Buzard v. Houston
119 U.S. 347 (1886)

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U.S. Supreme Court

Buzard v. Houston, 119 U.S. 347 (1886)

Buzard v. Houston

Argued November 2, 1886

Decided December 13, 1886

119 U.S. 347

Syllabus

A court of equity of the United States will not sustain a bill in equity, in a case of fraud, to obtain only a decree for the payment of money by way of damages when the like amount might be recovered in an action at law.

A bill in equity alleged that the defendant, after agreeing in writing to sell

Page 119 U. S. 348

to the plaintiff a certain number of cattle at a specified price, induced him to surrender the agreement and to receive instead thereof an assignment from the defendant of a similar contract of a third person with him and also to pay the defendant a sum of money and to give an obligation to pay him another sum, by false and fraudulent representations as to the solvency of that person, and prayed for a cancellation of the aforesaid assignment and obligation, for a reinstatement and confirmation of the original agreements and its enforcement on such terms as the court might direct, or else for a repayment of the sum paid and for damages, and for further relief. Held that the bill slowed no case for relief in equity, because an action of deceit would afford a full, adequate, and complete remedy.

If a bill in equity showing ground for legal, and not for equitable, relief prays for a discovery as incidental only to the relief sought, and the answer discloses nothing, but the plaintiff supports the claim by independent evidence, the bill must be dismissed without prejudice to an action at law.

This was a bill in equity, filed November 23, 1881, by Buzard and Hillard, citizens of Missouri, against Houston, a citizen of Texas, the material allegations of which were as follows:

That the plaintiffs were partners in the business of pasturing and breeding cattle upon a tract of land owned by them in the State of Texas, and on October 14, 1881, negotiated a purchase from the defendants of 1,500 cows and 50 bulls, to be delivered at Lampasas, in that state, in May, 1882 at the price of $15.50 a head, one-half payable upon the signing of the contract and the other half upon delivery of the cattle; that the terms of their agreement were stated in a memorandum of that date, signed by the parties and intended as the basis of a more formal contract to be afterwards executed, and that the plaintiffs at once paid to the defendant $500 in part performance. That on October 31, 1881, the parties resumed negotiations and met to complete the contract; that the defendant then proposed that in lieu of the contract with him for the cattle mentioned in the memorandum, the plaintiffs should take from him an assignment of a similar contract in writing, dated August 13, 1881, and set forth in the bill, by which one Mosty agreed to deliver to the defendant an equal number of similar

Page 119 U. S. 349

cattle at the same time and place at the price of fourteen a head.

That the defendant then stated that he had paid the sum of $15,000 on the contract with Mosty, and asked that in case of his assigning that contract to the plaintiffs, they should pay him that sum, and also the difference of $1.50 a head in the prices mentioned in the two contracts, but finally proposed to deduct from this twenty-five cents a head.

That as an inducement to the plaintiffs to make the exchange of contracts, the defendant represented to them that Mosty was good and solvent, and able to perform his contract; that he was better than the defendant, and then had on his ranch 1,200 head of the cattle, and that there was no doubt of the performance of this contract, because one McAnulty was a partner with Mosty in its performance, of all which the plaintiffs knew nothing except that they knew that McAnulty was a man of wealth, and fully able as well as willing to perform his contracts.

That on November 1, 1881, the plaintiffs, believing and relying on the defendant's representations aforesaid, accepted his proposition and paid the sum of $14,500, making, with the sum of $500 already paid, the amount of $15,000, which he alleged he had paid to Mosty on his contract, and executed and delivered to the defendant their obligation to pay him, on the performance by Mosty of that contract, an additional sum of $1,837.50, being the profit on the contract with Mosty in the sale to the plaintiffs, less the deduction of twenty-five cents a head, and returned to him his original contract with them, and in lieu thereof received from him his contract with Mosty, and his assignment thereof to the plaintiffs endorsed thereon, and set out in the bill, containing a provision that he should not be responsible in case of any failure of performance by Mosty.

That the aforesaid representations of the defendant were absolutely untrue, deceitful, and fraudulent, and were known by the defendant to be false, and the plaintiffs did not know and had no means of knowing that they were untrue; that those representations were intended by the defendant to deceive

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the plaintiffs, and did deceive them, to their great injury, to-wit, to the extent of the amount of $15,000 paid by them to him, and to the further extent of $10,000 for the expenses necessary to obtain other cattle, and for the loss of the increase of such cattle for the next year by reason of the impossibility of obtaining them in the exhausted condition of the market, and that Mosty, at the time of the assignment, was absolutely insolvent, and had no property subject to be taken by his creditors, and his contract was utterly worthless, as the defendant then knew.

The bill then stated that the plaintiffs brought into court the contract between the defendant and Mosty, that it might be delivered up to the defendant, and also the assignment thereof by the defendant to the plaintiffs, that it might be cancelled.

The bill prayed for a discovery; for a rescission and cancellation of the assignment of the contract with Mosty, and also of the plaintiffs' obligation to pay to the defendant the sum of $1,837.50; for the repayment to the plaintiffs of the excess of money received by the defendant from them beyond the amount which they were to pay him under the original contract; for a reinstatement and confirmation of that contract, and its enforcement upon such terms as the court might deem just and proper; or, if that could not be done, that the defendant be compelled to restore to the plaintiffs the sums of $500 and $14,500 received from them and also to pay them the sum of $10,000 for damages which they had sustained by reason of the defendant's fraudulently obtaining the surrender of the original contract, and by reason of the other injuries resulting to them therefrom, and for further relief.

The defendant demurred to the bill, assigning as a cause of demurrer that the bill showed that the plaintiffs' only cause of action, if any, was for the sums of money paid by them on the contract, and for damages for breach of the contract, for which they had an adequate and complete remedy at law. The circuit court overruled the demurrer.

The defendant then answered fully under oath, denying that he made any of the representations alleged, and repeating

Page 119 U. S. 351

the defense taken by demurrer; the plaintiffs filed a general replication; conflicting testimony was taken; at a hearing upon pleadings and proofs the bill was dismissed, with costs, and the plaintiffs appealed to this Court.

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