This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
As a general rule, mere expressions of praise or affirmations of value, such as, that an estate, sold as a renewable leasehold, is "nearly equal to freehold" (u); or that a house of mean character is "a desirable residence for a family of distinction" (x); will not, however objectionable they may be in point of morality, render the contract voidable by the purchaser; though their tendency would doubtless be to dispose the Court to refuse specific performance at the suit of the vendor. Thus, where the lessor of a quarry stated that the limestone in it was "fit for the London market" (an expression restricted in the trade for lime of the best quality), and it was in fact of a very inferior description, it was held that this, though a mere puffing statement on his part, was a bar to a decree for specific performance (y). So, an untrue statement by a vendor (though made in ignorance), that the house which he was selling was not damp, was held fatal in Equity (z), and a statement, that "the property is now held by a very desirable tenant at a rent of 400l." (the tenant being in fact quite unable to pay the rent, and going into liquidation almost immediately after the contract of purchase was entered into), was held sufficient ground for rescission (a). But it will be observed that in each of these cases there was an actual mis-statement of facts.
(n) See Bugden v. Bignold, (1843) 2 Y. & C. C. C. at p. 390.
(o) See Be Primrose, (1857) 23 Beav. 590; 26 L. J. Ch. 666, where the stranger was visited with costs.
(p) Be Harris and Rawlins, (1894) W. N. 19. See, however, s. 10 (1) of the L. P. Act, 1925.
(q) Re Wasdale, 1899, 1 Ch. 163; 68 L. J. Ch. 117; Be Phillip's Trusts, 1903, 1 Ch. 183; 72 L. J. Ch. 94; L. P. Act, 1925, s. 137.
(r) Stephens v. Green, 1895, 2 Ch. 148; 64 L. J. Ch. 546.
(s) See L. P. Act, 1925, s. 137 (3). See also s. 138.
(t) Low v. Bouverie, 1891, 3 Ch. 82; 60 L. J. Ch. 594.
Upon the same footing as a mere puffing statement is an expression by a vendor of his personal opinion (b); as, a statement on the sale of an advowson, that an avoidance was "likely to occur soon" (c); or on the sale of renewable leaseholds, that the fine payable was "small" (d). If a purchaser chooses to rely on the vendor's opinion as to what is a small fine, or a probability of speedy avoidance, he does so at his peril.
Amounting to mis-statement of facts.
(u) Fenton v. Browne, (1807) 14 Ves. 144, 149.
(x) Magennis v. Fallon, (1829) 2 Moll, at p. 588.
(y) Higgins v. Samels, (1862) 2 John. & H. 460. bee this case as to the narrow boundary which separates a puffing speculative statement from misrepresentation.
(z) Strangways v. Bishop, (1857) 29 L. T. O. S. 120.
(a) Smith v. Land Property Co., (1884) 28 Ch. D. 7.
(b) Bissett v. Wilkinson, 1927, A. C. 177.
(c) Trower v. Newcome, (1813) 3 Mer. 704. As to sales of advowsons after 14th July, 1914, see Benefices Act, 1898 (Amendment) Measure, 1923.
(d) Fenton v. Browne, (1807) 14 Ves. 144. Renewable leaseholds are now converted into terms of 2,000 years by L. P. Act, 1922, s. 145 and Sched. (15).
Where the purchaser is aware that the vendor's laudatory statements are in fact untrue, and yet enters into the contract, the maxim "caveat emptor" applies; as where property was described as standing on "a fine vein of anthracite coal," and it was within the purchaser's knowledge that it had been worked, and was almost exhausted (e). But where a false statement was made by the defendant to the agent of the plaintiff (an intending lessor) to induce the plaintiff to let the premises to a proposed lessee, which the plaintiff accordingly did in reliance upon such statement, it was held that the fact that the plaintiff's agent was aware that the statement in question was false was no answer to an action by the plaintiff against the defendant for damages for fraudulent misrepresentation (f).
Purchaser aware of untruth.
Where on the sale of a life interest, the particulars described the tenant for life as a very healthy gentleman, aged forty-eight, whose life was insurable, and an insurance was guaranteed at five guineas per cent., and it turned out that the vendors had recently insured the life at a rate less than five guineas per cent., but exceeding the rate usually charged on healthy lives, their bill for specific performance was dismissed with costs, though the purchaser admitted that he knew five guineas to be more than the usual premium (g).
Mis-statement as to life being healthy.
On a sale of a reversion in property, subject to an annuity, a condition that a recital in a former deed which stated that the annuity - described merely as "a life annuity " - had not been claimed for twenty-one years, should be evidence of its having determined, whereas, in fact, the annuity was charged merely on the reversion and was granted for four lives two of which were still subsisting, was held to be unfair, and specific performance was refused (h). And generally, if there is anything in the nature of the tenancies which prejudicially affects the value of the property, the vendor should inform the purchaser; for if he fails to do so specific performance may be refused (i).
As to charge.
(e) Colby v. Gadsden, (1865) 34 Beav. 416. (f) Wells v. Smith, 1914, 3 K. B. 722. (g) Brealey v. Collins, (1831) You. 317.
As to tenancies.
A false statement by a vendor of an independent fact - as that the property has been valued by a surveyor at a specified sum - will, if relied on by the purchaser (k) enable him to avoid the contract (l); and might sustain an action for damages (m). But a vendor, it seems, is not liable to an action of deceit for the false assertion that a third person has offered a specified sum for the estate, although such assertion induced the purchaser to enter into the contract (n). A vendor's statement, however, that he "will guarantee" a specified income to arise from the property, though not amounting to a contract, would, it appears, if made fraudulently, support an action of deceit (o).