Page:The Green Bag (1889–1914), Volume 07.pdf/169

 144

nothing to the force of the contract, " as the law im plies the same." But in this he was clearly wrong, for the law does not make any such conclusive impli cation. In the absence of fraud the parties certainly could lawfully agree that the writing contained the whole contract and should not be added to or changed by parol. On the other hand, in Tallis v. Jacson, '92, 3 Ch. 441, the court refused to upset a building contract because it contained a stipulation that the arbitrators certificate should be conclusive, and "should not be set aside for any pretense, charge, suggestion, or insinuation, of fraud, collu sion, or confederacy." On this the •• Law Quarterly Review" remarks: "No doubt it concerns society that fraud should not go unpunished, but the main tenance of contracts concerns it much more. ' If there is one thing,' said Jessel, M. R., in Printing Co. v. Sampson, 19 Eq. 464, 'which more than another public policy requires, it is that men of full age and competent understanding, shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice,' and Chitty, J., fully indorses the sentiment in Tallis v. Jacson, which case was itself an eminent illustrarion of the evil of interfering with contracts; for had the contract been annulled and the certificate set aside, it would have reopened thousands and thou sands of items of account, each item a battleground, and this merely for the sake of some problematic or possible fraud. Such a clause, as Chitty, J., said, 'looks terrific to a lawyer,' because law being based on distrust treats everybody as a probable knave. Business men do not. Hence they accept such clauses and show their sense in doing so; for their optimistic estimate of men is much nearer the truth than the pessimistic one of law." The question came up very recently in Bridger v. Goldsmith, New York Court of Appeals, October. 1894 (38 N. E. R. 458), where a sealed contract of sale of a business contained the following clause : "It is expressly understood and agreed between the parties hereto, that the said party of the first part has not, in any manner or form, stated, made, or represented to the said party of the second part, for the purpose of in ducing the sale of the said business or the making of this agreement, any statements or representations, verbally or in writing, in any respect to the said business, other than that the said party of the first part has been engaged in the piano business in the City of New York since 1867." It was nevertheless held that the party of the second part was not precluded from proving fraudu lent representations by which he had been misled. "I assume that the fact that a seal was unnecessarily affixed to an agreement for the sale of personal property

cannot affect the rights of the parties. Every defense is open to either party that would have existed in case the writing was unsealed. It appears that after the negotiations had been completed and the agreement drawn, the defend ant stated, in the presence of the plaintiff, and the counsel for both parties present, that he wanted a clause of this character inserted. The plaintiffs counsel at first objected to it. The defendant's counsel suggested that it would make no difference, and the plaintiff consented that it might be put in. There is evidence in the case tending to show that the plaintiff voluntarily assented to this stipulation, after having been advised by his counsel that it would have the effect of precluding him from subsequently alleging fraud in the transaction, even though it existed in fact. This provision is not a ' covenant,' in any proper sense of that term. Indeed, it can scarcely be considered as any part of the agreement at all. It does not relate in any manner to the subject-matter of the contract. It was a mere statement in the nature of a certificate as to a fact. It did not relate to the property, or to the terms of the sale or the payments, but to the absence of all fraud from the transaction. The clause cannot be given any greater effect than if it had been written upon a separate paper after the execution of the contract, and signed by the parties. The question now is whether it can be given the effect claimed for it by the learned counsel for the defendant—to preclude the plaintiff from alleging fraud in the sale, and pursuing in the courts the remedies which the law gives in such cases. It cannot operate by way of estoppel, for the obvious reason that the statements were false to the de fendant's knowledge. He may indeed have relied upon its force and efficacy to protect him from the consequences of his own fraud, but he certainly could not have relied upon the truth of any statement in it. A mere device of the guilty party to a contract, intended to shield himself from the results of his own fraud practiced upon the other party, cannot well be elevated to the dignity and importance of an equitable estoppel. If the clause has any effect whatever, it must be as a promise or agreement on the part of the plaintiff that however grossly he may have been deceived and defrauded by the defendant, he would never allege it against the transaction or complain of it, but would forever after hold his peace. It is difficult to conceive that such a clause could ever be suggested by a party to a contract, unless there was in his own mind at least a linger ing doubt as to the honesty and integrity of his conduct, I assume that there is no authority that we are required to follow in support of the proposition that a party who has perpetrated a fraud upon his neighbor may nevertheless contract with him, in the very instrument by means of which it was perpetrated, for immunity against its conse quences, close his mouth from complaining of it, and bind him never to seek redress. Public policy and morality are both ignored if such an agreement can be given effect in a court of justice. The maxim that fraud vitiates every transaction would no longer be the rule, but the exception. It could be applied then only in such case as the guilty party neglected to protect himself from his fraud by means of such a stipulation. Such a principle would in a short time break down every barrier which the law has erected against fraudulent dealing. It is agreed t hat, whatever may be said about the fraudulent character of the sale itself, this