Crayton v. Munger

• Decision Date: 01 January 1852
• Citation: 9 Tex. 285
• Parties: JOHN CRAYTON AND OTHERS v. N. H. MUNGER, ADM'R.
• Court: Texas Supreme Court

9 Tex. 285

JOHN CRAYTON AND OTHERS

v.N. H. MUNGER, ADM'R.

Supreme Court of Texas.

1852.

There is no principle which can sanction and give legal effect to fraud by which an innocent person has been deceived to his prejudice, by whomsoever and in whatsoever capacity committed. There is no person nor class of persons, capable of contracting at all, at liberty to perpetrate frauds upon others to their injury with impunity. Not even infants and married women, who, for most purposes, are incapable of contracting so as to bind themselves, are exempt from the obligation to observe, in their dealings with others, the dictates of natural justice and common honesty. (Note 48.)

An estate can neither be charged nor can it charge others by means of the illegal or fraudulent acts of its legal representative.

Where a party excepts specially to the pleadings of his adversary, the latter has a right to regard all other objections than those indicated, unless to matter of substance, as waived.

Quere? As to the extent of a prayer of a defendant who is resisting the collection of a note given for the purchase-money of land, that both parties be placed in statu quo.

The doctrine of caveat emptor, in its application to judicial sales, does not extend to a discharge of those who make the sales from the obligation which obtains in all sales, to act fairly and not fraudulently.

Appeal from Caldwell. This suit was instituted in the court below by the appellee against the appellants to recover the amount of a note executed by them for the purchase-money of a half league of land, bought by Crayton at a sale made by the appellee as administrator of Pettus, and to foreclose the mortgage executed by Crayton to secure the payment of the same.

To the original answer of the appellants the appellee excepted, and his exception was sustained by the court, giving the appellants (the defendants below) leave to answer over.

The parties, Thompson and McGehee, filed an answer setting forth that they were the sureties of Crayton and ought not to have been sued.

The party Crayton filed his amended answer, pleading substantially as follows:

1st. Payment.

2d. That the note sued on was executed by him and his codefendants, who were his sureties, for the half league of land mentioned in plaintiff's petition, sold by plaintiff to defendant Crayton at administrator's sale; that neither at the date of the sale or conveyance of said land by plaintiff to defendant (to wit, on the 5th August, 1851, and on the 28th August, 1851) was there any good and legal title to said half league of land in the plaintiff; that at the time of said sale and conveyance to defendant the plaintiff's title as administrator was wholly worthless and defective; that the land was not assets in the hands of the said plaintiff as administrator of Pettus; and that the plaintiff well knew the facts as stated when he made the sale to defendant; that the said plaintiff at and before the dates of said sale and conveyance falsely and fraudulently represented to the defendant that his (plaintiff's) title to said land was good and perfect; that plaintiff well knew at the time that his title was not good; that said plaintiff used false and fraudulent representations to induce the defendant to purchase; and that he, defendant, relying upon these false and fraudulent representations, was induced to purchase the land; that the plaintiff's intestate, William Pettus, in his lifetime, to wit, on the 11th day of July, 1839, sold and conveyed by bond for title to one George Adams one league of land, covering the half league sold by plaintiff as administrator, to defendant, of all which the said plaintiff had knowledge when he sold to defendant, and thus knowingly and wilfully committed a gross fraud upon him, defendant; that suit has been instituted and is now pending in the United States District Court sitting at Galveston, by parties claiming under said title bond to Adams against the plaintiff as administrator of Pettus, to compel him to make title, &c. Defendant prayed that the facts alleged in his answer might be heard and considered, and that the contract between himself and said plaintiff might be canceled; that defendant be allowed to give up to plaintiff the deed executed to him by plaintiff for said half league of land and reconveying to him whatever interest he acquired by said deed; that the note sued be surrendered to defendant and the parties placed in statu quo; or that, if not entitled to this relief, the plaintiff be restrained from proceeding to final judgment until the determination of the aforementioned suit against the said plaintiff in the federal court at Galveston.

To the amended answer of Crayton, as stated, and the separate answer of Thompson and McGehee, the appellee excepted specially, and the court sustained the exceptions and rendered judgment against the appellants. It was not stated as a cause of exception that the answer was not sworn to, nor that the defendant did not offer to restore the possession.

A. J. Hamilton, for appellant. The error assigned is the judgment of the court below sustaining the plaintiff's exception to the amended answer of the defendant.

It will be contended here, as it was in argument in the court below, that the doctrine of caveat emptor, in this and all other sales made by administrators, applies as well as in all other judicial sales. It is conceded that, as a general rule, the doctrine applies in all judicial sales, and that the purchaser takes without warranty, express or implied; but it is not a rule without exception, and the exception exists wherever the sale has not been conducted with fairness, certainly where it has been tainted with fraud.

There is no exception to the rule that “fraud vitiates every contract.”

In the application of this rule there is no principle of law or equity which creates an exception in favor of an administrator. If injury result to the estate from the fraudulent act of the administrator he will be responsible to the estate. The party against whom the fraud is perpetrated is not to be injured by it. (Swenson v. Walker's Administrator, 3 Tex. R., 93.)

The whole extent of the doctrine of caveat emptor, as applied to sales by administrators, or others selling under judicial orders or decrees is, that the sale is without warranty, and the case of Lynch et al. v. Baxter and Wife, 4 Tex. R., 431, goes no further. But a sheriff, or either of the parties, plaintiff or defendant to an execution, may be guilty of such fraud as will vitiate the sale.

The rule of caveat emptor applies not to judicial sales merely, but to all other public sales. (1 Story Eq. Jur., sec. 200, and notes.)

Thus, then, the rule being the same, anything which would avoid, in favor of the purchaser, a sale at auction, would also be good in a judicial sale.

The misrepresentation and fraud complained of was greatly to the prejudice and injury of the appellant, and would be actionable even in a court of law. (1 Story Eq. Jur., secs. 203 and 207.) And the same author, still continuing to treat of misrepresentations and concealments, proceeds to say: “But by far the most numerous class of cases of undue concealment arises from some peculiar relation or fiduciary character between the parties;” among which are enumerated “executors and administrators and creditors, legatees, or distributees,” &c. (Sec. 218; 13 Ves. R., 51; 5 Ves. R., 485.)

Any concealment or misrepresentation by the vendor in relation to the title of land by which the defendant is deceived is fraudulent. (See Bacon Abr., 4 vol., page 388, and numerous authorities cited; 3 Maine R., 332.)

It would be a reproach to equity jurisprudence to say that no relief can be had upon the facts presented in the appellant's amended answer, and which are admitted by the appellee's exception. Nor will the principles of equity be satisfied by the personal responsibility of the administrator. The administrator is but the legal agent of the estate, and the principals cannot profit by his fraud. (Amr. Dig., 2 vol., 240; Hughes' R., 71.)

N. H. Munger, for appellee. The demurrer was properly sustained to the second separate amended answer of Crayton--

1st. Because there is no affidavit as required by article 2505, Hart. Dig.

2d. An administration sale is a judicial sale; and a defect in the title and knowledge of that defect by the administrator would be no defense in a suit on the note. (Lynch et al. v. Baxter and Wife, Adm'rs, 4 Tex. R., 437.)

3d. The allegation that “the plaintiff falsely and fraudulently represented to the defendant that the title to said half league of land was a good and perfect title,” adds no force and gives no effect to the plea, that averment being a conclusion from facts or allegations of plaintiff, and not a statement of his representations. The allegation “that the plaintiff used false and fraudulent representations to induce defendant to purchase, and that he trusted to them,” are liable to the same objections. What proof could have been admitted under such averments? Surely no facts or statements of plaintiff. (Mimms v. Mitchell, 1 Tex. R., 443.) 4th. An administrator as administrator cannot commit a fraud or tell a lie. As an individual he may do both, and be responsible in damages therefor. If an administrator, as such, can commit a fraud, then the purchaser can plead in reconvention the injury...