Lyons v. Lefevre, 1841

[promissory note – auctioneer – land sales – Berkeley Estate – Gosford – fraud]

The Solicitor-General, for the defendant, claimed the right to begin, inasmuch as the proof of the issue lay upon the defendant.

Mr. Justice Burton decided, that the defendant was upon the pleadings entitled to begin, as the plaintiff was not prepared to give any evidence upon the account stated.

The Solicitor-General, then stated the case. It was an action brought to recover the amount of a promissory note for £90 2s. 3d., dated of the 27th of May last, payable in six months, which was given to the plaintiff by the defendant, as part of the purchase-money of some land sold by the plaintiff in his capacity of auctioneer. The defendant admitted having given the note, but alleged that he was induced to make it through the fraud of the plaintiff in giving a false representation of the land sold. The sale took place on the 27th of May last, having been previously advertised in the public papers in the most glowing terms. The defendant undertook to prove that the description of the land given by the plaintiff was wholly and completely false, and upon this ground he relied upon the verdict of the jury.

The defendant, by the plaintiff’s clerk, proved the sale, the publication at the sale-room of the advertisement, and the man of the land, the entry of the defendant’s purchase by himself in the plaintiff’s book, the terms of the sale, which were ten per cent, deposit in cash, and the residue by approved bills at three, six, and nine months, with security on the property, a receipt from one of the plaintiff’s clerks for the notes, the representations of the plaintiff at the sale, with respect to the locality, the nature, the advantages, and the distance of the land sold from certain places then referred to, the falseness of those representations in almost every particular, and the insertion of the advertisement of the sale in the Sydney Herald by one of the plaintiff’s clerks.

“The Berkley estate is situated in the beautiful and fertile district of Brisbane Water, within a short distance of the flourishing town of East Gosford, on the road to Maitland, and within three hour’s sail of Sydney. The land is alluvial, of the richest description, abounding with fresh water, and capable of producing heavy crops of potatoes, corn, wheat, and tobacco. The market-gardeners would realise a speedy fortune by cultivating onions, vegetables, and fruits, which can be transmitted by the Company’s steamers to Sydney in the course of a few hours, at a trifling expense. It is also peculiarly adapted for the man of small means, who wishes to realise an independence with a trifling outlay. Every inch of the land is fit for cultivation, and some thousand pounds worth of the finest timber in the colony may be cut off several of the small farms. As a speculation for the wealthy this presents an opening rarely to be met with: for there can be no doubt the inhabitants of East Gosford will in a very short time gladly give thirty or forty pounds per acre for land in their immediate vicinity, with a rich soil, abundance of fresh water, and a fine scenery to recommend it.”

There were several other special advantages, with respect to the land, set forth in the advertisement, all of which were substantially disproved by the defendant’s witnesses.

Mr. Windeyer addressed the Jury for the defendant, and said, that he should prove that the plaintiff had received the note in suit in his capacity of auctioneer; that he had accounted with his principal, and now held the bill on his own account; that the defendant had paid the first of his bills, after having viewed and inspected the land purchased by him, and he also had executed to him a conveyance of the land; besides he (Mr. Windeyer) would prove that there was no substantial misdescription of the land sold, but he would contend that unless there had been wilful and deliberate misrepresentation by the plaintiff, he was entitled to recover in this action, and that no vague representations by the plaintiff, upon what were altogether mere matters of opinion could in any way vitiate the sale, or take away the defendant’s liability. He cited 1 C. M. & R. 722. Sug. Ven. 283, 3 Meri. 704. 1 Sim. 13. 2 C. M. & R. 103.

The plaintiff having examined several witnesses in support of his case, Mr. Justice burton enquired whether it was likely that he would examined many more, and the counsel for the plaintiff having intimated his intention to examine several more, Mr. Justice Burton thought it better to adjourn the Court, and it accordingly adjourned till Tuesday morning.

When this case, was called on this morning the plaintiff called a number of witnesses in addition to those whom he had yesterday examined, for the purpose of showing that the owner of the land had executed a conveyance on the 16th of July to the defendant, which it appeared was prepared by an attorney who acted for both the parties to the conveyance, and who said that he had never before acted for the defendant, and had never told the defendant of his conveyance being executed; that after its execution he gave the convenance to Peek, the owner of the land, but would not have then given it to the defendant without an express authority from Peek or from the plaintiff; and that he acted upon verbal instructions. The plaintiff also gave evidence of several parts of the description being accurate; and in almost every instance the witnesses for the plaintiff directly contradicted those for the defendant with respect to the nature, the advantages, and distance of the land sold.

The Solicitor General, for the defendant, addressed the jury at some length, contending that from all the evidence in the case they must be satisfied of the falseness of the plaintiff’s representations with respect to the land, which was the consideration of the note.

Mr. Justice Burton said, that although the case had taken a long time in its trial, yet it was undoubtedly one in every way deserving of attention. It involved a serious imputation of fraud upon the part of the seller of the land, while the result of the case must be of some consequence to the defendant. The defendant resisted the payment of the note on the ground of the misrepresentations under which he was induced to make it. When a purchaser was imposed on in a purchase, like that for which the note was given, the imposition must be one calculated to deceive a prudent man; for the present case was different from that of the purchase of mere goods, which could be seen and inspected at the time of sale, whereas in such a case as this the purchaser must, to a great degree, rely upon his own enquiries, with respect to his purchase. The plaintiff in this case relied upon the facts of his having paid over the money to his principal, and of the representations which he gave being true; but the first circumstance could not avail the plaintiff, because being an auctioneer and merely an agent in the sale, he ought not to have paid over the money to his principal, till the conveyance was properly made to the defendant if he had paid over the money before that time, he must be taken to have acted under a del credere commission, and must therefore stand in the place of his principal. If the conveyance, which was given in evidence in this case, had been properly executed, the defendaut would have been prevented by it from resisting the payment of the note; but from the very objectionable way in which that conveyance appeared to have been executed, it did not conclude the defendant; for it must be looked upon as not having been delivered, and as being therefore incomplete. As to the payment of the first bill by the defendant, it was an unfavourable circumstance against him, and yet it was insufficient of itself to destroy his right of resisting payment of the note in suit, provided that note were given upon such a false representation as would otherwise entitle the defendant to resist its payment. Then as to the representations; they must have been calculated to deceive, and must have deceived the defendant; undoubtedly the conduct of the defendant was most imprudent, he ought to have made enquiries before he purchased; but yet if the representations were such as were calculated to impose on the defendant as a prudent and cautious man, and if the defendant were in fact imposed on, then the plaintiff was liable for those misrepresentations; and, therefore, with respect to the representations as to the distance of the land from Gosford, as to the road lying through the land and running to Maitland; as to the distance from Sydney; and as to the nature and advantages of the soil, if the jury believed that these representations were true they should find a verdict for the plaintiff; but if they believed that any of those representations were untrue, and were calculated to deceive a cautious and prudent person, and that they did deceive the defendant, then they should find a verdict for him. The learned Judge then read over all the evidence in the case, commenting upon it as he went along.

The jury retired for about five minutes, and returned a verdict for the plaintiff – Damages £93 15s.

Mr. Windeyer and Mr. Broadhurst for the plaintiff; the Solicitor General, Mr. Foster, and Mr. Cheeke for the defendant.

This was an action upon the defendant’s promissory note, for £90 2s. 3d., in favor of the plaintiff, payable in six months after date. The plea was, that the note was made through fraud and covin.

Upon the trial before Mr. Justice Burton, in June last, it appeared that the note was given as part of the consideration of a purchase by the defendant, at Auction, of a portion of the celebrated Berkely estate. The defendant gave evidence of the land having been mis-described at the auction; and the plaintiff gave contradictory evidence upon this point. The defendant had paid one note for the purchase.

The Solicitor General and Mr. Foster, for the defendant, now moved to set aside the verdict, and for a new trial, on the grounds of misdirection by the learned Judge, and of the verdict having been against evidence.

The argument of the learned counsel was at great length, and was principally based on the description of the property sold having been proved to have been false in several material particulars.

Mr. Windeyer and Mr. Broadhurst opposed the motion on the part of the plaintiff.

The Solicitor-General replied for the defendant, and the Court then delivered its judgment.

The Chief Justice said that he was of opinion, that the motion could not be sustained on the ground of misdirection in the learned Judge, who had tried the case; but there had been three other points relied upon in support of the misdescription of the land: 1st, as to its nature; 2nd, as to its distance from Sydney; and 3rd, as to a road lying through the land: upon the first and third points conflicting evidence had been given to the Jury, and as they had decided those points in favour of the plaintiff, the verdict should not be set aside on this account; but with respect to the second point, as the description of the land stated, that the estate was within there hours’ sail of Sydney, whereas all the evidence proved that four or five hours was the average time of the passage by steam to East Gosford – the nearest point of the sea to the estate – and that the estate itself was about nine miles from Gosford: he was of opinion that that was a material misdescription, which was in itself sufficient to vitiate the verdict, and that it should be therefore set aside.

Mr. Justice Stephen said, that it was quite clear that there had been a material mis-description in the distance of the estate from Sydney; but, even independently of this, he thought that there had been, also, a material mis-description in representing the estate as being in the immediate vicinity of East Gosford, whereas the one was proved to be nine or ten miles from the other, the Berkely Estate being also the farthest of the two from Sydney; therefore he was of opinion that the verdict which had been given upon this evidence was neither just nor equitable; and, unless this evidence should be falsified by other evidence at the next trial, he hoped that the result of the case would operate as a warning to others, and would effectually suppress a disgraceful system of puffing.

[1] See also Australian, 10 June 1841. In addition to the litigation over the Berkeley Estate, Lyons was sued by Whytlaw on a promissory note, damages £1045: Australian, 24 June 1841. The plaintiff Whytlaw acted on behalf of the Hunter’s River Steam Navigation Company.