Harris v. Tyson

• Decision Date: 21 May 1855
• Citation: 24 Pa. 347
• Parties: Harris <I>versus</I> Tyson.
• Court: Pennsylvania Supreme Court

24 Pa. 347

Harris versus Tyson.

Supreme Court of Pennsylvania.

May 21, 1855.

ERROR to the Common Pleas of Chester county.

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Bell, for plaintiff in error.—It was alleged that the deed was invalid. 1. Because it was procured by the fraudulent suppression of the truth and the suggestion of falsehood, inducing Jesse Harris to do what he otherwise would not have done.

The tract in dispute owes its value to the presence of sand chrome. Irrespective of this it is nearly worthless; but as a depository of that mineral it is worth a large sum of money. Leave to dig and carry it away is therefore a highly valuable privilege. Of this the plaintiff was ignorant, though he had some knowledge of the worth of rock chrome. But Tyson was aware of it before he procured a cession of the right to mine on the plaintiff's land. Yet this, during the negotiation, he concealed from the plaintiff. Under the circumstances in which the parties stood, is not this such an instance of suppressio veri as will affect the contract?

Constructive fraud is where a party knows the truth and conceals it: Pearson v. Morgan, 2 Bro. Ch. 390. As a general rule, each party is bound in every case 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's Com. 4th ed. 482 & n. This is consonant with the principle of the civil law, though subject to some qualification in our Courts, where the rule seems to be that to constitute undue concealment there must be a suppression of facts, which one party is bound in conscience and duty to disclose to the other: 1 Story's Eq., §§ 207, 208. This occurs wherever the circumstances are such as to attract the confidence of the ignorant party: 1 Madd. Ch. 265-6. There are various instances of this kind in reported cases: State v. Holloway, 8 Blackf. 45-7; Draper v. Bolare, 2 Vern. 370; Ibbottson v. Rhodes, 2 Vern. 584; 2 Hov. on Frauds, 197; Hundson v. Chancey, 2 Vern. 370. The principle has been asserted even in law: 1 Stark. R. 352, Gray v. Hall; also in Morgan v. Morgan, 1 Brod. & Bing. R. 289, a very strong case.

This doctrine was considered in Kentzing v. McElrath, 5 Barr 467, where it was held under the authority of Ludlow v. Organ, 2 Wheat. 178, that the obligation of a purchaser to communicate extrinsic facts which might influence the price was applicable only to cases where the means of intelligence were not equally accessible to both parties: Cornelius v. Malloy, 7 Barr 293. Where the slightest confidence is reposed and betrayed, equity will protect the injured party. Such confidence is always presumed where one of the bargainors is possessed of information which the other cannot attain to without scientific or laborious investigation. Such was the position of the plaintiff.

Fox v. Mackreth, 2 Brown's Ch. R. 420, was the case of a concealed mine known only to the vendor. But there, there was nothing to invite confidence, nor was any reposed. The parties dealt at arms' length. So says Lord ELDON in Turner v. Harvey, Jacobs's R. 178. The present is a very different case: 1 Story's Eq. 147, 148; Penny v. Martin, 4 John. Ch. 566.

The defect of proof as to Tyson's statements is attributable to the exclusion of the plaintiff's evidence. An inspection of the record will show that the defendant's counsel objected to any evidence of statements not made directly to Harris, or communicated to him afterwards, and of facts in relation to any other chrome than that found on the plaintiff's land, and that the court excluded all such evidence, as well as that which related to Tyson's design secretly to create a monopoly, and the steps he took for that purpose. It is a well settled rule that where the question is of fraud the utmost liberality is exercised in the admission of evidence: Stevenson v. Stewart, 1 Jones 307; Smull v. Jones, 1 W. & Ser. 138; Reeme v. Parthemore, 8 Barr 461; Bredin v. Bredin, 3 Barr 81. In Hunt v. Moore, 2 Barr 107, it is said a Court of equity will lay hold of slight circumstances to relieve where an advantage has been gained by silence. The evidence offered was all pertinent, and ought to have been admitted.

Whether falsehood was circulated, and, if so, how it influenced the plaintiff, were questions for the jury. Equity always relieves where there has been misrepresentation: Evans v. Bicknell, 6 Ves. 173, 182; 1 Story's Eq. 191; Pidlock v. Bishop, 3 B. & C. 605; Smith v. Bank of Scotland, 1 Dow. P. R. 272; 1 Story's Eq. 192; 2 Kent's Com. 452, 484, 490; Fisher v. Worrall, 5 W. & Ser. 478; Smith v. Richards, 13 Peters' S. C. R. 36; Ludlow v. Organ, 2 Wheat. 195; Sug. on Vend. 7th ed. 6; 1 Story's Eq. § 200. Nor is it important whether the party knew his assertions to be false; Arnslee v. Medlycott, 9 Ves. 21; Groves v. White, Frem. R. 57.

And even though a party misrepresents a fact through mistake; for it operates as a surprise or imposition on the opposite party: Pearson v. Morgan, 2 Bro. C. R. 389; Burrows v. Locke, 10 Ves. 475; De Mandeville v. Compton, 1 V. & B. 355; 1 Story's Eq. § 193; 1 Madd. Ch. 208; 1 Bro. Ch. C. 546.

So, if consent be obtained by imposition, circumvention, surprise, or undue influence: Fonb. Eq. B. 1, cap. 2, § 3, note (r) (a); Ib. § 8; 1 Story's Eq. §§ 221, 222.

Courts of Equity especially protect persons disabled by weakness, age, or other incapacity: Gartside v. Isherwood, 1 Bro. C. C. 358; 360, 361. The misrepresentation, however, must be a matter of substance, and the other party must be misled by it: Frower v. Newcome, 3 Mer. R. 704; 2 Kent's Com. 484; 1 Story's Eq. 191.

A transaction avoided by fraud cannot be subsequently confirmed, without a new consideration: Duncan v. McCullough, 4 Sir. & R. 483; Chamberlain v. McClurg, 3 W. & Ser. 36; Jackson v. Somerville, 1 Harris 370.

Courts of equity will grant relief on the ground of fraud established by presumptive evidence, where Courts of law would not deem the proof sufficient to justify a verdict: Fullager v. Clark, 18 Ves. 483; 1 Story's Eq. 190.

Was the evidence offered relevant and proper? With respect to Tyson's declarations, it will not be denied they would have been receivable if made to Harris himself. The question is then reduced to this: Was it allowable to give evidence that might satisfy the jury of Tyson's intention to induce a general delusion of which he might take advantage, and which probably extended to the plaintiff, although there was no direct evidence of it. The Court thought not. If correctly, stupendous frauds may be committed with impunity. Courts of equity may deduce fraud from circumstances affording presumptions alone.

2. The inadequacy of price paid for the privilege granted is so gross as to shock the conscience, and afford conclusive evidence of a fraud practised.

Here "ore leave" worth $5000 was purchased for $50. Mere inadequacy, as a general rule, is not enough; but where the inadequacy is so great as to satisfy the conscience of the Court that there must have been imposition or oppression, relief will be afforded: 1 Madd. Ch. 268; Booth v. Vernon, 9 Mod. 147. The consideration of a deed may be of itself sufficient evidence of fraud: 1 Madd. Ch. 267. A bargain may be hard, yet valid, unless it shocks the conscience: Coles v. Trecothick, 9 Ves. 246. A legacy of 1000l., purchased for 310l., was set aside by Lord THURLOW, as a rank fraud, on account of the price: Crow v. Ballard, 1 Ves. 215. The inadequacy must be so great as to afford strong presumption of fraud: Butler v. Haskell, 4 Dessaus. 651; Udall v. Kenney, 3 Cowan 598. There are various decisions which serve as precedents: Lakey v. O'Donnell, 2 Sch. & Lef. 471; Maskeen v. Cole, cited 1 Madd. Ch. 269; Clarkson v. Hanway, 2 P. Wms. 203. Where the inadequacy is great, though of itself insufficient, the Court will lay hold of slight attendant circumstances to rescind the contract: Harden v. Crawford, 1 Atk. 390; Heathcock v. Paignon, 2 Bro. C. C. 167; Stephens v. Bateman, 1 Ib. 22, 26, cited in a note to Moth v. Atwood, 5 Ves. 485; Osgood v. Franklin, 2 John. Ch. 23; Hough v. Head, 2 Ham. 502; Gest v. Frazier, 2 Litt. 118; Hardeman v. Barge, 10 Yer. 202; Tripp v. Tripp, 1 Rice, Eq. 84; Williams v. Powell, 1 Ire. Eq. 466; George v. Richardson, Gil. 230; McKinney v. Pinkhard, 2 Leigh. 149; Thornhill v. Evans, 2 Atk. 330; Pickett v. Laggon, 14 Ves. 215. In How v. Weldon, the only attendant circumstance was the known improvidence of sailors: 2 Ves. Sr. 516.

The disclaimer ought not to have been received at that stage of the cause. The letter produced by Sidwell had not been read to plaintiff or seen by him, and ought not to have been read to the jury, especially as the witness could not remember what he said to Harris.

Hickman and Lewis, for defendants in error.—In order to sustain the three points on which the plaintiff mainly relied, his effort on the trial in the Court below was, not to prove declarations made by Isaac Tyson and communicated to Jesse Harris, nor circumstances relating to the transactions between the contracting parties, but to give in evidence the declarations and acts of Tyson, which could in no wise have effected the contract on any reasonable ground of presumption or belief. It would by no means follow that if Tyson's declarations respecting the chrome had been carried to Harris, he would have given them a serious thought in making the subsequent contract. Their effect on his mind might possibly in such case have been properly left to the jury, as a subject of presumption. But it will not do to presume first, that Harris was informed of those declarations, and then, on the basis of that presumption, raise another, that he was influenced to his injury by those declarations. No presumption is allowable which rests only...