Lyon v. Smith

Mr. Justice Morris

delivered the opinion of the Court:

We have no doubt whatever that a most unconscionable advantage has been taken of the ignorance and the necessities of the complainant. The defendant Lyon himself admits that he made a hard bargain with him. It is a bargain which no court of equity will permit to stand, if it can find the means of avoiding it. The jealous scrutiny with which a court of equity will regard transactions between a mortgagor and a mortgagee could not have better opportunity for application than this case.

It is clear to us that the minds of the parties did not meet at all in the transaction which was consummated on November 13, 1890, and that, therefore, there was no valid contract between them. The testimony shows that the parties themselves never came together; that the transaction was managed by Adriaans; that Adriaans had been, and even for some time afterwards continued to be, the general agent of the defendant Lyon; and -that, while it does appear that Lyon’s proposition as communicated to Adriaans was such as he (Lyon) claims it to have been, it was never communicated to the complainant in that way, or at all events was not so understood by the complainant. And there is reason to believe that the complainant was wilfully misled in the matter by Adriaans. There being, therefore, no actual contract, the parties are entitled to have the apparent contract rescinded and declared void.

The decree of the court below seems to be based on the theory that there was an actual contract between the parties to the effect as claimed by the complainant, and is in effect a reformation of the apparent contract to that extent. We do not find that the testimony supports this theory, but rather tends to show, as we have stated, that there was no mutual agreement between the parties to the transaction. It is true that, if we assume the sum of $750 to be the real as well as the nominal value of lot 71, the practical result of the decree of the court below would be the same as that to be deduced from our conclusion. But inasmuch as in the light of the testimony as it stands, we are not fully justified in assuming that value to be as stated, and as there are probably other matters to be taken .into consideration, it seems most desirable and proper that the cause should proceed on the line which we have indicated.

Wé will, therefore, reverse the decree of the court below, and remand the cause to that court, with directions to decree a rescission of the contract of November 13, 1890, and to refer the cause to the auditor of the court for the statement of an account between the parties, upon the basis of such rescission.

We are not informed by the record before us whether the complainant’s bill contains a prayer for general relief. If it does not, it should be amended so as to include such a prayer. Reversed.