U.S. Supreme Court
Farnsworth v. Duffner, 142 U.S. 43 (1891)
Farnsworth v. Duffner,
Argued November 4, 1891
Decided December 14, 1891
142 U.S. 43
In a suit in equity for the rescission of a contract of purchase, and to recover the moneys paid thereon on the ground that it was induced by the false and fraudulent representations of the vendor, if the means of knowledge respecting the matters falsely represented are equally open to purchaser and vendor, the former is charged .with knowledge of all that by the use of such means he could have ascertained, and a fortiori he is precluded from rescinding the contract and from recovery of the consideration money if it appears that he availed himself of those means, and made investigations, and relied upon the evidences they furnished, and not upon the representations of the vendor.
Statements by a vendor of real estate to the vendee, made during the negotiations for the sale, as to his own social and political position and religious associations are held, even if false, not to be fraudulent so as to work a rescission of the contract of sale.
It is no ground for rescinding such a contract that the agents of the vendors, who had received the full purchase money agreed upon, misappropriated a part of it. chanroblesvirtualawlibrary
The Court stated the case as follows:
On February 26, 1879, a tax deed was executed by the Clerk of the County Court of Upshur County to George Henning and others for a tract of land supposed to contain 40,000 acres. The grantees in this tax deed were twenty-two in number, who had entered into a written agreement on December 11, 1877, to purchase the land at tax sale in that month. On April 24, 1883, this agreement for the purchase of this land was executed:
"We, the undersigned, agree to and with George Henning & Co., and bind ourselves to do certain things, through and with the committee of said company, viz., D. D. T Farnsworth, Jackman Cooper, and P. Thomas, as follows: we agree to pay to said committee fifteen thousand dollars for a certain tract of 40,000 acres of land, known as the 'Wm. H. Morton Land,' that was sold for nonpayment of the taxes, and bought by said George Henning and others, to whom the State of West Virginia made deed,"
"one hundred dollars of which sum in hand paid to said committee; two thousand dollars to be paid to said committee at the Buckhannon Bank on the 4th of May, 1883; the residue of said fifteen thousand dollars to be paid at the time of the making of a deed for said land; said deed to be made within forty days or as soon thereafter as possible. The deed shall convey all the rights and title to said land as conveyed by the state in a deed made to said company, the deed to be made to Joseph Duffner, Charles Duffner, and Matthew Duffner, the undersigned, with the guaranty that the said tract of land shall contain at least twenty thousand acres not legally held by actual settlers within the boundary of said tract of 40,000 acres; but in the making of the deed for said land it shall provide that all the actual settlers within boundary who have been in peaceable possession for ten years, according to law, and have paid the taxes on their claim or title, shall not be disturbed by any attempt in law from their boundaries so held by deed or title; all the rest of said 40,000 acres is to be held by the undersigned.
Now, if the said D. D. T. Farnsworth, Jackman Cooper, and P. Thomas shall make or cause to be made to us, the undersigned, a deed as above stated for said 40,000 acres, we will faithfully perform our obligations herein made. Witness our hands and seals this day and year of our Lord, April 24, 1883."
"CHARLES DUFFNER [Seal]"
"JOS. DUFFNER [Seal]"
"MATTHEW DUFFNER [Seal]"
"P.S. We agree also to pay the taxes on said land for the year 1883."
Thereafter a deed was made in pursuance of this agreement. The deed was dated May 12, 1883, but not in fact delivered until July 14, 1883. It purported to grant "all the rights, title, and interest vested" in the grantors by the tax deed heretofore referred to, which was specifically described. It also contained this provision in reference to settlers on the tract:
"The parties of the first part herein named convey the above-named 40,000 acres of land to said parties of the second part herein named, with the provisions that all of the actual settlers within the boundaries of said survey who have been in peaceable possession for ten years previous to this date according to law and having paid all of the taxes on their claim of title to any of said land shall not be disturbed by any attempt or action in law from their boundaries so held by them by deed as aforesaid, but all of the residue of said 40,000 acres is herein conveyed to the parties of the second part, and held by them, with the guaranty that said tract or survey of land shall contain at least 20,000 acres not legally held by actual settlers, as above named and provided for, within said boundary of 40,000 acres; but if, in case the quantity of land in said survey should prove to be less than 20,000 acres after deducting the number of acres legally claimed and held by actual settlers, as above herein named, then the parties of the first part, grantors, who now constitute the legal owners of said tract of land which was sold for the nonpayment
of the taxes due thereon in the name of William H. Morton, are to refund back to the said Duffners, parties of the second part, in proportion per acre for any deficiency of land below or less than 20,000 acres in said survey."
On February 12, 1886, Joseph Duffner, who had in fact advanced all the money for the purchase of this land and who had succeeded to the rights of his associates in the deed, filed his bill in the District Court of the United States for the District of West Virginia setting forth the fact of his purchase and the amount of money paid and alleging that the purchasers were induced to purchase through the false and fraudulent representations of the several grantors, such false and fraudulent representations being set out in full; also that the tax deed was void, and conveyed no title to any land by reason of three matters specifically pointed out, and praying a decree that the several grantors be adjudged to return to him the moneys by him paid, in proportion to their several interests as grantors in the conveyance. To this bill the defendants answered separately. Thereafter, on pleadings and proofs, the case was submitted to the court, and a decree entered in favor of the plaintiff in accordance with the prayer of the bill, setting aside the contract of April, 1883, and adjudging that the several defendants pay to the plaintiff their proportionate amounts of the moneys paid by him. The amounts thus decreed against two of the defendants, Daniel D. T. Farnsworth and Philip Thomas, being each over $5,000, they have appealed to this Court. chanroblesvirtualawlibrary