Morel v. MasalskiMorel v. Masalski
- Reporters:
- ,
- Before:
- Partlow (per curiam)
The amended bill alleged that appellees were the owners of an apartment building in Chicago. On September 15, 1925, they entered into a written contract with appellants for its sale for $47,000, of which $13,000 was paid when the contract was signed, $2000 was to be paid May 1, 1926, a trust deed for $20,000 due in five years was to be executed to the Chicago Title and Trust Company as trustee, a second mortgage for the unpaid balance was to be executed to Bessie Zacharewicz as trustee, payable at the rate of $125 a
The bill alleged that prior to the signing of the contract appellees told appellants thаt appellees had applied to the board of review of Cook county for a reduction of the general taxes on the property and the board of review had reduced the taxes to approximately $411.60 per annum, and the taxes for 1925 and ensuing yеar would be approximately that amount, which was made the basis for prorating the tax between the parties; that appellees delivered to appellants a written contract, in which they agreed that in case the taxes for 1925 were more than $411.60 they would refund to appellants the pro rata difference between that amount and what the taxes for 1925 actually were; that prior to the execution of the contract appellants investigated the income from the property and the various expenses of maintеnance, and found that the income would cover the maintenance, including interest, monthly payments on the second mortgage, and general taxes, provided the taxes were not larger than represented by appellees; that at the time the contract was executed the general tax bills for 1925 had not been issued but appellants took the statements of appellees to be true, and, acting upon such statements, entered into the contract; that the income from the premises is insufficient to cover the expense of maintenance if the taxes for any one year are greater than approximately $411.60; that appellants would not have entered into the contract had they known that the taxes were greater in any one year than said amount; that the tаx bill for 1925, when issued, showed a valuation of $4900 and a tax of $443, which appellants paid; that the tax bill for 1926 was issued on April 20, 1927, and showed a valuation of $9900 and a tax of $919;
The bill made the two appellees parties defendant, together with the Chicago Title and Trust Company, trustee, and Bеssie Zacharewicz, trustee, and prayed that the contract, the warranty deed, the deeds of trust to the two trustees, together with all notes and other evidence of indebtedness and all documents pertaining thereto, be set aside and declared null and void; that an account be taken, and appellees be restrained by injunction from instituting any proceeding to foreclose the mortgage until the further order of the court.
It is insisted by appellants that the amended bill stated a cause of action; that they were induced tо purchase the property upon fraudulent representations, to their injury; that they have offered to rescind the contract and are entitled to equitable relief; that one who is guilty of fraud cannot excuse himself by saying that the injured party was negligent; that they had nо opportunity to ascertain the amount for which the property was assessed, for the reason that they did not have access to the assessor‘s books; that misrepresentations, even though innocently made, may constitute fraud, and if a party acting thereon is injured he may have equitable relief. Appellees insist that a person cannot rescind a contract which he was induced to execute by representations made to him, however false and fraudulent, where such representations relate to a matter of law of which one party is presumed to know as much as the other; that in order to entitle a person to rescind a contract upon the
As a general rule, when a false representation of a material fact is made, and a party, in ignorance of the truth, relies upon such false representation and is induced thereby to enter into a contract to his injury, such representation will avoid the contract, and when the injured party in apt time offers to rescind the contract and invokes the aid of a court of equity, relief will be granted and the parties restored to their original status. (Baker v. Rockabrand, 118 Ill. 365; Mitchell v. McDougall, 62 id. 500.) The general rule is that a party guilty of fraudulent representations will not be permitted to charge negligence of the other party. Even where the parties are dealing at arm‘s length, if one of them makes to the other a positive statement, upon which the other acts in confidence of its truth, and such stаtement is known to be false by the party making it, such conduct is fraudulent and from it the party guilty of fraud can take no benefit. (Herpich v. Williams, 300 Ill. 540; Gilbey v. Hamlin, 297 id. 258; Leonard v. Springer, 197 id. 532; Linington v. Strong, 107 id. 295.) These general rules, however, have some limitations. In all cases where it is sought to hold one liable for false representations the question necessarily arises whether, under all the circumstances, the party seeking relief had a right to rely upon the representations made. In determining this question the representations must be viewed in the light of all the facts of which the party injured had actual knowledge and also suсh as he might have availed himself of by the exercise of ordinary prudence. If it appears that there were facts and circumstances present at the time the false representations
The contract was entered into on September 25, 1925, and it was not fully consummated until May 7, 1926. Appellants had over seven months in which to inform themselvеs as to the assessed value, but they did not avail themselves of this opportunity. They insist that under the law they had no right or opportunity to ascertain from the books of the assessing bodies just for what the property was assessed. In support of this contention they cite
The bill did not state a cause of action, the demurrer was properly sustained, and the decree will be affirmed.
Per Curiam: The foregoing opinion reported by Mr. Commissioner Partlow is hereby adopted as the opinion of the court, and judgment is entered in accordance therewith.
Decree affirmed.