James Howard v. Abel Edgell and Horace A. Edgell, 17 Vt. 9

The opinion of the court was delivered by Bennett, J. This case comes before us by appeal from the decree of the chancellor of the fourth judicial circuit. The object of the bill is to relieve the orator from the effects of his contract, and the grounds of this application, are fully set forth in his bill. The case is important to the parties; and the counsel are entitled to much credit for their industry, and the ability displayed in the argument. > To carry into effect the exchange of the lands, contemplated by thé parties, an agreement, under seal, was entered into between the orator and Horace A.

Edgell on the 8th of May, 1839, by which they were to have the Charleston lands appraised. By this agreement the value of the orator’s lands was fixed at five thousand dollars. The appraisers were to appraise the Charleston lands in the same proportion in reference to their actual value, taking into consideration the fact that the orator was to have the use of both the Concord and Charleston lands until the ensuing April. In regard to the' actual value of these lands ; there is, as is common in such cases, considerable diversity of opinion.

Taking the average estimate of some twenty two witnesses, examined on the one side and the other, we find that the orator’s lands in Concord are estimated at about the sum of three thousand dollars. The average result of the estimate of the witnesses examined, (some seven or eight,) as to the value of the five several lots in Charleston, places them at about the sum of nine hundred dollars, though falling below. The «urn awarded by the appraisers to be paid to the orator, upon the exchange of these lands, was three hundred sixty six dollars and sixty seven cents. The result is readily seen.

Though the contract of the 8th of May was made by the orator with Horace A.

Edgell, preparatory to the exchange of these lands, y.et it is claimed by the defendants, that, after there had been an examination of the Charleston lands by the appraisers, and while they were assembled at Concord to examine the orator’s lands, and before any definite action had been had by the appraisers; there was a verbal agreement between the orator and the Edgells, that Abel Ed-gell -should take the place of his son in the contract, and that things should proceed from that time, in carrying out the contract, the same as if Abel had been a party to it from the beginning, instead of his son.

For the purposes of this case, we are disposed to consider such parol agreement as proved by the evidence, and to regard it as 'binding upon the parties; though we do not find it necessary-to form, and much less to express, any definite opinion upon the point. We shall then proceed upon the assumed ground, that no objection can be made, because subsequent proceedings were had, and .the award made, as between the orator and Abel Edgell. We are called upon to set aside this exchange of property, and to restore the parties to their original condition, as far as practicable.

The important inquiry is, shall this he done ? It is not uncommon for a court of chancery to refuse to lend its aid to enforce a contract by reason of inadequacy in the consideration; but it is well settled ¡that mere inadequacy, independant of and unconnected with other ■circumstances, is not sufficient, per se, to rescind a contract, unless its grossness amount to fraud. In the one case it is of itself sufficient ; in the other it is to be considered with reference to the evidence, which is to be derived from it.

There is no certain rule as to the degree of grossness, necessary to furnish in itself evidence of fraud. Lord Thurlow, in Gwynne v. Heaton, 1 Brown’s Ch. R. 9, says, “it must be an inequality, so strong, gross and manifest, that it must be impossible to state it to a man of common sense, without ,producing an exclamation at the inequality of it.” This, in substance, is the rule, as laid down by other chancellors ; and is, at best, loose and unsatisfactory, but too firmly established to. be altered without changing the-rules of property. Equity, which requires equality, should preside in all agreements.

This is required by the pure morality of the gospel. Inadequacy in consideration renders the contract inequitable, and the principle of moral duty imposes the obligation of supplying the deficiency. In the case before us the difference is more than two to one; under the civil law, if, in the sales of immoveable property, the inadequacy of price was equal to half the value, the contract was, on that account, held vicious. Though the common law has not adopted this rule, still it has adopted rules, which, as applied to the evidence in this case, require this contract to be rescinded.

The evidence presents other ingredients, to say the least, of a suspicious nature, which, connecting themselves with th.e gross inadequacy of price, materially assist the orator in making out a case. ■ The deed of the orator of his farm to Abel Edgell and the other (deeds and writings were made out the day before the award of the» .appraisers was made, and placed in the hands of Isaac Denison, one of the appraisers, and not to be delivered over by him to the persons to whom they should belong, until the appraisers had determined the relative value of the lands upon the principles of the written submission, executed by the orator and Horace A.

Edgell. This fact is established most fully by the answer of Abel Edgell, and by the other testimony.

A standard value oí five thousand dollars had been put upon the orator’s lands by the agreement of the parties; and it was made the business of the appraisers to appraise the Charleston lands in the same proportion in respect to their relative and true value, taking at the same time into consideration the use which was to be reserved to the orator in the lands.- Lawrence and Moulton, two of the appraisers, testify that they paid no attention to the valuation of the Concord lands, as fixed in the agreement, but appraised all the lands at such sum as they supposed to be their actual value.

We find that the appraisers eventually fixed upon the ultimate difference, which should be paid by Edgell upon the. exchange, as the average of the difference of each man's appraisal, upon the principles by which he was governed. It is admitted by the counsel for the defendants, that, unless there has been an appraisal according to the spirit of the requirements of the written agreement, there was no authority vested in Denison to deliver over the deeds, which he held as escrows, and that they must fail for want of a legal delivery.

It is, however, assumed by counsel, that the views of Moulton, as to the spirit of the contract, were correct, and the principles, upon which he and Lawrence proceeded in appraising the property, necessary, in order to^prevent the advantages of a catching bargain. If we grant this, position, it follows that the three appraisers should have come to a result by adopting the same principles. Denison, however, says he took Howard’s lands at the assumed value of jive thousand dollars, and appraised the Charleston, lands in the same proportion, and thus obtained his result.

Consequently, as the final result was obtained from the individual result of each appraiser, the relative value of the lands has never been, determined, either upon the one principle, or the other. It is, however, very clear that the written submission required the appraisers to value the Charleston lands according to a given standard, and thus furnish premises for a result, not showing the actual, but a hypothetical difference in the lands. It is said that this gives the orator an unconscionable advantage in the appraisal.

It may be so, but what then 1 It does not follow that the court can msike a different submission for the parties, nor that they would aid the orator in carrying into effect, or retaining, an exchange predicated upon such an appraisal. All the powers of arbitrators are derived from the submission of the parties; and so it must be with these appraisers. 17 Johns. 405. The result must be, that, the appraisers not having kept within their powers, their award, upon which the exchange is predicated, is void.

It cannot be disguised, that the proceedings in this ease present some, at least, of the appraisers in an unfavorable light. It is quite remarkable that both Moulton and Denison should have adjudged the difference, which Edgell should pay upon the exchange, only jifty dollars, when an average of a large mass of testimony before us shows the actual difference in the value of the lands to be more than two thousand dollars ; and especially when Denison tells us that he took, as his basis, the Concord lands at their assumed value. This tends strongly to show gross ■partiality. We have also the testimony of George W.

Denison, that Isaac Denison told him that Edgell was getting “an all-Jiredgreat trade out of Howard; and that Howard was very much worried about it.” This conversation Mr. Denison thinks took place at Burke, when the appraisers were on their way from Charleston to Concord ; and, in the same conversation, he testifies that Isaac Denison said he had got to go down to Concord and make the writings, as Edgell would have no one else do it. Isaac Denison, however, in his testimony, sáys he has no recollection of ever having any conversation with G. W.

Denison, or any one else, upon the subject of his making the writings, before he went from Burke to Concord; and says he did not tell G. W. Denison, or any one else, soon after his return from Concord to Burke, that Abel Edgell had cheated Howard, nor any thing of the kind; but he does state that after the appraisers had been at Charleston, and before they went to Concord, he told G. W. Denison that Edgell was making “ a great trade ” with Howard, and that he was surprised they should leave it to men.

But whether he got “ a great trade,” if by this was meant an unequal bargain, must depend upon the result of the appraisal; and we find this ■same Mr. Denison fixing the boot money at fifty dollars. It is urged by the defendants, that most probably G. W. Denison must he mistaken as to the time of the conversation with Isaac Denison and that it was after the return of the appraisers from Concord. This might seem probable; but if so, it would not help the case. If Denison made the expression, imputed to him by G. W. Denison, after the appraisal was completed, it shows that he did not act his. judgment in making it.

It appears that the deed from Howard to Edgell, of his farm, was put on record the 21st of May. If there is no mistake in the date of this record, it must have been done before the award was made. All agree that the award was made on the 22d of May. Denison says he delivered over this deed, after the award was made, with •the other deeds and writings. It is most probable there was a mistake in the Town Clerk, in the day of the month on which it was. filed for record. In the testimony of E. D. Goodwin it appears, that, in conversation upon the subject of the trade with Mr.

Gil-key, Abel Edgell said, he and Denison were old settlers together, that there had always been a good understanding between them, and that he was not afraid to submit the case to him. All that can be said of this is, that it goes to show a personal friendship, and, in connection with other testimony, may tend to establish an improper partiality. In regard to the “ Upper Melendy lot,” one of the five Charleston lots, it is quite clear that Abel Edgell had no title to it.

The title was in the heirs of Asa Mathewson, and his administrator, at the Orleans County Court, December term, 1839, recovered the possession of it. Silas Gaskill testifies, that, in 1838,- when he bargained with Edgell for this and other lots, he told him he could only give him a quitclaim deed of this lot, — that it was all he had of it, — and that there were adverse claimants to it, &c.

Brigham Pike states, that, in the spring of 1838, he examined the title of Silas Gaskill to this lot, found it disputable and doubtful; and that, upon being enquired of by Abel Edgell, why he did not buy it of Gaskill, he assigned to him this, as the reason. He also says, that this conversation with Edgell was while he lived at Concord, and before he removed to Derby in April, 1839.

Edgell, it is true, in his answer, denies that he was informed by Gaskill that there were adverse claimants to this lot at any time, before he gave his quitclaim deed to Howard ; and also denies that he was informed by Pike that the title of Gaskill was doubtful within the time specified. It is consistent with the answer that he was subsequently informed of it.

The fact that Gaskill had no title was readily discoverable upon an examination ofithe records in the Town Clerk’s office ; and! we think, in view of the evidence and the nature of the case, that Edgell is chargeable with notice, before his deed to Howard, that Gaskill’s title, and of course his own, was invalid. The purchase of this lot, though Howard, by the contract of the-8th of May, was to have but a quitclaim deed, was not a bargain of hazard as to title. H'e was to pay its full value; and had the right to expect an equivalent.

Abel Edgell, in his answer, says that Gaskill told him, that the person of whom he bought gave only a quitclaim deed, and that he was not willing to give any other, but that he believed the title good, and that he should be willing to give a warrantee deed, were it not that it would break in upon his uniform practice of giving such deeds only as he received. He says he informed Howard of whom he bought the lot, of the kind of deed he had taken, and the substance of what Gaskill had told him, and that he himself did not know whether- the title was good or not.

Howard, then, was assured that Gaskill believed the title good, and that it was not on account of any doubts as to title, that he could only give a quitclaim deed ; and that Edgell 'himself did not know about the title. Whereas, Gaskill says he told Edgell there were adverse claimants, of the name of Mathewson, as he was informed when he bought, — that he had been threatened with a suit, though none had been commmenced, and he did not believe any suit would be commenced.

This information he says he gave Ed-gell, at the time he traded with him, and he thinks, also, the.substance of it about a year before that time. Edgell not only suppressed the information, which we think he had as to the defect of his title; but, in representing that Gaskill thought his title good, and that he had no objection to giving a warrantee deed but his practice did that, which was calculated to quiet any examination as to the title on the part of Howard. That Howard supposed he was to get a title to this lot no one can doubt.

The average value of the lot, by the witnesses examined, is about three hundred and twenty dollars. With a deduction of this lot, it would leave the value of the Charleston lands, received by Howard on the exchange, less than six hundred dollars. If Prescott’s evidence, in regard to his being solicited to make Edgell an offer for the Gilman lot, and that of' Saunders, in regard to the offer which he says he made for the Allen lot, can be relied upon, they do furnish evidence of a device on the part of Edgell to obtain an over appraisal of the Charleston lands.

These witnesses, however, are opposed by the answer of Edgell; and it may be difficult to determine how the facts in this particular were. In the case of Brown v. Sawyer, 1 Aik., 130, the rule is laid down, that gross inadequacy of price is evidence from which a jury-may presume fraud, or mistake, if there be no circumstances in the case, which rebut the presumption.

Though it should be held, that mere inadequacy of price will not of itself substantiate a charge of fraud, yet, when gross, and connected with other circumstances of suspicion, (as in the case of weakness of intellect, not amounting to insanity,) it may furnish satisfactory ground for relief, especially in a court of equity.

When we take into consideration the gross inadequacy of price, the fact that no award of the appraisers was ever made upon the principles contained in the contract of submission, and the many ingredients, to say the least, of a suspicious nature attending the case, we have no doubt that the orator, Howard, should have relief.

This Court, then, advise that the decree of the Chancellor be reversed, that the deed of the orator of the 21st of May, 1839, of his Concord farm, to Abel Edgell, be held null and void to every intent and purpose ; and that Edgell, and all persons claiming under him, be perpetually enjoined from setting up any title to said premises, and every part thereof, under said deed, both at law and in equityand that they and each of them be restrained from using said deed as evidence in a court of law, or equity; that the bond of the orator to said Abel, under date of 21st of May, 1839, specified in the bill, be delivered up by said Abel to the orator to be can-celled ; and that the said Abel be perpetually enjoined from having and maintaining any action, or' actions, on any of the covenants in said deed, or upon said bond, or for the seizin and possession of the lands specified therein ; and that the defendants pay to the orator, by a time to be fixed by the Chancellor, the costs in the Court of Chancery, and also the costs in this Court.

It is farther advised that the two deeds from Horace A. Edgell to the orator, and the three deeds from Abel EdgelHo him, specified in the bill, of the Charleston land, be held void, and of none effect to pass the title to said lands, or to give an action on the covenants therein contained, and that the note of one thousand dollars of the said Abel to the orator, endorsed down to $366,67, be held null and void and of none effect.

Provided) however, the decree is to be of no effect, unless the orator shall pay to the clerk of the Court, for the use of the said Abel Edgell, by a time hereafter to be fixed by the Chancellor, such sum as the said Abel paid on the orator’s notes to Joseph Fry, and the interest on the same, the amount of which is to be ascertained by the Chancellor, and this cause is remitted to the Court of Chancery, that it may be proceeded with accordingly.