Weed v. Page

[511] By the Court, Cole J. The circuit court refused to charge the jury that if they should find from the evidence that the respondents had received any money from Burtchy on the contract of purchase and sale, that they could not recover irnless they had shown that they had returned or offered, or made an effort to return what they had received, at the earliest convenient moment after discovering the fraud, and that most certainly they could not recover in the action unless they returned or offered to return what they had received before the conclusion of the trial. The goods in controversy were purchased of the respondents by Burtchy, and they attempted to rescind the contract of sale and reclaim the goods on the ground of fraud in the purchase. The goods were bought at different times between the 14th of April, 1857, and the 31st of August following; and the appellant, as sheriff, levied upon the stock of Burtchy by virtue of two executions against him in favor of certain creditors. The principle of law is well settled “ that a vendee acquires no property in, or title to goods, and cannot retain them against the vendor if he, the vendee, obtained such goods by fraud practised on the vendor under color of a purchase, whether on credit or otherwise. Chitty on Contracts, 8 Am. Ed., p 356. The sale procured by fraud is not absolutely void but only voidable, at the election of the vendor, who may either avoid the sale as soon as he discovers the fraud practiced upon him, and reclaim the goods or may affirm the contract. Ash & Anners vs. Putnam, 1 Hill, 302; Cary et al vs. Hotaling and another, id., 311; Olmsted vs. Hotaling, id., 317; Morson vs. Bout, 1 Denio, 69; Mattowan Co. vs. Bently et al,, 13 Barb. S. C. R., 641. But if the vendor see fit to rescind the contract on the ground of fraud, he must do it in toto. Miner vs. Bradley, 22 Pick., 457; Voorhies et al vs. Earl & Kellogg, 2 Hill, 288; Baker vs. Robbins, 2 Deino, 138; [512] He cannot affirm so much of the contract as may be advantageous to him and rescind as to the residue. The law gives him the right of recovering his property because he has been imposed upon and cheated in the purchase; and of treating the contract as though it had never been made. Or, he may assent to, and ratify the act of sale on the discovering the fraud and pursue his remedies on the contract. But he cannot treat the contract as valid in part and void in part. This seems to be the well settled doctrine in the books, and it rests upon reasonable grounds. In the present case the respondents proceeded upon the notion that they had a right to avoid the sale of the goods on account of the misrepresentations made by Burtchy as to his pecuniary responsibility. Assuming they had this right, they have brought their action to recover the goods as though the title was still in them. But it appears they have received on the contract some four hundred and fifty dollars of the consideration money. This amount they do not return or offer to return. They insist upon retaining this money and by this act affirm the very contract which the next moment, by this action, they contend is void. This cannot be done. The general rule that a party, who would rescind a contract on the ground of fraud, must restore, or offer to restore, what he has received upon it, is not controverted, but it is insisted that it cannot apply to this case, since Burtchy was in no condition to return the goods. He had neither the control or possession of them. This option to rescind or affirm the contract, is for the benefit of the vendor. If he elects to rescind he can do so. He is not obliged to do it. But if he seeks to avoid the contract, he must avoid the whole contract and not a part of it; and he must return the consideration received upon it before he can avail himself of his legal remedy to recover the property itself. We have been referred to the case of Ladd vs. Moore, 3 [513] Sand. S. C. R, 589, where a contrary doctrine is recognized. We regard that case as anomalous and opposed to the current of authorities. It establishes the principle that a party wishing to disaffirm or rescind a contract, is only bound to return whatever he has received upon it, upon condition that he shall thus restore himself to his own original position. But even in that case the court charged the jury that it was a rule of law that a party seeking to rescind a contract and bringing trover for the property sold, must, before commencing his suit, restore or offer to restore whatever he had received if the purchaser was accessible, and stated that the question in that case was, whether the vendor had made proper exertions to find the vendee, and it was held that he had. We do not find any proof in the case at bar, going to show that the respondents endeavored to find Burtchy for the purpose of tendering the amount of money which he had paid on the contract; and the circuit court refused to instruct the jury that the respondents could not recover unless they had shown that they had returned, or offered, or made an effort to return what they had received, at the earliest convenient moment after discovering the fraud, and that they could not recover unless they returned, or offered to return, what they had received before the conclusion of the trial. We are of the opinion that the instruction was proper and should have been given. The judgment of the circuit court must therefore be reversed and a new trial ordered.