THIS was an appeal from the Circuit Court of the United States for the District of Maine, sitting as a court of equity.
The facts are all stated in the opinion of the court.
It was argued by Mr. Fessenden, for the appellants, and Mr. Rowe, for the appellee.
The points made by the counsel for the appellants were the following, viz.:
The complainants claim to have their deed to Black, dated November 30, 1846, cancelled, and a reconveyance of said estate, on the following grounds.
1. For fraud and fraudulent representations.
2. For inadequacy of price, as, of itself, furnishing evidence of fraud.
3. For the two preceding grounds united.
General Considerations. The acts and declarations of Black, to show he had formed a design to commit frauds in making this purchase, as opportunity should offer.
All such acts and declarations of Black made to other persons, about the time of the transaction, are competent evidence for complainants, for that purpose. Bradley v. Chase, 22 Maine Rep. 511; Warner v. Daniels, 1 Woodb. & Minot, R. 90; Wood v. The United States, 16 Pet. R. 342; s. c. 14 Pet. R. 430.
Complainants rely on the testimony of the Vermont witnesses, viz.: Edward F. Putnam, Albert G. Soule, E. P. Soule, and Phebe Hendricks, to prove such acts and declarations of Black.
First Proposition. The bill, answer, and evidence, establish complainants' proposition of fraud, on the part of Black, in several particulars, either of which is sufficient to entitle them to a decree in their favor.
1. As to complainants' title and the evidence of it, and Black's misrepresentations concerning it.
2. Black's misrepresentations as to the number of acres.
3. Black's misrepresentations as to incumbrances on the land, and particularly of his lien thereon for taxes, alleged to have been paid by himself.
4. Black's misrepresentations of the value of the land.
(Each one of these points was examined according to the evidence.)
Second Proposition. The doctrine is well stated in Story's Commentaries on Equity Jur. §§ 245 and 246. After stating the general proposition that mere inadequacy is not a sufficient ground for relief, he says, (sect. 246,) 'Still, however, there may be such unconscionableness, or inadequacy in a bargain, as to demonstrate some gross imposition, or undue influence; and in such cases, courts of equity ought to interfere upon the satisfactory ground of fraud. But then, such unconscionableness, or such inadequacy, should be made out as would, to use an expressive phrase, shock the conscience, and amount, in itself, to conclusive and decisive evidence of fraud. And where there are other ingredients in the case of a suspicious nature, or peculiar relation between the parties, gross inadequacy of price must necessarily furnish the most vehement presumption of fraud.'
The same doctrine is stated in Fonb. Eq. B. 1, c. 2, sect. 9, note e.
'Where the deed is executed, if the parties have not been on equal footing, or, if there has been any concealment, or misrepresentation, or imposition, courts of equity uniformly set aside such deed or contract.' Sug. Vend. 6th Amer. ed. p. 317, and note 2.
'Where the circumstances of the case are such as have afforded an opportunity, either from the situation or condition of the parties, or the nature of the property, for either of them to take a fraudulent advantage of the other, and the consideration is grossly inadequate, this court considers that circumstance to be evidence of fraud, and will not only refuse a specific performance at the instance of the former, but will, at the suit of the latter, rescind the transaction.' Jer. Eq. Jurisd. 483, and notes.
'A conveyance, obtained for an inadequate consideration, from one not conusant of his right, by a person who has notice of such right, will be set aside, although no actual fraud or imposition be used.' Sug. Vend. 6th Amer. ed. 320.
'Although it may be impossible, by any general proposition, to define what is to be understood by gross inadequacy of consideration, as it must, in a great measure, depend upon the circumstances of each individual case in which the question may arise, yet, if it be so gross and palpable, as of itself to afford evidence of actual fraud, the court will set aside a sale.' Jer. Eq. Jur. 433, (note 7); Osgood v. Franklin, 2 Johns. Ch. 1, and cases cited.
In Turner v. Harvey, 1 Jacob's Ch. R. 169, which was a case where the vendors were ignorant of a fact or circumstances considerably increasing the value, the court say: 'If a word, a single word be dropped which tends to mislead the vendor, the principle that the purchaser is not bound to give the vendor information as to the value of the property, will not be allowed to operate.'
Again, in Hill on Trustees, 152, it is said, 'Mere inadequacy, of itself, is not enough to set aside a contract; but where the inadequacy is so gross that it is impossible to state it to a may of common sense, without producing an exclamation as to the inequality of it, the court will infer, from that fact alone, that there must have been such imposition, or oppression in the transaction, as to amount to a case of fraud, from which it would not suffer any benefit or advantage to be derived. Other circumstances of fraud will aid the court.'
To apply these principles to the case at bar.
The inadequacy of price, in this case, is such, as of itself, to afford evidence of fraud. In 1799 Parsons conveyed to Putnam for 50 cents an acre. Black paid Tyler and wife 8 1/2 cents an acre.
Black, in his answer, says that it was worth from 50 cents to $2 per acre, November 30, 1846. Now 50 cents to $2 averages $1.25 per acre; so that Black purchased for 8 1/2 cents an acre what he admits was worth $1.25 an acre. He bought for $50 what he admits was worth $757.50.
Third Proposition. The bill may be sustained on the ground of fraud and fraudulent representation, and for inadequacy of price, united.
On these principles the court will find a rule for their guidance in Seymour v. Delancey, 6 Johns. Ch. R. 222. Chancellor Kent, in that case, found it convenient to take the average value, as ...