Lehigh Zinc Iron Company v. Bamford/Opinion of the Court

by by John Marshall Harlan

United States Supreme Court

150 U.S. 665

Lehigh Zinc Iron Company  v.  Bamford

The defendants requested the court to charge the jury that the plaintiffs could not recover rent for any particular year, unless it appeared that the ores mined on the leased property in that year were sufficient, on the basis of the royalties stipulated, to amount to $1,000; and that, unless enough ore was found to enable the company, giving proper care and attention, to prosecute the mining without loss, then the consideration upon which its agreement was based failed, and plaintiffs could not recover. These propositions, embodied in specific requests for instructions to the jury, were rejected by the court. The same propositions constituted the grounds upon which the company, at the close of the plaintiffs' evidence, asked the court to dismiss the complaint. That motion, and the specific requests for instructions, were denied. The action of the court in those respects is assigned for error.

In our opinion, no error was committed by the court below. Looking at all the provisions of the lease, it is clear that the defendant engaged to pay as rent in each year the royalties fixed in the lease, and if in any year the royalties fell below the sum of $1,000 it was to make up the deficit, so that the latter sum should, in any event, be paid annually as rent. The defendant took the chance of a failure to find ore in sufficient quantities to justify working the mines, and the plaintiffs took the chance of not obtaining more than $1,000 annually during the existence of the lease for the use of buildings and fixtures that had cost them more than $60,000. To secure the payment annually of at least $1,000, the right was reserved to the plaintiffs to terminate the lease if the company failed in any year to pay that sum as rent. And that the company might get the advantage of any developments indicating that the leased premises were of substantial value, the exclusive privilege was reserved to it of purchasing them at any time while the lease remained in force for the price of $125,000. The rulings of the circuit court were in harmony with these views.

We are also of opinion that no error was committed in refusing the defendant's requests for instructions upon the subject of the alleged false representations. The charge upon that issue was very full and satisfactory. The court said, in substance, that a person who makes representations of material facts, assuming or intending to convey the impression that he has actual knowledge of the existence of such facts, when he is conscious that he has no such knowledge, is as much responsible for the injurious consequences of such representations, to one who believes and acts upon them, as if he had actual knowledge of their falsity; that deceit may also be predicated of a vendor or lessor who makes material untrue representations in respect to his own business or property, for the purpose of their being acted upon, and which are in fact relied upon, by the purchaser or lessee, the truth of which representations the vendor or lessor is bound, and must be presumed, to know. Touching the alleged representations as to the value of the leased property, the court said that general assertions by a vendor or lessor that the property offered for sale or to be leased is valuable, or very valuable, although such assertions turn out to be untrue, are not misrepresentations amounting to deceit, nor are they to be regarded as statements of existing facts, upon which an action for deceit may be based, but rather as the expressions of opinions or beliefs; that, as a general rule, fraud upon the part of a vendor or lessor, by means of representations of existing material facts, is not established, unless it appears such representations were made for the purpose of influencing the purchaser or lessee, and with knowledge that they were untrue; but where the representations are material, and are made by the vendor or lessor for the purpose of their being acted upon, and they relate to matters which he is bound to know, or is presumed to know, his actual knowledge of their being untrue is not essential.

We perceive no objections to these instructions. They were sufficient for the guidance of the jury in respect to the alleged false representations by the plaintiffs. Judgment affirmed.

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