— The proceedings in this case commenced with a bill in chancery to foreclose a mortgage filed by Shaeffer against Carr, the mortgagor, Prather, a junior mortgagee, and Matlack to whom the prior mortgage had been assigned in trust and for the use of the complainant. Answers were filed which admitted the execution of the mortgage by Carr, and that the debt which it was given to secure was unpaid; that the mortgage had been assigned to Matlack in trust for the complainant; and that it was prior in date to the mortgage held by Prather. At this stage of the cause, Shade, who had assigned to Matlack the debt against Carr and the mortgage by which it was secured, filed a petition setting forth that the assignment of the mortgage had been obtained from him by fraud, and praying that he might be made a defendant. The bill was amended by making him a defendant; whereupon he filed his answer to the complainant’s bill, and his cross-bill making Shaeffer and Matlack defendants to it.
The answer and cross-bill of Shade set forth the following facts, viz., that in January or February, 1839, Matlack arrived at Jeffersonville, having in his possession a barge containing a portrait of General Washington and fifty-six figures representing the signers of the Declaration of Independence, which Matlack was exhibiting to the public as “The grand national exhibition of the signers of the Declaration of Independence of the United Statesthat Shade visited the place of exhibition, and while there Matlack was prodigal in his statements of the great value of the property, and perceiving that the defendant was of a sanguine temperament, and that he had been struck with the singularity of the figures, continued his fraudulent misrepre
MatlacVs answer denies the fraud set up by Shade in his cross-bill. It admits the sale of the barge and its contents on or about the 4th of February, 1839, to Shade by Matlaclc for the sum of 8,000 dollars, to be paid as set forth in Shade’s cross-bill, and says he sold as the agent of Shaeffer. The respondent admits that he told Shade, at the time of the sale, that he was part owner of said property, believing it was proper for him to do so because he was verbally authorized by Shaeffer either to sell the property or to take an interest
Shaeffer, by his answer, admits that Matlach was his agent and sold by his authority ; that on being informed of the sale by Matlach, and being requested to ratify it, he came to Louisville to complete it in good faith; that he met Sleade who had had the possession of the figures about one month, and the contract was ratified, the bond given by Matlach for a title was taken up, and a complete title made by respondent to Sleade, who has retained the undisturbed possession of the property ever since. He further states that the original cost of the figures was about 6,000 dollars; that large profits had been derived from exhibiting them in various places ; that they were of great value ; and that he had been offered for the collection -of figures re.al estate valued at 12,000 dollars ; that “ the exhibition ” had yielded large profits to the respondent, and might also have yielded large profits to Shade if it had been properly managed; that the figures were of a composition which neither the heat of summer nor the cold of winter would affect, &c. He denies that at the time he executed a title to Sleade for the property, he made any false or fraudulent representations as to its value or the profits derived from its exhibition, or of the composition of the figures ; that Sleade having been in possession of them, and having exhibited them for. more than a month, was fully aware of their composition and of its durability, and expressed no doubts about either to the respondent. He
Replications were filed and a volume of testimony was taken. The cause was submitted to the Court on bill, answers, replications, exhibits, and depositions, and the Court decreed a rescission of the contract; the assignment of Carr's note and mortgage was set aside on the ground of fraud, and Shaeffer enjoined from further proceedings against Shade, &c.
. The decision of this case turns, we think, upon two questions ; first, whether there were such false and fraudulent representations by Matlack as to the durability of the figures, and as to the profits derived from their exhibition, as to impose upon Shade and induce him to make the contract set out in the bill; and, secondly, whether Shade, within a reasonable time after he had an opportunity of discovering the imposition, returned or offered to return the property. To determine those questions we must advert to the testimony.
A witness, Boyd, deposes that about the 3d of February, 1839, he was on board of the barge containing the figures, and heard Mallack and Shade in conversation about the purchase of the figures. In that conversation, Shade inquired whether the figures were “well received,” and what profits were derived from the exhibition of them. Matlack represented them as being well received and liberally patronized. Another witness, A. P. Shade, a son of the defendant, states that he was present at the time the contract mentioned in the cross-bill was made; while the parties were contracting, Shade inquired of Matlack whether the composition was not chiefly of wax ? Matlack replied that wax formed no part of the composition; that it was of a superior kind that would not be affected by heat or cold. He further states, that while Matlack was trying to sell the figures, he represented the receipts arising from the exhibition of them at Philadelphia as averaging 300 dollars a day for nine months ; that at Pitts-burg they averaged from 75 to 100 dollars per day for two weeks; and that at Cincinnati between 1,000 and 2,000 dollars were received; that the profits of “ the exhibition ” would pay for the property in twelve months. The reason he gave for wishing to sell was, that he was afraid to risk his health during the summer season in a southern climate. A
If this were a case in which the means of information relative to the value of the property sold had been equally accessible to both the parties, and they had dealt upon equal terms, a Court of equity would not interfere with the contract. Such however is not the fact. The value of the figures as a source of revenue was entirely unknown to Shade, while on the other hand it was well known to the owners. It should not have been misrepresented.' The value of the figures as such depended much, indeed entirely, on public favour and public patronage. Of the patronage bestowed, Shade had no means of information except as he derived it from the plaintiff in error or his agents.
When a party to a contract places a known trust and confidence in the other party, and acts upon his opinion, any misrepresentation by the party confided in, in a material matter constituting an inducement or motive to the act of the other party, and by which an undue advantage is taken of him', is regarded as a fraud against which equity will relieve. Laidlaw et al. v. Organ, 2 Wheat. 178, 195.—Evans v. Bicknell, 6 Ves. 174, 182, 192.—Phillips v. Duke of Bucks, 1 Vern. 227.—1 Fonb. Eq. b. 1, c. 2, s. 8.
It is wholly immaterial in this case to inquire, whether Matlach intentionally misrepresented the amount of profits derived from exhibiting the figures or not, because if his misrepresentations were innocently made by mistake, they operated as a surprise and imposition on Sleade, as much as if they had been made through design. Ainslie v. Medlycott, 9 Ves. 21.—Pearson v. Morgan, 2 Bro. Ch. Rep. 388.—Burrowes v. Lock, 10 Ves. 470.
Although we are of opinion that an undue advantage was taken of Sleade by deceiving him in regard to matters which no vigilance on his part could detect, yet we think the contract cannot be rescinded. Applications to a Court of chancery for the exercise of its jurisdiction to rescind a contract are, it is true, addressed to the sound discretion of the Court; but that discretion must be exercised by the Court, either in granting or refusing the relief prayed, in conformity with established principles. It is a rule of equity jurisprudence, that a contract will not in general be rescinded, where the contracting parties cannot be placed in the identicaksituation
It appears from the testimony in the case, that the sale was made by Matlach to Sleade on the 4th of February, 1839, and that Sleade took the figures immediately into his possession and conveyed them to Louisville, where he exhibited them until the 4th of March following, when the plaintiff in error ratified the contract made . with him by Matlach, and gave him a title to the property. At the period last named, Sleade expressed no desire to rescind the contract. He continued to use and exhibit the property at Louisville, and St. Louis, and intermediate places, until in the month of November following, almost ten months after the date of the purchase, and not until then does he offer to return the property, or propose to rescind the contract. It furthermore appears, that the property cannot be restored in the same condition in which it was at the time of the contract, on account of some part of it being mutilated and disfigured by experiments made to ascertain the ingredients of which it was composed. Another reason why the contract should not be rescinded on the application of Sleade is, that he has rendered no account of the receipts during the time the figures were in his possession, nor are there any means of ascertaining satisfactorily what they amounted to. For these reasons a rescission of the contract cannot be decreed.
It is competent for this Court, under the circumstances, to render such a decree in the premises as the justice of the case requires. We are of opinion that a decree must be rendered in favour of Shaeffer for the value of the property, subject to such payments as Shade has made. This part of the case is attended with some difficulty, as we have to arrive at the value amidst a mass of conflicting testimony. The admission of Shaeffer is that the original cost of the figures was 6,000 dollars. There is proof that he had been offered for them when they were new, and before they had been brought west of the mountains, at one time property valued at 12,000 dollars, at another time property valued at 7,000 dollars;
Decree accordingly.