Cain v. Guthrie

Smith, J. This was a bill in chancery filed by William Guthrie against John Cain. The plaintiff alleges that on the 16th of June, 1838, he was a resident of the state of Ohio and was making preparations to move with his family to Indiana; that on that day he purchased of Cain a certain tract of land in Madison county with the purpose of settling upon it; that he paid Cain 200 dollars in hand, and gave his note for 150 dollars payable in one year from date with ten per cent, interest; that Cain made him a title-bond conditioned for a conveyance of the land on the payment of the note; that Cain made divers false and deceptive representations respecting the quality, location, and description of the [410] land to the plaintiff, at the time of the sale, to induce him to .make the purchase; that after he had thus purchased the land, the plaintiff moved with his family to Madison county, and on his arrival in the neighborhood immediately went to examine it, and found to his surprise that it did not correspond with the representations made by Gain. The plaintiff further alleges that Gain assigned the note for 150 dollars to one Wood, and that the latter, at the August term of the Madison Circuit Court in 1841, obtained a judgment upon it against the plaintiff, by default, in an action of assumpsit. Cain answered, admitting the sale of the land, the payment of 200 dollars, part of the purchase-money, the execution of the note, its assignment, and the delivery of the title-bond, but denying the false representations. The Circuit Court, in accordance with the prayer of the plaintiff, decreed a rescission of the contract for the sale of the land; that Gain should refund to Guthrie the 200 dollars paid by the latter with interest; and that the former should also pay into the clerk’s office of the Madison Circuit Court the amount of the judgment obtained by Wood as assignee of said note, to be paid over to Wood in satisfaction of the judgment; and that for the enforcement of the decree execution should issue, &c. Applications to a Court of equity for the exercise of its jurisdiction to rescind a contract, are addressed to its sound discretion, but such discretion must be exercised in conformity with established principles. A contract will not in general be rescinded, unless the contracting parties can be restored to the same situation occupied by them respectively when the contract was entered into, nor unless the application for a rescission be made within a reasonable time. If a party desires to rescind a contract on the ground of mistake or misrepresentation, he is bound to be prompt in communicating the facts upon which he relies to the opposite party, and also his intention to rescind. Johnson v. M‘Lane, 7 Blackf. 501.— Shaeffer v. Sleade, Id. 178. — Boyce's Ex'rs v. Grundy, 3 Peters, 210. — Lawrence v. Dale, 3 Johns. C. R. 23. — M‘Neven v. Livingston, 17 Johns. 437. — Masson v. Bovet, 1 Denio, 69. In this case, the bill was not filed until nearly four years after the date of the contract sought to be rescinded, nor is [411] there any reason assigned why the application was so long delayed. If there had been such misrepresentations as to warrant the plaintiff in regarding the contract as fraudulent, he should have promptly given Cain notice of his intention to rescind. It seems, however, that he made no complaint that the land did not answer the description which had been given of it at the time of the purchase, until after a judgment had been obtained against him on the note, and this judgment was not rendered until about two years after the note was due. W. Quarles, for the plaintiff. J. Smith, for the defendant. We, therefore, think the plaintiff has not brought himself within the rules which Courts of equity have prescribed with respect to this kind of relief, and that there is consequently no equity in the bill. Per Curiam. The decree is reversed with costs. Cause remanded, &c.