Delany v Keogh

• Jurisdiction: Ireland
• Judgment Date: 28 February 1905
• Date: 28 February 1905
• Court: Court of Appeal (Ireland)

DELANY

and

KEOGH

K. B. Div.

Appeal

Action of deceit — Fraud — Fraudulent misrepresentation — Concealment of material fact — Sale by auction.

Ambrose v. KeohanDLTR 17 I. L. T. R. 7.

Andrews v. MockfordELR [1896] 1 Q. B. 372.

Angus v. CliffordELR [1891] 2 Ch. 449, at p. 463.

Arnison v. SmithELR 41 Ch. D. 348.

Brownlie v. Campbell 5 A. C. 925.

Cullen v. Thomson's TrusteesUNK 4 Macq. H. L. 424.

Derry v. Peek 14 A. C. 337.

Derry v. Peek 14 A. C. 377.

Dimmock v. HallettELR L. R. 2 Ch. App. 21.

Eaglesfield v. Marquis of Londonderry 26 W. R. 540.

Fitzgerald v. Portarlington 1 Jones, 431.

Lee v. JonesUNK 34 L. J., C. P. 131.

Pasley v. Freeman 11 Sm. L. Cas. 64.

Pasley v. FreemanUNK 2 Sm. L. C. 64.

Patch v. WardELR L. R. 3 Ch. App. 203.

Peek v. Gurney 6 H. L. Cas. 377, at p. 403.

Richardson v. MellishENR 11 Bing. 229.

Smith v. Chadwick 9 A. C. 190.

Smith v. Chadwick 9 A. C. 201.

Stanley v. M'GauranUNK 11 L. R. Ir. 314.

VOL. II.] KING'S BENCH DIVISION. 267 SLATE, the conclusions arrived at by my lord and my brother Madden. AppellaRht I unwillingly come to this conclusion, since I am sensible of the 13"WSMRS' Respondents. great inconvenience which will result from our decision ; but I feel myself coerced not only by the language of the 4th section of the Act, more especially of the proviso at the end, but also by the decisions in the cases of Jones v. Huxtable (1); The Queen v. Kennett (2) ; and Hill v. Browning (3), which appear to me to lay down that a sale by weight means that the weight of the article as bread must be ascertained at or previous to the sale, and that it is not sufficient that it should have been weighed in its state as dough. Solicitor for the appellant : Joseph Alexander. Solicitor for the respondents : Patrick Maxwell. T. G. T. DELANY v. KEOGH (4). Action of deceit—Fraud—Fraudulent misrepresentation—Concealment of material fact—Sale by auction. K. B. Div. 1904. - – Nov. 24, 23. Dec. 13. The defendant, an auctioneer; was employed by B., a solicitor, acting on Appeal. behalf of a client, to sell a publichouse. The defendant published an adver- 1905. tisement, the instructions for which he received from B., in which the Jan. 19, 20, premises were described as " held under lease for a term of years, at £25. A 23 rent of £18 yearly has been accepted by the landlord for several years in lieu cb : 8. F of said rent of .E25. The rent, license duty, and taxes, are less than 1 ls. weekly." This calculation was made on the basis of the yearly rent being £18. The lease contained a covenant against alienation without the landlord's conÂsent ; but the defendant was not aware of this. Some days before the auction the landlord wrote to the defendant a letter, stating that in future he would insist on payment of the higher rent. The defendant consulted B. as to what (1) L. R. 2 Q. B. 460. (2) L. R. 4 Q. B. 565. (3) L. R. 5 Q. B. 453. (4) In the King's Bench Division, before PALLES, C.B., and ANDREWS and J oirivsori, JJ. THE IRISH HEPORTS. [1905. course he should adopt, and B., being of opinion that the landlord was estopped from recovering more than £18 a-year, instructed the defendant to proceed. The defendant believed this opinion to be correct. At the auction the defendant read the statement as to the rent without comment. The plaintiff was declared the purchaser, at £430. The plaintiff believed that the landlord could recover the full rent, but thought he would be content to receive the reduced rent. The landlord subsequently sued the plaintiff for the full rent, and the plaintiff was obliged to pay. In an action for deceit against the auctioneer, which was tried before Wright, J., without a jury, judgment was entered for the defendant : Held, by Palles, C.B., and Johnson, J. (dissentiente Andrews, J.), that, on the evidence, the defendant had no intention to deceive ; that he did not state what he knew to be untrue, and that the statement was made in the honest belief that it was true ; and that the defendant was not liable. Held, by the Court of Appeal (reversing the decision of the majority of the King's Bench Division), that the statement in the advertisement, and in the particulars of sale, implied a representation that the vendor had no reason to believe that the reduction in the rent would be discontinued ; that the case was not one of mere suppression, but that it involved misrepresentation ; and that the defendant was liable for damages. Derry v. Peek (14 A. C. 374) distinguished. ACTION to recover damages for deceit and false representaÂtion. The action was tried before Wright, J., without a jury, when the following facts were proved : By lease, dated the 27th October, 1865, the Rev. George Bradley demised to Edward Keating a house and premises, to which a license was attached, at Tallaght, in the county of Dublin, for sixty-one years, subject to the rent of £25 per annum. The lease contained a covenant against alienation withÂout the landlord's consent. For over twenty years the landlord had accepted £18 a-year as rent, in lieu of £25. In February, 1903, Mrs. Martin, in whom the lessee's interest was vested, instructed Mr. Bradley, a solicitor, to sell the house, and Bradley employed the defendant, who was an auctioneer. The advertisement, which was prepared from information supplied by Bradley, after describing the preÂmises and the lease, stated VOL. II.] KING'S BENCH DIVISION. 269 years, at £25 per annum. A rent of £18 yearly has been accepted by K. 71 the landlord for several years in lieu of the rent of £25. 1904. " The rent, license duty, and taxes, are less than 11s. weekly." DE1 kiNY 12. On the 2nd March, 1903, Mr. Tench, the landlord, who had KEOGH. purchased the reversion in July, 1893, wrote a letter to Keogh, in which he stated " The rent of licensed house is £25 a-year, according to the lease. When the Martins were paying the rent themselves, they represented they were very poor. It is a different thing now, when the purchase-money will probably go to pay off a brewery Company, and I insist upon the rent in future being paid in accordance with the lease." This letter was written in consequence of an intending purchaser having called upon Mr. Tench, about acceptance of the ordinary rent. Keogh forwarded the letter to Bradley, and asked for instructions as to what he should do, and Bradley gave it as his opinion that the landlord could not recover the higher rent, and directed Keogh to proceed with the sale. The grounds for Bradley's opinion were—his firm had been the landlord's solicitors, and acted as receivers ; they had received the rent at £18 a-year ; they had enforced payment by ejectment for non-payment of the rent at £18 a-year only ; and they had sold the landlord's interest to Tench, as an £18 holding. The auction was held on the 6th March, 1903, and the plainÂtiff, having seen the advertisement of the sale in the newspapers, attended the auction on the 6th March. The defendant read out the particulars of sale without comment, adding that it was a cheap place ; and after several biddings, the plaintiff was declared the purchaser at £430. The plaintiff believed that he was buying subject to the rent of £18, and that he would not be called on to pay more, and stated that if he had known that the landlord would have insisted on the full rent of £25, he would not have bid more than £300. On cross-examination he stated that he knew the rent in the lease was £25 a-year ; that he thought the landlord would be content with £18, but that he could insist on the full rent. The plaintiff had consulted his solicitor, Mr. Moran, before the auction. The plaintiff did not know, until he got a letter from Tench, on the 21st October, demanding payment, that he would insist on the full rent of £25. 270 THE [LUSH REPORTS. []905. Mr. Moran stated in evidence that he knew the tenant was liable to pay £25, and that there was no obligation on the landlord to take less, but that he thought the less rent would be taken. He told the plaintiff that he could be called on to pay the full rent reserved. The value of an increased liability to £7 a-year for the residue of the term was calculated by an actuary at £110. Arthur Bradley, the solicitor for Mrs. Martin, proved that his opinion was that Tench was estopped from claiming more than £18. Richard Bradley, his uncle, was previously the landlord, and his firm acted as his solicitors and rent-collectors. On the 8th October, 1891, a civil-bill ejectment for non-payment of rent was issued, and in June, 1892, a second ejectment was brought and a decree was obtained. In both of these the rent was stated to be £18. The defendant proved that the advertisement was prepared from information supplied by Bradley ; and he knew nothing about the covenant against alienation ; that when he consulted Bradley as to Tench's letter, he believed Bradley's statement and acted on his opinion. He thought the rent was £18 a-year and no more. On cross-examination, lie said it would have been material to have let those at the auction know of Tench's determination to enforce the higher rent. He thought he would have got the same bid even if he had read out Tench's letter, but it would probably have had an effect on those attending the sale. On the 26th October, Tench wrote a letter claiming £25, a year's rent down to 29th September, 1903 ; and he issued a writ against the plaintiff for the amount : the plaintiff paid the amount and costs. Plaintiff having brought this action against Keogh for fraud, the case was tried by Wright, J., without a jury, when judgÂment was entered for the defendant. The plaintiff moved in the King's Bench Division to set aside the judgment, and enter judgment for the plaintiff with such damages as the Court might think just. Voi.. II.] KING'S BENCH DIVISION. Moriarty, K.C., and Thomas Harrison, for the plaintiff : It is clear that the plaintiff was induced to enter into the contract of...