Bassett v. Brown

105 Mass. 551 | Mass. | 1870

Wells, J.

The evidence for the demandant tended to show that the tenant, while acting or pretending to act as the demand-ant’s agent for the sale of the land in question, procured a deed of it to be made to himself. This was in form and in legal effect a conveyance of the title to Brown. But as the demandant intended it only as a means of carrying into effect a supposed sale to a third party, and the tenant concealed his purpose to obtain the property for his own use, the agent cannot maintain against his principal a title so acquired in fraud of the obligations pertaining to that relation. Aside from this relation, the evidence tended to show such deceit and fraud practised upon the demand-ant, in respect to the consideration in the transaction, as to render the deed voidable on that ground.

In either case the deed was voidable only, and not void. The title passed according to the terms of the deed, subject to the grantor’s i ight to defeat it. The demandant was entitled, upon discovering the facts, to elect whether to affirm the conveyance and retain the consideration, or to avoid it. If he would do the latter, he must return the consideration, or whatever property he may have received in exchange for that which he conveyed. Thayer v. Turner, 8 Met. 550. He must do it, or at least signify his election, within a reasonable time; otherwise his continued silence, after knowledge of the facts which entitle him to dis-affirm, will be construed as an election to affirm j or an affirmance by acquiescence. Chit. Con. (10th Am. ed.) 489, 815. Kimball v. Cunningham, 4 Mass. 502. Copeland v. Mercantile Insurance Co. 6 Pick. 198. Perley v. Balch, 23 Pick. 283. Per Buller, J., in Towers v. Barrett, 1 T. R. 136. Norton v. Young, 3 Greenl. 30. If, after such knowledge, he continues to deal with the property received as his own, he thereby affirms the contract by which he received it. 2 Kent Com. (6th ed.) 613. Story on Sales, §§ 420, 446. Hoffman v. Noble, 6 Met. 68. Leonard v. Morgan, 6 Gray, 412. Campbell v. Fleming, 1 Ad. & El. 40. Whitney v. Allaire, 4 Denio, 554. Whether the act of avoidance is within reasonable time is a question of law, to be decided by the court, upon all • the circumstances of the case; unless something equivocal in those circumstances, or material facts in dispute, require a submission to the jury with instructions. Holbrook v. Burt, 22 Pick. 546, 555. Haskins v. Hamilton Insurance Co. 5 Gray, 432, 438. Kingsley v. Wallis, 14 Maine, 57. Pratt v. Farrar, 10 Allen, 519.

From the evidence adduced by the demandant in this case, it appears that within two or three months after the conveyance he became aware of all the facts which aré now disclosed, in regard to the conduct of the tenant in taking and holding the deed of the land for his own use. We think it sufficiently apparent also, that as early as the winter or spring of 1866, when Farrington, who had been endeavoring, as his broker, for a year or more, to dispose of them, made return to him of the unsold stocks, and the proceeds of those sold, he must have come to a pretty accurate knowledge of the character of the commodity he had received for the land. This was, as he himself says, “ eight, ten or twelve months after his suspicions were aroused ” that he had been defrauded. After that he “ swapped off” several hundred shares of the stocks to one Fuller.

In August 1867 he first took measures towards rescinding his conveyance to Brown. It does not appear that he then offered to return the stocks; or that he has done so at any time until the offer made by him at the trial.

We are all of opinion that- upon the facts as reported, and all legitimate and proper inferences therefrom, which might be drawn in his favor by a jury, the demandant shows no right to recover in this action.

In Thayer v. Turner, 8 Met. 550, an action of replevin, it was held that the avoidance must be made complete by an offer to restore property received in exchange, so as to revest the title, before bringing the suit. The cases, in which it has been held sufficient to produce at the trial, and there offer to surrender, that which was received as. consideration, are confined to those, in which the note of the purchaser was given for the property; Thurston v. Blanchard, 22 Pick. 15; or where the action was against a third party, who held the property with notice of the fraud, but who had no interest in the return of the consideration; Stevens v. Austin, 1 Met. 557; Manning v. Albee, 11 Allen, 520, and 14 Allen, 7 ; or where the action was for the price, not seeking to rescind the sale, but only the fraudulent transfer of worthless securities in payment. Bridge v. Batchelder, 9 Allen, 394.

The demandant contends that the stocks were worthless ; and therefore it was unnecessary, as it would be useless, to return them. Such unquestionably is the rule of law, if they were absolutely of no value to either party. But it is not sufficient that they were of no intrinsic value, or of no market value. If they were capable of serving any purpose of advantage by their possession or control, or if their loss was a disadvantage to the tenant in any way, he was entitled to have them returned. This rule is held with great strictness in actions at law; as in the case of the casks that contained worthless lime, Conner v. Henderson 15 Mass. 319 ; and the sack that covered the rejected bale of cot ton, Morse v. Brackett, 98 Mass. 205, and 104 Mass. 494.

In this case, it was not denied that the stocks were genuine, as shares of corporate capital; but it was claimed that such capital was made up of “ alleged mining rights ” only, and those put in at fictitious prices. The evidence tended to show that the real value of the shares was little or nothing, and their speculative value very small. But the demandant’s own dealings with them proved that they could be used in the way of trade ; and it was not shown that Brown might not have derived some benefit from them if they had been returned to him at the proper time. We think the evidence does not show them to be so absolutely of no value as to excuse the failure to return them. Perley v. Balch, 23 Pick. 283.

The cases above cited relate to sales of personal property. But we are aware of no difference between real and personal property, in respect of the necessity of a return of the consideration in order to rescind the contract of sale. The avoidance of a deed of land, on the ground of fraud relating to the contract or its consideration, can be effected only by a rescission of the entire contract. Arnold v. Richmond Iron Works, 1 Gray, 434. The exceptions, in cases of disability of the party, from insanity or infancy, are distinct recognitions of the general rule as here stated. Gibson v. Soper, 6 Gray, 279. Chandler v. Simmons, 97 Mass. 508. So also is the case of Walker v. Swasey, 2 Allen, 312, in which the parcel of land recovered was not included in the contract actually made by the parties.

Perhaps the same reason for a return before bringing an action for the property sold may not exist in real as in personal actions. But the difficulty in the way of a rescission of the contract by the demandant goes deeper than to defeat the present suit. Even if he may return other shares than those specifically which he received from the tenant, on the ground that all shares in the same corporation are alike, (which may be questioned, as a matter of strict legal right,) yet the fact that he retained them for two years or more after discovering the frauds of which he complains, endeavoring to sell them, and selling many of them, instead of returning them and reclaiming his land, is concl usive against his right to return them at this time in any mode. What remedies at law or in equity he may now have, we need not consider.

The bill in equity, previously brought by Bassett to set aside the same conveyance, was dismissed on the ground that, upon its allegations, there appeared to be an adequate remedy at law. But that bill did not disclose any of the facts upon which we now hold it to be too late for him to return the stocks to Brown. It therefore, by not excluding the existence of a right to have complete remedy at law, failed to show jurisdiction in equity; and was necessarily dismissed upon demurrer. That judgment was rendered upon the pleadings alone.

According to the terms of the reservation, judgment is to be entered For the tenant. ■