Adams v. Humes , 9 Watts 305 ( 1840 )

The opinion of the court was delivered by

Gibson, C. J.

This action, though brought on a specialty, stands by agreement of the parties on the purchaser’s bid; and standing therefore as a bill to have the purchase executed by payment of the price, it is open to an equitable defence even at law. Now though the maxim caveat emptor is applicable, in such a case to patent defects in the quality of the estate, it is inapplicable to defects in the title. Equity looks with such extreme jealousy on that, that it is the course of the English chancery never to compel a purchaser to pay for a title, unless it is so clearly marketable as to be free from a blemish that might be a hindrance to parting with it; and where there is nothing in the circumstances of the bargain, to show that less was treated for than a clear legal estate, less will not be forced upon him here. It is argued, however, that there is a class of cases in which the vendor is only an implement to effect the sale, and that being ignorant of the quality of the title, he sells, and the purchaser buys, just what the former owner had, and no more; in proof of which are cited our own decisions on the nature of our sheriff’s sales, under the satutes for taking land in execution. But to say nothing of the special enactment, that the vendee shall have exactly what the debtor had, it would result from the nature of the office, that the sheriff is only an instrument, which the law uses to turn the debtor’s estate into money; of the nature of which he is necessarily ignorant, and that, being directed to sell it for what it will fetch, he has no power to make conditions in respect to the title or the price of it. His vendee, therefore, takes it as he takes his wife, for better, for worse. It is certainly true, that the same principle was unnecessarily applied by Lord Rosslyn, in Pope v. Simpson, 5 Ves. 446, to a sale by a bankrupt’s assignees. But as they are always put in possession of the muniments, and as they thus have an opportunity to become acquainted with the title they profess to sell, their sale is not to be distinguished from the sale of any other trustees; and we accordingly find that Lord Rosslyn’s principle has been rejected by some of the most eminent equity judges that have sat in Westminster Hall. In White v. Foljambe, 11 Ves. 345, Lord Eldon entered a formal protest against it; “That assignees under a commission of bankruptcy,” said he, “ may sell under a special contract such estate as the bankrupt had, I admit. But if the assignees exhibit to sale a freehold estate of inheritance, not marking by the contract, that they mean to sell nothing more than it shall turn out the bankrupt had, the agreement ÍS' to sell the inheritance free from incumbrance, and (I except a lease which falls within this case) there is no principle which protects the assignees if they do not inform themselves before they propose a sale, what is the real nature of the title. Proposing an estate on terms which, if used by any other person, would be taken to tender a freehold estate of inheritance, free from incumbrances, they cannot say that it is not what they meant to- tender. I agree to that case, (Pope v. Simpson,) if it means only this; that if they offer to a purchaser a freehold estate, free from incumbrances, and before the contract is executed, it appears to a court of equity, that the assignees cannot make such a title, the court of equity ought to leave the- parties to law. The assignees, when they make a title, only covenant that they have not encumbered; but that does not prove that they did not mean to sell the fee simple, and they are only in the same situation of other persons who, having tendered a fee simple to sale, find they have been mistaken in the title; and in that case the court would say they should be left to law. The proposition is very different, that where the assignees of a bankrupt expose to sale an estate of inheritance, they are not bound to inform 'themselves as diligently, and bound by the contract as much, as any others.” I have extracted these<remarks entire, not more for the great authority of the quarter whence they come, than for their explicitness and good sense. The substance of them has been repeated in M’Donald v. Hanson, 12 Ves. 278, by Sir William Grant: “ If assignees in bankruptcy,” said he, “ choose to advertise that they have not good title, or that they will sell only such title as they have, that is another thing. But if they advertise in the common way, there is no reason why they should not be bonnd as other persons.” And it will be found in Spurrier v. Hancock, 4 Ves. 667, as he truly observed, that Lord Alvanley had no conception that assignees are entitled to any peculiar indulgence. Yet, as a commission of bankruptcy has been called a statutory execution, their office bears more resemblance to the office of a sheriff, than does that of assignees under .a voluntary assignment for the benefit of creditors, or than that of any other trustees. Finally in Deverell v. Lord Bolton, 18 Ves. 512, Lord Eldon again adverted to Pope v. Simpson, and adhered to what he had said in White v. Foljambe. After decisions so direct, and by men so eminent, there is little doubt of the principle on authority, and there is as little doubt of it in reason. Every trustee to sell has the muniments and ample opportunity to learn the nature and circumstances of the title. If it is imperfect or encumbered, it is easy to offer it for what it will fetch as it stands. Bidders for an uncertainty may not be found; but open dealing is not to be dispensed with for the dishonest purpose of putting the estate into the hands of a purchaser at a higher price; and it was justly remarked by Lord Eldon, in Deverall v. Bolton, that a court of equity gives no encouragement to such a purpose. If, however, it is found that the estate can be better sold on general terms, it will be easy to change the plan; but in either way, every thing should be avoided which might lead to misconception, and when trustees omit the necessary precautions against it, they have no room to> complain that they are held to the terms of an ordinary sale. It would be difficult to find a reason for the notion of Lord Rosslyn. That a purchaser may not call on a trustee for a covenant of title, is because it would be neither just nor politic, to require a vendor to warrant a thing, in which he has not a personal interest. No man would accept the office of a trustee, if it might place him in that predicament. Being answerable for nothing but unfair dealing, he is bound only to warrant that he has not encumbered the title, and to have refrained from positive misrepresentation. But in order to deal fairly, he is bound to acquaint himself with the title, and to sell the estate as the beneficial owner of it would sell it. In the case at bar, there was no saving of any thing. The estate was proposed in the advertisement, merely as a tract of land situate in a particular township and containing so many acres. Not a word was said about an outstanding price of a former purchase. As a vendee by articles, the insolvent assignor had only an equity, the title having been withheld as a security for the purchase-money; and his assignee’s vendee has a right to have a clear legal title, or in its stead, a deduction equal to the sum it will cost to procure it; and of that he was deprived by the direction. ■

Judgment reversed, and a venire de novo awarded.