Ely v. Stewart

delivered the opinion of the court.

After repeated efforts to sell the property of the Okisko Company, it was eventually struck off to Hugh Ely, who refused to comply with the terms of sale. The trustees made a report of their proceedings, stating the refusal of the purchaser to comply, and asking for an order to resell the property at his risk. The purchaser filed his answer, stating several grounds of objection to the ratification of the sale, and to the passage of such an order as the trustee had asked for. Depositions were taken and filed. And on the 7th of May 1850, the chancellor passed an order, directing the trustees to resell the property, at the risk of Hugh Ely, unless he should comply with the terms of sale on or before the 31st day of the same month. From this order the present appeal is taken.

In the first objection urged by the purchaser, he refers to the advertisement as constituting part of the terms of sale, which described the property as having a water-power of about fifteen feet fall, when, in truth, there is not a fall of fourteen feet; which error or mistake, the purchaser contends, releases him from any obligation to complete the contract. But it is not at all times a necessary consequence, that a mistaken or erroneous statement by a vendor, in regard to the property, will authorise the vendee to refuse to comply with the terms of sale.

According to the rule as laid down by Judge Story, in the 1st vol. of his Equity Jurisprudence, sec. 191, a misrepresentation which will entitle a purchaser to relief, must lie in a matter important to his interests, by which he is actually misled. And in section 202, he repeats the doctrine that the party must be misled by the misrepresentation, and then adds: “For if he knows it to be false, when made, it cannot be said to influence his conduct, and it is his own indiscretion, and not any fraud or surprise, of which he has any just complaint to make under such circumstances.”

We agree with the chancellor, in believing that under the circumstances of this case, and in view of the relation of the *416purchaser to- the property, and his means of knowledge, he did not rely upon the- representations of the trustees, but upon his own information.

In the original contract of sale-, which is an agreement between the Elysville Manufacturing Company, as vendors, and the persons-who were about to become the Okisko Company, as vendees, this- property is stated to have about fifteen feet fall of water power. This contract is dated the 15th of July 1845, and was signed by the five Messrs. Ely, (Hugh Ely being one of them,) “as individuals, and as the persons constituting the Elysville-Manufacturing Company.” For a considerable time previous to this agreement, Hugh Ely had an interest in this- property, to the- extent of one-fifth, and after the- organization of the Okisko Company he was a member of it.

On the 22nd of May 1849, this property was advertised for sale- by the president of the Okisko Company,, by order of the board; and in the advertisement the- water-power is said to be about fifteen feet fall.- Being so intimately connected with the property; with such ample means of information in regard to it, in every respect, it cannot be supposed that he so relied upon the representation- of the trustees in relation to the water power, as that it offered any inducement for him to buy, or that he was misled by it, to any extent. This objection therefore cannot avail him. In addition to Story’s Equity Jurisprudence, above referred to, see 2 Kent’s Com.,.485, and 1 Sug. on Vend., 386, secsr 14 and 15.

The next objection is, that after the sale the purchaser was notified by the president of the Elysville Manufacturing Company, that the water which he might take from the river, by means of his dam, must not be returned to the stream, at any point below where he owned the land on both sides of the river. And if he cannot return the water below the point mentioned, he says he will lose three feet of water-power, and be deprived of the use of the factories included in the sale to him.

This objection cannot release the purchaser from his con*417tract, because he has the right, under the sale, to return the water to the river, below the point where the lands purchased by him are situate on both sides of the stream.

Prior to the 15th of July 1845, the Elysville Manufacturing Company were the owners of the land now held by them, and also of the land and mills which they sold to the Okisko Company. Previously to and at the time of that sale, there were mills situate upon the part included in' the sale; which mills were supplied with water, by means of a race running through the land purchased by the Okisko Company, and after being used by the mills, the water was discharged into the river where the Elysville Manufacturing Company then held, and still hold, the land on the opposite side of the river. The dam which caused the water to flow into the race was but a very short distance above the point, where the land sold to the Okisko Company is situate on both sides of the Patapsco. From a little below the dam, down to the lower extremity of the land of this company, their property lies only on one side of the stream. If therefore they, by their purchase, acquired no right to discharge the water from, their mills, as it was usually discharged, but were bound by law to return the water to the rivet, where they held land on both sides, it is manifest that their mills could not be used by them, except by the permission of the Elysville Manufacturing Company. Such a state of things would have made the water-power of very little value. But we cannot agree that the ground assumed in the notice given to Hugh Ely, which is the basis of his present objection, is correct in this case.

This was mill property, and no doubt but that the mills and the water-power constituted considerable portions of the estimated value of the whole property, which was $25,000. The original contract of the 15th of July 1845, stipulates, that “the Messrs. Ely shall deed to the association thus to be formed, their entire water-power and water privileges at Elysville, of about fifteen feet fall of the Patapsco Falls, together with about forty acres of land;” and after describing the land, proceeds to say, “the said forty acres of land to be conveyed *418above embraces the whole site, upon which are now erected their merchant-mill, saw-mill, storehouse, and six family tenements.” The object and design of which contract was to form a company or association, of which the five Messrs. Ely were to constitute a part, for the purpose of erecting- and putting into operation a cotton factory upon the property described in the contract. The deed from the Elysville Manufacturing Company to the Okisko Company recites: “And whereas the parties hereto of the first part have lately sold and disposed of the land and premises hereinafter particularly described, with the improvements thereon and the appurtenances thereto belonging, and also all the water rights and privileges aforesaid, to the parties of the second part.” And after granting the land, the deed proceeds, “together with the manufactory, and other buildings and improvements thereon erected, made or being, and the rights, ways, roads, woods, waters, water-courses, water-rights, privileges, hereditaments and appurtenances thereto belonging or in anywise appertaining, inclusive of the right and privilege of backing the water of Brice’s run, as before mentioned.”

The deed professes to convey a manufactory, with all water-rights, which property was then using a race, for the purpose of conducting the water from the Patapsco to the factory, from whence it was returned to the river, below where the land conveyed by the deed was situate on both sides of the stream. It cannot be that the Elysville Manufacturing Company, the grantors in this deed, have any right to impose upon the purchaser, Hugh Ely, such a restriction as is indicated in the notice given to him by the president of that company.

There are two other objections presented by the purchaser, one in reference to the dam, and the other in regard to the representation as to the granite deposites.

On the 4th of September 1849, this property was offered for sale by the trustees, on the premises. At which time, Hugh Ely and Thomas Ely, the president of the Elysville Manufacturing Company, were present, according to the testimony of A. Murdock. Thomas Lansdale confirms the state*419ment of Mr. Murdock in regard to Hugh and Thomas, and adds, that there were four or five, but is positive four, of the Elys present. The deposition of Murdock shows, that in reply to a question, it was stated by Mr. Speed, one of the trustees, in the presence and hearing of the whole company, that the property would he sold, with all the water rights belonging originally to the factory, and as they then stood. Lansdale states, that on this occasion, in the presence and hearing of the whole company, Mr. Speed said, “that the sale was by consent of all the parties, that every difficulty as to the sale was removed, and that the whole property of the Okisko Company would be sold complete, as it was.” The same witness also says, “the dam at that time was in the same position it now occupies.”

This testimony, together with the other matters disclosed in the record, force upon us the same conclusion in reference •to the two last objections, at which we arrived in regard to •the first.

The property originally was part of an estate belonging to •Hugh Ely and his four brothers. He was a party to the original contract of sale, a party to the deed, and a member of both companies. As a member of the Okisko Company, he was a party defendant to the suit under which this sale was made. He was one of the complainants in a suit of the Elysville Manufacturing Company against the Okisko Company, claiming a vendor’s lien. The decree in the present case for a sale was passed by the consent of all parties. He was present at the offer to sell, in September 1849, on the premises, and heard what was said by the trustee in regard to the intended sale; at which time, the dam was in the same condition as when the witness (Lansdale) was examined. Being so long deeply interested in the property, and having such ample means of knowing its state and condition, and the privileges attached, and being so intimately connected with both companies, it would inquire great credulity to believe that this purchaser did not rely upon his own information, but upon the representations of the trustees made at the sale, whereby *420he was induced to purchase, and thus was led into error by them, to his prejudice. He must haye known that his means of information were quite as good, if pot far superior to thos.e of the trustees.

The order of the .chancellor will therefore be affirmed, and the cause remanded, for the purpose of having that order carried into .effect. The court will sign a decree accordingly.

Order affirmed and cause remoulded.