Case XLVI: The Obligation of Restitution, Arising from Concealing the Real Value of an Object and Thereby Depreciating its Price

Mr. A. is a dealer in works of art and antiques. Once a year, or oftener, he makes a business trip to Europe, to purchase a new supply of goods. He is an expert in the business, and knows to a nicety what an article of this kind is worth, and what price it will bring in the American market. Now, it often happens that Mr. A., in order to purchase some article at a bargain, conceals its true value from the owner, often insisting that it has very little or no value, and thus succeeds in purchasing for a trifle, pieces that he knows are worth a great deal, and which he afterward disposes of for many times the price he paid for them. In this way he is making considerable money, but sometimes has misgivings about his methods of making it. What judgment, from the view-point of good morals, are we to form of Mr. A.'s business methods?

Mr. A. is certainly bound to restitution, provided his conduct in the purchase of goods is really deceiving and unjust. Whether his conduct is really such in each and every instance, will appear from the following considerations, as also the extent of his obligation to make restitution.

1. Mr. A. conceals from the owner of the piece of furniture or art its true value, which it possesses by reason of its age or workmanship, etc. He simply remains silent about it. He is careful to drop no remark that might arouse suspicions in the owner as to its real worth. Now we ask, Is Mr. A. bound in conscience, in every instance, to enlighten the owner of a work of art as to its real value? Fr. Lehmkuhl (I. 1120) has this to say on the subject: “An agreed price

... may be admitted for things found among dealers in old goods, provided the proceeding is not deceitful and fraudulent. Thus, if a valuable thing is discovered among worthless objects, it must be considered whether the buyer’s knowledge is exceptional, or whether those who commonly see that thing regard it as valuable, so that it is rather the ignorance of the seller or of a few unskilled persons that is exceptional. If the latter obtains, the very low price is not regarded as just; if the former, it is not regarded as unjust. Hence it is readily admitted that, if I discover old books to be of great value, I may obtain them for myself at a lower price, provided I do not act deceitfully.” That is to say, if the purchaser's knowledge, in this particular business, is altogether exceptional, he may profit by it. If the purchaser's knowledge is not exceptional, but the ignorance of the owner of the work of art, etc., is quite unusual, then the purchaser may not profit by his knowledge, because what he profits by, then, is in reality not his own knowledge, but his neighbor's exceptional ignorance.

This is also the view of Fr. Noldin, S.J., professor of moral theology in the University of Innsbruck. Dealing with the same case, which we give above, he says: “If one of the contracting parties knows the true value of the thing and the other is ignorant of it, the following distinction must be made: the sale is unjust if the true value of the thing is easily known by all experts; but the sale is just when the true value of the thing is discovered only by the buyer because of his exceptional expertise.” And he gives the reason as follows: “The reason for the first is that the ordinary price, which is commonly determined by experts, is greater. The reason for the second is that the thing is not commonly valued more highly” (The. Mor. II., n. 589).

If Mr. A., therefore, ob singularem ejus peritiam, being an expert, alone knows the value of the object, and he leaves the owner of it in ignorance of its real value, and thus succeeds in buying it for little or nothing, only to sell it later on for a very handsome price, he does not commit any injustice against the owner. Because, under these circumstances, the object has little or no value for the owner, since the value put upon it by those versed in such matters is very small. Mr. A. is not responsible for the ignorance of the owner. He did not deceive the owner into offering the object for avery small price, and can not be considered, therefore, the causa efficax of the lucrum cessans, which the owner might have enjoyed if he had known the article's true value. Therefore, Mr. A. is not bound to restitution for this part of his conduct.

2. But how stands the case with regard to the rest of Mr. A.'s business methods? Mr. A. not only conceals the true value of the goods he intends purchasing, by observing a profound silence, but he positively contributes to lead the owner into error, in order to profit by it. Can we also, in this case, maintain that Mr. A.'s conduct is not a causa efficax damni, and, therefore, does not create an obligation to restore? Even here we can excuse Mr. A. from the obligation of restitution if what he did amounts to nothing more than an effort, common to all barter, to purchase goods as cheaply as possible. That is called a trick of trade, and in itself does not constitute an act of injustice, even though a less experienced seller might sometimes be induced by it to sell an article cheaper that he would otherwise have sold it, provided the price paid may still be considered a justum pretium.

St. Alphonsus says: “Hence it must also be noted that credence is not commonly given to the falsehoods of sellers when it is sufficiently known that these are ordinary stratagems; and therefore they are not regularly bound to restitution on that account, as the Salmanticenses and others teach. I said ‘regularly,’ because if a seller should at some time certainly perceive that the buyer believes his falsehoods and therefore buys at a higher price, then indeed he is not excused from injustice” (Theol. Mor. iv., n. 805).

What the Holy Doctor says here of the seller who by false exaggerations endeavors to deceive the purchaser, and thus receive a higher price for his goods, we may apply to the case of the purchaser who, by false representations, induces the owner of a work of art, for instance, to part with it at a price far below the lowest pretium justum. In this case Mr. A. can scarcely be excused from the obligation of making restitution. By false and unjust representations, he procures an article at a price far below any actual value it possesses. His profit can not be ascribed, in this case, to any exceptional knowledge he possesses, but only to his mendacious representations. He is, in fact, positively cheating his neighbor. “The reason is that the buyer, as is now plain in itself, is no less bound than the seller to observe commutative justice in a contract; therefore, just as the seller cannot with a safe conscience accept more than the just price demands, so the buyer cannot give less than the limits of the just price demand” (Elbel. vi., n. 179).