the acts of the appellant as his, and thus make valid what was wrongful. . . . Where a vendee seeks a specific execution' of an agreement, there is, says Mr. Sugden (Sugden Law on Vendors, 193), much greater reason for affording the aid of the court at the suit of the purchaser,, when he is desirous of taking the part to which a title-can be made.” [Atty.-Gen. v. Gower, 9 Mod. 224; Mortlock v. Buller, 10 Vesey Jun. 315.] In my opinion the bill stated a case for equitable-interposition, and the evidence abundantly supported it and the decree should be affirmed. Sherwood, P. J., concurs in my views; Burgess, J., dissents and expresses his views in a separate opinion. In Banc. The foregoing opinion of Gantt, J., in Division Two, after a rehearing in Banc is adopted as the opinion of the court. Sherwood, Robinson, Valliant, Marshall and Brace, JJ., concurring therein; Burgess, C. J., dissents and expresses his views in a dissenting opinion.