To ascertain its jurisdiction, this Court looks not to a single
feature of the case, but to the entire controversy.
Where the prayer for relief is either for conveyance of land
worth less than $5,000 or for a rescission of a contract of sale
and repayment of the purchase money of over $5,000, the necessary
amount is involved to give this Court jurisdiction of an appeal
from the Court of Appeals of the District of Columbia.
Where the issues are mainly those of fact, in the absence of
clear showing of error, the findings of the two lower courts will
be accepted as correct.
Where a party desires to rescind on the ground of
misrepresentation or fraud, he must upon the discovery of the fraud
announce his purpose and adhere to it. If he continues to treat the
property as his own, the right of rescission is gone, and he will
be held bound by the contract.
This was an action begun in the Supreme Court of the District of
Columbia by Mary Shappirio and Jacob Shappirio, her husband,
against Minnie D. Goldberg and George Goldberg, her husband, having
for its object equitable relief because of alleged fraud of the
respondents in the sale of certain property in Washington, District
of Columbia, to the complainant, Mary Shappirio.
It appears that the sale was made through one Richold, a broker
in real estate. George Goldberg was the owner of the property, and
by memorandum made on May 11, 1900, authorized Richold to sell the
property known as lots Nos. 1245 and 1247, being part of lot 28,
square 977, fronting 34 feet on 11th Street S.E. by 80 feet deep to
an alley. Richold sold the property to Jacob Shappirio, for whom he
was seeking an investment, for the price of $6,000. The terms were
cash, $100 having been paid down at the making of the sale.
This
Page 192 U. S. 233
property, having two buildings upon it, and being part of lot
28, is described as follows:
"Beginning for the same at the southeast corner of said lot and
running thence north on Eleventh Street thirty-four (34) feet;
thence west eighty (80) feet eight (8) inches to an alley; thence
south on said alley fourteen(14) feet; thence east eighteen (18)
feet; thence south twenty(20) feet, and thence east sixty-two (62)
feet eight (8) inches to the place of beginning."
In the rear of the premises there was a strip 20 by 30 feet,
having upon it a shed or stable, which, before the sale, was in the
possession of Goldberg under an arrangement for its use, and was
used by him in connection with the premises. This piece was not
fenced off at the time of sale, and might well be taken to be a
part of the premises by any person examining the same without
accurate knowledge of the extent of the property actually owned by
Goldberg. The annexed plat shows the part of lot 28 covered by the
description in the deed, and the part of lot 2 in dispute:
image:a
Although the purchase was made by Jacob Shappirio, the deed was
made to Mary Shappirio, June 5, 1900. On September 28, 1900, a
conveyance by the owner of the title to lot 2 was made of the part
of that lot in the rear of the premises to Minnie D. Goldberg, wife
of George Goldberg, for the consideration of $300. Mary Shappirio
and Jacob Shappirio, on
Page 192 U. S. 234
June 5, 1900, executed a deed of trust upon the property
conveyed to her in the sum of $4,500. In the trust deed, the
property was accurately described.
After the property had been conveyed to Mary Shappirio, it was
rented to Goldberg, the vendor, who continued to occupy the same
for eleven months. Upon asking a reduction of the rent, which was
refused, Goldberg left the premises. On May 18, 1901, the present
bill was filed, in which it was charged that Goldberg, in order to
induce the sale in question, falsely represented that the property
in the rear of lot 28 belonged to him, and would be included in the
property sold, and notwithstanding the appearance of the property
and the representations of Goldberg, the part conveyed did not
include the part of lot 2 in the rear of lot 28; that George
Goldberg afterwards purchased the property, part of lot 2, and
caused the same to be conveyed to Minnie D. Goldberg, his wife, as
a part of a scheme to defraud the plaintiff; that the wife was a
party to the fraud, and had no interest in the property except to
hold it for her husband.
The bill prays that this parcel of ground, part of lot 2, be
decreed to be held by Minnie D. Goldberg for the use of the
plaintiff, Mary Shappirio, and be conveyed to her. If this relief
cannot be granted, the prayer is that the sale be rescinded, and
Goldberg be required to pay back the amount of the purchase money,
with costs and charges, and, upon default of payment, the property
be sold.
A general denial of the allegations of fraud and deceit is made
in the answer, together with the averment that the plaintiffs
relied upon their own investigation, and if they were deceived as
to the extent of the property, it was the result of the want of due
care upon their part.
In the supreme court, the bill of the complainant was dismissed,
which decree was affirmed in the Court of Appeals.
Page 192 U. S. 239
MR. JUSTICE DAY delivered the opinion of the Court.
The first question raised for our consideration involves the
Page 192 U. S. 240
jurisdiction of this Court on appeal, it being claimed that the
matter in dispute, exclusive of costs, does not exceed the sum of
$5,000. By the Act of February 9, 1893, chapter 74, 27 Stat. 434,
jurisdiction to review the final judgments of the Court of Appeals
of the District of Columbia is given where the matter in dispute
exceeds the sum of $5,000, exclusive of costs. In determining this
question, we may look to the allegations and prayer of the bill to
ascertain the relief sought and the real extent of the controversy
between the parties. The bill contains a prayer for the conveyance
of the small strip of ground, which was purchased for $300, and if
that were the only subject matter of the suit, the amount required
to give this Court the right of review would not be in controversy.
But if this relief is denied, the complainant seeks, in the
alternative, to have the contract rescinded and the payment of the
sum of $6,000, the purchase money, with costs and interest, decreed
against the respondent. Upon the pleadings, we are of opinion that
this sum is also in dispute between the parties, and therefore this
Court has jurisdiction. To ascertain the right of jurisdiction in
such a case, we look not to a single feature of the case, but to
the entire controversy between the parties.
Stinson v.
Dousman, 20 How. 461.
In this case, the issues are mainly those of fact, and, in the
absence of clear showing of error, the findings of the two lower
courts will be accepted as correct.
Stuart v. Hayden,
169 U. S. 1;
Dravo v. Fabel, 132 U. S. 487. An
examination of the record in the light of these findings does not
enable us to reach the conclusion that error has been committed, to
the prejudice of the appellants.
As to what was said by Goldberg at the time of the purchase of
the property, in conversation with Richold, the broker, and at the
time the premises were visited by Shappirio with a view to
purchase, there is much conflict of testimony. The use of the
premises as a connected whole might well lead the purchaser to
believe, in the absence of accurate knowledge, that it was all
under the ownership of one person, and would be
Page 192 U. S. 241
included in the sale of the property to him, and, as said by the
Court of Appeals, we believe that Shappirio may have been ignorant
of the true condition of the title. But it was also found by that
court that a correct description of the property was given in the
deed and recorded chain of title. Richold, who made the sale, was
entrusted by Shappirio with the examination of the deed and title,
and thirty days were given to complete the purchase. For this
purpose, Richold was the agent of Shappirio, and it not appearing
in the proof that he was misled by the representations of Goldberg
or that by any scheme or plan he was kept from a full examination
of the title and the description of the property contained in the
deed furnished, he must be held chargeable with knowledge which the
opportunity before him afforded to investigate the extent and
nature of the property conveyed and which he undertook to examine
for the purchaser. It is true that Richold testifies that he was
misled by the silence of Goldberg and by the situation and use of
the property, and stoutly denies that he had the knowledge which a
reading of the accurate description of the deed would give. But he
undertook to investigate the matter and report upon the title. A
casual reading of the description in the deed or examination of the
recorded plat would have shown that the premises were not of a
uniform depth of eighty feet, and had the L-shape extension in the
rear of the lot, which excludes any part of lot 2 from the premises
conveyed. For the purpose of this examination, Richold was the
agent of Shappirio, and his knowledge and means of information must
be imputed to the purchaser. There are cases where
misrepresentations are made which deceive the purchaser, in which
it is no defense to say that had the plaintiff declined to believe
the representations, and investigated for himself, he would not
have been deceived.
Mead v. Bunn, 32 N.Y. 275. But such
cases are to be distinguished from the one under consideration.
When the means of knowledge are open and at hand, or furnished to
the purchaser or his agent, and no effort is made to prevent the
party from using them, and especially where the
Page 192 U. S. 242
purchaser undertakes examination for himself, he will not be
heard to say that he has been deceived to his injury to the
misrepresentations of the vendor.
Slaughter
v. Gerson, 13 Wall. 379;
Southern Development
Co. v. Silva, 125 U. S. 247;
Farrar v. Churchill, 135 U. S. 609;
Farnsworth v. Duffner, 142 U. S. 43.
If this action is viewed as one to rescind a contract, in the
light of the testimony and the findings of the courts below, the
appellant stands upon no better ground.
It is well settled by repeated decisions of this Court that,
where a party desires to rescind upon the ground of
misrepresentation or fraud, he must, upon the discovery of the
fraud, announce his purpose and adhere to it. If he continues to
treat the property as his own, the right of rescission is gone, and
the party will be held bound by the contract.
Grymes v.
Sanders, 93 U. S. 55;
McLean v. Clapp, 141 U. S. 429. In
other words, when a party discovers that he has been deceived in a
transaction of this character, he may resort to an action at law to
recover damages, or he may have the transaction set aside in which
he has been wronged by the rescission of the contract. If he choose
the latter remedy, he must act promptly, "announce his purpose and
adhere to it," and not by acts of ownership continue to assert
right and title over the property as though it belonged to him. In
the present case, some months before the beginning of this action,
probably in October, 1900, Shappirio learned that the conveyance
did not include the premises, part of lot 2, in the rear of lot 28.
It may be that the mere lapse of time in this case would not of
itself have defeated the right to rescind, as a purchaser has a
reasonable time in which to make election of such remedy after
discovery of the fraud,
Neblett v. Macfarland,
92 U. S. 101,
92 U. S. 105, but
he cannot, after such discovery, treat the property as his own and
exercise acts of ownership over it which show an election to regard
the same as still his, and at the same time preserve his right to
rescission. In the present case, after discovering that the part of
lot 2 had not been conveyed by the
Page 192 U. S. 243
deed, Shappirio collected rents for some months upon the
property, corresponded with Goldberg as to future terms of rental,
declined to reduce the rent, made some repairs upon the property,
and performed other acts of ownership. This conduct is wholly
inconsistent with an election to undo the transaction and stand
upon his right to rescind the contract.
We find no error in the judgment of the Court of Appeals
affirming the decree of the Supreme Court, and it is
Affirmed.
