Harris v. Carter's Administrators , 3 Stew. 233 ( 1830 )

By JUDGE COLLIER.

The questions offered for our examination are these:

1st. Are the Harris’ entitled,to a recision of their contract with Newman?

2nd. If they are compellable to perform their contract, is the decree rendered below erroneous?

1st. It is the acknowledged province of equity to rescind contracts, on the application of either the seller or purchaser, when a proper case is offered for its interference. It would be unprofitable here to consider the various causes for which contracts may be rescinded; as the only one which it is pretended exists, is fraud on the part of Newman, in misrepresenting his title to the Harris’.

It is certainly a correct rule, that one who has purchased an estate under the influence of the fraudulent representations of the seller, may rescind the contract, and recover back the purchase money if paid, or avoid its payment if unpaid. But a purchaser, with a knowledge of his vendoi’’s title, cannot object that he had no title at the time of the sale, if he afterwards consummate his title before the vendee has performed the conditions on which he is authorized to demand it. Let us inquire whether the facts presented by the record may not be brought within the operation of the rule as thus qualified.

It may be remarked, that no testimony was offered by the appellants, Harris and Austin, to sustain the allegations of their bill. The agreement of sale recites that Hubbard and wife have “duly conveyed” their portion of the land to Newman. And did it appear that Newman had neither an equitable nor legal title from Hubbard and wife, the misrecital might well be considered such a suggestio falsi, as to have authorised a recision of the contract on a timely application. But it has nót been made to appear that Newman had not an equitable title, he admits that he has not a legal one, and states that he had a bond for a conveyance of title from Hubbard and wife, at the time the agreement was entered into. Taking the answer of Newman, so far as it is responsive to the bill as true, the inference is fair, that by the words “duly conveyed,” was meant the bond of Hubbard and wife for title.

The alleged misrepresentations as to Newman’s title, are positively denied in his answer, which in the absence of proof, must be taken as conclusive upon that point. The two specific grounds relied on why the contract should be rescinded, (1st.) the misrecital in the agreement of Newman’s title; and (2nd.) the fraudulent misrepresentations .in regard thereto, being negatived, as it is conceived, sufficiently bjr his answer, the appellants, Harris and Austin, cannot claim a recision for any matter existing anterior to, or arising out of the agreement. Nor is it believed that they are entitled to relief for any cause accruing subsequently. A title was acquired by Newman of Hubbard and wife, before they had demanded, or by the terms of the agreement, were authorised to claim it. And there being an entire failure to establish the fraud complained of, no cause is made out for the interference of this Court.

We have not considered whether the purchasers are placed in a situation move unpropitious to relief, from the circumstance of their notes to Newman, being transferred bona fide, and without notice of any objection to their consideration. That question opens an extensive field for inquiry in this country, upon which, as it is unimportant to a decision of the case, we decline entering.

2nd. The decree is proper in directing the injunction against Elliott’s intestate to be dissolved, and execution to issue against Austin, de bonis intestatis; but in awarding execution against George W. Harris, for the purpose of satisfying this judgment, the decree is certainly erroneous. The judgment is rendered against William W. Harris, and the execution must pursue it. It therefore follows, that a decree which directs execution to issue against other persons, than the administrator of the defendant in the judgment, and the securities in the injunction bond, cannot be sustained. And it is only by force of the statute of 1825, that these latter are made liable to execution.

Nor was it competent for the Court below, to have rendered a decree in favor of Beirne and Patton, for the amount of the note and interest, which they held by assignment from Newman. They had exhibited no bill asking the coercion of its payment; and upon their answer;. they are only entitled to a.decree for costs. If one who-is made a defendant in Chancery would obtain relief against the complainant, his remedy is by cross bill; when the answer has responded to the bill, it prays that the defen-may be dismissed with his costs; and this is the only prayer which it is competent to embrace in the answer.

With regard to the propriety of making Tale a party, it may be remarked that all parties interested should ba. brought before the Court, that all interests involved may be adjudicated, and litigation cease. Tate was a party in interest remotely, if not immediately, and was properly before the Court. Yet the amended bill of the appellants, Harris and Austin, making him a party, and his answers are so succinctly and loosely drawn, as not to enable the-Court, in the absence of proof, to render a definitive.decree thereupon. The proper disposition of the bill, .making Tate a party, is to dissmiss it without prejudice. It is not however proper that the appellees should be delayed-in a decision of their respective interests, and especially as the record discovers enough to shew that the equity of the appellants, .if preserved, is paramount to that of Tate. They however may have done or omitted to do some act, by which Tate has gained a legal advantage; if they have, their supineness or overweening solicitude to be relieved from a contract, which the depreciation in the value of property has rendered disadvantageous, cannot prejudice the bona fide assignees of their vendor.

When one purchases real estate under circumstances which should put him upon inquiry as to the title of him whose interest he purchases, he stands in the same situation, as if he had actual notice of any incumbrance upon it, or of any transfer of right. The possession of the Harris’ was a circumstance which should have put Tate upon inquiry, and if he purchased while they or any one under them was in possession, their equity must prevail against him.^a

Again, the purchase of the estate by Tate, pending this suit, in which the title was litigated, is presumptive notice that Newman had previously parted with bis interest in it.

“For if a person purqhases an estate pending a suit, involving the question of title to it, he will be considered to be a purchaser with notice; although he were no party to the suit. This rule is founded upon the idea, that as the pendency of a suit is a transaction in a sovereign Court 'of justice, all people are supposed to be attentive to what passes there.”^a

As the view we have taken disposes of the case upon its merits, we decline an examination of the remaining points discussed, and direct the following decree to be entered: “This cause being argued by counsel, and due tion being thereupon had, it is ordered and decreed that the decree of the Circuit Court be reversed, and the original, supplemental and amended bills of the appellants, Harris and Austin, be dismissed without prejudice as to the respective rights of said appellants and the said Waddy Tate, and that the appellees, Beirne and Patton, have leave to proceed on the note of which they are holders.

It is further ordered and decreed, that the appellee, John, R. Elliott, administrator of Thomas J. Carter, 'have execution of the judgment at law, recovered by the said Carter in his lifetime, against Patrick Austin, intestate, to be levied de bonis intestatis, and that he also have execution, pursuant to law, against the securities in the injunction bond. It is further ordered, that the appellants, Harris and Austin, pay the costs incurred in this Court and the Court below, to be levied of Harris, de bonis propriis, and of Austin, de bonis intestatis.”

Reversed and rendered.

a 1 Atk. 490.

a Newland on Con. 506.