Phelps v White

• Jurisdiction: Ireland
• Judgment Date: 24 February 1881
• Date: 24 February 1881
• Court: Chancery Division (Ireland)

Appeal.

Before PALLES, C. B., and DEASY and FITZ GIBBON, L.JJ.

PHELPS

and

WHITE.

Pasley v. FreemanENR 3 T. R. 51.

Bos v. HelshamELR L. R. 2 Ex. 72.

Re Turner and Skelton 13 Ch. Div. 130.

Manson v. Thacker 7 Ch. Div. 620.

Cann. v. CannENR 3 Sim. 447.

Horner v. Williams Jo. & Ca. 274.

Besley v. Besley 9 Ch. Div. 103.

Allen v. Richardson 13 Ch. Div. 539.

Manson v. ThackerENR 13 C. B. 786.

Rawlins v. WickhamENR 3 De G. & J. 316.

Hart v. Swaine 7 Ch. Div. 42.

Vendor and purchaser Conditions of sale Misrepresentation Material error in rental Purchaser completing in ignorance of mistake, though having the means of its discovery Compensation Breach of contract or fraudulent representation

160 LAW REPORTS (IRELAND). , [L. R. I. Appeal. of powers to involve their children, the objects of the powers, in 1880. embarrassment, under the belief that they could escape by antioi DUGGAN pating the very fund which was settled with the purpose of pre & Duoorag. venting such liabilities from being incurred. Decision below affirnied. Solicitor for the Appellants : Mr. J. H. Cathrew. Solicitor for the minor Respondents : Mr. Allan Nesbitt. Solicitors for the Respondent Honoria Duggan : Messrs. Tench _Reynolds. Appeal. PHELPS v. WHITE (1). 1881. Vendor and purchaser-Conditions of sale-Misrepresentation-Material error Jan. 25. in rental-Purchaser completing in ignorance of mistake, though having the Feb. 24. means of its discovery-Compensation-Form of action-Breach of contract or fraudulent representation-Order XVIII., Rule 16. The contract for sale of an estate provided inter alia that any material error in the rental furnished to the purchaser, and referred to in the agreement, should not annul the sale, but that compensation should be made in respect thereof. The rental so furnished, and on the faith of which the purchaser entered into the contract, represented in substance that by a fee-farm grant of part of the estate the timber thereon (which was of the value of 800, or thereabouts) was reserved to the vendor. The value of the timber formed a material element in the purchaser's calculation of the price. The timber, though reserved in the original lease in perpetuity, which had been converted into the fee-farm grant, had been afterwards granted by a subsequent owner of the estate to the lessee, and was not reserved by the fee-farm grant, and the vendor had, consequently, no title to the timber. In the abstract of title deÂÂlivered to the purchaser the conveyance of the timber was set out, and the material portions of the fee-farm grant were correctly abstracted, and copies of the deeds were furnished along with the abstract ; but the attention of the purchaser not being specially called to the error in the rental, the existence of (1) Before PAILES, C. B., and DEASY and Flu GIBBON, L.JJ. VOL. VII.] •CHANCERY DIVISION. 161 the error escaped. the notice of the solicitor and. counsel for the purchaser, and. Appeal. was not in fact known to the purchaser or his solicitor until after the purchase 1881. was completed, the purchase-money paid, the conveyance executed, and posses- PHELPS lion taken by the purchaser :- v. Held (affirming the judgment of Chatterton, V. C.), that the purchaser was WRITE. entitled to compensation for the value of the timber. Per PALMS, C. B. :-The purchaser was so entitled to compensation-1st, on the ground of the antecedent misrepresentation, independently of the clause in the contract for sale providing for the allowing of compensation. 2ndly, the statement in the rental relating to the timber having been made a substantive part of the contract, on the ground of the collateral contract or warranty that the timber was so reserved. It is not necessary that the Plaintiff should frame such an action either as one for damages for breach of contract or for fraudulent misrepresentation ; but it is sufficient to set out in the statement of claim facts which entitle him to relief, and to pray for any relief which the facts may warrant. Manson v. Thacker (7 Ch. Div. 620) and Allen v. Richardson (13 Ch. Div. 524) considered, and Bos v. Helsham (L. R. 2 Exch. 72) and In re Turner and Skelton (13 Ch. Div. 130) approved of. APPEAL by the Defendant from the Vice-Chancellor's judgÂÂment of the 2nd of June, 1880. The hearing below is reported. -5 L. R. Ir. 318, where the facts of the case are sufficiently stated. Mr. Holmes, Q. C., and Mr. Naish, Q. C. (with them Mr. John Gibson, Q. C., and Mr. Lane Joynt), for the Appellant. Mr. 0' Hagan, Q. C., and Mr. R. Reeves, Q. C. (with them Xr. E. Maunsell), for the Respondent. The arguments were substantially the same as those`' in the Court below. PALLES, C. B. :- The Plaintiff, a purchaser, has instituted this action to recover compensation for a mis-statement in the rental and particulars upon the faith of which he effected his purchase, The subject-matter of the sale was, inter alia, certain perpetual yearly rents issuing out of lands and hereditaments described in the rental, and "all the timber, &c., excepted and reserved by the several 02 Feb. 24. 162 LAW REPORTS (IRELAND). [L. R. I. Appeal. fee-farm grants by which the said rents were respectively created." 1881. One of those perpetual rents, which issued out of the lands of PHELPS Ballykelly, was created by a fee-farm grant of 15th June, 1871, from the late Lord Annaly, through whom the vendor claims, WHITE. and is described in lot 17. The rental, in reference to that lot, contains a statement that the fee-farm grant " reserves all timber trees growing, or which should thereafter grow, on said premises, to Lord Annaly, his heirs and assigns." In fact, this grant did not reserve the timber; and that it was known to those acting in the sale for the vendor, that it did not reserve it, is admitted. By an unfortunate mistake, explained at length in the affidavits, a gentleman in the office of the eminent solicitor acting for the vendor, in adapting for the purposes of the present sale a rental under which Lord Annaly had previously purchased, struck out a statement that the timber had been purÂÂchased by the tenant, and stated, as the description contained in the fee-farm grant, that which was not in fact the description therein, but which was the description in a prior lease. He did. this without having present to his mind that the two descriptions were not identical. The differehee was caused by the interÂÂmediate purchase of the timber by the tenant. I am satisfied that this mistake was committed through inadÂÂvertence, and without any intention of deceit ; and I unreservedly and unfeignedly acquit the person who committed the mistake of moral culpability. Nevertheless, the result of that mistake was the circulation for the purposes of the sale, by those acting for the vendor, of a rental containing a statement that. the grant excepted the timber, a statement not only contrary to the fact, but contrary to what the vendor's advisers knew to be the fact. It has been proved to my satisfaction that the purchaser was materially influenced by the statement in question in determining the amount of his purchase-money; and that although his solicitor had, before the conveyance, the means of knowledge, such solicitor did not, nor did the purchaser himself, until after conveyance and possession, actually know that such statement was untrue. The question upon this appeal is, whether the execution of the conveyÂÂance and entry into possession, under such circumstances, debar Yu,. VII.] CHANCERY DIVISION the Plaintiff of the right, otherwise unquestionable, of claiming compensation. Upon that question I am unable to entertain a doubt. First, I take the case as depending upon representation. The representation, being contained -in a rental, was made with intent to be acted upon by intending purchasers. It operated as a material inducement to the Plaintiff not only to enter into the contract of purchase, but to accept a conveyance in pursuance of that contract. The subject-matter of the contract and of the conveyance is, in reference to timber, limited to the timber reserved by the grants. The timber in question, not having been so reserved, formed no part of the thing contracted to be sold, and was not in fact conveyed. It is elementary law that such a representation, so acted upon, is, in law, fraudulent. 4` &tens, without fraudulenter ," says Buller, j., in Pasley v. Freeman (1), if made with knowledge that the contrary of that which was represented is the fact, would be sufficient to supÂÂport an action for deceit. But it is of the essence of such an action that the Plaintiff should suffer damage. The damage here complained of is, that the Plaintiff has been induced by the false statement to take a conveyance under which the timber did not pass ; whereas if the representation were true, the timber would, under that conveyance, have become his property. To such a cause of action, which I agree with the Vice-Chancellor is inÂÂcluded in the statement of claim, the execution of the conveyance without knowledge of the mis-statement can be no answer. It is no more than the ultimate ascertainment of the damage, the completion of the cause of action. To test this, let me ask, how could the execution of such a conveyance be relied on in answer to what was formerly a common law action ? If knowledge of the untruth of the representation existed when the conveyance was accepted, the knowledge would have been evidence that the acceptance of the conveyance was not induced by the misÂÂstatement. It might have determined the relation of cause and effect, which it is necessary to the sustainment of the action (1) 3 T. R. 51. should exist between the mis-statement and the damage. But that which severs this connexion is not what, in relation to the investigation of title, is called. "notice"; it is not that which is sufficient to put a person on inquiry ; it is knowledge in fact, and nothing else. A person who has...