Court Opinion

ID: 6738411
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:16.228461+00
Date Added: 2024-06-11T16:01:52.898778
License: Public Domain

Gbaoe, J.
(dissenting). I dissent from the per curiam opinion signed by the majority court, denying a rehearing. I am fully convinced-*252that a rehearing should be granted. I do not agree with most of the reasoning of the per curiam opinion.
The plaintiff had a loss to his crop by hail. It is claimed by the plaintiff that the adjustment was for $335 and a return of the premium note. The defendant claims the adjustment was for the amount stated in exhibit 1, which was $250. The adjustment was signed by the adjuster on behalf of the insurance company and by the plaintiff; and this adjustment constitutes a contract, in writing, of settlement, and remains a contract until rescinded and until any money received thereunder is returned. The plaintiff did receive under exhibit 1 the written contract of settlement in question, $164.04 in cash, and his premium note of $85.96, which two amounts aggregate $250, and which fully satisfied said written contract of adjustment and paid the total loss as agreed to in said written contract of adjustment. There is no allegation of fraud in the complaint, and there is no testimony showing that the adjuster made any false representations upon which plaintiff relied and was induced to sign the written contract of adjustment.
At the time plaintiff brought this action, he knew of exhibit 1, had his copy of it with him, and at that time had received and cashed a check for $164.04, and knew that he received $164.04, and admits it in his testimony, and admits receiving back the note. He then knew, or must be held to have known, that the amount of the written contract of adjustment was less than what he claims the adjustment actually was.
If the plaintiff’s version is assumed to be true, he would not only have alleged-the loss adjustment as he claims it was, but he should have alleged the making of the written contract of adjustment for-$250, admitted the signing thereof, and have alleged that he was deceived and misled when he signed same, and pleaded that at the earliest opportunity he rescinded said written contract of adjustment and tendered back the $164.04 and his note, which were received under and by virtue of the terms of said written contract of adjustment; or if these facts should have appeared in the testimony, the plaintiff should ask t'o have amended his complaint so as to correspond with the proof and made the tender above referred to so that each party might be placed just where they were with reference to the subject of litigation.
*253As this case now stands, the .written contract of loss adjustment has not been canceled or rescinded. The plaintiff still retains all the money and the note that he received from the defendant thereunder, and the defendant is held for a further loss upon an alleged entirely different and oral contract of settlement. It appears to me that this is directly in conflict with what our statutes require that a person who desires to rescind a contract must do.
Section 5934, Compiled Laws 1913, sets out very plainly what one who desires to rescind a contract must do. Such section in substance provides that, if the consent of the party rescinding was given by mistake or obtained through duress, menace, fraud, or undue influence exercised by or with the connivance of the party as to whom the contract is rescinded; or if through the fault of the party against whom the contract is rescinded the consideration fails in whole or in part; or if the consideration becomes entirely void or fails in any material respect from any cause, or by consent of all of the other parties, — the contract may be rescinded.
Section 5936, Compiled Laws 1913, provides that when not by consent rescission can be accomplished only by the use, on the part of the party rescinding, of reasonable diligence to comply with the following rules:
1. Ho must rescind promptly upon discovering the facts which entitled him to rescind, if he is free from duress, menace, undue influence, or disability, and is aware of his right to rescind; and,
2. He must restore to the other party everything of value which he has received from him under the contract; or must offer to restore the same upon condition that such party shall do likewise, unless the latter is unable or positively refuses to do so.
That the loss adjustment in writing for $250, signed by the insurance company by their adjuster and the plaintiff, is a contract, cannot be disputed.
The plaintiff admits he signed that contract, as the following testimony of the plaintiff, on cross-examination will show:
Q. I show you exhibit 1, the loss adjustment, and ask you if that is your name on the bottom ?
A. Tes.
*254Q. You signed that?
A. Yes, that’s my writing.
Q. You knew you were signing up an adjustment when you signed this?
A. Yes.
Q. That was the adjustment for the grain you had lost ?
A. Yes.
Q. It was the insurance adjuster who handed you that to sign?
A. Yes.
Q. That was on the 12th day of August, 1914 ?
A. Yes.
Q. You got a copy of this paper you signed up?
A. Yes.
Q. And you have held that in your possession all the time since ?
A. Yes.
Testimony which shows that at the time Mathias received the check he knew the amount of the cheek is as follows:
Q. Mr. Mathias, at the time you got your check you knew it was a check from the insurance company for your loss of grain ?
A. Yes. .
Q. And you knew the amount of it ?
A. Yes.
Q. $164.04?
A. Yes.
Q. Jake Graeber told you all about that?
A. Yes.
Q. At that time Jake Graeber told you you were getting back your note marked paid as a part of the settlement of the insurance?
A. Yes.
Q. And you took the note ?
A. Yes.
Q. And you took the check?
A. No.
Q. Well, you indorsed it and told Graeber to give you credit for the money?
A. Yes, it went on the land debt.
*255. Q. Now, Jake Graeber explained this whole matter to you in-German ?
A. Yes, he told me.- He just showed me the check.
Q. He told you who it was from and what it was for ?
A. Yes.
Q. And you said that was all right when he handed those things-to you ?
A.- He said.it was;not enough.
Q. But you took it?
A. What could I do ? I didn’t know better than to take it.
Q. But you took it ?
A. Yes.
Q. At the time you signed exhibit 1 here, you knew it was an adjustment with respect to the loss of your grain.?,-
A. Yes. He thought it was $335.
■This testimony conclusively shows that the plaintiff signed exhibit 1, the written loss adjustment, and he knew what he was signing when he did sign it, and that when he signed the check for $164.04 he knew the amount of that check, and he accepted his note back, and without any protest so far as the testimony shows.
- Throughout all this evidence there is nothing which charges deceit, misrepresentation, or fraud; and it cannot be successfully disputed that exhibit 1, the loss adjustment signed in writing by both.the plaintiff and defendant, is a contract. Not only that, but it is a contract, the full benefits of which the plaintiff accepted and retained. He received and retained the full amount of said written settlement by receiving $164.04 and his note, a total of $250. He has never rescinded that contract; never offered to return the money received thereunder ; never offered to return the note for the premium; and notwithstanding that this contract was admittedly made, the plaintiff proceeds to bring in court another action alleging a different cause of action, totally disregarding this contract and entirely failing to offer to rescind and restore to the defendant the money and the note and everything of value received under said contract.
In the case of Swan v. Great Northern R. Co. post, 258, L.R.A. 1918F, 1063, 168 N. W. 651, a. case which the writer claims is simi*256lar in principle to the case at bar, where the decision was signed by every member of this court, the following language appears, referring to the statutory provisions above set forth:
“These statutory provisions seem to be decisive of this case. The rules announced are plain and specific. They apply to all contracts. They permit a, person who has been defrauded to rescind the contract to which his consent was obtained by fraud, but in order to rescind he must restore or offer to restore the consideration received on the condition that the other party shall do lilceiuise, unless the latter is unable or positively refuses to do so. These miles are largely codifications of the common-law rules, and are founded upon elementary principles of justice. ‘One who has been led into a contract upon which he has received something of value cannot ignore the contract however induced, wnd proceed in a court of law as if the relations of the parties were wholly unaffected thereby. lie cannot, while retaining its benefits wnd thus affirming the contract, treat it as though it did not exist/ ‘He cannot treat it as good in part and void in part, bud must affirm or void it as a whole. Home Ins. Co. v. Howard, 111 Ind. 544, 13 N. E. 104.
“A contract induced by fraud is voidable at the option of the defrauded party. He has, upon discovery of the deceit, the option of cither rescinding or affirming the transaction. He must do one or the other. He cannot do both. He cannot rescind in pari and affirm the remainder. Guild v. More, 32 N. D. 432, 455, 155 N. W. 44.
“He cannot at the same time be permitted to abrógale the contract and retain the benefits he has received under it. Beare v. Wright, 14 N. D. 26, 31, 69 L.R.A. 409, 103 N. W. 632, 8 Ann. Cas. 1051; Black, Rescission & Cancellation, §§ 561 et seq. If he desires to rescind he must comply with the provisions of the statute and restore or lender what he has received as consideration for the contract on the condition that the other party shall do likewise, unless the latter is unable or positively refuses to do so.”
In the case of Swan v. Great Northern R. Co. where the suit was against the railway company for damages, and the company claiming that for a certain sum in settlement in writing of plaintiff’s claim for damages, plaintiff gave said company a release, this court said concerning plaintiff’s claim for damages: “Respondent has cited sev*257eral cases in support of the general proposition that it is unnecessary to return or tender the consideration received for a release obtained by fraud as a condition precedent to the maintenance of a suit for damages, but that the amount received may be deducted from the verdict if one is obtained against the defendant. The decisions cited by the respondent are, by no means, the only judicial expression upon the subject. On the contrary, there is a square conflict in the decision. A large and probably the largest number of modern decisions announce a doctrine contrary to that contended for by respondent and support a rule in harmony with the conclusions we have reached in applying the provisions of our statutes. See 34 Cyc. 1071; Charron v. Northwestern Fuel Co. 149 Wis. 240, 49 L.R.A.(N.S.) 1162, 134 N. W. 1048, Ann. Cas. 1913E, 939; Burns v. Reading, 188 Mich. 591, 155 N. W. 479. As already stated, a release is a contract, and whore a person, with full understanding of the character and nature of the instrument, executes a release and receives a consideration therefor, there is no more reason why he should be excused from returning or tendering a return of the consideration received than in other cases where a rescission is sought.”
The case of Swan v. Great Northern R. Co. was an action for damages, and in rescission of a contract, and this court has unanimously held that, before said action could be obtained, Swan would be compelled to return the benefits which he received under the alleged settlement for which he gave his release.
It is clear the same principle applies to the case at bar. The plaintiff, knowing that he had signed the written contract of settlement and knowing that he had received $164.04, and his premium note back under said written settlement, if he desired to recover upon any other cause of action or any other alleged contract, he was in duty bound to tender back the benefits which he had received by reason of having signed a written contract in settlement of his claims against the insurance company.