Concord Bank v. Gregg

Parker, C. J. The principle that contracts obtained through fraudulent representations are voidable at the election of the party thus defrauded, is well settled. 7 Johns. 325, Kettletas vs. Fleet; 19 Maine 281, Ayers vs. Hewett; 12 Pick. 307, 312, Rowley vs. Bigelow; 22 Pick. 18, Thurston vs. Blanchard; Ditto 546, Holbrook vs. Burt. And this principle is as well applicable to contracts respecting the sale and conveyance of real as of personal estate. It was applied by this court in the case of Sanborn vs. Osgood, and also in the case cited in the argument by the plaintiff’s counsel, 11 Johns. 50, Frisbee vs. Hoffnagle. The general principle relative to such cases has been said to be, that the parties must be put in the same situation in which they stood at the time the contract was entered into. See Long on Sales 139, (Rand’s Ed. 242,) and cases there cited. But this must be understood to be with reference to the subject matter. If it were true in a strict literal sense, no contract could be rescinded after there had been a change of possession, because the parties could not be put in the same situation in which they were before the contract. The vendor, by the contract, would have lost the possession of [339] the thing which formed the subject matter, and, perhaps, been thereby deprived of some use of it; and the vendee having the possession would in most cases have had some advantage from that possession, although perhaps nothing from which, upon the whole, he had derived any pecuniary profit. It is sufficient that the property is returned to the vendor in a reasonable time, and that he is placed substantially in statu quo. W e are of opinion that the defendant brings himself within this principle. He received a conveyance of land, mills, &c., February 23d, 1841. He did not file the quitclaim deed with the clerk until the first of September, 1841. But it appeared that Cochran and George (tenants under the lease to Austin,) were in possession, and did not agree to surrender it. A road, too, was to be opened, which was not done. It was also agreed that no interest should be charged until the defendant had the possession. Actual possession he does not appear ever to have had. The mills were burned within a few days after the conveyance, without any agency or fault of the defendant. There is nothing tending to show that they would not have been burned in the same manner, if the conveyance had never been made. The notice that -he could have possession was not received until after the mills were burned ; whether it was actually made as -of the day on which it is dated, is therefore immaterial. We cannot say that there was any unreasonable delay in making the reconveyance. For aught that appears, it was done as soon as the fraud was discovered. We are of opinion, also, that as a suit had been commenced upon the note, it was sufficient to lodge the quitclaim deed with the clerk, and to have notice given to the plaintiff’s agent. If no suit had been commenced, it might have been necessary to tender the deed to some agent of the plaintiff. But in Thurston vs. Blanchard, 22 Pick. 18, it was held sufficient that the vendor had the note of the fraudulent [340] vendee in court, ready to be surrendered, at the time of the trial of the action to recover the value of the goods. We have no doubt that there was fraud enough in the representations made by Head, to avoid the sale, had he been himself the vendor instead of the agent. But it is contended that Head was a special agent, and that in making these representations he exceeded his authority, and that the plaintiff is not therefore responsible. It is not quite clear that there is not evidence in the case from which a jury might find that Head had authority to make such representations. One of the directors made declarations to the same effect respecting Cochran’s possession, &c., though there is not the same evidence that he had knowledge of their falsity. We place no great reliance upon this, however, because we are of opinion that, notwithstanding Head was a special agent for the sale, the plaintiff is chargeable with his fraudulent acts and declarations, done and made for the purpose of effecting the sale. Were it otherwise, the principal would never be liable for the frauds of a special agent, unless he commissioned him to commit a fraud. And so with corporations, who must always act by agents. See 10 N. H. Rep. 538, Hatch vs. Taylor. If, however, it were settled that the principal was not answerable in damages for the fraudulent representations of his special agent, made while conducting the business committed to his agency, that would not relieve the plaintiff from this defence. Even if that were so, the principal could not avail himself of the fraud of the agent, and hold the other party to the contract thus fraudulently procured; and all the defendant asks here is, that he should be discharged from the contract. Judgment for the defendant.