from such default if the subsequent events though not amounting to such impossibility as would excuse at law are, nevertheless, of a kind which not only greatly change the value of one performance or the other, but also could not reasonably have been anticipated when the contract was made, specific performance has in some cases been denied.11 If such events, however, while producing hardships which makes it inequitable to decree performance of all the terms of the contract, nevertheless do not affect its primary object, equity may enforce it with such modifications as justice requires.12 § 1426. Non-disclosure. Since courts of equity refuse to enforce harsh and unfair bargains, it follows that the boundaries of unfair dealing and of mistake which will defeat the right to specific performance are wider than those which define such fraud or mistake as will prevent the enforcement of contracts at law or justify an injunction or rescission in equity. Not only will innocent misrepresentation of a material fact preclude recovery, a doctrine that has now been generally adopted from courts of equity by courts of law, as a ground for rescission, 13 but failure to communicate material facts of which fair dealing demanded the disclosure, will preclude specific performance both of contracts 81 Kan. 569, 106 Pac. 270; Joffrion v. Gumbel, 123 La. 391, 48 So. 1007; Van Buren v. Stocking, 86 Mich. 246, 49 N. W. 50; Green v. Reder, 199 Mich. 594, 165 N. W. 807; Pomeroy v. Fullerton, 141 Mo. 581, 33 S. W. 173; Reddish v. Miller, 27 N. J. Eq. 514; Ruff's Appeal, 117 Pa. 310, 11 Atl. 553; Harper v. Hughes (Tex. Civ. App.), 143 S. W. 7.15; Gish v. Jamison, 96 Va. 312, 31 S E. 521; Newberry v. French, 98 Va. 479, 36 S. E. 519; McAllister v. Harman, 101 Va. 17, 42 S. E. 920. 11 King v. Raab, 123 Iowa, 632, 99 N. W. 306; Bartley v. Lindabury, 89 N. J. Eq. 8, 104 Atl. 333; Gotthelf v. Stranahan, 138 N. Y. 345, 34 N. E. 286, 20 L. R. A. 455; Wadick t. Mace, 191 N. Y. 1, 83 N. E. 571; Huntington v. Titus, 50 N. Y. App. Div. 468, 64 N. Y. S. 58. If the principle is sound that the risk of accidental destruction of the property is on the purchaser from the signing of the contract (see supra, §§ 927 et seq.) there can be no propriety in any case in relieving him from performance because of supervening hardship. 12 Wright v. Vocalion Organ Co., 148 Fed. 209, 79 C. C. A. 183; La Follette v. La Follette Water &c. Co., 252 Fed. 762, 164 C. C. A. 602; King v. Raab, 123 Ia. 632, 99 N. W. 306; cf. Franklin Tel. Co. v. Harrison, 145 U. S. 459, 36 L. Ed. 776, 12 Sup. Ct. Rep. 900; Clark v. Hutzler, 96 Va. 73, 30 S. E. 469. 13 See infra, § 1500. between vendor and purchaser, 14 and contracts of other kinds. 15 The law of England, however, has gone very far in enforcing specific performance in spite of non-disclosure of material matters, 16 though there as elsewhere concealment would deprive the plaintiff of relief. 17 14 Byars v. Stubbs, 85 Ala. 256, 4 So. 755; Shoop v. Burnside, 78 Kans. 871, 98 Pac. 202; Bowman v. Iorns, 2 Bibb, 78, 4 Am. Dec. 686; Woollums v. Horsley, 93 Ky. 582, 20 S. W. 781; Wolford v. Steele, 27 Ky. Law. Rep. 1177, 87 S. W. 1071, 27 Ky. L. Rep. 88, 84 S. W. 327; Banaghan v. Malaney, 200 Mass. 46, 85 N. E. 839, 19 L. R. A. (N. S.) 871, 128 Am. St. Rep. 378; Bean v. Valle, 2 Mo. 103; Corby v. Drew, 55 N. J. Eq. 387, 36 Atl. 827; Margraf v. Muir, 57 N. Y. 155. 15 Cowan v. Sapp, 81 Ala. 525, 8 So. 212; Hetfield v. Willey, 105 Ill. 286; Shea v. Evans, 109 Md. 229, 72 Atl. 600; Dodd v. Home Mutual Ins. Co., 22 Oreg. 3, 28 Pac. 881, 29 Pac. 3. 16 Turner v. Green, [1895] 2 Ch. 205; Greenhalgh v. Brindley, [1901] 2 Ch. 324. si 17 "The distinction between suppression of a fact and mere lence is a very old one, and is to be found in a passage from Cicero (De Off, lib. iii. c. 13), which is cited by Sir Edward Fry in his book (3d. Ed. p. 329) 'Aliud est celare, aliud tacere; neque enim id est celare quicquid reticeas.' The obligation to speak is at the root of this proposition." Turner v. Green, [1895] 2 Ch. 205. So in Fothergill v. Phillips, L. R. 6 Ch. 770, a suit for the enforcement of an agreement to sell a farm from which unknown to the defendants the plaintiffs had by trespass taken coal, Lord Hatherley said: "The observations of the Vice-Chancellor, as to the purchasers knowing more of the value than the vendors did, would, if I may venture to say so, have been erroneous if made without reference to the special circumstances of the case. I apprehend it would be an error to say generally that you cannot enforce a contract in this court where the one party knows more of the value than the other does. It happens frequently in the purchase of pictures, for instance, that one party knows a great deal more of the value than the other, and yet the bargain is perfectly good. But I apprehend that the Vice-Chancellor meant his observations to be understood with reference to the circumstances of the particular case, and that when he says the vendors did not know the subject-matter of the contract, he meant that they did not know that coal had been taken to the extent of 2000 tons, and that in that state of circumstances they could not be held to the bargain. If, indeed, undervalue were shown, this observation would naturally suggest itself; the case is not merely that the purchasers, being more experienced men, knew the value of the coal better than the vendors, but that the vendors being unable to gain access to the coal, the purchasers took advantage of an unlawful access to it in order to test its value, and did not communicate to the vendors the result. I apprehend that in such a case the court, whatever it might do as to cancelling the contract, certainly would decline to enforce it." In Falcke v. Gray, 29 L. J. Ch. 28, 31, Kindersley, V. C., said: "Lord Thurlow went so far as to say, that if a man went to purchase an estate, and $1427. Mistake. Because of the discretionary character of the remedy, in some cases a mistake by the defendant though not sufficient to prevent the formation of a contract or to give equitable ground for its reformation or rescission will, nevertheless, excuse him from liability in a suit for specific performance. Unilateral mistake has not infrequently been thus held an excuse.18 But this principle is ordinarily limited to cases where the enforcement of the contract, as made, would be harsh. 19 And if the defendant was guilty of gross carelessness in making a mistake, his negligence will dispose the court not to exercise its discretion in his favor.20 Mistake of law, though not generally ground for rescinding or reforming a contract, 21 may afford a reason for denying specific enforcement thereof, especially if its terms are unfair. 22 And a degree of mental weakness in a spendthrift, 23 intoxicated person, 24 or aged or infirm person,2 ,25 or person ig there was a valuable mine under it, of which the purchaser knew, but the vendor did not, the court would not set the contract aside; yet no one can doubt that the court would not enforce specific performance of such a purchase." See in accord Byars v. Stubbs, 85 Ala. 256, 4 So. 755; Bean v. Valle, 2 Mo. 103. But see contra Caples v. Steel, 7 Or. 491. See further, infra, §§ 1497-1499. 18 Webster v. Cecil, 30 Beav. 62; Day v. Wells, 30 Beav. 220; Rushton . Thompson, 35 Fed. 635; Clowes #. Miller, 74 Conn. 287, 295, 50 Atl. 728; Coppage v. Equitable &c. Trust Co., (Del. Ch. 1917), 102 Atl. 788; Mansfield v. Sherman, 81 Me. 365, 17 Atl. 300; Kelley v. York Cliffs Imp. Co., 94 Me. 374, 47 Atl. 898; Somerville v. Coppage, 101 Md. 519, 61 Atl. 318; Bowman v. McClenahan, 19 N. Y. Misc. 438, 44 N. Y. S. 482 (affd. in 20 N. Y. App. Div. 346, 46 N. Y. S. 945). "Stewart v. Kennedy, 15 A. C. 75, 105; Preston v. Luck, 27 Ch. Div. 497; Dewey v. Whitney, 93 Fed. 533, 35 C. C. A. 414; Heyward v. Bradley, 179 Fed. 325, 102 C. C. A. 509; Western R. Corp. v. Babcock, 6 Metc. 346; Mansfield v. Hodgdon, 147 Mass. 304, 17 N. E. 544; Lacroix v. Longtin, 22 Ont. L. R. 506. 20 Tamplin v. James, 15 Ch. D. 215; Van Praagh v. Everidge [1902] 2 Ch. 266; Heyward v. Bradley, 179 Fed. 325, 102 C. C. A. 509; Krah v. Wassmer, 75 N. J. Eq. 109, 71 Atl. 404; Cape Fear Lumber Co. v. Matheson, 69 S. C. 87, 48 S. E. 111. See infra, § 1596. 21 Infra, §§ 1581 et seq. 22 Higgins v. Butler, 78 Me. 520, 7 Atl. 276; Trigg v. Read, 5 Humph. 529, 42 Am. Dec. 447. 23 Henderson v. Hays, 2 Watts, 148. 24 Nagle v. Baylor, 3 Dr. & War. 60; Mætzel v. Koch, 122 Iowa, 196, 97 N. W. 1079; Henderson v. Hays, 2 Watts, 148. 25 Banaghan v. Malaney, 200 Mass. 46, 85 N. E. 839, 19 L. R. A. (N. S.) 871, 128 Am. St. Rep. 378; Cuff v. norant of the language, 26 which would not amount to the insanity or imbecility necessary to produce legal incapacity to contract, 27 will afford ground for refusing specific performance, especially if the bargain is not a fair one. § 1428. Inadequacy of consideration. If the consideration for a promise is so inadequate as to warrant the conclusion that the nature of the bargain cannot have been fairly understood, specific performance will be denied; 28 especially when such inadequacy is taken in connection with other circumstances, even though they do not amount to actual fraud. 29 It is generally said that the inadequacy of consideration standing alone must be so extreme as to afford evidence of fraud, or it will be no bar to specific performance.30 The absolute form of the statement is probably due originally to a purpose merely to deny that the English law has any principle like that of the Roman law which required as a condition of the validity of a contract that the price should exceed half of the value, and unquestionably it is undesirable to lay down a hard and fast rule of this sort. There are many degrees of inadequacy and as a matter of fact inadequacy of consideration Dorland, 50 Barb. 438; Spotts v. Eisenhauer, 31 Pa. Super. Ct. 89. 26 Miller v. Tjexhus, 20 S. Dak. 12. 27 See supra, §§ 249 et seq. 28 Chesterfield v. Jansen, 2 Ves. Sr. 125; Day v. Newman, 10 Ves. 300; Savile v. Savile, 1 Peere. Wms. 745; Riordan v. Stout, 17 D. C. App. Cas. 397; Christian v. Ransome, 46 Ga. 138; Thayer v. Younge, 86 Ind. 259; Norris v. Clark, 72 N. H. 442, 57 Atl. 334. 29 Cleere v. Cleere, 82 Ala. 581, 3 So. 107, 60 Am. Rep. 750; Knott v. Giles, 27 Dist. of Col. App. Cas. 581; Shoop v. Burnside, 78 Kans. 871, 98 Pac. 202; Ratterman v. Campbell, 26 Ky. L. Rep. 173, 80 S. W. 1155; Wolford v. Steele, 27 Ky. L. Rep. 88, 84 S. W. 327; Higgins v. Butler, 78 Me. 520, 7 Atl. 276; Worth v. Watts, 74 N. J. L. 609, 70 Atl. 357; Great Northern R. Co. v. Sheyenne Tel. Co., 27 N. Dak. 256, 263, 145 30 Coles v. Trecothick, 9 Ves. 234, 246; Callaghan v. Callaghan, 8 Cl. & F. 374, 401; Erwin v. Parham, 12 How. 197, 13 L. Ed. 952; Alabama Central R. Co. v. Long, 158 Ala. 301, 48 So. 363; Zempel v. Hughes, 235 Ill. 424, 85 N. E. 641; Warner v. Marshall, 166 Ind. 88, 75 N. E. 582; Lawson v. Mullinix, 104 Md. 156, 64 Atl. 938; Lee v. Kirby, 104 Mass. 420; New England Trust Co. v. Abbott, 162 Mass. 148, 38 N. E. 432, 27 L. R. A. 271; Shaddle v. Disborough, 30 N. J. Eq. 370; Seymour v. DeLancey, 3 Cow. 445, 15 Am. Dec. 270; Combes v. Adams, 150 N. C. 64, 63 S. E. 186; Kramer v. Dinsmore, 152 Pa. 264, 25 Atl. 789. See also Harrison v. Guest, 8 H. L. C. 481. rarely does stand alone. There are always many surrounding circumstances, and it is certainly true that inadequacy of consideration in connection with other facts which of themselves would not bar relief may justify a refusal to enforce a contract. Moreover, if a case be supposed to arise on demurrer to the bill or otherwise where the only possible matter of objection is extreme inadequacy of consideration, to say that this of itself cannot be sufficient reason to refuse specific performance is inconsistent with the numerous cases which assert that the remedy is discretionary, and that harsh or unfair contracts will not be enforced.31 Surely inadequacy of consideration may make a bargain harsh and unfair, though it is not fraudulent. 32 § 1429. Public policy. If a contract is illegal or opposed to public policy, specific performance is obviously improper, and it is possible that specific performance may be opposed to public policy, though a recovery of damages at law would not be. A plaintiff who is ignorant of the facts on which illegality is based, may frequently recover at law on an illegal contract.33 But specific performance of such a contract is another matter and though even this has been granted where public necessity required it,34 such an instance is exceptional. On the other hand, in some cases contracts which might not be thought illegal at law will, nevertheless, be denied specific enforcement. The con "Supra, § 1425. *See, e. g., Marks v. Gates, 154 Fed. 481, 83 C. C. A. 321, 14 L. R. A. (N. S.) 317; Koch v. Streuter, 232 Ill. 495, 83 N. E. 1072; Oliver v. Johnson, 238 Mo. 359, 142 S. W. 274; Spotts #. Eisenhauer, 31 Pa. Super. Ct. 89. "See infra, § 1631. "In Seattle Electric Co. v. Snoqualmie Falls Power Co., 40 Wash. 380, 82 Pac. 713, 1 L. R. A. (N. S.) 1032, the court for a brief period specifically enforced a contract which was held illegal as designed to create a monopoly. A refusal to enforce the contract would have involved the sudden cutting off of the supply of electricity upon which the transportation and lighting systems of the city of Seattle were dependent. The court held that the public interest required that the contract be performed until such time as an adequate supply of electricity could be otherwise procured. At law, the primary question is whether the plaintiff's part in the contract in question is so blameworthy that he should be denied recovery. (Infra, § 1630). In equity when specific performance is sought, there must be the further inquiry whether it is against public policy to have the contract performed. |