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Albert W. Weeks vs. Israel L. Currier & another

Massachusetts Supreme Judicial Court1898-10-19
172 Mass. 53

Summary

Holding. The demurrer is overruled and a decree is entered for the plaintiff for reconveyance of the property. A party defrauded into executing a deed through material misrepresentations has an equitable remedy to set aside the deed and obtain reconveyance, despite a concurrent remedy at law.

The plaintiff signed and delivered a blank deed to real property, leaving the grantee's name to be filled in later. The defendant Currier, acting as a broker, filled in another defendant's name, arranged for a false witness signature, and recorded the deed. Currier had induced the plaintiff to execute the deed through several material false statements about a property being exchanged for the plaintiff's land—specifically regarding its recent sale price, rental income, and existing encumbrances. All representations were knowingly false and made as if within Currier's personal knowledge.

The defendants argued the plaintiff had an adequate remedy at law and therefore could not seek equitable relief. The court rejected this argument, noting that Massachusetts statute authorized equity courts to set aside deeds obtained by fraud. The court held that fraudulent oral misstatements are not merged into a written instrument and can support an equitable decree. Because the false statements were material, knowingly made as personal knowledge, and relied upon by the plaintiff, they constituted actionable fraud. The court also held defendants liable for the fraudulent acts of their agent performed within the scope of his authority, and that a defendant's expenditure of money on fraudulently obtained property does not excuse reconveyance.

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

Key issues

  • Whether equitable relief is available to set aside a deed procured by fraud when a legal remedy exists
  • Whether fraudulent oral representations made by an agent constitute grounds for rescission despite a written deed
  • Whether an agent's false statements made within the scope of authority bind the principal
  • Whether a defendant's improvements to fraudulently obtained property excuse reconveyance

Procedural posture

The case came before the court on a report containing findings of fact, with the defendants joining a demurrer to the plaintiff's equity bill for rescission and reconveyance.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Knowlton, J.

This case comes before us on a report containing a finding of facts, and showing that the defendants joined an answer in demurrer with their answer in matters of fact. The judge found that the plaintiff made a deed of his land which was executed without inserting the name of the grantee in the blank spaces left for it, and was delivered to the defendant Currier. Currier was acting as an agent and broker for the defendant Curry, and afterwards he filled the blanks with the name of Curry, caused one Mnlvey to write his name as a witness upon the deed, although Mulvey did not see the plaintiff or his wife sign it, and then caused it to be recorded in the registry in the county in New Hampshire where the land was situated. The judge also found that the plaintiff was induced to sign and deliver it by representations of Currier that a house and lot in Worcester in this Commonwealth owned by Curry, which were in the hands of Currier for sale, and which were conveyed to the plaintiff in exchange for the property described in the deed from the plaintiff, had recently been sold for thirty-two hundred dollars ; that they were rented for fourteen dollars per month, and that there were only certain named encumbrances upon the property. All of these representations were false. They were made by Currier as of matters within his personal knowledge, and they were relied upon by the plaintiff as inducements to make the contract. The plaintiff offered to reconvey the property conveyed to him by Curry, and demanded a conveyance to himself of the property described in the deed delivered to Currier. These facts are all set out in the plaintiff’s bill, and the representations are alleged to have been fraudulently made by the defendants.

The principal ground of the demurrer is that the plaintiff cannot have relief in equity because he has a full, adequate, and complete remedy at law. Since the enactment of St. 1877, c. 178, (Pub. Sts. c. 151, § 4,) relief may be had in this Common wealth in equity to set aside a deed of real estate procured by fraud and to obtain a reconveyance. The remedy at law by a writ of entry is concurrent. Billings v. Mann, 156 Mass. 203. Emerson v. Atkinson, 159 Mass. 356, 361. Nathan v. Nathan, 166 Mass. 294.

Fraudulent representations and oral misstatements made with intent to deceive are not so merged in a written instrument procured by means of them that they may not be made the basis of a decree to set it aside. The demurrer must therefore be overruled.

It follows upon the facts found that the plaintiff is entitled to a decree against the defendants. The false statements found to have been made were material, and, being relied upon, they entered into the substance of the contract. Medbury v. Watson, 6 Met. 246, 260. Manning v. Albee, 11 Allen, 520, 522. Chatham Furnace Co. v. Moffatt, 147 Mass. 403. If a statement of a fact which is susceptible of actual knowledge is made as of one’s own knowledge, and is false, it may be made a foundation of an action for deceit without further proof of an actual intent to deceive. Litchfield v. Hutchinson, 117 Mass. 195. Burns v. Dockray, 156 Mass. 135. Chatham Furnace Co. v. Moffatt, 147 Mass. 403. Milliken v. Thorndike, 103 Mass. 382.

In a suit of this kind a defendant is affected by a false and fraudulent representation, made by another while acting as his agent within the scope of his authority, as if he had made it himself. Haskell v. Starbird, 152 Mass. 117.

That Currier has expended some money upon the property fraudulently obtained, the same having been conveyed to him by Curry, does not relieve him from the obligation to return it. Snow v. Alley, 144 Mass. 546, 552.

The facts found by the judge fully establish the right, of the plaintiff to a reconveyance. Without considering the effect of the unauthorized changes made in the deed after it was signed, there must be a Decree for the plaintiff.