Adams County MsArchives Court.....Frazier, E June 1818
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Source: Reports Of Cases Adjudged In The Supreme Court Of Mississippi, June Term, 1818
Written: June 1818

E. FRAZER vs. S. D. GERVAIS.

If A, is in possession of a rumor, calculated materially to effect the price 
of any commodity, and purchases it, without previously communicating this 
rumor to the vendor, the sale is fraudulent and void, as well in a court of 
law, as in a court of equity.

Fraud avoids every obligation, however solemn, and courts of equity, and of 
common law, have concurrent jurisdiction, in all cases of fraud, properly 
brought before them.


OPINION OF THE COURT.

This suit is brought on a bill of lading, by which the defendant undertook to 
transport forty-five bales of cotton, from the Walnut Hills in this state, to 
Natchez. It appeared on the trial, that the plaintiff had purchased the cotton 
of the defendants, and took a bill of lading, for delivery at Natchez. That 
the defendant proved, that the plaintiff, previous to the purchase, was in 
possession of a rumor of peace between the United States and Great Britain, 
which he had not communicated to the defendant. On behalf of the defendant, it 
was contended at the trial, that the plaintiff; being in possession of this 
rumor, and having failed to communicate it to the defendant, it was such a 
suppression of the truth, as rendered the transaction fraudulent and void. The 
Judge who tried the cause, charged the jury, that the evidence to establish 
the plaintiff’s knowledge of the peace, and his concealment thereof from the 
defendant, was proper under the issue to be left to the jury, in as much as, 
the bill of lading was given at the time of the sale, and grew out of, and was 
connected with it, and that if the sale was fraudulent, the bill of sale must 
be so also, and directed the jury, that if they were satisfied, that the 
plaintiff was in possession of a rumor of peace, and if that rumour was 
calculated to affect materially the price of cotton, and did not communicate 
it to the defendant, they ought to find for the defendant; which they 
accordingly did.

It is contended on behalf of the plaintiff, that a court of law, ought not to 
look beyond the bill of lading, and that consequently, nothing should be 
admitted in the defence, but a loss of the property, by such casualities, as 
would exuse a common carrier, such as the act of God, or of the common enemy, 
or of the opposite party.—If the bill of lading had been fairly and lawfully 
obtained, nothing would excuse the non-delivery of the property, other than as 
contended for by the counsel of the plaintiff. But this contract, to carry and 
deliver the property mentioned, must stand on the same footing, as all other 
contracts and agreements. If obtained by fraud, by a suggestion of falsehood, 
or suppression of the truth, it is void, and the party is not bound to perform 
it. It is immaterial, with what formality or under what solemnity, an 
obligation is entered into, if obtained by fraud, or imposition, it may be 
avoided, either in a court of equity, or a court of law, as these tribunals 
have concurrent jurisdiction.

In the present case, it was alleged, that the plaintiff was in possession of 
material information, which was unknown to the defendant, and which the 
plaintiff withheld, by reason whereof, he was enabled to impose on the 
defendant, by purchasing his property at a price, far below its value at the 
time. This was the enquiry properly submitted to the consideration of the 
jury, and they have found it to be the fact, and this court has no reason to 
believe, that their verdict was without or contrary to evidence so far as it 
has been disclosed to them. The motion for a new trial must be overruled.

Note. It would certainly be well, for the best interests of society, if the 
pure principles of morality inculcated in this case, could be established as 
the law of the land, and practically enforced in the ordinary transactions of 
life. Such a rule, as it is laid down in this case, has been considered by 
many enlightened tribunals, as replete with difficulties. A, by accident, or 
superior industry, hears rumors, calculated if true, to enhance the price of 
an article, and P, purchases it, without communicating this rumor to B. Is A 
bound to enquire of B, the extent of his knowledge, before he purchases from 
him—if so, before he enters upon a bargain, is he bound to communicate to him, 
every fact or rumor calculated to enhance the price of the article—or if not 
every fact, what facts, and who is to be the judge, or is there to be no 
certain standard? If A hears, that bad seasons have affected the crops, must 
he communicate it to B, before he purchases, and unfold to him, every fact 
within his possession, calculated to affect the price, and is the obligation 
on the part of B, to apprize A of every fact calculated to diminish the price 
of an article reciprocal, on pain of rendering the contract invalid? Or who 
shall decide that the facts not communicated, were material, or that they were 
fraudulently withheld, or how ascertain the fact of the ignorance of either 
party? In the case of Laidlaw vs. Organ, 2d Wheaton 178, the Supreme Court of 
the United States, in facts identical with those contained in this case, 
decided, as follows:

"The question in this case is, whether the intelligence of extrinsic 
circumstances which might influence the price of the commodity, and which was 
exclusively within the knowledge of the vendee, ought to have been 
communicated by him to the vendor? The court is of opinion that he was not 
bound to communicate it." The fact withheld in this case was the news of the 
peace concluded between Great Britain and the United States, and the article 
purchased, was tobacco, materially enhanced in price by this intelligence.


Source: Reports of Cases Adjudged in the Supreme Court of Mississippi, June 
Term, 1818, By R. J. Walker, Reporter of the State. Natchez: Printed at the 
Courier and Journal Office, 1834; pages 72-73.

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