Pugh v. Stigler

Turner, J. (after stating the facts as above). As in his answer and in open court defendant specifically admits the allegations set forth in the complaint, it only remains for us to determine whether the answer states facts sufficient to constitute a cross-complaint. By way of cross-complaint, defendant in substance alleges that in making the contract he relied upon the opinion of W. C. Wells, vice president of the company, and upon the opinion of Hon. Charles B. Stuart, as to the validity of the title contracted to be conveyed, which they represented to be good, and which he says was “doubtless” well known to them to be “doubtful, and which would require a deduction from the intrinsic market value of the property to induce an ordinary prudent person to buy”; that the facts with reference to said title are that it was allotted to Ellis Jefferson, 'deeeased, a duly enrolled Choctaw7 Indian by blood, and was commonly called a “dead claim”; that the restrictions upon the alienation of said land had never been removed from any of the heirs of said Ellis Jefferson, who were full-blood members of said tribe; that no patent had issued in the name of said Ellis Jefferson; and that he was advised that the Midland Valley Land Company had no title, and could convey none, and that it is insolvent. He admits that since the execution and delivery of the bond for title he has been in possession of the property, and states that before he w7as advised of the doubtful state of the title he erected buildings and other valuable improvements on said land of the value of $2,500; that he is ready and willing to pay the sum sued for as soon as the Midland Valley Land Company “conveys to him a good and merchantable title to said lands,” and unless it does he has sustained damages in the sum of $2,800 *857 for its failure so to do as agreed' — and prays that the cau.se be transferred to the equity docket, and that the company be made a party to the suit and “compelled to remove all incumbrances and question and doubt from its title to said property by the proper and necessary actions and suits, so that it can convey a clear and undisputable title”; and he further prays that, if it fails to do so, this contract be rescinded, and for judgment against the Midland Yalley Land Company for $2,800 for “breach of contract,” and that the judgment be declared a lien upon the land, and for costs. It will be observed that the cross-complaint discloses a prayer for a rescission of the contract upon the ground that the vendor had no title to convey; but the vendee makes no offer to restore the premises to the vendor. Therefore judgment should be rendered on this pleading in favor of the plaintiff, if its allegations are insufficient to sustain a judgment for the defendant. 11 Enc. Plead. & Prac. 1033. In other words, as stated on page 1046 of the the same work: “A motion for judgment on the pleadings is in the nature of a demurrer, which it closely resembles, and admits for its purposes the truth of all the facts well pleaded by 'the opposite party.” The question, then, for us to determine, is whether' or not the vendee, holding under a bond for title, can make defense tha*t the vendor has no title to convey without offering to restore the premises to the vendor. We think not. The rule is well settled, as laid down in 2 Warvelle on Yen dors, § 869, that: “As' has been shown, it is a fundamental principle in this branch of the law that a rescission contemplates, as far as possible, a complete restoration of the parties to the positions they respectively occupied prior to entering into the engagement. Indeed, this is ordinarily the indispensable condition to the granting of the relief. * * * ” In Lewis and Wife v. Boskins, Administrator, etc., 27 Ark. 61, the court held, in effect, that where land was sold on credit and a bond given to make title on the pajonent of the purchase *858 money, the effect of the contract was to create a mortgage, and that the purchaser entering into possession under such contract, so long as he retains possession, cannot deny his vendor’s title and that, if the vendor is unable to convey the title and the vendee would rescind the contract, he must restore the possession to the vendor; citing in support of this doctrine Pintard v. Goodloe, Hemp. 502, Fed. Cas. No. 11,171, Weathersby v. Wilson, 1 Nott & McC. (S. C.) 373, and Willison v. Watkins, 3 Pet, 43, 7. L. Ed. 596, and Thredgill v. Pintard, 12 How. 24, 13 L. Ed. 877. See, also, in support of this doctrine, Benjamin et al. v. Hobbs, 31 Ark. 151. In Johnson v. Douglass, 60 Ark. 39, 28 S. W. 515, the court say: “The fact that the vendee, having a bond for title, is in possession of the land, will not prevent him from resisting the pa37ment of the purchase money when the title of the vendor has failed; but he must, in order to avail himself of this defense, offer to rescind and restore the premises to the vendor” — citing Yeates v. Pryor, 11 Ark. 58; Lewis v. Davis, 21 Ark. 239; Harvey v. Morris, 63 Mo. 475. In 18 Enc. Pleading and Practice, 829, is laid down the general doctrine that: “In suits for the rescission and cancellation of contracts the court applies the familiar maxim of equity, off almost universal application, that he who seeks equity must do equity. The plaintiff will not be permitted to repudiate his contract and still retain the benefits which he has derived from it, and his desire and willingness to restore what he has received must appear in the bill or complaint; otherwise, he will have no standing in a court of equity.” It follows that the court, in rendering judgment on the pleadings in favor of plaintiff and against defendant for the balance of the purchase money must be sustained, and the judgment of the lower court affirmed; and it is so ordered. Dunn and Kane, JJ., concur; Williams, C. J., and Hayes, J., not participating.