Court Opinion

ID: 7968287
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:43.115879+00
Date Added: 2024-06-11T16:34:42.423080
License: Public Domain

Collins, J.
There is but one feature of this case which we need to consider, and that is presented by appellant’s fifth assignment of error, — that the conclusion of law ordering judgment in plaintiff’s favor was not justified by the findings of fact. When purchasing stock shares of the Charleston Iron Company from defendant, in February, 1892, plaintiff paid a part of the agreed price, and executed and delivered his promissory notes for the balance. These notes were renewed and interest was paid several times, the last renewal being in June, 1892.
This action was commenced in January, 1893, to compel-a surrender and cancellation of the notes, and to recover the various sums of money paid by plaintiff, on the ground, as alleged in the complaint, that false and fraudulent statements and representations as to the depth in iron ore to which the mining company had sunk its shafts and pits were made by defendant and his agent to plaintiff with intent to deceive and defraud the latter, and to induce him to purchase the stock shares in question.
These allegations were found to be true, and the court also found that plaintiff relied upon and believed them when buying the stock. It then proceeded to find that plaintiff discovered the false and fraudulent character of these statements and representations in the month of July, 1892, and that afterwards, and prior to January, 1893, he had several interviews and communications with defendant concerning the payment of his notes, executed and delivered in renewal in June previous, then past due; that in none of said interviews and communications did plaintiff call defendant’s attention to the fact that false and fraudulent statements and representations had been made to him, nor did he in any way repudiate the transaction or claim that it should be annulled on that ground. On the contrary, the plaintiff at these interviews and in these communications, some of which occurred in the first half of the month of January, 1893, informed defendant that he did not have the money with which to pay the notes, and that the latter would have to carry them along for some time. He first made the *468claim now put forward on or about January 19, 1893. It will thus be seen that a period of more than six months elapsed after plaintiff learned, that he had been deceived and defrauded before he mentioned it to defendant, or manifested an intention to repudiate his obligations.
During this period of time he had frequent interviews and communications with defendant respecting the payment of his paper, but at no time did he intimate that he had been deceived and defrauded, or that he intended to refuse payment. His default was always excused on the ground that he was not in funds, and he frequently requested defendant to hold the notes for payment in the future. He did not, after knowledge of the alleged fraud and deception, renew the notes, nor did he in express words affirm the transaction, but he said and did things wholly inconsistent with a purpose or intention of refusing to abide by it. He must be deemed to have waived his right to rescind upon the ground of fraud, and to have elected to retain and pay for the stock shares.
While the facts are different in the two cases, no real distinction can be pointed out between plaintiff’s acts and conduct after he discovered the fraud and those of appellant in Marshall v. Gilman, 47 Minn. 131, (49 N. W. 688.) Any act of ratification of a contract after knowledge of the facts authorizing a rescission amounts to an affirmance, and terminates the right to rescind. Kraus v. Thomp\son, 30 Minn. 64, (14 N. W. 266.) See, also, Crooks v. Nippolt, 44 Minn. 239, (46 N. W. 349.) Mere passiveness, even for an unreasonable length of time, will terminate the right.
It is the duty of a party who has been induced to enter into a contract through fraud to act upon the first opportunity after discovering such fraud, and to rescind the contract by repudiating its obligations and restoring what has been received under it, if he desires to avail himself of his right to rescind. He is bound to elect what course he will pursue within a reasonable time, at least, after learning of the deception, and is not at liberty to hesitate and delay or wait for a future view of his own convenience, or of the market value of the property, before determining the question of affirmance or rescission. Masson v. Bovet, 1 Denio, 69; Baird v. Mayor, etc., of N. Y., 96 N. Y. 567; Key v. Jennings, 66 Mo. 356; *469Hunt v. Blanton, 89 Ind. 38. As to the circumstances under which this rule will be applied, see cases collated in 21 Amer. & Eng. Enc. Law, p. 80, note 2. %
Under the findings of fact in respect to plaintiff’s acts and conduct for a period of six months after he discovered the fraud and deceit practiced upon him, he is not entitled to the relief demanded in his complaint.
Order reversed.
(Opinion published 57 N. W. Rep. 1134.)