Fowler v. Meadow Brook Water Co.

Opinion by Mr. Justice Potteb, The plaintiff in this case sought to repudiate a contract, upon the ground that when he made it, he was so completely intoxicated as not to know or understand what he was doing. Upon the trial the learned judge of the court of common pleas charged the jury that in order to avoid the contract, the plaintiff must prove not only the fact of intoxication, but in addition must show one of three things : First, that the contract was procured by fraud or undue influence. Second, that the defendant knew, or should have known by something appearing in the transaction, of the plaintiff’s condition at the time, or Third, that the transaction was manifestly unfair or oppress sive. [476] We think this was going too far. In Bush v. Breinig, 113 Pa. 310 (p. 316), we said: “ The rule formerly was, that intoxication was no excuse, and created no privilege or plea in avoidance of a contract; but it is now settled according to the dictate of good sense and common justice, that a contract made by a person so destitute of reason as not to know the consequences of his contract, though his incompetency be produced by intoxication, is voidable, and may be avoided by himself, though the intoxication was voluntary, and not procured by the circumvention of the other..party.” In the present case the court was therefore in error in its instruction to the jury with regard to the effect of the intoxication of the plaintiff upon the validity of the contract. But in order to recover, it was incumbent upon the plaintiff to prove not only that he was incapacitated by intoxication, when the contract was made which he now seeks to repudiate, but he must go further and show that he rescinded the agreement within a reasonable time after his recovery. The rule with regard to rescission is thus stated in 21 Am. & Eng. Ency of Law, 84: “ Where a contract is sought to be rescinded by one of the parties thereto, he must place the other in statu quo. He will not be allowed to repudiate a contract and retain the benefit derived thereunder against equity and good conscience, but must return, or offer to return, such benefit.” There is also a thorough discussion of the question by Judge Sharswood in Beetem v. Burkholder, 69 Pa. 249, which he begins by saying that, “ Whenever one of the parties to a contract has the right to rescind it, and elects to do so, before commencing his action to recover back the money which he has paid, he must give notice to the vendor and offer to return the thing sold.” In the present case the consideration received by the plaintiff was a release in full for himself and his partner from the obligations of a prior contract under which he was liable to incur serious losses. We have examined the testimony carefully and have not found anything to indicate any offer by the plaintiff to restore the consideration which he had received for the contract which he now attempts to repudiate, or that he attempted or offered in any way to restore the status quo. His own account of his action in this respect is given in his [477] testimony concerning his interview with the president of the defendant company. The plaintiff says he went to Mr. Scranton’s office to ask if he might resumé work. In reply the plaintiff states, “ He asked me if I didn’t understand my situation. I said, ‘ What situation ? ’ He said, ‘ Don’t you know that we have took the contract away from you? ’ I said, ‘No, sir.’ ‘ Well,’ he said, ‘ it is so, and jrou cannot go on with it.’ ‘ Well,’ I said, ‘ I cannot leave my tools there for you.’ He said, ‘ I dare you to take them away.’ Them is all th.e words.” We cannot gather from this the expression of any desire or willingness to restore the defendant company to the position in which it was prior to the execution of the agreement by which it gave up its bond of indemnity and cancelled the original contract and released the plaintiff and his partner from all liability for the further prosecution of the-work as required by the former agreement. The plaintiff cannot be allowed to retain the benefits of the release from his former contract and at the same time recover for himself the value of his interest in the tools and machinery which he had transferred by means of the second agreement, to the defendant company, as part of the consideration for that release. Acting upon the new agreement, which was made in perfect good faith, the defendant company upon their part annulled the former contract and released the plaintiff and his partner from all liability thereunder, and surrendered the bond of indemnity. In order to place the defendant company in statu quo, it would have been necessary for the plaintiff, before beginning this action, not only to have shown a bona fide willingness to complete the original undertaking and carry out that contract in accordance with its terms and conditions, but it was necessary also to obtain the assent and agreement of his partner thereto; it would have been his duty also to have reinstated or restored the bond of indemnity given to the defendant, company to secure the faithful performance of the work. As the testimony does not show that the plaintiff did any of these things, the assignments of error must be dismissed and the judgment is affirmed.