Lundahl v. Hansen

Mr. Justice Wilkin delivered the opinion of the Court: The bill is certainly very loosely drawn, and a decree upon it without amendment, even if authorized by the evidence, could not have been sustained. It is also true, as contended by counsel for appellee, that the only substantial relief sought by the bill is the repayment of money paid under the contract, and for that relief, if complainant is entitled to treat the agreement as rescinded, there is a complete and adequate remedy at law. But in our view of the case the decree of the Superior Court was fully authorized upon the broader ground that under the issues and the proofs no sufficient cause for the rescission of the contract was shown. The grounds attempted to be set up in the bill for the cancellation of the contract, considered in the inverse order in which they are stated, are, that, on information and belief, the defendant had no legal title to the premises sold, at or since the making of the contract, and was not therefore in a position to carry out the contract on his part. This is an attempt to set up fraud on the part of the vendor, but the allegation is so manifestly insufficient that no one could seriously contend that a decree could be supported by it. Neither is it pretended by the complainant, in his testimony, that he was in any way misled or deceived by the defendant as to the true condition of the title at the time of the sale,' or afterwards. Under the evidence in the record the contract could have been specifically enforced by either party, the defendant having obtained the title at the time when, by the terms of the contract, he was bound to convey. (Monsen v. Stevens, 56 Ill. 335.) The allegation that the defendant refused to make and deliver to complainant a good and sufficient deed upon his offer to pay the balance due upon the contract, is wholly unsupported by proof. If, then, the bill can be maintained at all, it must be upon the ground that the defendant is shown to have wrongfully attempted to declare a forfeiture of the contract, and refused to go on and carry out the same as agreed upon. This seems to be conceded in the argument, and counsel state the ground of the right to the relief prayed, as follows: “If Hansen wrongfully forfeited the contract when Lundahl was not in default, it was a breach of the contract, and Lundahl could treat the contract as rescinded, and proceed against Hansen, kt equity, for a cancellation of the contract and delivery up of the notes executed and delivered to Hansen in pursuance thereof, and a repayment of the money paid by Lundahl under the contract.” Numerous authorities are cited as supporting this proposition, but we are unable to see how a single one of them can be construed into even a recognition of the doctrine therein announced. The attempt evidently is to bring the ease within the rule, that “when one party has absolutely refused to perform, or has incapacitated himself from performing, his side of the contract, the other party may rescind the contract and sue for what he has already done under it.” < The reason of this rule is, that the party absolutely refusing to go on with the agreement is presumed to consent to a rescission, and, the other party electing to so treat it, there is, in effect, a rescission by consent. The mere fact that one of the parties may have understood his rights under the contract to be different from what they in fact were, and attempted to declare a forfeiture of it when he had no legal right to do so, would not, as we understand the law, necessarily entitle the other party to treat the contract as rescinded. So far from the declaration of forfeiture indicating a consent to rescission, it is an express effort to exercise a right under its provisions. It might be, if the rights of the other party were injuriously affected thereby, that a court of equity would allow him to treat it as rescinded; but the proposition here is, that the wrongful declaration of forfeiture gives the right of rescission, without reference to any question as to how the rights of the other party are affected. In this case there is not the slightest evidence of an injury resulting to appellant by the attempted forfeiture, or refusal to accept the payment due July, 1891. It is also clear, from the testimony even of appellant himself, that he did not treat the contract- as-at an end upon the attempted forfeiture, but refused to do so. Both his testimony and that of the appellee shows, that while the latter, speaking of the action of his agent in giving notice of the forfeiture, said he could not go back on what the agent had done, he, at the same time, negotiated with appellant for a settlement of the matters between them, and offered him a certain sum of money. Appellee swears positively that appellant took the matter under advisement, being undecided whether he would accept it or not. The most that appellant says on that subject is, that he does not remember whether he said anything about accepting or refusing the offer. It is clear, from all the proof, that appellee was not, at the time this bill was filed, insisting upon an absolute forfeiture of the contract, and that appellant knew it. It is not denied that before the bill was filed appellee mailed a letter tb appellant, which he should have received in due course of mail before the bill was filed, in which he expressly told him that he withdrew the notice of forfeiture, and was ready and willing to go on and fulfill the contract on his part. It is true, appellant testified that he did not get the letter until after his bill was filed; but even if he did not, we fail to see that he was in a position, after receiving it, to ask a court of equity to allow him to treat the contract as rescinded because of the breach of the other party, there being no evidence of injury done him. It might have furnished a sufficient reason for asking the court to' require appellee to pay the costs, but certainly no more. The weakness of appellant’s case lies in the fact that he seeks to rescind and cancel a contract, fairly entered into, because of an attempt by the other contracting party to do a thing which he had no right to do, but which was wholly harmless to him. If he had elected to treat the declaration of forfeiture as an abandonment of the contract on the part of appellee, and proceeded to recover back what he had paid under it, he might have insisted, with some plausibility, that there was a rescission. But even that he did not see proper to do. We are clearly of the opinion that no sufficient cause was shown in the court below for asking the interposition of a court of equity to cancel the agreement between these parties. Appellant’s proper remedy was a bill for specific performance, or an action at law on the contract for its breach. He may still have one of those remedies, but the decree of the Superior Court will be affirmed. ‘Decree affirmed.