106 Tenn. 60 | Tenn. | 1900
, On March 21, 1894, the Complainant, Oscar,. Talbott, executed his note to G. W. Pickle for $7,500, due two years after date with interest front date, and to secure its payment, conveyed (his wife, joining in. the. deed) to W.
Complainants in this bill seek a rescission of the contract of sale, as evidenced by the war-
The prayer for relief is rested upon, two grounds, first, it is insisted that all these instruments were procured through fraud and duress upon the part of Manard, although the bill concedes that at the time of the execution of the first trust deed, in 1894, the latter advanced for Talbott $6,714.75, which, with interest, was unpaid at the time of the making of the deed in fee in March, 1897; and, second, that there was a parol contemporaneous agreement between the parties at the time of the execution of this last instrument, that Manard, after- retaining enough of the land conveyed to him to discharge the debts due him from Talbott, was to reconvey to him the balance, which agreement, it is averred, had subsequently been repudiated by Manard.
The Court of Chancery Appeals, in their opinion, find every material averment of the bill against complainants. They relieve Manard of all charges of fraud, oppression, machination, or device in obtaining these various conveyances, and find that they were executed voluntarily and understandingly by the complainants, and for a valuable consideration. They also report that there was no parol contemporaneous agreement at the time of the exe
We understand this decree to be • rested upon one of two grounds, or possibly upon both. The bill charges, and that Court finds, first, that in the $7,500 note Manard embraced an excess of $785.25, over and above the sum of $6,714.75 advanced by him to Talbott, which sum was carried forward and formed a part of the consideration of the final warranty deed; and, second, that there was a great disparity between the value of the consideration paid and the land conveyed to Manard.
The defendant, -Manard, in his answer, admits that this excess over and above the amount paid by him for Talbott was embraced in the original note, and ran through the subsequent transactions.
As to this feature of the case the Court of Chancery Appeals finds as follows: “That Manard, when approached by complainant for a loan to remove judgments resting upon his 400 acre' tract o'f land, said that he would procure it for him, but would charge him $785.25 as commission for doing so; the loan to be secured, etc. . . . Complainant Talbott agreed to this proposition. At the time the proposition aforesaid rvas made,
Upon this state of facts it is insisted that byr thus agreeing to procure a loan for Talbott, Man-ard became the agent of the former, and was bound to exercise good faith to his principal, and that Manard’s concealment from Talbott of the changed condition of the loan tainted the note and mortgage security, and was a vice which entered into all the subsequent dealings of the parties, including the deed of March 18, 1897.
That it was the duty of Manard, upon this altered condition as to the loan, to notify Talbott that he had not earned his commission, and credit the note by the sum representing this com
This undertaking, as has been seen, is reported by the Court of Chancery Appeals to have been in good faith, and the note was taken to a third party upon an assumption that he would carry the loan. Thus, when the note and mortgage were executed, and the money was paid to Talbott, there was no element of bad faith or usury on the part of Manard. He may have charged too high a commission for his service, but this would not ' serve to impeach the transaction. To this time and point it was a contract enforceable in law.
Does the fact that subsequently he concluded to carry the loan himself have a retroactive effect and make void or voidable the whole contract, which before that was good? Could Talbott, if informed at any time while the $1,500 note and trust deed were alive of the true history of this transaction, have avoided both upon the ground that his agent had concealed from him the fact in question? As
But if it were conceded that this view is erroneous in its application to this note and mort-age, it certainly is not so far as the deed in fee executed in 1897 was concerned. The relation of principal and agent extended only to the procurement of the loan. That relationship terminated in 1894. Talbott was under obligation to pay to Manard at least the money advanced to him and legal interest, as well as the judgment against him which Manard" had bought. These items constituted a valuable consideration for the warranty deed thus executed. It is true Talbott would be entitled to recover the commission charged in 1S94, and interest from March 21, 1894, but this would not affect the integrity of the deed or cut down the title which Manard had acquired through it.
The Court of Chancery Appeals report, on the subject of the value of the property in question as follows: “At the time this deed was executed 1 March, 1897) the tract or farm, although run down . . . and its fences and improvements greatly out of repair, and although financial depression then prevailed . . .was worth, according to Manard himself, . . . $10,000. Under the . . . weight of the testimony, it was worth from $12,000 to $14,000. Some witnesses put its value at $20,000, some $18,000, some $16,000, some $14,000, and some $13,000. Under the weight of the most reliable evidence a reasonable estimate of its value in March, 1897, was $13,000.” For this property Manard gave up his debts, which then amounted to about $8,000.
Opinions as to value are always inore or less speculative and uncertain. This is evidenced by the wide divergence of views of the witnesses in this case. Iiut conceding the fact to be that the property conveyed was worth $5,000 more than Manard paid, is that alone sufficient to authorize a Chancery Court to decree a rescission of the contract ?
In Mann v. Russey, 101 Tenn., 596, this Court
Mr. Pomeroy, in Sec. 928 of 2d Yol. of his Equity Jurisprudence, says: “If there is nothing but mere inadequacy of price, the case must be extreme in order to call for the interposition of equity.” And again in Sec. 926 he says: “If the parties being in the situation, and having the ability to do so, have exercised their own independent judgment as to the value of the subject-matter, Courts of Equity should not, and will not, interfere with such valuation.” This author, however, recognizes in his note to Sec. 927, that the inadequacy of consideration may be so great as to place the burden upon the party seeking io enforce the contract, of showing affirmatively that the result is a deliberate and intentional transaction bv the parties. It is true that in
We do not think in the present case that the inadequacy of consideration is so great 'as to shock the conscience of the Court or raise a presumption of fraud within the rule of Gwinne v. Heaton, 1 Bro. Ch. 1, or Mann v. Russey, supra.
But if it were conceded sufficient to raise a presumption of fraud, yet we think the finding of facts by the Court of Chancery Appeals fully rebuts it. Talbott in full possession of his faculties without pressure, fraud, deceit, duress, or corrupt device on the part of IVIanard, came to him, ‘‘with the proposition to let” him have the property, and IVIanard accepted it. Using the words of that Court, “he (Talbott) simply recognized, in view of his habits, age, and environments, that he could not pay the mortgage debts on the land, and he was willing to let IVIanard have it at the amount of the debts on it, rather than have a foreclosure sale of it under the trust deeds.”
Upon such facts we think a Court of Equity is without excuse for interposition, unless its office is to stand as the guardian of all persons who
But if it were granted that we are wrong' in these conclusions, yet there is another well recognized rule of equity practice, which repels complainants in their effort to rescind, and that is, nothing can induce a Court of Equity to exercise its extraordinary pow.er in decreeing rescission of contracts, save conscience, good faith, and reasonable diligence. When one with full knowledge of the fraud of which he complains sleeps on his rights, he will be repelled. Knuckolls v. Lea, 10 Hum., 576; Ruohs v. Bank, 94 Tenn., 57; Woodfolk v. Marley, 98 Tenn., 467.
In the present case the complainants' waited nearly two years after the making of the warranty deed before they assailed it. They occupy the property as the tenants of Manard all that time, and see him make valuable improvements upon it, without protest. They make no claim that during this period they were ignorant of their rights or of what they noAV allege to he the unscrupulousness of Manard’s conduct or the injustice of his claims. This being so, if. ever entitled to it, they come too late for relief. The result is that the decree of the Court of Chancery Appeals is reversed.
In one respect, however, partial relief may he granted to complainant .Oscar Talbott under the prayer for general relief. As has been stated,
A decree will be entered here in favor of complainant, Oscar Talbott, against defendant, Manard, for this sum of $785.25, with interest from March 21, 1894, the date of the first note. The complainant, Oscar Talbott, -will pay three-fourths of all the costs of the case, and defendant Manard one-fourth.