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Law School Case Brief

Jackson v. Seymour - 193 Va. 735, 71 S.E.2d 181 (1952)

Rule:

Mere failure of consideration or want of consideration will not ordinarily invalidate an executed contract. The owner of the historic estate of Blackacre can give it away, and he can sell it for a peppercorn. Courts, though they have long arms, cannot relieve one of the consequences of a contract merely because it was unwise. They are not guardians in general to the people at large, but where inadequacy of price is such as to shock their conscience equity is alert to seize upon the slightest circumstance indicative of fraud, either actual or constructive.

Facts:

Plaintiff seller appealed from the Circuit Court of Brunswick County (Virginia), which decreed that she was not entitled to rescission of the deed to real estate that she sold to defendant buyer, her brother. The lower court also rejected a proposed amendment to the bill of complaint tendered by seller on the ground that it had been tendered too late under the peculiar circumstances of the case. The undisputed evidence showed that shortly after the buyer acquired this tract of land from his sister, he cut and marketed therefrom timber valued at approximately 10 times what he had paid for the property. The trial court denied rescission because seller failed to prove actual fraud. 

Issue:

Was plaintiff entitled to rescission?

Answer:

Yes

Conclusion:

On appeal, the court reversed and held that a mere statement of the matter showed the gross and shocking inadequacy of the price paid. Neither of the parties knew of the timber on the land and buyer admitted that he would not have bought the property from seller for the small amount paid if he had then known of the true situation. The court held that the inadequacy of consideration here, together with the confidential relation of the parties, the pecuniary distress of the seller, and the mutual mistake of the parties as to the subject matter of the contract, entitled seller to relief in equity. The court also found that the bill alleged the constituent elements of constructive fraud, so it was not necessary to amend it. The court remanded the matter to restore the status quo in so far as practicable.

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