Henderson & Co. v. Boyett

Henderson & Co. v. Boyett. Action of Detinue. 1. Rescission of contract, for fraud; parties must he placed in statu quo. — In order to exercise the right of rescission for fraud, the party offering to rescind must place the other party as near as practicable in statu quo; and, therefore, where, in the execution of a mortgage, an older mortgage is surrendered to the mortgagor as a part of the consideration of the last mortgage, if, upon subsequently discovering that the mortgagee .practiced,a fraud in procuring the execution of the later mortgage, the mortgagor desires to rescind and avoid said mortgage on the ground of such fraud, it is a condition precedent to the exercise of that right that he put the mortgagee in statu quo by sairrendering or offering to surrender the old mortgage, which came into his possession as a part consideration for the new note. Appear from the Circuit Court -of Covington. Tried before the I-Ion. J. TV. Foster. Appellants brought their suit in detinue against appellee to recover two yokes -of -oxen, one log cart and fixtures, and also some corn, -seed -cotton and fodder of the crop -of 1898. The plaintiffs claimed title under a mortgage which had been executed to them by the defendant on the 22d day of January, 1898. . The defendant -set up as a defense to the action that the mortgage had been procured by fraud, by reason of the fact that the agent of the plaintiffs represented to hi-m that there was no- crop included in the mortgage and by reason of the representation he was. induced to ■sign it. To this plea the plaintiff replied that under the mortgage executed in 1898, in part consideration for it, they -surrendered the mortgage executed by Mm to them in 1897, and that the defendant had not returned •or offered to return said mortgage of 1897 to the plaintiffs, hut continued to hold the same claiming that he bad the right to do so. On the trial of the -cause the plaintiffs -offered in evidence the mortgage executed on January 22, 1898, which conveyed the -crop-s of that -current year, and the •other personal property sued f-or. The evidencie showed that -the mortgage of 1898, under which plaintiffs claimed title to the property sued for, was given in payment and satisfaction of - a mortgage which had been executed 'by the defendant to the plaintiffs in 1897. The evidence further -showed that when the mortgage of 1898 was executed the mortgage of 1897 was surrendered to the defendant by the plaintiffs, that the defendant had retained possession -of the same after its surrender and was still in possession of it at the time of the trial of this case, that defendant had -discovered that the crop was included in the mortgage -of 1898 a few days before suit was-brought against him, that he knew at this time that plaintiffs were claiming title to the crop and other personal property conveyed by the mortgage of 1898, and that the 'defendant had never, at any time, offered to return to the plaintiffs the mortgage made in 1897, but had retained the same claiming that he had a right to do so. The mortgage of 1897 conveyed defendant’s crop for that year, all of his personal property of every description and also the cart rollers and chain and oxen covered by the mortgage of 1898. The evidence showed without conflict that the property sued for was the property mentioned and described and 'conveyed in the mortgage executed on January 22, 1898. After the introduction of all the evidence, the court holding that because the defendant had not offered to return to the plaintiff the mortgage of 1897, he was estopped from setting up the execution of the mortgage of 1898, gave at the request of the plaintiffs the general affirmative charge in their behalf as to all of the property sued for-, which was covered by the mortgage of 1898. There were verdict and judgment for the plaintiffs. Thereafter the defendant made a motion for a new trial, upon the ground that the defendant was not estopped to set up fraud on the part of the plaintiffs in the execution of the mortgage of 1898 by his failure to offer to return the mortgage of 1897; and that, therefore, the question of fraud in procuring the execution of the mortgage of 1898 should have been left to the determination of the jury, and that the general affirmative charge should not have been given in favor of the plaintiffs. Upon the hearing of this motion, the court granted it and ordered a new trial. From this judgment the present appeal is prosecuted by the plaintiffs, who assign the rendition thereof as error. Powell & Albritton, for appellants. Where -a contract is sought to be rescinded by one of the parties-thereto he must place the other in statu quo. I-Te will not be allowed to repudiate a contract and retain the benefit derived thereunder agaiust equity and good conscience, but must return, or offer to return, such benefit.— 12 Ain. «St Eng. Ene. of Law, 84-86; demison v. Woodruff ct Heath, 34 Ala. 146; dones v. Anderson,, 82.' Ala. 302; Young v. Arnt.ee cfi Bros., 86 Ala. 116; Bu>eei ah r. Gilbreath et al., 24 So. Rep. 421. P. N. 1Ijok.:jax, contra. [MAJORITY — AIcCLELLAR, C. J.] AIcCLELLAR, C. J. A part of the consideration for the mortgage of 1S98 was the surrender to the defendant of the mortgage of 1897. This latter mortgage was accordingly surrendered to the defendant as-satisfied. He has had it ever since and has it now. He has not offered to return it to plaintiff's, but claims the right to retain it. On this state of facts he is not entitled to a rescission and avoidance of the mortgage of 1898 on the ground of fraud. It is a condition precedent to that right that he-put plaintiffs in stain quo by surrendering or offering to surrender the mortgage of' 1897, which came to his possession as a part of the consideration for the new mortgage and upon the assumption of the validity of the latter.—21 Am. & Eng. Encyc. of Law, p. 84 et seq.; Jones v. Anderson, 82 Ala. 302. To the plea of fraud on the part of plaintiff's in proeuriiur tlie CM-'ution by defendant of the mortgage ol 1898, plaintiffs replied that- under that mortgage and as part consideration for it they surrendered to him the mortgage of 3897, that defendant has not offered to return the same to plaintiffs lrat continues to hold it under a claim of right to do so. The replication waa a proper one, and its averments were proved, it follows that tlie trial court in the first instance properly gave the affirm:)cive charge for the plaintiffs, and erred in granting a new trial on the theory that the general charge should not have been given for plaintiffs. The judgment granting a new trial must therefore he reversed, and a judgment will be here entered overruling and denying defendant’s motion for a new trial. Reversed and rendered.