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outline. The further particulars will be given in the course of the discussion to follow.
The general principles upon which a suit of this kind proceeds are too well settled to need the citation of authorities. A misrepresentation with regard to material facts, by which a purchase of property is intentionally induced, amounts to a fraud which vitiates the transaction, and entitles the purchaser to be relieved. As a qualification of this, however, it is at the same time universally held that, where the means of knowledge are at hand, and are equally open to both parties, if the purchaser does not avail himself of them, he will not be heard to say that he has been deceived by the misrepresentations of the vendor, being charged with the knowledge of all that could have been so readily ascertained. And the same rule obtains where, not resting on the statements of the vendor, he undertakes to make, and does make, an independent investigation and verification of his own. Slaughter v. Gerson, 13 Wall. 379, 20 L. Ed. 627; Farnsworth v. Duffner, 142 U. S. 43, 12 Sup. Ct. 164, 35 L. Ed. 931; Smith v. Curran (C. C.) 138 Fed. 150. It is obvious, however, that in order to have this effect the examination must be an untrammeled one, and that this is not the case where fraud or concealment is practiced in the course of it, or misrepresentations made which would themselves afford occasion for relief. An examination perverted in this way by the act of the vendor is the same as no examination at all. Neither does it matter, if misrepresentation be proved, that the bargain, even so, was a good one, from which the purchaser is likely to sustain no loss. In an action of deceit, no doubt, this would be relevant on the question of damages, in order to show that there were none (Sigafus v. Porter, 179 U. S. 116, 21 Sup. Ct. 34, 45 L. Ed. 113; Pittsburg Life & Trust Co. v. Northern Central Ins. Co. (C. C.] 140 Fed. 888), although to this the authorities are not all agreed (Walker v. Walbridge, 136 Fed. 19, 68 C. C. A. 569); but not so upon a bill to rescind (Hansen v. Allen, 117 Wis. 61, 93 N. W. 805; Clapp v. Greenlee, 100 Iowa, 586, 69 N. W. 1049). The purchaser is entitled to the bargain which he supposed and was led to believe that he was getting, and is not to be put off with any other, however good. It is of no consequence, in the present instance, therefore, that the plaintiffs got coal lands of intrinsic value, which are worth, perchance, all that was paid for them, if they were fraudulently induced to believe, by representations for which the defendants are responsible, that the Upper Freeport vein, for which they negotiated, underlaid the whole property, whereas in fact it extends over but a comparatively limited part.
Turning, then, more immediately to the case in hand, it is not necessary to hold, as charged in the bill, that the plaintiffs are the victims of a scheme deliberately concocted by the defendants to get off onto them property which was known not to be of the character which they were led to suppose. It would, indeed, be difficult to so find. The evidence is not that way; however, there may be circumstances calculated to arouse suspicion, looking back upon the transaction and having regard to the sequel. It may be, for instance, that “Jos." Barnes (one of the original parties who took up the options, but who sold out
to Greer during the negotiations), as well as Greer himself, if not other of the defendants, had reason to believe that the Upper Freeport vein, by which the property was being sold, was of limited range over the Falls Tract, which constituted one-third of the whole acreage, and yet allowed it to be represented that it extended unbroken throughout the entire field, constituting, as it was declared, a body of coal of 5,000 acres, reaching over to the Cheat river. “Jim” Barnes' remarks, also, to McMillan: "Oh, let's call it all Freeport. We want the coal to go”—may seem to disclose a certain willingness to amplify, if not misstate, the facts; and it would no doubt inspire greater confidence in their honesty of purpose if the defendants, one and all, instead of clinging to the bargain after knowing the means by which it had been obtained, had followed the lead set them, and conceded the right of the plaintiffs to rescind. But giving due allowance to this and other circumstances which have been brought forward, and having regard not only to their individual but their collective weight, they are too inconclusive to justify the charge of intended fraud on the part of the defendants themselves. The declarations of the defendants with respect to the extent of the Upper Freeport vein may have been expressed with greater positiveness than was warranted, particularly in view of the distinct intimation to the contrary which they had. But they were at the same time accompanied with the qualification that they themselves had never been over the property, and were not much acquainted with it; and the statements could not therefore have been understood as anything more than the usual commendatory expressions which are accustomed to pass at such a time—“trade talk”—by which, however positive, no one is expected to be bound. Sawyer v. Prickett, 19 Wall. 146, 22 L. Ed. 105; Kimball v. Bangs, 144 Mass. 321, 11 N. E. 113; Pittsburg Life & Trust Co. v. Northern Central Ins. Co. (C. C.) 140 Fed. 888. And that the plaintiffs did not rely on these representations alone is shown by the expert examination which they undertook to make notwithstanding them. To the suggestion that “Jos.” Barnes conveniently sold out his interest because he knew too much, there is to be opposed the confidence of Greer, who knew pretty much the same facts, and yet was willing to put just so much more money into the property. And the casual remark of "Jim" Barnes, to which allusion has been made, is more than offset by his straightforward expression of readiness to take back the property when its real character was disclosed, because it was not what had been represented or sold. That this course was not pursued, either by himself or the other defendants, is explained, according to counsel, not only by the advice that they were not liable, and the changed conditions which made it inequitable, but also by the fact that the money which they got out of the transaction has been tied up in the purchase of other land in that vicinity. It is to be remembered, moreover, that it was the plaintiffs who sought out the defendants in this matter, and not the defendants the plaintiffs; which naturally modifies our judgment, looking over the whole transaction.
But this is by no means all of the case, nor, indeed, the important part of it. The serious thing is the rascally conduct of George W.
Shaffer, the defendants' agent, in showing the property. As expressively acknowledged by Barnes to Murray: “That G-d - Shaffer is to blame for all of it.” That he purposely set about to mislead and deceive those who were sent by the plaintiffs to examine the land is overwhelmingly established. For this we have not only the accomplished fact, but his own words as well, not being able to refrain from boasting of it after having been smart enough to do so. The motive is to be found in his interest. Not only was he employed by the defendants to show the property, for which he got so much a day, but he was further paid a certain price per acre (50 cents or a dollar, it seems to be differently stated) for each acre sold, which naturally made him desirous that it should go. He evidently resolved that it should not fail for lack of anything on his part, and it did not. His declarations after the fact are objected to as inadmissible to bind the defendants, being merely narrative. But not all of them stand that way. For instance, his taking McMillan to task for putting on his map the McKinney openings on the Falls Tract, which gave away the extent of the Upper Freeport vein in that section; and his declaration to E. M. Hartley, in the same connection, that he was not going to show these openings to Haseltine, and that “McMillan was too damned honest”; both of which were before Haseltine was taken over the property. Also his directions to Sanford Scott, the day that Haseltine was at Masontown, “to put his hands over his mouth so that he would not give anything away,” and to caution his men not to say anything to Haseltine as to where the coal lay, and particularly not to indicate that there was any opening on the Falls Tract except the one at the depot; significantly observing that, if a mountain boy like himself could fool an Ohio expert, “let him take his medicine,” and that unless they did this, and if it was found that the coal went so far up the hill (referring to the McKinney openings), they could not get the field to go, and it would stop the whole sale. But whether after the fact or not, all his declarations and statements as to what he did and why he did it are direct evidence both of knowledge and of purpose, and in any view are therefore competent. They are themselves facts, which, taken in connection with the occurrences as detailed by the parties whom he was conducting over the property, not only serve to give character to his acts, but disclose and confirm the deception practised
The first expert put forward by the plaintiffs to make a critical examination of the field was R. M. Haseltine, a coal man, as already stated, of considerable experience, through whose acquaintance with the defendants, particularly Keighley, the parties had been brought together. His examination began September 25th, before the last visit of Murray and the others, which he missed, but was continued, by direction, after it. He had arranged to have McMillan show him the property, with whom he had worked in putting together the map of it; but upon going to Morgantown, Shaffer turned up instead, meeting him with a conveyance at the station, and taking him in charge. The first point visited was the so-called “open cut” on the Falls Tract, the position of which, and other places referred to in the narrative to follow, will appear by the accompanying diagram:
It was declared by Shaffer that the vein here was the same as had been seen by Haseltine on previous visits at the Old Mill and the Scott mine, which was known to be the Upper Freeport, and that it extended clear through to Rohr, as he would show him, and also over to Bee Run to the east-a distance of about six miles. It was a new exposure, as he said, which he had had made to demonstrate that the coal was under the whole field. This was untrue, and he knew it, or, at least, was in such doubt that he had no right to make so positive an assurance with regard to it. It may be that in the beginning he believed what he stated, for we find him contending with U. G. Watson, one of the original owners up there, before the Falls Tract was bought, that the Kephart property adjoining carried the Upper Freeport, having leveled over, as he said, from where it cropped in the road. Neither is too great stress to be laid on the fact that when this tract was being bought of the owners he argued that there were but 500 acres of the Freeport vein, where they contended for 600 or 700. Sale was being made by the acre, and he would naturally talk the quantity down, and accept, what they conceded, that at most but one-third of the tract was coal. But putting all this aside, and whatever may have been his earlier views, enough remains to show that he had no doubt as to the character of this vein at the time in question. For instance, when asked by McMillan, after the defendants had taken up the tract, whether he had not found a splendid opening of coal at this cut, he said that he had made the Falls people, the original owners, very sick over it, making them believe that it was a fine vein, although in reality there was nothing but a small stratum of coal and then a stratum of slate, the coal and slate being so mixed up that it was of no value. To the same party also he said that there was no Freeport coal as far as Rohr, although he had told Haseltine just the contrary; that it did not exist in that region, giving as a reason that wells had been bored there, and did not go through it. To W. H. Warner, a prospective purchaser, when he and Keighley and Shaffer were at the cut together in the early summer, Shaffer professed not to know what the vein was; it being generally agreed, however, by them all that it was not the Upper Freeport. So to U. G. Watson, after describing how he had sheared down the sides of the vein with a pick, so as to make it look like Freeport coal, and telling him how he had fooled Haseltine with regard to it, he admitted that it was Kittanning. And after the deal with the plaintiffs was closed, and he was urging Sanford Scott, one of the original owners, to take cash and discount the notes which he held for the deferred payments due him, his chief argument was that the purchasers would find out that there was no coal in that section, and then not pay the rest; which led Scott to say: "George, you know there is no coal in that country,” to which he replied: "Damn it, I know that, and that is why we are trying to get the money before they find out.” There is evidence, also, that instead of this opening having been made in the ordinary manner, the sides had been carefully trimmed down, by reason of which the vein was given a much better appearance, and one which was calculated to obscure the different benches of coal and slate, and make them look pretty much alike. This is