Gilchrist v. Manning
| Decision Date | 18 June 1884 |
| Court | Michigan Supreme Court |
| Parties | GILCHRIST v. MANNING. |
A compromise, (which is not supposed to be a compromise,) and which is grossly unfair in its results, cannot be held conclusive against a person who is entirely ignorant of business ways and methods.
Continued use of an unseaworthy vessel, under a contract of purchase procured by means of fraudulent representations as to the condition, is no waiver of damages by suit, whatever waiver it may be of a right to rescind the contract.
Appeal from Wayne.
Dwight N. Lowell and Otto Kirchner, for defendants.
Complainant filed his bill to foreclose a land mortgage made on dwelling-house property in Detroit belonging to defendant Margaret. The court below dismissed the bill for reasons referring to want of consideration and fraud.
The mortgage and notes for $2,000 formed part of a consideration of $5,000 which was the agreed purchase price of a schooner named the Cornelia Amsden. The bargain was made April 14 1881, at Detroit; defendants then being there, and complainant also, although he lived in Ohio. The vessel was then at Alpena and not accessible. Complainant had entered this with other vessels for sale in a ship-broker's books, and there were placed there certain data of description. There is some conflict as to just when and how these entries were completed, but as we are satisfied from the testimony that they contain the actual representations on which the parties bought, this is not important. There is some doubt, also, how far complainant intentionally, and with actual knowledge to the contrary, made this showing. But as it was actually made and relied upon, and intended to be relied upon, he is responsible for the correctness of the statements.
The description of the vessel was that she measured 184 tons, was rated B 2, with lumber capacity of 225,000 feet, and draught of 8 1/2 to 9 feet loaded, built in 1863, with new stanchions, new bulwarks, new rails, and stringers center-board, and box, and new foresails, and all the canvas good. On these and other representations of the same sort the defendants bought the vessel for $5,000, paying $1,000 down, giving notes for $2,000, secured by mortgage on the vessel, and the remainder covered by the mortgage now in suit. When Capt. Manning went up a few weeks after to take possession he found the vessel, outside of the pier at Alpena, loaded with lumber, and with considerable water in her hold, frozen up. He ran her down to Sandusky and unloaded her, and thereafter continued to use her for some months for lumber. The canvas, except the foresail, was not suitable or sufficient, and he was obliged to use her as a barge, so that she was towed back and forth and did not usually run under sail. During the latter part of the season she broke loose from the rest of the tow, on an occasion, off Sand Beach, and drifted ashore. The captain his family, and crew left her while she was helpless, about 10 miles from land, and got ashore without serious difficulty in a small boat. The vessel became water-logged and wrecked. She was subsequently taken into dry-dock and repaired at an expense, as shown, of $4,092. The material-men libeled her for repairs, and she was sold in admiralty for $2,400, and afterwards brought $3,000 at private sale. The testimony showed that the vessel was in very bad condition and unseaworthy; that her timbers were rotten; and that there had been no such renewal and repairs as were represented, and that her canvas was not good. The value was variously estimated, but seems to have been regarded, by the most satisfactory witnesses, as worth no more than $2,000. We think the case shows that defendants were defrauded in the sale at least $3,000, besides the personal risks in using an unseaworthy vessel, and the other losses. We do not see how the continued use of the vessel, which defendant George Manning was compelled by his circumstances to make, could be any waiver of damages, whatever might be the case as to rescission. But it is, in our opinion, reasonably certain that while the condition of the canvas was soon...
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