Maloy v. Berkin

27 P. 442, 11 Mont. 138, 1891 Mont. LEXIS 63
CourtMontana Supreme Court
DecidedAugust 31, 1891
StatusPublished
Cited by8 cases

This text of 27 P. 442 (Maloy v. Berkin) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Maloy v. Berkin, 27 P. 442, 11 Mont. 138, 1891 Mont. LEXIS 63 (Mo. 1891).

Opinion

Harwood, J.

This case stands for review, upon appeal from the judgment and an order overruling appellant’s motion for a new trial. The object of the action was to obtain a decree of cancellation of a deed of conveyance of an undivided one-fourth interest in a certain quartz lode mining claim, situate in Jefferson County, known as the “ Ida Mine,” for alleged gross inadequacy of consideration paid for said property, and acts of fraud and deceit in the procurement thereof. It appears that the deed of conveyance in question was made and delivered March 22, 1890, in consideration of one thousand and twenty dollars paid to the grantor, and on the twenty-fifth day of that month he commenced this action for cancellation of said deed. In the complaint an offer is made to restore to defendant the sum of money paid plaintiff as such consideration, with interest thereon, or to pay the same into court for the use of defendant, or to make such disposition thereof as the court may direct; but it is not shown by the complaint that plaintiff had, prior to the commencement of the action, tendered or offered to return to defendant said sum of money. Defendant’s counsel moved the court for judgment on the pleading, on the ground that an action for cancellation of a contract cannot be lawfully commenced and maintained unless it is shown by plaintiff that he has first tendered back to defendant that which was received as consideration for the execution of the contract, and that the same does not appear in this case. The motion was overruled, and the action of the court in that respect is the first alleged error assigned by appellant.

We do not perceive why, in reason, the doctrine contended for should apply in cases of this nature. The very object and [145]*145purpose of the action is to compel an undoing of what has been done ; to compel a mutual restoration of each party to the position he occupied before the fraudulent transaction was consummated. Neither the relief nor the right to relief is predicated upon the tender back of what was paid in procuring the contract. In this case the relief, if granted, proceeds upon the ground that some circumstances or conditions exist in relation to the parties which in law amounts to constructive fraud, or that actual fraud has been practiced in procuring the execution of the conveyance or contract. (Willard’s Equity Jurisprudence, 302; 1 Story’s Equity Jurisprudence, § 694, et seq.; 2 Pomeroy’s Equity Jurisprudence, §§ 922-928.) As a matter of course, in granting such relief the court requires equity at the hands of the complaining party, as well as from the party guilty of fraud; that is, the restoration of everything of value received in the transaction. The precise point has been under consideration in numerous well-considered cases of this nature, and it has been held that a court of equity will proceed with the action for cancellation without requiring, as a condition precedent to commencing the action, that the complaining party shall have tendered back what he had received; that an offer in his complaint to restore the same is sufficient; and,.if a case is made out which moves the court to grant relief, it carries into effect the maxim that he who seeks equity shall do equity. (1 Story’s Equity Jurisprudence, § 693; Gould v. Cayuga Co. Nat. Bank, 86 N. Y. 75; 99 N. Y. 337; Allerton v. Allerton, 50 N. Y. 670; Vail v. Reynolds, 118 N. Y. 302; Shuee v. Shuee, 100 Ind. 477; Hopkins v. Snedaker, 71 Ill. 449; Whelan v. Reilly, 61 Mo. 565; Thomas v. Beals, 154 Mass. 51.)

We think the rule is sustained by the greater weight of authority as applicable in cases like the one at bar. If such were not the rule, fraud might, in its manifold resources, frequently contrive to so shape the conditions and circumstances that the defrauded party could not make an offer to restore, prior to invoking the power of the court for relief; and relief would then be denied by reason of the rule. However, the rule seems not to be applied to all cases where rescission is sought, as will be seen by consulting the cases cited supra. Where a party defrauded is so situated in respect to the subject-matter that he [146]*146can return to the guilty party that which the lattdr parted with in the transaction, and nothing more is necessary to effect a rescission, in such ease the rule seems to be, that the complaining party must first restore, or offer to restore, what he received, & before he can maintain his suit or defense; as, where a party has been induced through fraudulent representations to buy chattels, he may rescind the contract by a return or a tender back of such chattels, and resist payment therefor on the ground of fraud in the inducement to purchase, or recover back money or other valuable things given in payment; but it must appear that within a reasonable time after discovery of the fraud restoration or offer thereof was made. The ease of Gifford v. Carvill, 29 Cal. 589, and the cases therein cited, are illustrations of that class of cases. It will be observed, however, in the illustrations brought to view, that the action or defense through which relief is sought is an action at law, or a defense to such an action. In the one case the action is to recover back money paid out in the transaction induced by fraud, or, on the other hand, a defense against an action brought to enforce the contract, which was procured through fraudulent representations. Occasionally a case will be found where the true distinction seems to have been lost sight of, and the rule requiring a return or offer to return, as a condition precedent to maintaining the action, is applied to an action in equity for cancellation, rescission, or annulment. This seems to have been done in the case of Herman v. Haffenegger, 54 Cal. 161, cited by appellant. That was an equity case for the rescission of a contract on the ground of fraud in procuring it, and for recovery of property claimed to,have been parted with by the complaining party through fraudulent representations. The court denied relief on the ground that it did not appear that the plaintiff had, prior to commencing his action, returned or offered to return what he had received in the transaction. The only authority cited was Gifford v. Carvill, supra, which was not an equity action for rescission or cancellation, but was an action at law in all its attributes. The latter case was brought to enforce payment of certain promissory notes, and the defense set up was fraudulent representations made and relied upon in the sale of mining stock, for which the notes were given. [147]*147Fraud, as a defense in such a case, does not belong exclusively to equity jurisdiction. We find no error in the action of the court in overruling defendant’s motion for judgment on the pleadings.

This cause was tried by the court, sitting with a jury impaneled to aid in finding the facts. All other specifications of error urged by counsel for appellant relate to the admission of evidence and finding of facts. It was alleged in the complaint that one George La Point, by prearrangement, conspired with defendant to aid him in procuring a conveyance of said property from plaintiff for a grossly inadequate consideration; and that in furtherance of such design said La Point did a series of wrongful acts, and made certain false representations, specifically set out and alleged, calculated to aid, and which did aid defendant in procuring a conveyance of said property.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Simeon v. Klenze
213 P. 440 (Montana Supreme Court, 1923)
Buhler v. Loftus
165 P. 601 (Montana Supreme Court, 1917)
Arnold v. Fraser
117 P. 1064 (Montana Supreme Court, 1911)
Clark v. O'Toole
1908 OK 27 (Supreme Court of Oklahoma, 1908)
Mueller v. Renkes
77 P. 512 (Montana Supreme Court, 1904)
Ludington v. Patton
86 N.W. 571 (Wisconsin Supreme Court, 1901)
Kelly v. Clark
42 L.R.A. 621 (Montana Supreme Court, 1898)
Waite v. Vinson
36 P. 828 (Montana Supreme Court, 1894)

Cite This Page — Counsel Stack

Bluebook (online)
27 P. 442, 11 Mont. 138, 1891 Mont. LEXIS 63, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maloy-v-berkin-mont-1891.