Sutton v. Morgan , 158 Pa. 204 ( 1893 )

Opinion by

Mr. Justice Williams,

The plaintiff sought and obtained in the court below the rescission of a contract made by him with Mrs. Morgan for the purchase of her farm near Remington station on the Pittsburgh, Ft. Wayne & Chicago Railroad. The ground on which his right to relief was placed was that the execution of the contract by him had been induced by fraudulent misrepresentations, made to him by Mrs. Morgan’s agents, particularly by her husband and John E. Glass, largely through J. C. Williams, who was a co-purchaser of the land and whose interest therein was now held by the plaintiff. The master found that the negotiations were conducted between Williams and Morgan ; and that the representations made by Morgan and Glass to him were repeated by Williams to Sutton, and induced the purchase by him. He finds that several of these representations were in fact false. Among them are the following: The thirty-four acres lying between the railroad and the river, amounting to nearly one third of the farm, were represented as suitable for building lots, and above the reach of ordinary floods. The master finds that most of this land could be made suitable for building only by filling. It was represented that extensive railroad yards were being opened in the immediate neighborhood of this farm, and that there was at the time these negotiations were going on an active demand for lots on this farm. The master finds that no such demand existed. It was represented that the car shops of the railroad company were to be moved to the neighborhood of this farm, and that men connected with the road had declared that it was their purpose to make another city there, like Altoona. This was not true. It was represented that a syndicate of men connected with the railroad company had been formed, and that an offer of seventy-five thousand dollars had been made for the farm on their behalf, payable sixty-five thousand dollars in cash and mortgage, and ten thousand dollars in the stock of the land company to be formed by the purchasers. The master found that no syndicate had been formed or offer made. Under the influence of these representations the plaintiff was led to buy the farm at sixty-five thousand dollars. The master finds that it was at the time worth not more than thirty thousand dollars, “ unless for speculative purposes; ” but he does not find what its speculative value was, nor is it easy to see how the speculative value could have been much in advance of its actual value for business purposes, since no operations were in progress or in contemplation calculated to enhance its value in the near future. But the master,found further that Morgan believed the representations he made to be substantially true, and that there was no fraudulent combination between Morgan and Glass, or Morgan and Williams, to defraud Sutton, and for this reason recommended a decree dismissing the bill.

The learned judge who sat as chancellor in this case differed from the master in relation to the character of the representations made by Morgan. He found the fact to be that Morgan had no reasonable ground for belief that the shops of the railroad company were about to be removed, or that a syndicate of men connected with the company had been formed for the purchase of his wife’s farm, or that he had been offered by such men, or any one on their behalf, the sum of seventy-five thousand dollars or any other sum for it. He further found that the representations made by Glass to Williams in regard to the same subjects, viz., the removal of the shops, the existence of the syndicate, and the offer on its behalf of seventy-five thousand dollars for the farm, were false ; that Glass knew them to be untrue when he made them; and that they were made to aid Morgan in effecting a sale by stimulating Williams, and through him those whom he represented, to conclude a contract at once before the syndicate would be ready to make the advance payment and take the property. He thus reversed the master’s finding as to the good faith of the representations made by both Morgan and Glass, and reached the conclusion that the contract of sale was procured by representations that were untrue, and known to-be untrue by those who made them. Upon the findings of fact so modified he declined the decree recommended by the master, and held the plaintiff entitled to the relief prayed for.

This appeal from the decree so made requires us to examine the evidence so as to determine whether the conclusions of the master, or of the court below, should be adopted. This examination we have made, and we are led by it to concur with the learned judge in his findings and conclusions. The master found that Sutton agreed to pay more than twice the actual value of. the farm; that he did this under the belief that the representations, made to Williams and communicated by him, were true; and that these representations were not true. The learned judge concurs in these findings, and so far there is no room for doubt. The evidence however sustains the judge in the further finding that both Morgan and Glass knew their statements, in regard to the removal of the shops, the existence of the syndicate of men connected with the railroad, and the offer of seventy-five thousand dollars by that syndicate for the farm, were not true; and that these statements were made to raise delusive expectations of gain, and to hasten the making of a purchase by Williams and the' person whom he represented. It is said that Williams should have inquired for himself, and that his opportunities of obtaining information were just as good as those of Morgan. This may be. Prudence should have led him and his “financial man ” Sutton, to test the truth of the glowing statements made by Morgan and Glass, but it did not. They fell easily into the trap which was set, with some skill and some effrontery, for them ; but their neglect, or want of prudence, cannot justify the falsehood or fraud of those who practiced upon their credulity. The doctrine of contributory negligence cannot be invoked by the defendants to save them from liability for misleading their victim. They must stand or fall on the truth, and good faith, of the representations that led to the sale. Was there an active demand for lots on the Morgan farm when Williams was told there was ? The master and the learned court both find there was none. Was the railroad company about to remove its shops to that point and build another Altoona there ? It is settled that it was not. Did a syndicate of prominent capitalists and railroad men exist that had been formed to secure this farm? No such syndicate existed. Had Morgan been offered by this syndicate or by any one on its behalf seventy-five thousand dollars for the farm ? He had not. Let us suppose the fact to be, as the master supposes, that Morgan was misled by rumors of an intended removal of the shops and entertained an expectation that it might be done; how could he be deceived about a demand on him for lots or an offer made to him by the alleged syndicate ? These statements were false. He knew they were false. He made them to deceive Williams and secure a purchaser. He accomplished his purpose. He inflamed the expectations and quickened the action of his dupe; but it is against equity that an advantage so obtained shall be enjoyed, and the person who has been wronged left without a remedy.

We think the learned judge was right in his view of this case, and his decree, so far as it relates to the rescission of the contract, the return of the money paid and the cancellation of the mortgage, is affirmed. For his gross carelessness the plaintiff ought to lose his costs'. No bill of costs will be taxed for the plaintiff.