93 P. 821 | Or. | 1908
delivered the opinion of the court.
The complaint herein does not allege any fraud or misrepresentation as a basis for setting aside the compromise and settlement. Neither does it aver that such agreement was not made in good faith, unless concealment can be inferred from the statement that the trustee did not inform the county court that the decree rendered in the case of Dekum v. Multnomah County, 38 Or. 253 (63 Pac. 496) had been affirmed.
The doctrine once prevailed that the failure of a party to a contract to disclose every material fact of which he knew the adverse party was ignorant, although such actuality was equally within the observation or reach of both parties, would afford sufficient equitable grounds for rescinding an agreement that was consummated by means of the concealment: Pom. Eq. § 850. This precept is modified to some extent by a text-writer, who, discussing the question, says:
“As a general rule, each party is bound to communicate to the other his knowledge of material facts, provided he knows the other to be ignorant of them, and they be not open and naked, or equally within the reach of his observation”: 2 Kent, Com. *482.
“The rule here laid down, though one undoubtedly of moral obligation, is perhaps too broadly stated to be sustained by the practical doctrine of the courts. The qualification of the rule is that the party in possession of the facts must be under some special obligation, by confidence reposed or otherwise to communicate them truly and fairly.”
It is unnecessary, in view of the conclusion reached, to consider whether or not the plaintiff can retain the ■money paid, which affords a valuable ■ consideration for the compromise and settlement, and seek a rescission.
An error having been committed by the trial court, the decree is reversed, and the cause remanded with directions to sustain the demurrer. Reversed.