Court Opinion

ID: 8185483
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:07:54.746316+00
Date Added: 2024-06-11T16:40:24.024502
License: Public Domain

Newman, J.
In order to recover in an action for the conversion of goods, the plaintiff must have the title, general or special, of the goods, and the right of immediate possession. 26 Am. & Eng. Ency. of Law, 744. Whether the transaction by which the goods came to the possession of the defendant be considered the creation of a trust to apply the proceeds of the goods and accounts to the payment of the plaintiff’s debt to the sewing-machine company, or a mortgage for the security and indemnity of the sureties on his bond, it transferred the title to the goods. Hill v. Merriman, 72 Wis. 483. The transaction evidently included both purposes. The title would, in ordinary cases, remain in the grantee or mortgagee until the purpose contemplated had been fulfilled. It is not easy to see how the plaintiff *529-has become reinvested with the title. The purpose has not yet been fulfilled. His mere demand could not revoke the title. If the transaction be held to create a trust, still the trustee has a beneficial interest to be protected. If he failed to execute the trust or misapplied the fund, it would seem that the remedy would be in equity to compel its execution. But it is understood that it is claimed that the plaintiff’s demand for a return of the goods worked a rescission of the transaction, and revested the title to the goods in him. No doubt it might have this effect if he was, in the circumstances, entitled to make compulsory rescission. Ordinarily, it requires the consent of both parties to rescind a contract, as well as to make one. But there are some exceptions. If the contract has been procured by the fraud of one party, the other party may rescind the contract on discovery of the fraud, by giving prompt notice of rescission, or the institution of an action. The only fraud hinted at is the failure to apply the fund to the purposes intended. If this was in pursuance of a preconceived intention not to apply the fund to the purpose, it is a fraud which might justify a rescission. But, in order to have that effect, the fraudulent intent must have existed at the time of the making of the contract (King v. Brown, 24 Ill. App. 579; Bidault v. Wales, 20 Mo. 546), and is not proved by the fact alone of nonperformance (Patterson v. Wright, 64 Wis. 289). So, also, the nonperformance of the contract by one party will, in some circumstances, afford ground for its rescission. The more common case is where the nonperformance by one party disables the other party to perform on his part. In that case the party dis.abled is excused from performance on his part, and may, at his option, treat the contract as rescinded. But this option does not arise where the failure to perform is only partial, and there remains a distinct part of a subsisting and executed consideration. In such a case the remedy of the injured party is by an action on the contract itself. Selby v. *530Hutchinson, 9 Ill. 319-333; Weintz v. Hafner, 78 Ill. 27; Burge v. C. R. & M. R. Co. 32 Iowa, 101; Myer v. Wheeler, 65 Iowa, 390; Stevenson v. Polk, 71 Iowa, 218; 2 Parsons, Cont. 679; 21 Am. & Eng. Ency. of Law, 46.
The defendant bas partly performed bis undertaking. He is still liable as a surety on the plaintiff’s bond. That is, in part,, the executed consideration upon which the transfer of the goods was made. An action on the contract, if there is a breach of it, will afford the plaintiff complete relief. So it is held that his demand for the return of the goods did not operate as a rescission of the contract, so as to revest the title-in the plaintiff; and that the plaintiff has no sufficient title to maintain his action as for a conversion of the goods.
By the Court.— The judgment of the superior court of. Douglas county is reversed, and the- cause remanded for a. new trial.