Equity Jurisdiction, Rescission. Contract, Rescission, Modification. Revere. Waterworks. Municipal Corporations, Power to borrow money for waterworks.
Jurisdiction of a suit in equity for the rescission on the ground of fraud of a contract of sale and of a conveyance made in accordance therewith cannot be retained for the purpose of changing material stipulations of the contract as to the price to be paid by the purchaser after proper findings have been made that no fraud entered into the transactions.
In a suit in equity by the inhabitants of the town of Revere against the Revere Water Company, seeking to have declared void the contract of sale of the defendant's waterworks to the town which was held in Seward v. Revere Water Co. 201 Mass. 453, to have been authorized by the town and to be in accordance with its votes and with statutory authority, that decision was affirmed and, on findings made by a master, it was held that the contract was not made under any mutual mistake; and also, that the fact, that the amount of the bonds to be issued in accordance with the contract was in excess of the debt limit of three per cent of the last tax valuation prescribed by R.L.c. 27, § 4, was not material, it appearing that it did not exceed the limit of ten per cent of that valuation prescribed by R.L.c. 25, § 32, as to bonds issued for the purchase of such rights.
In the same suit it was held that the purchase by the town from the company was not consummated by the vote of the town, but only by the conveyance of the property to the town, so that until such conveyance the company was entitled to the net profit of its business and was not subject to certain provisions of the contract relating to amounts spent for new construction.
SHELDON, J.
This bill was brought to rescind the sale to the plaintiff of the defendant's waterworks and plant, for alleged fraud of the defendant. Upon the facts found and reported by the master, that contention cannot be maintained. If this report is confirmed, yet the plaintiff, though not rescinding its purchase but retaining the property acquired thereby, now seeks to set aside the stipulation for the price which it was to pay, and to have the amount thereof determined anew, by making certain deductions from the agreed amount thereof. Equity cannot do this; it would be to make a new agreement for the parties. Non constat that the agreement would have been made at all if one of its material stipulations had been altered. If the town has a right to recover any of the sums claimed here, that right must be enforced at law. Andrews v. Moen, 162 Mass. 294. Tuttle v. Batchelder Lincoln Co. 170 Mass. 315, 317. This fundamental objection to the maintenance of the bill goes deeper than the cases cited. The bill seeks to rescind the whole agreement; it cannot be maintained for the mere elimination of one of its material elements and the substitution of something else which the parties did not agree upon. It is of no consequence that one party, or even that the court, might think that the proposed substitution was of something that the parties properly might have agreed on. See Coffing v. Dodge, 167 Mass. 231, 233.
The agreement was not void upon its face. It was in accord with the statutes under which it was made. Seward v. Revere Water Co. 201 Mass. 453. It was authorized by the town. It was not made under any mutual mistake. That the amount of the bonds to be issued thereunder was in excess of the statutory debt limit is not material because of the purpose for which they were issued. R.L.c. 25, § 32; and c. 27, § 2.
This was not a purchase accomplished by the very vote of the town; it was an agreement, carried into effect by a subsequent sale and purchase. The property did not pass to the town upon the passage of the vote, but only upon the consummation of the transaction. Such cases as Braintree Water Supply Co. v. Braintree, 146 Mass. 482, and Rockport Water Co. v. Rockport, 161 Mass. 279, do not apply here. Accordingly, if it could maintain the bill, the plaintiff could not recover the amount received as income or the amount spent for new construction in the meantime.
So far as the plaintiff's exceptions to the master's report are not covered by what has been said, we see no occasion to discuss them. None of them can be sustained.
The decree dismissing the bill must be affirmed with costs.
So ordered.