McLeod v. McEachern

ANDERSON, C. J. While the respondent O. B. McLeod was the holder and owner of certain mortgages on the land in question, and Avhich were past due, he entered into a lease contract Avith the complainants, under the terms therein set forth, and which said contract is “Exhibit A” to the original bill, and which will be set out by the reporter. Under the terms of said lease the said C. B. McLeod was to refrain from foreclosing said mortgages during the existence of same. The lease also provided that in the event that the possession of the several premises is not delivered as hereinbefore stipulated, it shall be optional Avith the said C. B. McLeod not to be bound by the said lease. In the event he decides not to be bound thereby, he shall notify John C. McLeod, and may proceed with the foreclosure of his said mortgages. The lands were delivered as agreed to in the lease, and C. B. McLeod Avent into possession of same under said lease, as a tenant of the lessors, and. was so in possession of the lands when he foreclosed his respective mortgages. Counsel for the appellant C. B. McLeod practically admits, in brief, that J. C. McLeod, Sr., Avas the rental agent of said C. B. McLeod, and there is an abundance of proof in the record going to shoAv that said C. B. McLeod was in the possession of the land under the lease, collecting and claiming the rents and exercising control of and dominion over the places leased to him. Having entered into the possession of the lands as the tenant of the lessors, and being so in possession when he foreclosed his mortgages, his action in doing so was in violation of the instrument under Avhich he entered, and he had no right to repu [236] diate the lease and to assert a superior title to his landlords without first surrendering the possession of the land.—Davis v. Williams, 130 Ala. 531, 30 South. 488, 54 L. R. A. 749, 89 Am. St. Rep. 55. The respondent has set up fraud and misrepresentation, as to the condition of the land, which induced him to enter into said lease, hut, even if this were true, he should have restored the status quo, in order to claim a rescission of the lease contract. He could not remain in the possession of the lands under the lease contract after discovering the fraud, and repudiate the said contract. It is well settled by the decisions of this court that, when a person acquires a thing and was induced by the fraud of the owner to purchase or lease same, he has the right to rescind by acting seasonably; that is, by restoring or offering to restore the thing purchased or leased, unless the thing was valueless, or if he failed to do this, to abate the price agreed to be paid.—Fuller v. Chenault, 157 Ala. 46, 47 South. 197; Eagan v. Johnson, 82 Ala. 233, 2 South. 302. He cannot deal with the property as his own under the contract after discovering the fraud and afterwards rescind.-—Graybill v. Drennen, et al., 150 Ala. 227, 43, South. 568. “He cannot hold on to such part of the contract as may be desirable on his part and avoid the residue, but must rescind in toto, if at all.”—Stephenson v. Allison, et al., 123 Ala. 439, 26 South. 290. Nor did the failure of the lessors to pay the $100 or of J. C. McLeod, Sr., to deliver the mules agreed upon authorize'a rescission of the lease by C. B. McLeod, for the reason that, whether these matters were or were not originally intended as inseparable from the lease of the lands, the said C. B. McLeod treated them as separable by entering into and holding the land after the claimed failure to pay the money and deliver the stock, and did [237] not decline to do so because of these defaults. If he considered these items as not separable, then he should not have taken the lands under the lease, or should have restored them if he regarded said defaults as giving him the right to reject or rescind the lease. He had no right to enter upon the lands and retain them after said defaults, and then assign them as giving him a right to rescind, and at the same time holding to the possession of the land which he had acquired under the lease that he violated ivhen he foreclosed his said mortgages. The chancery court did not err in holding that the complainants were entitled to an accounting between the parties and to have the mortgages canceled upon payment of any sum found to be due thereon. Nor was there error in holding that said complainants were not cut off from an accounting and cancellation by virtue of the attempted foreclosure sale by the respondent C. B. McLeod, and the decree of said court is affirmed. Affirmed. McClellan, Sayre, and de Graffenried, JJ., concur.