Rackemann v. Riverbank Imp. Co.
| Decision Date | 21 October 1896 |
| Citation | 44 N.E. 990,167 Mass. 1 |
| Parties | RACKEMANN et al. v. RIVERBANK IMP. CO. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
J.C. Gray, for plaintiffs.
C.A Williams, for defendant.
This case comes up on demurrer. According to the averments of the bill, an agent employed by the defendant to offer the defendant's land for sale, in order to induce the plaintiffs to buy a lot at $3.50 a foot, offered, in behalf of the defendant, that if they would do so the defendant would not sell any of its land shown on a plan at less than that price. The plaintiffs accepted the offer, and agreed to buy a lot on the terms offered, and afterwards took a deed thereof from the defendant. The agent's offer was not in writing, nor did the defendant give him any authority to make it, and at the argument the plaintiffs conceded that he had no implied authority; but the plaintiffs never doubted that he had authority. Within a little less than a year after the plaintiffs took their deed, the defendant was offering lots and actually sold two lots, at less than that price. The plaintiffs were soon informed of these facts, and notified the defendant that each sale was a breach of the defendant's agreement. The defendant denied that its agent had any authority to make such an agreement, and repudiated the same. Up to this time the plaintiffs had no doubt that the agreement was made with the authority of the defendant, and there had been no communication nor occasion for communication between the plaintiffs and the defendant upon the subject of the agreement. Negotiations ensued, and about five months later the plaintiffs notified the defendant of their election to rescind the transaction, and demanded back the money paid by them, and the cancellation of a note given in part payment, and a discharge from the covenants of a mortgage given to secure the note. The defendant contends that there was no contract until the principals made one, and that the defendant never contemplated that the agreement now relied on should form a part of the transaction. The bill sufficiently avers that there was a contract between the plaintiffs and the agent, and that it was understood by the plaintiffs that the agent's agreement with respect to the price in the future should form a part of the transaction. This was not so understood or contemplated by the defendant, and the agent had no express or implied authority to make the agreement. Accordingly we are to assume that the plaintiffs accepted the deed with the understanding that they had an oral contract of the defendant, through its agent, in respect to the price at which future sales should be made, when, in point of fact, they had not got one.
The question does not arise in this case whether the plaintiffs retaining the land, could maintain an action for damages against the defendant for breach of its agent's contract. The plaintiffs make no claim for damages. Neither do they make any charge of fraud. But they seek to rescind the transaction on the ground that they did not get what they thought they were getting, namely, an agreement to keep up the price of the neighboring lots. The defendant repudiates the contract which its agent made in its behalf, as unauthorized and void. The plaintiffs concede the defendant's right to do this. The question is, can the plaintiffs, under this state of things, be held to their purchase, or are they entitled to rescind it, and get back the consideration which they paid, upon reconveying the land to the defendant? Upon the averments of the bill, we think that they have this right of rescission. The defendant would not have secured the advantage of the sale to the plaintiffs except for the offer and promise of its agent. The defendant employed him to offer its land for sale. He made the offer of a lot to the plaintiffs, accompanied by the promise which has been mentioned. The plaintiffs agreed to take the land with the promise. It turns out that they got the land without the promise. The defendant cannot retain what is beneficial in the transaction, while disclaiming what is onerous. When it repudiates the means by which the plaintiffs were brought to contract with it, this entitles the plaintiffs to give up the contract altogether, unless there is some other objection to their doing so. The rule in this respect is the same whether the unauthorized act of the agent was fraudulent or merely a matter of warranty or promise. Udell v. Atherton, 7 Hurl. & N. 172; Brady v. Todd, 9 C.B. (N.S.) 592, 606, ad finem; Bank v. Addie, L.R. 1 H.L.Sc. 145; Houldsworth v. Bank, 5 App.Cas. 317; Kennedy v. McKay, 43 N.J.Law, 288; Titus v. Railroad Co., 46 N.J.Law, 393, 420; Krumm v. Beach, 96 N.Y. 398; Eberts v. Selover, 44 Mich. 519, 7 N.W. 225; Knappen v. Freeman, 47 Minn. 491, 50 N.W. 533. ...
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