Smith v. Bounds Package Corp.

Brune, C. J., delivered the opinion of the Court. The appeal in this case is from a decree in equity setting aside and declaring null and void a contract for the sale of land and of a herd of cattle and of other personal property and ordering the refund by the appellant, as vendor under the contract, to the appellee, as purchaser thereunder, of the net sum of $8,000, with interest from the date of the decree. The Chancellor filed a brief, but comprehensive, opinion in which he held that the con ⁷⁶ tract should be rescinded and that the parties could and should be restored to substantially their original positions. The decree recited that it was in conformity with the opinion and, as a practical matter and in substance, it carried into effect the views expressed in the opinion, although the sum directed to be paid to the appellee was described as “damages.” The basis for rescission was mistake.

Bounds Package Corporation, the complainant below and appellee here, (for brevity referred to below as “Bounds”) is engaged in the timber business, and in furtherance of that business entered into a loosely drawn contract with the appellant Smith for the purchase of a farm and other property, which is dated December 20, 1951, and is signed by Smith and witnessed by one Paul Brake and by W. Ray Phillips, an agent of Bounds. The document reads as follows: “Received of Bounds Package Corporation the sum of Five Thousand Dollars ($5,000.00) as part payment on farm located at Woolford, Maryland, and the following named items: 50 Head Cattle, 1 water pump, 1 engine, 11 rolls wire, all the hay in the Josiah Linthicum barn at Church Creek, Maryland located on the east side of the Taylors Island Road. Additional payment of Ten Thousand Dollars ($10,000) is to be paid upon removal of cattle, and the balance of ($25,000.00) to be paid January 15, 1952 upon receipt of satisfactory deed to the purchaser.” It will be noted that the contract does not undertake to describe the farm mentioned in it. Smith did own a farm at Woolfords which he acquired through a deed referred to as the Brooks deed; but he did not own about half the land which Bounds thought it was buying, and the portion which he did not own contained more than half of the timber which Bounds thought it was buying.

Bounds’ only interest in acquiring the tract was based upon its desire to acquire the timber. ⁷⁷ The proposed sale was brought about through negotiations conducted by Brake. One of the disputed questions is whether or not Brake was the agent of Smith. In the view which we take of the case it is not necessary to decide this question. The appellant had employed Brake on five previous occasions to sell land for him and had also employed him in an effort to sell the Woolf or ds farm some time before the negotiations with Bounds.

Smith met Brake one day at a gasoline filling station and told him that he would like to sell the farm at a price of $35,000. A then very recent mishap to a truck used to haul hay for the cattle seems to have been the cause of Smith bringing the matter up at that time. Brake said he would try to find a customer and promptly got in touch with Bounds. Neither Smith nor Brake seems to have had anything approaching accurate knowledge with regard to the boundaries of Smith’s farm.

Brake had an aerial map of the property which he had obtained from Smith some time previously. This map showed lines which included in the Smith farm about 113 acres which it later developed were owned by one Lee Jones. Brake testified that he had gone over the lines shown on this aerial map with Smith. Smith had had some bulldozing done in conformity with the lines shown on that map, and the Chancellor found that both Smith and Brake thought the 113 acres actually belonging to Jones were covered by the Brooks deed.

Brake showed what he thought was the Smith property to Phillips, Bounds’ agent, as including the 113 acres belonging to Jones. The Chancellor found that