The Federal Reporter (Annotated), Volume 171: Cases Argued and Determined in the Circuit Courts of Appeals and Circuit and District Courts of the United States. September-October, 1909. Page: 28
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171 FEDERAL REPORTER.
improving, an4. they made misrepresentations which deceived the de-
fendants to their injury. They were'both guilty of moral turpitude
and of breaches of duty. But in the case at bar the plaintiff owed the
defendant no duty to disclose the nature of his transaction or the
terms of his sale. It was dealing with the defendant at arm's length.
It was not asking the defendant to pay the draft for $2,000. It was
not the guarantor of the payment of that draft or surety in any sense
for the drawee. It was the vendor of its cattle; Putnam was the
vendee. Putnam was the drawer of the draft; he was its guarantor,
and he it was that was requesting the defendant to pay the $2,000,
not on the plaintiff's, but on Putnam's, account. The plaintiff, the
vendor, stood on one side and Putnam and the defendant on the other
side of this transaction, and to each of the latter the rule caveat emp-
tor was applicable in all its force. The plaintiff's inquiry whether or
not the draft would be paid was not a request for its payment, but
a mere request for information. It was the owner of its cattle. One
of the conditions of its contract of sale was that they should be paid
for in full at or before their delivery, and that it should be entitled to
their possession until they were paid for in full, and the record dis-
closes no evidence that the defendant ever made any statement or
representation inconsistent with the existence of that condition, and
hence none that ever could estop it from enforcing the condition.
The only statement the evidence shows that it made, that it had sold
its herd of cattle, and, even the bank's unauthorized statement that the
cattle had been bought for immediate shipment and that they had been
shipped, were all consistent with the condition of the sale, and the
rule of caveat emptor placed on the defendant the burden to ascertain
the terms of the sale if it deemed them material.
In Henshaw v. Bissell, 18 Wall. 255, 271, 21 L. Ed. 835, the Su-
preme Court said:
"There is, therefore, no case for the application of the doctrine of equita-
ble estoppel. For its application there must be some intended deception
in the conduct or declarations of the party to be estopped, or such gross
negligence on his part as to amount to constructive fraud. An estoppel in
pais is sometimes said to be a moral question. Certain it is that to the
enforcement of an estoppel of this character, such as will prevent a party
from asserting his legal rights to property, there must generally be some
degree of turpitude in his conduct which has misled others to their injury."
In Brant v. Virginia Coal & Iron Company, 93 U. S. 326, 335, 336,
23 L. Ed. 927, the Supreme Court again said:
"It is difficult to see where the doctrine of equitable estoppel comes in
here. For the application of that doctrine there must generally be some
intended deception in the conduct or declarations of the party to be estopped,
or such gross negligence on his part as to amount to constructive fraud, by
which another has been misled to his injury' 'In all this class of cases,'
says Story, 'the doctrine proceeds upon the ground of constructive fraud or
of gross negligence, which in effect implies fraud. And, therefore, when the
circumstances of the case repel any such inference, although there may be
some degree of negligence, yet courts of equity will not grant relief. It has
been accordingly laid down by a very learned judge that the cases on this
subject go to this result only, that there must be positive fraud or conceal-
ment, or negligence so gross as to amount to constructive fraud' 1 Story's
Eq. 391. To the same purport is the language of the adjudged cases. Thus,
it is said by the Supreme Court of Pennsylvania that 'the primary ground of
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The Federal Reporter (Annotated), Volume 171: Cases Argued and Determined in the Circuit Courts of Appeals and Circuit and District Courts of the United States. September-October, 1909., legislative document, 1909; Saint Paul, Minnesota. (https://digital.library.unt.edu/ark:/67531/metadc38217/m1/40/: accessed April 25, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.