Court Opinion

ID: 9688595
Source: CourtListenerOpinion
Date Created: 2023-08-24 17:57:36.267457+00
Date Added: 2024-06-11T18:18:40.555952
License: Public Domain

RENTTO, Judge
(dissenting).
The judgment appealed from awarded plaintiffs a recovery of $1.00, being the amount of the jury verdict on their cause of action for damages arising from defendant's breach of the contract for sale. It also granted defendant's request for strict foreclosure of the contract, allowing the plaintiffs a period of ten days in which to pay defendant the sum of $29,106.81, in default of which defendant was entitled to immediate possession of the premises. No mention was made therein of a denial of plaintiffs' request for a rescission.
On the rescission feature of this litigation the only finding made by the court is this one:
"That plaintiffs discovered the alleged defect in the title to the real property described in the abstract of title received in evidence as Exhibit '9', in April of 1965, and did not elect to rescind the contract for deed, remaining in possession and collecting the rents on the property, from that period until April of 1967, when plaintiffs elected to rescind the contract."
Concerning this phase of the case it concluded:
"That plaintiffs are not entitled to a rescission of the contract for deed executed on or about August 15, 1964, *335by reason of their failure to rescind timely upon discovery of the alleged fraud as to Greenway Street and Fifth Avenue and are estopped from asserting such right to rescind, having been in the possession of the property, collecting the rents and profits from same, for a period of two and one-half years."
The court found further that at the time of trial the defendant had merchantable title to the property and was ready, willing and able to perform his obligations under the contract.
Pursuant to SDCL 1967, Ch. 53-11, a party may unilaterally rescind a contract by notifying the other party of his election to do so and offering to restore everything of value that he has received. He may thereafter bring an action to enforce rights arising therefrom. This is a law action and is often referred to as an action on a rescission. It is not to be confused with an action for a rescission provided for in SDCL 1967, Ch. 21-12. Sweeney v. United Underwriters' Co., 25 S.D. 1, 124 N.W. 1107; Purcell v. International Harvester Co., 37 S.D. 517, 159 N.W. 47; Sabbagh v. Professional & Business Men's Life Ins. Co., 79 S.D. 615, 116 N.W.2d 513; Main v. Professional & Business Men's Life Ins. Co., 80 S.D. 288, 122 N.W.2d 865. The latter proceeding is on the equity side of the court. In it a notice prior to the commencement of the action is not necessary and rescission is affected by the court's decree.
The category into which this action falls is not clear from the trial record. There are indications that it was treated as an action on a rescission and also that it was regarded as an action for a rescission. It seems to me that the majority opinion views it as an action on a rescission. If it is, then in order to maintain it, the plaintiffs must prove that they unilaterally rescinded the contract prior to its commencement by serving 'the required notice and offering to restore. Hegge v. Hegge, 44 S.D. 555, 184 N.W. 800. It is doubtful that the letter of April 25th indicated that plaintiffs had elected to rescind, but be that as it may, one of the essentials of such rescission is that it be done promptly. SDCL 1967 53-11-4.
*336As to the matter of notice the court found that it was not timely and for that reason held that plaintiffs were not entitled to a rescission of the contract. The majority in reversing this action of the trial court has to hold that the court's finding is clearly erroneous. SDCL 1967, 15-6-52(a). In this I am unable to concur.
If the action is an equitable one for a rescission, the finding of untimeliness could justify the trial court's holding denying rescission. The general rule seems to be that circumstances incident to a delay in bringing a suit for rescission may render it inequitable to grant relief. 12 C.J.S. Cancellation of Instruments § 51; 13 Am.Jur.2d, Cancellation of Instruments, § 44. This record furnishes ample support for so holding, especially in view of the fact that defendant in his counterclaim offered to perform and at the time of trial was ready, willing and able to perform. SDCL 1967 21-50-2. See Moter v. Hershey, 48 S.D. 493, 205 N.W. 239, and Walsh v. Bellamy, 68 S.D. 291, 2 N.W.2d 102.
It is generally held that a suit for damages and one for restitution for breach of contract are alternative remedies. Restatement of the Law— Contracts, § 381. When one seeks damages he seeks to enforce the contract whereas restitution is based on its rescission. Ordinarily both are not available as remedies for a single injury by breach of contract. Corbin on Contracts, Vol. 5A, § 1223. The majority opinion by now allowing rescission is, in effect, awarding relief which plaintiffs elected to seek from the jury but was denied them when only nominal damages were awarded. The damages sought and not allowed included amounts paid on the contract, plus interest, closing expenses, and loss of profits.
Accordingly, I dissent.
HOMEYER, J., concurs in this dissent.