Gamblin v. Dickson

SULLIVAN, C. J. The respondent brought this suit for the purpose of having canceled and annulled a certain warranty- deed conveying real estate in Bonner county to the appellant. It is alleged, among other things, in the complaint that the defendant through fraud and conspiracy procured the respondent to convey said land to him. The defendant answered and denied the material allegations of the complaint. The cause was tried by the court without a jury, finding of facts was made and judgment entered in favor of the respondent. A motion for a new trial was denied. This appeal is from the judgment and order denying a new trial. It appears from the record that the respondent was the owner of seventy-eight acres of land bordering on Hayden Lake, Bonner county, and that the appellant desiring to purchase the same offered to trade the respondent for said land forty shares of stock in the Spokane and Big Bend By. Co., a corporation that had done certain things toward procuring a right of way for said road, but none of said road had been constructed. It appears that the stock was represented by the appellant to be of the value of $100 per share, when in-fact it had no market value. [737] Upon all of tbe evidence introduced on tbe trial, in wbieb there is a conflict, tbe court found upon all of tbe issues in favor of tbe respondent, and found that said railroad company at tbe time said exchange was made bad little tangible property, and its franchises, contracts and property were not sufficient to give more than a nominal value to its stock, and at tbe time of making said transfer in June, 1907, it was of little or no value, and that it was of little or no value at tbe time of making said finding of facts, to wit, on tbe 25th of September, 1909. On a careful examination of tbe evidence, we find that it fully supports and sustains tbe findings made by tbe court. Errors are assigned in regard to tbe admission of certain testimony; in denying a motion to strike out certain testimony; denying a motion for a nonsuit, and also in refusing to admit certain testimony offered by tbe defendant. We are fully satisfied from an examination of tbe entire record that it contains no reversible error and that tbe assignments of error are not well taken. In limine, counsel for appellant contends that before a party is entitled to rescind a contract, be must put, or offer to put, tbe other party in statu quo by a full restoration of all be has received. Tbe rule there stated is applicable in cases where a rescission is made before an action is brought, but it is not necessary where a suit for rescission is brought. Tbe correct rule is stated in 24 Am. & Eng. Ency. of Law, p. 621. Tbe author there says: “Whether tbe complainant in a suit for rescission must, as a condition precedent to relief, have offered or tendered restitution to tbe defendant prior to tbe beginning of tbe suit, is a matter upon wbieb tbe authorities are conflicting. Tbe rule of tbe better considered cases is, that it is sufficient that tbe plaintiff makes bis offer to restore or to do equity, in bis bill or complaint, and shows therein that be has substantially preserved tbe status quo on bis part so as to be able to fulfill bis offer. This rule proceeds upon tbe principle that it is always within tbe power of a court of equity to require that tbe person invoking its aid shall submit to equita [738] ble terms as a.condition of relief, and that the parties being properly before the court, the court may impose upon them any terms which may be just and equitable in the premises, and may enforce compliance therewith. It is conceded that the rule is different in actions at law based upon a rescission by the act of the party, but the distinction taken is based upon the difference in the powers of the two courts.” In Nelson v. Carlson, 54 Minn. 90, 55 N. W. 821, the court held that where a party seeks the aid of a court to rescind a contract, it is not necessary that he previously attempt a rescission or make any tender to the other party, except where such tender is necessary to put the other party in default. In Carlton v. Hulett, 49 Minn. 308, 51 N. W. 1053, it was contended that a restoration or tender should have been made -before the action could be brought, but the court held against that contention in the following language: “Authorities in support of respondent’s position on this point are abundant, but are foreign to the case, because she has not attempted to abrogate and rescind the mortgage contract by her own act, but by judicial proceedings instead. In such eases, where one seeks the aid of a court to set aside and rescind a contract, it is not essential that he should have previously attempted a rescission, or should have made any tender to the other party, except when such tender is necessary to put the other party in default. By submitting her cause to the court, the plaintiff expressed a willingness to perform such conditions as it may regard necessary to impose as proper terms on which relief shall be granted. What such a plaintiff ought to do, and what he must do, to reinstate the other party in statu quo, as a condition for repudiation and rescission, is for the court, which always possesses the necessary power to determine the question.” The same rule is adhered to in Hansen v. Allen, 117 Wis. 61, 93 N. W. 805, and in Ludington v. Patton, 111 Wis. 211, 86 N. W. 571. In the latter ease the court clearly draws the distinction between a suit for a rescission of a contract on the ground of fraud and an action at law to recover back that which has been paid upon a contract void for fraud. The [739] latter contemplates a precedent rescission of tbe contract by act of the plaintiff, and an action in equity to rescind a contract invites and requires equity to effect that end, and looks to the decision in that action to accomplish it, and to impose such terms of rescission as may be deemed equitable under all of the facts in the case. The earlier decisions in California, Colorado and Washington and some other states would indicate that they were made without reference to the distinction above mentioned. See, also, Clark v. O’Toole, 20 Okl. 319, 94 Pac. 547, where the rule here laid down is discussed at length and authorities cited. " The record shows that the respondent in the case at bar did offer to place the defendant in statu quo, not before the suit was brought, but afterward, and thfe decree entered required the plaintiff to pay to the defendant the sum of $500, with interest thereon at the rate of seven per cent from the time said money was paid by the appellant, and to deliver to the appellant forty shares of the capital stock of said railway company, and upon the payment of that amount and the delivery of said shares, within thirty days after the entry of said judgment, defendant was required to reeonvey said land to the respondent. We find no reversible error in the record and the judgment is affirmed, with costs in favor of respondent. Ailshie J., concurs.