Marbury v. Stonestreet , 1 Md. 147 ( 1851 )

Tuck J.,

delivered the opinion of the court.

It appears by the opinion filed in this cause, that the proceedings in the case, for the sale of James B. Pye’s estate, were before the court below when this decree was pronounced. They however form no part of the record, and cannot be treated by us as in the case, except so far as they are admitted by the pleadings. The record being defective in this and other respects, the case will be remanded for further proceedings, according to the views of this court. 11 Gill and John., 342.

We agree with the court below, as to the character of the representation contained in the notice of sale. Where land is sold in gross, for a sum certain, upon a statement of the number of acres, quantity must be regarded as a material consideration with the vendee. If there be other inducements to the purchase, they should be shewn. We are not to suppose that a person will give as much for 530 acres of land, as he would pay for 669, of the same quality. This property was advertised as c‘containing, by survey, 669 acres,” There was no qualifying expression, such as more or less, by estimation, &c., to intimate to the public that a positive declaration as to quantity was not intended. On the contrary, the particularity of the number, and the words, by survey, indicated that the contents had been ascertained by the most accurate method. The authorities shew, that the exhibition of a plat is equivalent to an averment of the quantity of land. And. we find that relief has been granted, where the deficiency was much less than in the present instance. It is difficult to understand wdiy this statement was made at all, except that the trustee, believing that the land comprised that number of acres, designed to offer the quantity as an inducement to purchasers. It was more than a mere description of the property. If this sale had been made by the appellee, in his own right, relief could not be refused. In the case of Hill vs. Burkley, 17 Ves., 401, it is said, “when a misrepresentation is made as to the quantity, though innocently, the right of the purchaser is to have what the vendor can give, with an abatement out of the purchase money, for so much as the quantity falls short of the representation. That is the rule generally, for although the land is not bought or sold professedly by the acre, the presumption is, that in fixing the price regaid was had by both parties, to the quantity which both supposed the estate to consist of. The demand of the vendor and the offer of the purchaser, are supposed to be influenced in an equal degree, by the quantify which both believe to be the subject of their bargain. Therefore a ratable abatement of price, will probably leave both parties in nearly the same relative situation, in which they would have stood, if the true quantity had been originally known.” This doctrine is recognized, and approved by Judge Story, in 4 Mason, 417. We are aware of no reason why the same principle should not be applied to sales made by a court, whose duty it is to protect those who deal with it in good faith. In such cases, equity is done by making compensation out of the unpaid purchase money. 2 Har. and Gill, 350, 358. It makes no difference whether the party making the statement, knew it to he false or not, provided it be of something forming a material inducement to the purchase, and by which the other party was misled to his injury. “The gist of the enquiry is, not whether the party making the statement knew it to be false, hut whether the statement, made as true, was believed to be true, and therefore, if fake, deceived the party to whom it was made.” 6 Gill and John., 58. 1 Md. Chan. Dec., 498. 1 Story, 195.

The counsel for the appellee contend, that there is no rule by which this equity can be adjusted in the present case, because there were marl, timber, and fisheries, with a view to which the purchase may have been made. There is no proof of their value, nor that they formed any inducement with the appellant in making the purchase. That is part of the appellee’s case, and should be made out by him. Such qualities of an estate, may be important in ascertaining the deficiency to be allowed. The purchaser is not always entitled to a ratable deduction per acre. Other considerations besides the mere value of the soil, are often highly estimated in purchases of land, and are proper to be regarded in making compensation, in cases of this kind. This right is not without an equivalent to the vendor, for if the vendee gets substantially that for which he bargains, equity will compel him to take an allowance for deficiency. Consequently all circumstances that give value to the property, must be taken into the account. Battee on Contracts, 67 L. L., 85. 10 Ves., 506. 17 Ves., 402.

Various objections have been urged, with much force, on the part of the appellee, to the form of the proceedings, want of parties and of proofs, which it is necessary to consider. It is said that the appellant should have sought his relief by a different form of proceeding, and that an original bill will not lie in a case like the present, unless the sale be impeached for fraud. We have not been referred to any case in which it is said that a purchaser cannot, after ratification and enrolment of the order, claim a deduction for so much as the land falls short in quantity, by original bill or petition. If the deficiency be known before the ratification, the party should proceed by petition, and there are circumstances under which a bill of review would be necessary. The practice, however, has not been uniform, as a notice of the cases will shew.

In Weems vs. Brewer, 2 H. & G., 390, a purchaser filed his petition, more than two years after the final confirmation, and after he had passed his bonds to the trustee, in compliance with the terms of sale, asking to be discharged from his contract, on the ground of recently discovered equities, affecting the title. It was objected that he should have proceeded by original bill; but the late chancellor said that “there were many precedents, and that it had long been the practice to proceed by petition.” In Brown vs. Wallace, 4 Gill and John., 483, it appears, from the chancellor’s statement of the case, that William Cole, one of the purchasers, sometime after the confirmation of the sale, was allowed, on petition, a deduction for deficiency in the lot purchased by him. The Court of Appeals did not revise the chancellor’s opinion in Weems vs. Brewer, on this point of practice, but affirmed his decree on the merits. And the sale to Cole was not before that court, on the appeal in Brown and Wallace. They are entitled to respect, however, as precedents in chancery, because of the learning that distinguished the late chancellor in all matters affecting the history and practice of his court. In Ridgley vs. McLaughlin, 3 Har. and McH., 230, a bill was filed by a purchaser in chancery, to vacate the sale, on the ground that the defendants, the alleged owners of the land, had no title thereto ; and relief was granted, although the sale had been ratified, and there was no allegation of fraud. But in Hollingsworth vs. McDonald, 2 H. & J., 230, a bill of review was held to be necessary. Certain property said to belong to Thomas Parkin, had been sold to pay his debts, under a decree in a cause in which Hollingsworth and wife were defendants. After the ratification it was discovered, as was alleged, that the estate was not the property of Parkin, but belonged to Mrs. Hollingsworth, (one of the defendants in the original suit, and a complainant in the case now referred to,) and they sought to vacate the sale. The court said that they should have proceeded by bill of review, or original bill, charging fraud, to set aside the original decree. The validity of the sale depending on the correctness of the decree, it was necessary to examine into its merits, and in that way get rid of the sale. We have also been referred to the case of Jay and Mason vs. Pinkney, 12 Gill and John., 69. There one of the defendants — not a purchaser — sought to set aside the decree, and the court held, that for that purpose, an original bill was never appropriate, except when the decree is impeached for fraud. It is to be observed, that in these cases the purchaser was not asking to be relieved against his contract, but the party defendant to the original cause was seeking relief against the decree; not because of any infirmity in the sale, but on account of error in the decree itself. The case of Prize vs. Glenn and Stewart, is not in point. The complainant filed an original bill against trustees in chancery, to recover a distributive share of the proceeds of sale in another cause. The chancellor intimated that the regular course to enforce the order ratifying the distribution, was by petition in the case in which the audit was made, in which we fully concur.

There is also a class of cases somewhat analagous to the present enquiry, in which the same want of uniformity is observable, viz: applications to vacate the enrollment of decrees, which is to set aside the decree. In Burch vs. Scott, 1 Gill and John., 393, a bill was filed for this purpose, but in Oliver vs. Palmer and Hamilton, 11 Gill and John., 143, relief was granted on petition.

From these cases it appears, that there has been no settled practice on these subjects. If the decree which authorises the sale, and lies at the foundation of the purchaser’s title, may be vacated by original bill, or by a more summary proceeding, on the ground of surprise or mistake, it seems difficult to assign a satisfactory reason for not permitting a sale to be enquired into, in the same manner, for the same or similar causes. It is ascribing to the order confirming the sale, a .higher dignity than to the very decree under which the trustee makes the sale. And to apply this reasoning to the present case, it may be said, that the inconsistency is more manifest when the vendee, instead of setting aside the sale, only-asks that he may not be required to pay for more than he gets.

In such a case the purchaser does not ask that he may be discharged from complying with his contract. He claims an equity, growing out of a subsisting agreement, that the court with which he has dealt, cannot perform. The authorities say, that it is his equity to have what the vendor can give, and compensation, by way of deduction, for the deficiency. The weight of argument is clearly on the side of the more convenient and summary proceeding. The trustee and parties in interest, are all before the court; the fund is undisposed of, and under its control; the purchaser is to take his title under that cause; and if creditors are interested, it might he necessary to make numerous defendants to a bill, whereas they could be easily affected with notice by petition.

This seems t.o have been the practice in cases where the sale had been finally confirmed, hut the proceeds not yet audited, and the accounts ratified. And hence in Weems vs. Brewer, (where the fund had not been audited,) the chancellor said : “If the case in which this sale was decreed to be made, had been entirely closed, and was no longer depending, then it w’ould have been not only proper, but necessary, to proceed by bill; by which all the former litigating parties, with the trustee, if alive, might he again brought into court, and have an opportunity of being heard to the extent of their respective interests.” But in Brown vs. Wallace, 4 Gill & John., 483, (where the auditor’s account had been confirmed, and the term passed,) an original bill was entertained by the chancellor and Court of Appeals. It will appear that that case is in most respects a precedent for this.

Wallace had been appointed trustee in chancery, to make sale of one Mitchell’s estate; Brown purchased part of the property; passed his bonds according to the terms of sale; the sale was ratified; and the auditor’s report, distributing the fund, also confirmed; the bonds were put in suit, and judgments obtained against the purchaser and his sureties, who filed original hills on the equity side of Harford county court, against the trustee alone, praying that the sale might be vacated as to part thereof, for reasons assigned, and as to another part, claiming a deduction for deficiency. Injunctions were granted and the cases afterwards removed to the chancery court. If it he assumed, as urged by the counsel for the appellee, that the auditor’s accounts in this case have been stated and confirmed, the only material difference between the two cases will be found in the fact, that Brown’s bill was not filed in the same court in which the original decree was passed. It does not appear that any suggestion was made or point raised by the counsel, the chancellor or the Court of Appeals, as to the necessity or propriety of a bill of review, or of an original bill charging fraud in the sale. In hoth courts the merits of the case were fully examined, and passed upon; and the only objection taken, as to the form of proceeding, was, that the remedy should have been sought in the chancery court, and that the parties in interest were not made defendants. The Court of Appeals, in disposing of the objections as to the character in which Wallace made the sale, and his excess of authority, said “the final ratification of the sale was conclusive upon the purchaser, as to these questions.” But, in reference to his claim-for deficiency, they use this language; shewing that they distinguished between an application to vacate a sale, and one to obtain compensation, as in the present case. “If he, Brown, was in a situation to enquire into it, (had filed his bill in time,) and could prove the deficiency, it would have been allowed him.” The confirmation of the sale, it appears, would have interposed no obstacle to his claim for abatement, if he had not delayed his application for an unreasonable time, and could have proved that the land contained less than he bought.

When the sale has been finally ratified, the fund distributed by an audit and confirmation, and the term passed, a bill, either original or of review, is required, because these proceedings ascertain and determine the rights of the persons interested in the proceeds of sale. The suit is then considered as closed, and such proceedings must be resorted to as will bring the parties again before the court. This the chancellor, in Weems vs. Brewer, said, a petition would not accomplish; but in Brown vs. Wallace, an original bill was not objected to, as inappropriate for the purpose.

The last case on this subject, and one much relied upon by the appellee’s counsel, is Tomlinson vs. McKaig, 5 Gill, 256. The court decided, that before ratification, all objections are open for consideration. “But after the sale has been confirmed, and after the term has passed and the proceedings are considered as enrolled, the court possesses no power over the decree to annul the same, except by bill of review, for error apparent on the face of the decree, or for some new matter discovered since the decree, or by an original bill to annul the same for fraud.” The objection was made, in that case, as well to the decree under which the sale was made, as to the sale itself; not by the purchaser, but by the defendants in the original cause, against whom and the trustee, the purchaser was enforcing the contract of sale. As regards decrees, the court were but announcing the well established doctrine. But if that opinion is to be considered as applying to purchasers relying upon an equity, such as is sought to be enforced by the appellant, the same rules of practice that would be enforced on an application to annul the decree, it cannot be denied that the cases in which a different mode of proceeding has been allowed must be considered as overruled. And the appellee’s counsel, placing this construction on the opinion of the court, have insisted, that on its authority, this decree must be affirmed; because this is neither a petition, a bill of review, nor an original bill charging fraud. If we give this interpretation to the decision, (on which it is unnecessary to express an opinion,) we cannot resist the suggestion of the appellant’s counsel, that the case should be remanded under the act of 1832, ch. 302.

We have seen that the right to relief in cases like the present, does not depend on a knowledge by the party making a misstatement, of its want of truth. It depends on its being untrue, and on the effect it may have had on the conduct and interests of the other party. The appellant avers, that he made this purchase upon a misrepresentation of the trustee, in which he confided, and by which he was misled to his injury. It would be difficult for a party making a purchase to shew his intentions, and the considerations that influenced him, except by his own declarations, which are not often received, when offered by himself. But the circumstances shew, as we think, that the purchase was made, in a great degree, with reference to the quantity of land, and there is proof of a considerable deficiency, though not sufficiently accurate for a final decree. It is said that there is no allegation of fraud in this bill. This is true, and we may go further and say, that there is nothing in the record from which any fraudulent purpose can be inferred or imputed to the appellee. He, doubtless, had in his possession information which, in his judgment, warranted the statement he made. But, as far as appears to us, the parties did not treat on equal terms; and if the vendee, having no means at the time of verifying the notice of sale, made the purchase in confidence of its truth, we cannot see the justice of casting the loss on him, in the absence of proof of default on his part. For although much must depend on the general justice of the case, upon consideration of all the facts and circumstances attending the application, and it may happen that the complainant cannot proceed, yet, wc think, he was entitled to have his claim considered. The case does not belong to that class which are treated “as evil acts with evil intents.” It does not involve any question of motive. But “if a party innocently makes a misrepresentation of a material fact, by mistake, it is equally conclusive, for it operates as a surprise and imposition upon the other party. This relief results from the principle, that a man who makes a misrepresentation, without knowing it to be true, or taking means to inform himself, will be held to make good the contract which this statement has caused another, equally innocent, to enter into with him. There are many cases where recoveries have been had on this ground, and it is now a well recognized doctrine of fraud.” 1 Story Eq., 192, 193. If, therefore, the case can be brought, by pleadings and proofs, within this principle, we think the appellant is entitled to have the record remanded.

It has also been objected, that the bill has been so long delayed, that the parties cannot be placed in statu quo. If It were an application to vacate the sale altogether, we might say that it does not sufficiently appear whether this will be the result or not. Lapse of time is certainly important to be considered, and especially where the condition of the parties interested, and the value of the property, have undergone material change. But this objection does not always prevent relief where the purchaser offers to perform his contract, subject to an abatement, though it sometimes has that effect. For in adjusting the equities between the parties, consequences arising from delay should receive due weight, as it is upon the whole case, that the court is to determine whether, and to what extent, relief should be granted. It should be remembered that the trustee was informed of this deficiency, while a large portion of the purchase money was in the hands of the vendee, before it was due, according to the terms of sale, and when the parties entitled to receive it, had been subjected to no more delay than the contract of sale warranted. When one party to a contract makes a representation, on which the other relies, it is not laches in him not to proceed immediately to verify that statement. Partridge vs. Usborne, 5 Russ., 195.

It cannot affect the equity of the case, whether the money belongs to the heirs or the creditors of Pye. In either case they cannot rightfully claim more than he owned; and if they obtain that, at its fair value, no injustice will be done them, if he were alive, and had sold this land upon a similar representation, he would be subject to the same rule of equity. Why should those claiming under him expect to occupy a more favorable standing in court?

In allowing this claim of the appellant, the court will protect the interest of others. If the trustee has made disbursements under the direction of the court, the appellant cannot complain if he does not receive compensation in full. This will have been the result of delay in his application, and the consequence must fall on himself.

It is immaterial whether the survey was made with the concurrence of the trustee or not. He had no authority to bind the parties by any such voluntary proceeding. It should have been made under the order of court. And besides, if it be in all other respects correct, we could not sanction it, without disregarding the act of 1811, ch. 90, which requires the assistants to be sworn white men.

The proceedings and parties in the original cause (and the creditors, if the auditor’s account has been confirmed,) should have been brought into this record, so as to have had all the facts and persons interested, before the court. It would be manifestly improper to act finally in the case, without affording them an opportunity of defending their rights against the claim of the appellant.

Considering the imperfect state of this record, and that there is no evidence before us of the condition of the original cause at the time this bill was filed, we have expressed our opinion more fully than might otherwise have been necessary, for the direction of the parties in the further prosecution of the cause. And believing that the purposes of justice require it, we shall remand the cause under the act of Assembly. The appellant can then proceed with the present case, or commence de novo, as he may be advised. The injunction heretofore granted and dissolved, should be reinstated, until the case is finally disposed of.