Green v. Chandler

25 Tex. 148

• Court: Texas Supreme Court
• Decided: July 1, 1860
• Status: Published

Opinion

Roberts, J.

The charge of the court is concluded with the following instructions, to-wit: “On the whole case then, as to titles, the court instructs that the law of the" case is with the plaintiffs, for want of sufficient proof of any material defects in his title, or of any valid superior title in a third party.” This in effect decided the case. Eor if there was no sufficient evidence of a defective title, or superior outstanding title in another, the grounds set forth by Green in his answer, for a rescission of the contract of sale had failed. The true issue was whether or not Green had a right, under all the circumstances, to abandon and rescind the contract at the time he gave notice to Chandler that he would abandon it, and in pursuance thereof did leave the premises.

The suit was in substance on the part of Chandler an effort to enforce a specific performance of the contract for the sale of land, and on the part of Green an effort to have it declared to have been already rescinded by virtue of his own acts of renunciation and abandonment, predicated upon the then existing state of things.

The grounds upon which Green claimed to be entitled to have the contract declared to be rescinded, which the evidence tended to establish, were, that Chandler represented his title to he good at the time of the sale, and that he purchased relying upon such representation; that Chandler had no title to the land which authorized him to sell it; that he, Green, had paid a part of the purchase money, had made valuable improvements, would continue to improve and cultivate the land if he remained upon it, and the bond given to him by Chandler and wife was no adequate security for the damages he might sustain if Chandler ultimately failed to make him a title; and that after finding out the defect of title in Chandler, he, Green, offered to rescind the contract, give up the money paid, and his improvements, as a compromise, and upon his • proposition being rejected by Chandler, he gave ^notice that he would abandon the contract, and in pursuance thereof did abandon the premises.

An examination of these grounds separately will facilitate a proper understanding of the case.

1st. That Chandler representecUiis title to be good at the time of the sale, and that he, Green, purchased, relying upon such representation.

It will be proper first to consider the subject upon the supposition that the representation was not fraudulently made, and did not deceive Green in the purchase. This representation, in the absence of fraud, is nothing more than what is implied from the execution of the bond from Chandler and wife to Green. The fact that a party undertakes to sell, implies an affirmation on his part that he has such title on his part as he binds himself to convey. (3 Blackstone, 451; Story on Sales, 367; 9 Price (Eng. Exchq.) 488, Purvis v. Rayer; and 5 Barn. & Adolph. Souter v. Drake, 992.)

The allegation and proof that Chandler did actually represent his title to be good was not otherwise important, in the absence of fraud, than as showing that he did not agree to take such title as Chandler had, or that he would risk his then having or afterwards getting a more perfect title than that which he then had. If Green purchased with a knowledge of any defect of Chandler’s title, or with any risk as to his getting a better title, those were facts to he alleged and proved by Chandler, in order to enable him to hold Green bound to adhere to this executory contract. (Cooper v. Singleton, 19 Tex. R., 260.) The charge omits to present the existence of this implication, and to fix the burthen of removing it upon Chandler.

2d. That Chandler had no title to the land°which authorized him to sell it. Chandler held under a title bond from Watson and wife. The land sold was the separate property of Watson’s wife, and there was no private examination and acknowledgment of the bond by Mrs. Watson, nor was it on record, up to the time of the institution of the suit and the filing of the answer or cross-bill. Chandler had not paid one cent toward the land thus sold. It is not shown that Green was apprised that Mrs. Watson had not fully and properly executed the bond, at the time of the sale, and it is only rendered probable that he knew that Chandler had paid nothing toward the land. Green’s knowledge or information of these facts, or either of them, was a question for the jury, to be determined under an instruction that the burthen of establishing such knowledge or information rested upon Chandler. That these facts, constituting the alleged defects of title, existed, is not denied and was not controverted. Chandler then had simply no title at all to the land which he had undertaken to sell to Green, hi or did he have that which would, in law or equity, give him any pretence for asserting a title to the land. (Callahan v. Patterson & Patterson, 4 Tex. R., 61.)

If Green had no notice of the facts, and particularly of the important fact that Mrs. Watson had not properly executed the bond, he had the right, prima facie, upon ascertaining the defect, to renounce the contract at once. (Higgison v. Clows, 15 Vesey, 524; Hovendon, 2 vol., 9-30.) In the case of Purvis v. Rayer, it is said that “it is a general rule in equity, founded on the principles of honesty and the dictates of good sense, that if a person, generally speaking, offers any thing for sale, the vendee, or he who becomes the purchaser, is entitled to see that the vendor has it with the qualifications, and in the way in which he, the vendee, understood that he bought it; that is, so as to afford him an assurance of having bought what he wanted, and meant to buy, or at least, what was offered or professed to be sold, or he may reject the contract.” (9 Price, 488; 4 Eng. Exchq., 188.) As it is expressed in Story on Sales, “where there is a total failure of title on the part of the vendor, the vendee may, if the contract be executory and unfulfilled, refuse to,perform it, and reclaim any portion of the purchase money which he may have advanced.” (St. on Sales, 176; Barn. & Adolph., 999; Sugden on Vendors, 1 vol., 241; Judson v. Wass, 11 Johns. R., 528.) “Where one party fails in performing the contract, the other, if he mean to rescind it, should give a clear notice of his intention.” (1 Sugden on Vendors, 266.) If a party wishing to rescind the contract fail to give such notice, by some act indicating his intention, in a reasonable time after he is apprized of the defect, he may often be deemed to have waived his right to abandon the contract, if afterwards the vendor should be able to make a title. (Hogart v. Scott, 1 R. & M., 293; 1 Adolph. & Ellis, 40.) This right to abandon the contract is subject to many equitable qualifications, dependent upon the various circumstances in which the parties are placed, and the relations they occupy towards each other in reference to the trade, and upon the conduct of the parties after the defect is discovered, &c.

For instance, in this case, this implied affirmation of title in Chandler was part of the consideration of the contract, as well as the prere promise of Chandler and wife to make a title upon the payment of the money. If it was not shown that Green relied alone upon such mere promise, and it appeared that Chandler had no title, then one of the considerations which constituted Green’s security did not exist. He had not obtained all that he had contracted for'. His chances for ultimately getting a title were diminished far below what they would have been if Chandler had such title as his contract implied. The purchase money he had already paid, and the improvements put upon land were more liable to be finally lost. On the other hand Chandler, although he had failed to have such right to the land, was not yet in default as to his promise to make title; for the money had not been paid, nor had the time arrived for the payment of the money, and Chandler might be able to cure the defect in his title before that time arrived, and he had placed Green in possession of the land. Still, Green could not be expected to continue to expend money and labor on the land after the discovery of his diminished security, unless the Security, which he certainly had, [the personal obligation to make title under a penalty,] was sufficient to protect him in the damages he might sustain if he never got a title. This gave him a right to re-investigate the extent of his remaining security, and to be assured by Chandler that it was sufficient to protect him; or to demand that Chandler should put himself in possession of the right implied in his contract. If Chandler had supposed he had a right to sell, and was "therefore a bona fide seller, if would be reasonable that Green should give him notice that he was dissatisfied with his security; and if Chandler then failed, after a reasonable time, to cure the defect, or to give assurance of ample security that he would make title, Green would have the right to abandon the contract, by giving notice to that effect and leaving the premises. (Taylor v. Brown, 2 Beavan, 183; Watson v. Reid, 1 Russ. & Milne, 236.)

Should Chandler afterwards cure the defect and seek to enforce the contract specifically, it would be incumbent on him to show that he had, in a reasonable time, cured the defect, or given ample assurance of security, or such other facts as would make it clearly equitable and just to decree a specific performance. (Jenkins v. Hiles, 6 Ves., 655; Mortlock v. Buller, 10 Ves., 315.) If the failure of title and notice of dissatisfaction and intended repudiation be shown, the burthen of showing the facts which would, in equity, entitle Chandler to enforce the contract, would rest on him; and it would not be incumbent on Green to disprove them in the first instance, to entitle him to rescind.

3d. The security for a title which Green had remaining at the time he gave notice of intended rescission, was the penal bond signed by Chandler and wife. This was not an obligation relating to her separate property. It would not bind her separate property, nor could it be made the foundation of a decree of court, subjecting her separate estate to liability for it. Green’s only security, therefore, was the personal liability of Chandler on the bond; and the amount of his property, as distinct from that of his wife’s, was not shown by Chandler, nor did it otherwise appear in the evidence.

The views thus far presented are predicated upon the assumption that Chandler sold the land in good faith, supposing he had a right to sell it, and that he did not purposely fail to exhibit the defect. In such case courts of equity, while recognizing the legal right of rescission, are liberal in relieving against the inequitable exercise of it, when the substantial rights' of the parties can be preserved. (Salisbury v. Hatcher, 2 Young & Coll., 54; Voorhees v. Meyer, 2 Barbour Sup. C. R., 47; Dutch Church v. Mott et al., 7 Paige, 77; Wood v. Machin, 5 Hare, 160; Eyston v. Simonds, 1 Young & Coll., 611.)

The rules of equity are very different, however, in a case of actual fraud. If Chandler was aware of the defect of his right to sell, and withheld information of it, and expressly represented that he had a good title, [that is, such valid right as authorized him to sell,] with intent to deceive Green, and thereby did decoy Mm into a purchase, a court of equity would not relieve against a rescission of the contract of sale by Green. Such positive fraud Would vitiate the contract, and equity would not help it out. (2 Sugden, 235, 240; 1 Brown, 62, 440.) Green, upon discovering the fraud, might at once give notice of his repudiation, either directly or by some act clearly manifesting it, and abandon the premises, and resort to any legal means to be restored to his rights or recover his damages. (Campbell v. Flemming et al., 1 Barn. & Ell., 40.) The fact that Chandler, after such abandonment, cured the defect in Ms right, or that Watson offered to make a good title upon the- payment of the money by Green, would not defeat Green’s right to rescind the contract. (Dalby v. Pullum, 1 Russ. & Milne, 296.)

“The effect of fraud is, not to alter the agreement partially, but to vitiate it in toto. A party who has been guilty of any sort of misrepresentation is barred, personally barred, from all right to enforce a contract, which that misrepresentation can have had any influence in inducing the other party to agree to.” ' (Clermont v. Tasbury, 1 Jac. & Walk., 120; Cadman v. Horner, 18 Ves., 10; Winch v. Winchester, 1 Ves. & Beat., 378; 1 Sugden on Vendors, 235, § 30; Edwards v. McLeary, Cooper’s Ch. Ca., 318; same case, Swanst. Ch. R., 302.) “Where a person takes upon himself to contract for the sale of an estate, and is not absolute owner of it, nor has it in his power, by the ordinary course of law or equity, to make himself so, though the owner offer to make the seller a title, yet equity will not force the buyer to take it; for every seller ought to be. a bona fide contractor.” (Sugden, 2 vol., 241, § 52.)

There is no evidence in this case of acquiescence in the contract notwithstanding the fraud, if fraud existed, and therefore it is unnecessary to press the inquiry into a consideration of the rules of equity on that subject. (Campbell v. Flemming et al., 1 Adolph. & Ellis, 44; Story on Sales, § 159, p. 137.) If there was a fraudulent representation as to Chandler’s title, upon which Green relied and acted in the purchase, this defect in Chandler’s right was a sufficient ground for rescinding the contract, if Green chose to do it. The defect existing at the time Green gave notice of abandonment and left the premises, and at the time of bringing the suit and filing the answer, the fact of curing the defect some months afterwards, by an acknowledgment of the bond by Mrs. Watson, would not relieve Chandler against the rescission.

The charge of the court in this case gave to the title of Chandler, notwithstanding its defect was cured after notice of renunciation of the contract, and after suit brought to rescind, the same effect as though it had been equally perfect at the time of the sale. This would certainly not have been correct if the jury had believed that Chandler had made a fraudulent representation or concealment, by which Green was deceived.

Under any view of the case that the jury might have taken of the evidence, as to the fraudulent representations, it was admitted that Chandler’s right was defective until some time after the suit was brought and the answer filed; and that rendered it inequitable for Green to pay the costs. (Eyston v. Simmons, 1 Young & Coll., 613; Dutch Church v. Mott et al., 7 Paige, 77.)

We are of opinion that there was error in the charge of the court, and therefore the judgment will be reversed and the cause remanded.

Reversed and remanded.