Bennett v. McMillin

Citations

• 179 Pa. 146
• 36 A. 188
• 1897 Pa. LEXIS 614

Syllabus

<p>Fraud — Relation of trust — Duty to disclose material facts.</p> <p>If a party knows that another is relying upon his judgment and knowledge in contracting' with him, although no confidential relation exists, and he does not state material facts within his knowledge, the contract will be avoided; for knowingly to permit another to act as though the action was confidential, and yet not state material facts, is fraudulent.</p> <p>M. owned an interest with others in oil and gas leases, which he undertook to sell for himself and the other owners, and his brother J., who had no interest in the property at the time, aided him in the project. M. and J. procured an offer from R. to take the property and pay the owners one half the proceeds of sales. M. subsequently prepared an agreement naming his co-owners as assignors of the leases, and himself and his brother as the assignees. In this 'agreement it was set forth that all the pai'ties were associated together as owners of the property, and it was stipulated that M. and J. should take the gas and pay one fourth the net proceeds to all the owners, including themselves, they to retain three fourths. R.’s offer was concealed by M. and J., and J. personally solicited the other owners to sign the agreement, representing that it was the best that could be got. This agreement was not signed, but subsequently a draft of another was prepared embodying substantially the same terms, with the names of the purchasers left blank. This was executed at the solicitation of J., and without any communication by him as to R.’s offer. After its execution M. and J. filled in the blank with their names as purchasers, and on the same day entered into a contract with R. under which they made large profits. A bill in equity was subsequently filed by the co-owners against M. and J. for an account of the profits. Held, that J., by aiding in the fraud by which the profits were made, became liable to an accounting,’although he had no interest in the