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Rice et al. versus Olin, Executor, &c., of Scofield

Supreme Court of Pennsylvania1875-10-21
79 Pa. 391

Summary

Holding. The judgment is reversed and a new trial is ordered. The trial court erred by instructing the jury on matters of fact as though they were settled questions of law, particularly regarding whether Rice was defrauded and whether he waived his fraud defense through delay and continued dealings with Scofield.

Rice purchased land from Scofield based on representations about the property's soil, timber, and surface characteristics. Rice later claimed he had been defrauded and sought to defend against a mortgage foreclosure by deducting the difference between the purchase price and the actual value of the land. The trial court gave instructions to the jury that prevented Rice from asserting this fraud defense, particularly by ruling that Rice's failure to complain about the alleged fraud for five or six years after discovering it barred him from raising it as a defense.

The appellate court found multiple errors in the trial judge's instructions to the jury. Most significantly, the court determined that the judge improperly converted factual questions into legal conclusions, thereby preventing the jury from properly considering whether fraud occurred and whether Rice had waived his right to assert it. The court also rejected the judge's instruction that Rice's knowledge of the property's true character combined with his delay in complaining constituted a complete bar to his defense.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a purchaser defrauded regarding land characteristics can defend against mortgage foreclosure by claiming a setoff for the difference in actual value
  • Whether delay in asserting a fraud defense and continued presence on the property constitutes a waiver as a matter of law
  • Whether the trial court properly distinguished between factual determinations and legal instructions to the jury

Procedural posture

The case was appealed from a trial court judgment in a mortgage foreclosure action where Rice was the mortgagor-defendant claiming fraud in the underlying land sale.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Mr. Justice PaxSon

delivered the opinion of the court, November 15th 1875.

_ _ The portion of the charge referred to in the first specification of error was but an expression of opinion upon the facts. It was not a binding instruction, and does not amount to error: Sailor v. Hertzogg, 10 Barr 296; Ditmars v. The Commonwealth, 11 Wright 335.

But there was error in that portion, of the charge embraced in the second specification, and also in the answer to the plaintiff’s fifth point. It was competent for Rice to have rescinded the contract when he discovered the alleged fraud. That he was not bound to rescind, and could defend against the payment of the balance of the purchase-money, at least to the extent of the injury sustained, is settled by numerous decisions: Fisher v. Worrall, 5 W. & S. 478; Good v. Good, 3 Id. 472; Hessner v. Helm, 8 S. & R. 178. It is true, the learned judge says in another part of his general charge: “ If Rice did not know the real character of the land as to soil, timber, and surface, and you believe he bought on that inducement alone, and that he was deceived by Scofield, he can deduct from the purchase-money the difference between what he agreed to give and what it was then actually worth.” If the answer to the fifth point had been obscure or equivocal, the paragraph just cited might have cured such defect. But when the answer to a point is palpably wrong, it cannot be aided by the general charge.

It was also error to instruct the jury as contained in the third specification of error,, that “ even if he (Rice) had no opportunity for examination before he bought, if you believe that he knew its real character for soil, surface and timber, very soon after he purchased, and was on the land once or twice a year thereafter, and did not make known the fraud or complain of it to Scofield for five or six years after such knowledge, he cannot now set it up as a defence, and the plaintiff is entitled to recover the amount secured by the mortgage, deducting the payments actually made thereon.” If the facts be as above stated, they would have been very persuasive reasons for the. jury to have found, either that no fraud had been perpetrated, or that it .had been waived by the defendant, Rice. It was error for the court to rule it as a question of law.

The answer to the plaintiff’s first point is not clear. It is first affirmed and then qualified with the remark: “ but as Rice is still a party, and may be liable on a bond, if one exists, we think any defence in Rice may be set up here.” As the practical effect of this ruling was to allow the jury to pass upon Rice’s defence, we do not regard the first portion of the answer as material. Nor do we think it necessary in this case to decide how far the purchasers at the sheriff’s sale, who are the terre-tenants, and who have been admitted to defend, can attack the consideration of the mortgage. Rice, the mortgagor, is a defendant, and is upon the record.

The attempt of Ball, the assignee in bankruptcy of Rice, to withdraw Rice’s appearance, amounts to nothing. He had no authority for any such action, nor any right to interfere with Rice in his defence to the mortgage. That the latter was entitled to take this defence, cannot seriously be questioned; the exigencies of the case do not require us to go further.

The plaintiff’s third point should not have been affirmed. It assumes that Rice inspected the property, which was one of the questions of fact to be submitted to the jury. Nor does the case rest upon the question of warranty. The complaint is of a fraudulent representation of the character of the property, extent of the timber, &c.

W,e think the court below indicated the correct rule for the measure of the damages. The remaining assignments of error are sufficiently covered by what has already been said.

Judgment reversed and a venire facias de novo awarded.