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Opinion of the Court.
in Arrest of Judgment for a small Fault in the Declaration, which was overruled, and Judgment given for the Plaintiff."
James v. Morgan is cited by Lord Chief Justice Hale, 1 Ventris, 267, Lord Eure and Turton, note, to the point that "upon certain contracts the jury may give less damages than the debt amounts to," and also in Bacon's Abridgment, Damages, D. 1, together with Thornborough v. Whiteacre, 6 Mod. 305; S. C. 2 Ld. Raym. 1164, sub nom. Thornborow v. Whitacre; to the same point, stated thus: "Though in contracts the very sum specified and agreed on is usually given, yet if there are circumstances of hardship, fraud or deceit, though not sufficient to invalidate the contract, the jury may consider of them and proportionate and mitigate the damages accordingly."
In Thornborough v. Whiteacre, the plaintiff declared that the defendant, in consideration of 2s. 6d. paid down, and £4 178. 6d. to be paid on the performance of the agreement, promised to give the plaintiff two grains of rye corn on a certain Monday, and to double it successively on every Monday for a year; and the defendant demurred to the declaration. Upon calculation, it was found that, supposing the contract to have been performed, the whole quantity of rye to be delivered would be 524,288,000 quarters. The court recognized the case of James v. Morgan as good law, and said that though the contract was a foolish one, the defendant ought to pay something for his folly. "The counsel for the defendant, perceiving the opinion of the court to be against his client, offered the plaintiff his half crown and his cost, which was accepted of, and so no judgment was given in the case."
In Leland v. Stone, 10 Mass. 459, James v. Morgan and Thornborough v. Whiteacre are referred to with approbation, and the principle of mitigating the damages applied, as also in Cutler v. How, 8 Mass. 257; Cutler v. Johnson, 8 Mass. 266; and Baxter v. Wales, 12 Mass. 365. And see Greer v. Tweed, 13 Abb. Pr. N. S. 427, and Russell v. Roberts, 3 E. D. Smith,
Mr. Justice Swayne remarks, in Scott v. United States, 12 Wall. 443, 445: "Where parties intend to contract by parol, and there is a misunderstanding as to the terms, neither is
Opinion of the Court.
bound, because their minds have not met. Where there is a written contract and a like misunderstanding is developed, a court of equity will refuse to execute it. If a contract be unreasonable and unconscionable, but not void for fraud, a court of law will give to the party who sues for its breach damages, not according to its letter but only such as he is equitably entitled to. James v. Morgan, 1 Lev. 111; Thornborow v. Whitacre, 2 Ld. Raym. 1164; Baxter v. Wales, 12 Mass. 365."
But James v. Morgan and Thornborough v. Whiteacre were plainly cases in which one party took advantage of the other's ignorance of arithmetic to impose upon him, and the fraud was apparent upon the face of the contracts. In the latter case the defendant, by demurring, admitted that there was no fraud, and consequently the only question was on the validity of the contract in the absence of fraud, and it was sustained, but the plaintiff was allowed to take nominal damages only. And as to many of the cases it may be objected that they are at variance with the rule that a party must recover according to his contract if he sue upon it, or not at all, although, if the express contract were void, the defendant might nevertheless be held in general assumpsit, upon the implied contract to pay for property received from the plaintiff and retained.
The true principle deducible from the authorities, and most consistent with the reason of the thing, seems to be this: In the instance of a special contract which has been wholly executed and the time of payment passed, if the plaintiff proceeds in general assumpsit, the express contract is only evidence of the value of the consideration, which is open to attack by the defendant in reduction of damages. But, where the action is in special assumpsit, the express promise of the defendant fixes the measure of damages to which the plaintiff is entitled. And while the general rule is that the performance of every contract may be resisted on the ground of fraud, at law as well as in equity, yet upon a contract of sale, the defendant having accepted performance, cannot interpose this defence to defeat the contract, unless he returns the article or proves it to have been entirely worthless, though he may ordinarily recoup the damages which he can show he has sustained through
Opinion of the Court.
the fraud. And there may be contracts so extortionate and unconscionable on their face as to raise the presumption of fraud in their inception, or at least to require but slight additional evidence to justify such presumption. In such cases the natural and irresistible inference of fraud is as efficacious to maintain the defence at law as to sustain an application for affirmative relief in equity. When this is so, if performance has been accepted in ignorance and under circumstances excusing the non-return of articles furnished, and these have some value, the amount sued for may be reduced to that value.
In the case at bar the shucks had been appropriated by the government before the discovery of the error in the schedule and the position of the claimant in regard to it, and if the defendant successfully impeached the contract on the ground of fraud, the judgment for the actual market value of the shucks was correct, and sustainable under the pleadings.
In order to guard the public against losses and injuries arising from the fraud or mistake or rashness or indiscretion of their agents, the rule requires of all persons dealing with public officers, the duty of inquiry as to their power and authority to bind the government; and persons so dealing must necessarily be held to a recognition of the fact that government agents are bound to fairness and good faith as between themselves and their principal. Whiteside v. United States, 93 U. S. 247, 257; United States v. Barlow, ante, 271.
If the claimant intended to induce the agents of the government to contract to pay for these shucks thirty-five times their highest market value, and the agents of the government knowingly entered into such a contract, it will not be denied that such conduct would be fraudulent and the agreement vitiated accordingly. If the claimant knew that a clerical error had been committed, of which the agents of the government were ignorant, and deliberately intended to take advantage of the error to obtain the execution of a contract for the payment of so grossly unconscionable a price, or if the facts were such that he must be held to have known that their action, if understandingly taken, would be in palpable dereliction of their duty to their principal, and, notwithstanding, sought to profit
by it, the character of the fraud, so far as the claimant is concerned, is not changed by the fact that such action was the result of the negligence or mistake of the government's agents, untainted by moral turpitude on their part.
The claimant by his replication insists that the price of sixty cents per pound for shucks "was the price at which he intended to bid, and that there was no mistake on his part in making out the bid." This is an admission, when taken with the findings of fact, that he designed to commit the agents of the government to a contract "such as no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other," and is fatal to his recovery according to the letter of the contract. Nor is its effect in that regard weakened in any degree by the suggestion that, under bids on each item separately, the claimant made but little profit, or none at all, on some of the articles.
The Court of Claims did not err in the admission of the evidence upon which the fifth finding of fact is based, nor in its refusal to permit the claimant to recover more than the market value of the shucks, its allowance of which we will not disturb.
No. 128. Argued November 20, 21, 1889. - Decided December 16, 1889.
The right of action of a plaintiff under a title derived from an assignee in bankruptcy, to redeem from a sale under a deed of trust, was held in this case to be barred by the two years' limitation contained in § 5057 of the Revised Statutes.
That section does not apply only to a suit to which the assignee in bankruptcy is a party; but it applies to a case where nearly a year of the two years had run against the right while the assignee owned it, after his appointment, and the rest of the two years ran against it in the hands
Statement of the Case.
of the plaintiff, his transferee, so that more than two years elapsed between such appointment and the bringing of the suit to redeem, and the property covered by the trust deed was held adversely by the defendant, under a sale under the trust deed, for more than two years before the bringing of that suit.
On the facts of this case there was no fraudulent concealment by the defendants from the assignee in bankruptcy or the plaintiff.. Sufficient information as to the trust deed, and its contents, was given in the bankruptcy schedule, filed more than eleven months before the assignee was appointed, and more than one month before the sale under the trust deed, to put the assignee in bankruptcy and the plaintiff on inquiry.
Moreover it appeared that, two days before the sale under the deed of trust, the plaintiff knew of the contents of the schedule in bankruptcy and who held the debt secured by the deed of trust.
The plaintiff having, by a petition to the bankruptcy court, procured the sale of the property by the assignee in bankruptcy, and the application of its proceeds on the debt on which his suit to redeem was founded, waived any right to redeem arising under a judgment before recovered by him for his debt.
THE Court, in its opinion, stated the case as follows:
On the 1st of April, 1871, Nathan S. Grow, of Chicago, Illinois, executed a trust deed to Benjamin E. Gallup, of the same place, to secure the payment of a promissory note for $35,000, payable in five years from that date, with interest at the rate of 9 per cent per annum, payable half-yearly on October 1 and April 1, as evidenced by 10 interest coupons, bearing the same date, for $1575 each. The note was payable to the order of Grow, and was endorsed by him payable to David R. Greene or order. The trust deed stated that the $35,000 was a loan to Grow made by the legal holder of the note. Greene was the person who loaned the money. who loaned the money. He resided in New Bedford, Massachusetts. The real estate covered by that trust deed was at the northeast corner of West Madison and Sheldon streets, in Chicago, being 73 feet on West Madison Street, in front, 116 feet deep, on Sheldon Street, 73 feet in the rear, on a line parallel with West Madison Street and on a 16-feet alley, running east and west, and 116 feet on the east line, parallel with Sheldon Street. It was described as having on it three four-story brick stores with stone fronts, fronting on West