Opinion
08-10-1888
GRAY v. BOWMAN.
J. W. Wartman and J. S. Scovel, for complainant. M. B. Taylor and S. H. Grey, for defendant.
Bill to rescind a contract.
J. W. Wartman and J. S. Scovel, for complainant. M. B. Taylor and S. H. Grey, for defendant.
BIRD, V. C. Gray was the owner of several houses and lots in Camden and in Winona. Bowman was the owner of a hotel and lot of ground at Anglesea, on the Atlantic coast. This hotel was at a new seaside resort, and had been run only two years. On the———of March, 1887, these parties agreed to exchange these properties. On the———day of March the agreement was specifically performed. Gray soon took possession of the hotel, and ran it through the season. On the———day of October, Gray filed this bill, by which he seeks to have the contract rescinded, and to be restored to his former position. Fraud on the part of Bowman is the ground of this prayer. Gray alleges that Bowman induced him to buy; telling him that when he (Bowman) purchased the hotel he gave $30,000 for it, and that there was a mortgage on it for $15,500; and also that, during the two years of 1885 and 1886, the guests had averaged 70 per day. He also alleges, and offered some proof to show, that Bowman offered to sell, and by the original agreement did bind himself to sell, to him a much larger tract of land than was included in the deed; and that he likewise promised to advance to him $2,500 to be secured by mortgage on the hotel.
It will be perceived that Gray can take nothing by this allegation as to the quantity of land, because he accepted the deed for a less quantity than he says he agreed to buy; and that, too, with a full knowledge of the contents of the deed, and of the quantity of land described therein. He does not pretend that there was any fraud practiced on him by which he was induced to accept the deed without understanding the quantity of land described therein. He was bound to speak then. By accepting the deed, he accepted every change, from the alleged original agreement which was expressed in the deed, unless he can show that, by some trick or device, he was deceived into a false belief as to the contents of the deed. And what has been said of the fraud alleged, respecting the quantity of land, is applicable to the charge concerning the promise to loan $2,500. Gray accepted $1,000 in lieu of the $2,500, and that prevents him from being heard now.
Three allegations of fraud remain to be considered: First, that Bowman said that he paid $30,000 for the hotel and grounds; second, that he had secured a mortgage thereon for $15,500; and, third, that the house had a patronageof 70 guests per day, for the two preceding years. Gray says that Bowman told him, when they were negotiating, that the hotel cost $30,000. And Bowman admits saying that it cost from $25,000 to $30,000, and insists that that is the truth, when all the costs of the surrounding improvements are taken into the account. A man by the name of Coleman was sworn as a witness, on behalf of Gray, who fully corroborates Gray in about all that he says, on this point as well as on all others. But he was in the real-estate business, and had his office in the same room with Gray, and about his character there were some revelations, even from his own lips,—such as that he had been employed by Bowman to repeat to Gray the whole of the fabricated story of which Gray now complains, and knowing that it was a fabrication, and deliberately doing it for the purpose of deceiving Gray, who he knew was confiding in him,—which renders it quite impossible to place any reliance on anything he has said. But, whatever the exact language of Bowman was, I am satisfied, from all the circumstances of the case, that Gray was not materially influenced thereby, at the time. I have no doubt that Gray would have taken the hotel had Bowman said that it cost only $25,000. I say this because Gray says that he was to have a much larger lot of ground than he got, and was to have a loan on the furniture of $2,500, when Bowman, at last, would only let him have $1,000; and also because Gray had these city lots on hand, and was doubtless anxious to exchange them for seashore property, if not charmed with the view of keeping a hotel in such a locality. Gray's city lots were heavily in-cumbered, and he was in arrear, both in taxes and interest; so that the $1,000 which he secured by the exchange was all employed in discharging these liens. And, besides this, it is in evidence that the hotel did cost $28,000. I do not wish to be understood as holding that a man cannot bind himself by such assertions as that a parcel of land or an article of merchandise cost a given sum, or that any such assertion may not be said to amount to a fraud. I only conclude that enough does not appear in this case to satisfy me that Gray was controlled by the assertions to such an extent as that he would not have made the purchase had the precise cost been given him.
And these last observations apply with equal force to the charge of fraud secondly named. Bowman is very emphatic in his denial of saying that the hotel had a patronage of 70 guests each of the two preceding years. He says the subject was talked about, and that he was there on one occasion the year before; that he may have said that there were 40 or 50 or 60 there at the time. But Bowman referred Gray and Coleman to Mrs. Tomkins, who had managed the hotel for the two previous years, and to Mr. Swope, who had owned it, as to all these matters. Mrs. Tomkins was, at the time, living very near the hotel, but there is some uncertainty whether Gray called on her or not. Both he and Coleman called on Mr. Swope, and from him they learned very much about the true situation of the premises. He says that inquiry was made as to the number of guests for the two preceding years, and that they asked if there were as many as 40 or 50 or 60, and that he told them, "No; not over 20." Now, there was some doubt in his mind whether Gray was present when this conversation was had, but I can have no doubt of it, if Coleman's story is to be credited at all; for he swears that he was Bowman's agent, and employed to bring about this exchange, and that a lie was put into his mouth by Bowman, which, for a price, he was to repeat, and which he had repeated many times to Gray. Now, why should he, at this stage of the negotiations, ask Mr. Swope as to the number of guests? If he was the real agent of Bowman, he had all the information required on this score. No; there was no possible reason for him to interrogate any one on this. But the inquiry was, I am satisfied, made, and that, for the reasons given, in the presence of Gray. This information Gray was bound to heed. Mr. Swope had been the proprietor of the house for those two years, and Bowman had referred Gray to him; so that it can have no material influence on the case, in a court of equity, whatB. said, for Gray had gone to a more reliable source of information, as directed. He was not bound to go, but, having been so directed, and having gone, he cannot now ignore what he there learned. There is only one theory upon which it can be believed that Gray was not present when Mr. Swope said that the guests had not exceeded 20; and that is that Coleman was, in truth, the agent of Gray, and not of Bowman, as Bowman insists. Bowman swears that he never employed Coleman in the matter at all. He admits paying him a small sum of money after this transaction, but says that it was on another account. Gray also paid Coleman a small sum of money, but he not only swears that it was not on this account, but that he never employed Coleman. Besides this, it appears that the hotel register, which had been used for the two previous years, was left in the hotel, and was all the time on the desk. Mr. Gray was in the hotel twice at least before the purchase, and, I think, three times,—once alone with Coleman; and, if he did not examine the register, he must have been very indifferent as to the number of guests. But the fact that he was indifferent in this is enforced by the further fact that he soon took possession of the hotel, and had abundant means of ascertaining the whole truth, and undoubtedly did; but he never uttered a word of complaint to it until the season was about at an end.
I conclude, however, upon the whole case, that the contract should be rescinded; and that there should be a reference to ascertain the amounts of money due from each of the parties, and to state the balance that may appear to be due,—including therein all principal moneys, interest, taxes, and moneys paid for other liens discharged, and also paid for valuable permanent improvements. But I conclude that this should be without costs; and, to show why I so conclude, I have taken the pains to make the foregoing outline of the principal points of the testimony. And, in addition to the foregoing, it is worthy of remark that when, at the close of the season, Gray and Bowman met at or near the hotel, and Gray complained that the business had not been prosperous, Bowman offered to re-exchange with Gray. It is true that Gray denies having any conversation with Bowman at this time. But one or two witnesses are called, who say that they saw and heard them in conversation; and one of them says that he spoke to them, and interrupted their talk. Neither heard anything that was said. I conclude that Bowman made this offer, and I should infer, from the testimony, that it was to his interest to do so. Again, Gray made no demand of Bowman before filing his bill. I do not decide that this was necessary in order to carry costs; but, under the circumstances, it has influence with me in withholding them. It should be added that, almost immediately after the suit was begun, Bowman tendered to Gray a deed, reconveying to him all the lands which Gray had given in exchange for the hotel, and demanded that Gray should restore to him all his former rights. Gray refused to comply with this demand. It is true, Bowman did not tender the costs up to the time of the tender. And I do not say that he was not obliged to, in order to make the tender complete; but it has influence with me in withholding costs when, from that moment, it was most apparent to Gray, (himself a lawyer,) and to his counsel, that, if Gray was sincere, both parties were anxious for a rescission.