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U.S. Supreme Court

Southern Development Co. v. Silva, 125 U.S. 247 (1888)

Southern Development Company v. Silva

No. 1210

Submitted January 9, 1888

Decided March 19, 1888

125 U.S. 247


The general rule that when the answer of the defendant in a cause in equity is direct, positive, and unequivocal in its denial of the allegations in the bill, and an answer on oath is not waived, the complainant will not be entitled to a decree unless these denials are disproved by evidence of greater weight than the testimony of one witness, or by that of one witness with corroborating circumstances, applies when the equity of the complainant's bill is the allegation of fraud.

In order to rescind a contract for the purchase of real estate on the ground of fraudulent representation by the seller, it must be established by clear and decisive proof that the alleged representation was made in regard to a material fact, that it was false, that the maker knew that it was not true, that he made it in order to have it acted on by the other party, and that it was so acted upon by the other party to his damage, and in ignorance of its falsity and with a reasonable belief that it was true.

Page 125 U. S. 248

Statements made by the seller of a speculative property like a mine at the time of the contract of sale concerning his opinion or judgment as to the probable amount of mineral which it contains, or as to the character of the bottom of the ore chamber, or as to the value of the mine, if they turn out to be untrue, are not necessarily such fraudulent representations as will authorize a court of equity to rescind the contract of sale.

The fact that a representation made by a seller was false raises no presumption that he knew that it was false.

When the purchaser of a property undertakes to make investigations of his own respecting it before concluding the contract of purchase, and the vendor does nothing to prevent his investigation from being as full as he chooses, the purchaser cannot afterwards allege that the vender made representations respecting the subject investigated which were false.

In equity. Decree dismissing the bill. Complainant appealed. The case is stated in the opinion of the Court.

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