Garner, Neville & Co. v. Leverett

WALKER, J. The vendor of the complainant perpetrated a most gross and flagitious fraud upon him. The fraud consisted in the representation that the title was good, when the vendor had incumbered it with a mortgage, to secure a debt equal to the value of the land; and in the delivery of a deed to the complainant as genuine, to which the vendor, without authority, subscribed the names of a third person and his wife; whom he represented to have the title. The vendor has left the State, and is insolvent, and the mortgage is not discharged. The bill for a rescission was filed within a reasonable time after a discovery of the fraud. Upon these facts, the complainant was entitled to a rescission, without an abandonment of possession. If the want of title, or deficiency in the title, or a mistake, had been the ground of the application for a rescission, it would have been essential that the complainant should have first abandoned the possession, unless a retention had been necessary for his reimbursement or indemnity. — Young v. Harris, 2 Ala. 108; Elliott v. Boaz, 9 Ala. 772; Greenlee v. Gaines, 13 Ala. 198; Parks v. Brooks, 16 Ala. 529; Read v. Walker, 18 Ala. 323; Foster v. Gressett, 29 Ala. 393; Gallagher v. Witherington, 29 Ala. 420. Where fraud is the ground of the application, a different rule prevails. There an abandonment of possession is not necessary to the maintenance of a bill for rescission, as is held in Cullum v. Bank, 4 Ala. 37, § 10, and Read v. Walker, supra; see, also, Long & Long v. Brown, 4 Ala. 622. The distinction between fraud and other grounds for a rescission is, that fraud itself taints and vitiates the contract. Fraud alone is, in equity, sufficient to avoid it. In a court of law, a restoration of the property, or an offer to restore it, would be necessary,’before the contract could be treated as annulled. But a court of chancery, unlike a court of law, may require as a condition precedent to the rescission an abandonment of the land, and the payment for the use and occupation by the purchaser; and therefore does not adopt the same principle which prevails at law. Such is the flexibility of courts of equity, [414] in adapting their decrees to the actual condition of the parties, that its pervading excellence, in the language of Mr. Justice Story, is, “that it varies its adjustments and propositions so as to meet the very lorm and pressure of each particular case, in all its complex habitudes.” — Coffin v. Newsom, 2 Kelly, 640. In this last cited case, the supreme court of Georgia, in an able opinion, maintain the proposition which we have asserted, both by argument and authorities, which seen to us altogether satisfactory. [2.] The rents, for the period of the complainant’s occupation, were due to the vendor, and not to the assignees of the notes given for the purchase-money. The latter had no lien on those rents, and the vendor’s right to them did not pass with the assignment of the notes. They could only recovery those rents as creditors of the vendor; subjecting a demand due him to the payment of their claims. That object could only be accomplished through the agency of a cross bill. The assignees of the notes in this case, having filed no cross bill, asserting their rights as creditors of their co-defendant, and asking an appropriation of the sum due him to their benefit, had no right to any portion of the money ascertained to be due for the occupation of the land. It follows, that the chancellor, in ordering the payment to them of the value of the use and occupation of the land, less the counsel fees of the complainant, has rendered a decree more favorable to' them than the law authorized. [3.] The chancellor certainly erred, in permitting the complainant to retain the amount necessary to pay his solicitors out of the rents due his vendor; but this error was to the prejudice of the vendor, and not of the assignees of the notes, who alone appeal and assign error. Although the case would on this point be reversible upon an assignment of error by the complainant’s vendor, it is not reversible upon the assignment of error by the assignees of the notes for the purchase-money. There is no error in the record, prejudicial to the appellants. The decree of the court below is affirmed.