Newell v. Rosenberg

176 N.E. 616, 275 Mass. 455, 1931 Mass. LEXIS 962
Massachusetts Supreme Judicial Court·Decided May 26, 1931·Published·Cited by 18 cases

Opinion

Sanderson, J.

These actions were tried together. The case of Newell against Rosenberg and Nesson, .begun by [457] writ dated June 19, 1930, is an action of contract to recover upon three promissory notes given to the plaintiff by the defendants as part of the consideration for the assignment of a contract for the purchase of land in Florida sold through the plaintiff’s agents. Each note contained a promise to pay a reasonable attorney’s fee. The answer is a general denial, payment, denial of genuineness of the signatures, failure and partial failure of consideration for the notes, that the defendants were induced to enter into the transaction by fraud, and that the notes were not properly delivered to the plaintiff so as to constitute him a holder.

The case of Rosenberg and Nesson against Newell, begun July 23, 1930, is an action of contract to recover the money paid in the Florida transaction or of tort based upon fraud and misrepresentations of Newell’s agents in connection with the same matter. The answer is a general denial and payment. In this case the plaintiffs elected to proceed on the count in contract and at the close of the evidence, subject to the plaintiffs’ exception, the jury by direction of court returned a verdict for the defendant.

The only exception argued in the second case is to this order. In that case the plaintiffs’ right to recover in contract was dependent upon proof of rescission. In May, 1926, Rosenberg stated that he would make no more payments on the contract because it was induced by false representations. No further payments were made and the plaintiffs took no steps to rescind the contract by returning or offering to return what they had received until 1930 at the conclusion of the evidence in the trial of the case. They then tendered the instruments they had received with a reassignment. The tender was refused as coming too late. An attempt to rescind at that time was of no avail to the plaintiffs. A right to rescind must be exercised promptly after facts which justify it are known. In any event the rescission must be made before the action was begun. Thayer v. Turner, 8 Met. 550, 552. Brocklehurst & Potter Co. v. Marsch, 225 Mass. 3, 10. Patch v. Cashman, 244 Mass. 378, 379. The evidence that the rights under the mortgage contract on the property in Florida had been [458] lost by foreclosure would not if admitted have been of help to the plaintiffs on this issue even though after the foreclosure there may have been nothing of value which the plaintiffs could have offered to return. The excluded evidence had no tendency to prove that the property received by the plaintiffs was of no value when purchased. The date when foreclosure proceedings were instituted does not appear in the record. In the ruling on this evidence we find no error. The plaintiffs’ contention that they might rescind without offering to return what had been received is untenable. It is also clear from the finding of the jury, which will be referred to later, that no misrepresentation or fraud for which Newell was responsible was practised and that no ground for rescission existed. The plaintiffs having failed to establish their right to recover in contract, the order directing a verdict for the defendant was right.

The exceptions argued in the case of Newell against Rosenberg and Nesson will next be considered. In this case both defendants admitted that they signed the three notes which were introduced in evidence by the plaintiff. There was evidence from which the jury might have found that the defendants were induced to enter into the transaction by fraudulent representations. The morning after the jury retired to consider the case they came into court "with a sealed verdict, and the judge in the absence of counsel after raising a question about the meaning of the verdict asked" the jury if they found that there was any fraud on the part of the vendor or his agent for which the vendor was liable, and the foreman replied: “We did not.” The judge stated, in substance, that if no fraud or false representations were found, there was no defence to the notes and that the verdict should be for the face of the notes with interest and a reasonable attorney’s fee. The judge then said: “It will appear on the record that the jury answered that they found there was no fraud or false representations for which this plaintiff Newell was responsible, and that embodies your view.” The foreman answered, “Yes.” Thereupon the judge directed the jury to find for the plaintiff for the amounts of the notes with interest and a reasonable attor[459] nev’s fee. They then retired to determine the amount due. Apparently upon their return they had not added the interest to the principal so as to make the verdict one total sum, and at the suggestion of the judge this addition was made by the foreman in the court room and the verdict then recorded. To all that thus took place in the absence of counsel the defendants later saved their exceptions.

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Newell v. Rosenberg, 176 N.E. 616, 275 Mass. 455, 1931 Mass. LEXIS 962 (Mass. 1931).

176 N.E. 616 (Newell v. Rosenberg) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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