Reed v. Rogers

OPINION. RAYNOLDS, D. J. The appellant assigns error as follows : 1. The District Court erred in not sustaining plaintiffs motion for .judgment on the pleadings, because plaintiffs right to the rescission and cancellation prayed for in his complaint was fixed and determined by the charge in said complaint and. the admission in defendant’s answer that there had been a failure of title as to 160 acres of the 420 acres of land which defendants had attempted and pretended to convey to plaintiff. 2. The District Court erred in not giving judgment for plaintiff, after trial of this cause on the merits, because the aforesaid failure of title, as idmitted by defendants, and as found by the court from the evidence, showed such gross and palpable fraud, or mutual mistake, as to make it inequitable for the court to refuse to grant the rescission and cancellation prayed for by the plaintiff. 3. The District Court erred in giving any consideration whatever to defendants’ plea of laches, or to their defense that the parties could not be placed in statu quo, because, as admitted in their answer, and as found by the court from the evidence, defendants themselves were at all times, and are still, in default as to title to the aforesaid 160-acres, and, therefore, no't entitled to interpose any such plea or defense in a court oí equity. The appellant assumes in the first assignment of error that the mere fact that the pleadings showed a failure of appellees to make title in regard to the 160 acres of the 420 acres transferred would of itself entitle him to a judgment of rescission. In this we think he is mistaken. • It is a familiar principle that on a motion for judgment upon the pleadings all the allegations of the pleadings are to be taken as true and that if an issue of fact is raised the motion cannot be granted. Sutherland on Code Pleading, Vol. 1, See. 1447; Noland vs. Owens, 74 Pac. (Okla.) 954; Moore vs. Murry, 75 Pac. (Mont.), 514, and eases cited. 1 Further, there are other allegations in the pleadings •which set forth the condition of affairs, explaining the . failure of title. It appears that when the exchange of property was made between the parties the appellant went into possession and had remained in possession for three years before this suit for rescission was brought; and it appeared further that the appellant had made extensive improvements and would have been unable to have returned the property to the appellees in statu, quo. It further appeared from the pleadings that the appellees alleged that plaintiff had taken possession with full knowledge of the title to the property in question being a script location; and further it was alleged that it was because of the action of plaintiff’s son, with plaintiff’s approval, instituting a homestead claim upon the 160 acres in question that defendants were unable to make title to the property after the government had refused to patent the land under defendants’ first application. In view of all these allegations in the pleadings, which raised issues to be tried, it can hardly be contended that the plaintiff was entitled to judgment of rescission on the pleadings or that the court erred in refusing to grant such motion. The second and third assignments of error may be treated together as they involve the same proposition. The trial court, in its opinion and findings, which are a part of the record before us, found that although the plaintiff had been in possession for three years, he had slept upon his rights, both as to the represeneations as to the quality of the land and the title; that he had allowed an unreasonable length of time to pass before he brought his suit for rescission on account of misrepresentotions or fraud as regarding the character or quality of the land or failure of title. In fact, the trial court found no equitable ground on which rescission could be given. The law on this subject is well stated under the title, Vendor and Purchaser, 39 Cyc., page 1413, where the following principle is laid down, sustained by numerous authorities: “Where a purchaser enters into possession under a contract executed by a conveyance with covenants of warranty, he is not entitled to rescind for failure of title in the vendor or for defect in the title, but must seek his remedy in an action at law on the covenants, in the absence of fraud, mistake, insolvency, or non-residence of the vendor, or unless the purchaser has suffered eviction by title paramount to that of the vendor. * * * * The remedy which a court of law can afford unless some extraneous circumstances intervene to prevent it, is fully adequate to all the demands of justice; and that is a sufficient reason why a court of chancery will not interpose.” 2 Where a contract has been full and completely performed a court of equity will not grant relief by way of rescission unless the strongest of reasons exist for its interposition, and this is true even though the circumstances of the case are such that were the contract still executory a court would not decree specific performance at the suit of the other party. It has been held frequently that nothing short of actual fraud or mistake will justify the court in decreeing rescission of an executed contract. Seddon et al. vs. Northeastern Salt Co., Ltd., et al., 1 Am. & Eng. Ann. Cases, page 544, and note thereto: “Cancelling an executed contract is an exertion of the most extraordinary power of a court of equity. The power ought not to be exercised except in a clear case and never for an alleged fraud unless the fraud be made clearly to appear. Never for alleged false representations unless their falsity is certainly proved and unless the complainant has been deceived and injured by them.” Atlantic Delaine Co. vs. James, 94 U. S. 207. “Where a party desires to rescind upon the ground of mistake, or fraud, he must, upon the discovery of the facts, at once announce his purpose and adhere to it. If he be silent and continue to treat the property as his own, he will be held to have waived the objection and will be conclusively bound by the contract, as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to' the right which had before subsisted.” Grymes vs. Saunders, 93 U. S. 62. Tbe authorities cited by the appellant in his brief which we have carefully examined, apply to executory contracts where the rule is different from the one applicable in a case of this kind. “Here is a contract which has been fully executed. * * * The consideration has been paid ,the conveyance executed, and full covenants have been given and accepted. There is no suggestion of insolvency or non-residence, or that the plaintiff’s remedy at law would not be adequate. *' * * It seems to us that much of the apparent conflict that is found in the adjudicated cases on this subject is due to a failure to observe the distinction which obtains between the rules applicable to a contract still executory and one actually executed.” Decker vs. Schultze, 27 L. R. A. 355. 3 There are other reasons o.n the face of the record why it is apparent that rescission should not be granted in a case of this kind. There is nothing to show the value of the property for which it is alleged the title failed as compared with the remainder of the lands. The allegations made in the answer and not specifically denied, showing collusion between the appellant and his son, although not taken into consideration in this opinion, bn. the face of the record would be a ground for denying rescission. Finding as we do no error in the record, the decision of the'district court is herewith affirmed.