US SUPREME COURT DECISIONS

The courts of the United States have equity jurisdiction to rescind a contract on the ground of fraud, after one of the parties to it has been proceeded against on the law side of the court and a judgment has been obtained against him for a part of the money stipulated to be paid by the contract.

This Court has been often called upon to consider the sixteenth section of the Judiciary Act of 1789, and as often, either expressly or by the course of its decisions, has held that it is merely declaratory, making no alteration whatever in the rules of equity on the subject of legal remedy.

It is not enough that there is a remedy at law; it must be plain and adequate; or in other words as practical and as efficient to the ends of justice and its prompt administration as the remedy in equity.

It cannot be doubted that reducing an agreement to writing is in most cases an argument against fraud, but is very far from a conclusive argument. The doctrine will not be contended for that a that a written agreement cannot be relieved against on the ground of false suggestions.

It is not an answer to an application to a court of chancery for relief in rescinding a contract to say that the fraud alleged is partial, and might be the subject of compensation by a jury. The law, which abhors fraud, does not permit it to purchase indulgence, dispensation, or absolution.

A bill in chancery was filed in that court by the appellee, Felix Grundy, against the appellants, the executors of James Boyce, to enjoin a judgment at law which they had obtained against him for $4,700, and to rescind a contract made between James Boyce and himself, on 3 July, 1818, by which Boyce sold and agreed to convey to the complainant, Grundy, 950 acres or arpents of land on the Homochito River, in the State of Mississippi, and for which Grundy agreed to pay him $20,000, $2,000 two thousand of which were to be paid in hand, and the balance in yearly installments of $2,000. A deed of general warranty was, by the written agreement of the partners, to be made to the purchaser in four years.

Grundy having failed to pay the amount of the installments chanrobles.com-red

Page 28 U. S. 211

due January 1820 and 1821, Boyce's executors commenced suit upon the contract for the two first installments, in the Circuit Court for the District of West Tennessee, and recovered judgment for the same with interest. On 30 August, 1823, Grundy filed his bill, praying an injunction against the judgment at law, and a rescission of the contract.

The grounds of equity stated in the bill and relied on were the fraudulent and false representations of Boyce in making the sale of the land.

1. In regard to an island in the river, part of the land purchased, containing 265 acres, not being subject to inundation, except a very small part, easily prevented; and of the quality of the land on said island.

2. In showing and selling a body of good and level land, as part of the tract, which is not included within its limits. And representing that a quantity of bad and hilly ground was not within the tract, which is included.

3. In representing that he had a good title to the land, having no title, and not being able to make a good right.

The answer of the defendants in the circuit court denies the allegations charging fraud and misrepresentation by James Boyce, and avers Grundy's information as to the true state of the title, the quantity and quality of the lands, and alleges that they have been prevented from obtaining the legal title by the failure of Grundy to pay the installments due upon the contract, and which were necessary to enable them to obtain a conveyance.

Depositions were taken on the part of the complainant and the defendants, which with other testimony were exhibited in the circuit court on the hearing of the cause. The testimony exhibited on the part of the complainant in that court fully established the allegations in the bill to the satisfaction of the court. The whole evidence is referred to, and the facts of the case are sufficiently stated in the opinion of this Court.

The circuit court perpetuated the injunction and rescinded the contract between Boyce and Grundy, and decreed that chanrobles.com-red

Page 28 U. S. 212

the money paid by the complainant to Boyce should be refunded with interest. The defendants appealed to this Court. chanrobles.com-red

Page 28 U. S. 214