Court Opinion

ID: 5447848
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:14:01.272047+00
Date Added: 2024-06-11T08:32:15.836802
License: Public Domain

McFarland, J.
A demurrer to the amended complaint was sustained, and, plaintiff declining to further amend, judgment was rendered for defendant, from which plaintiff appeals. The complaint is substantially as follows: Defendant is the uncle of plaintiff, and ever since the latter’s boyhood plaintiff was under the control and direction of defendant, and in his employ, and a part of the time resided with him. Defendant was accustomed in a great measure to guide and direct plaintiff’s actions in business and other matters; was tyrannical and overbearing, and impatient of opposition; and thus had and retained great influence over plaintiff, who was accustomed to rely upon and be guided by defendant in matters of business. Defendant owned much more than a majority of the stock of a certain corporation called the Bancroft Company, and entirely controlled and managed its affairs. Defendant was the president of said corporation, and plaintiff was employed as the manager of its business. In September, 1887, plaintiff became the owner of thirteen hundred and forty-five shares of the stock of said corporation, and continued to own the same until the thirteenth day of February, 1891. In November, 1890, plaintiff borrowed three thousand five hundred dollars from the People’s Home Savings Bank, and, as security therefor, pledged to said bank said thirteen hundred and forty-five shares of stock. On February 12, 1891, defendant demanded of plaintiff that plaintiff should transfer and deliver to defendant the said thirteen hundred and forty-five shares of stock, and all his interest in the assets and property of said corporation for the sum of five thousand dollars, and then and there “ informed plaintiff that unless he should forthwith transfer to him [defendant] the said stock and property on the terms aforesaid, *377he [defendant] would inform the said bank that plaintiff was not the owner of said stock, or any part thereof, and that plaintiff had pledged said stock without right or authority.” He also said that he (defendant) would not pay more than two thousand dollars of said indebtedness of plaintiff to said bank, and would levy assessments on the stock of said corporation to the extent of closing out its business. " Thereupon plaintiff, solely through the influence possessed over him by defendant,, and his habitual fear of defendant, and terrified by the threats aforesaid, and fully believing that defendant would carry said threats into execution, and would make to said bank and to others the statements so threatened, and that by reason of such statements plaintiff’s character and reputation would be blasted and destroyed in the community in which he was residing and doing business, on the thirteenth day of February, 1891, acceded to said demand.” Thereupon defendant directed plaintiff to deliver said stock to the said Bancroft Company, and to give to said company a bill of sale of all his interest in the property of said corporation, which plaintiff did on said day, " solely for the reasons aforesaid.” The said company paid said indebtedness to said bank, and paid the balance of the five thousand dollars to plaintiff. It is averred that "plaintiff’s consent to so transfer and deliver said stock to said corporation and to execute the bill of sale aforesaid was not freely given, but was obtained solely by the means aforesaid, and in consequence of the menace and the undue influence so exercised by defendant as aforesaid.” Also “that, as plaintiff is informed and believes, the value of said thirteen hundred and forty-five shares of stock on the said thirteenth day of February, 1891, was the sum of fifty thousand dollars, as was then well known to defendant, and plaintiff has been damaged by the wrongful acts of defendant as aforesaid in the sum of forty-five thousand dollars.” It is also averred, upon information and belief, that after said transaction defendant so mismanaged the affairs of said corporation *378that “ the said shares of stock became, and were at the commencement of this action, greatly depreciated, and of little or no value.” The prayer is for “ judgment against defendant for the sum of forty-five thousand dollars and for costs of suit.” It does not appear when the action was commenced, but the present complaint was filed November 6, 1893, nineteen months after the alleged cause of action accrued. No offer to rescind was ever made by appellant.
Waiving all questions as to the sufficiency of the complaint in other respects, we think that the learned judge of the court below was right in holding that it does not show any ground for avoiding the sale through want of the free consent of the appellant, unless that ground be “undue influence”; and that in such a case the remedy is rescission. It is admitted that no case can be found in all the books where a general action for damages has been maintained upon the ground of undue influence in procuring a sale or other contract. In Le Caux v. Eden, 2 Doug. 594, the question was whether an action at common law could be maintained for an imprisonment on a capture at sea as prize, and Duller, justice, said: “ There is no case in which it has ever been holden that such an action would lie; and if it could be maintained, there are, in every way, such frequent opportunities for it that it must have happened in every day’s practice, or some instances at least must have been in the memory of those who have had long experience in ‘Westminster Hall’; but there is not the smallest trace of such a determination, or even dictum, in any court in England. A universal silence in Westminster Hall on a subject which so frequently gives occasion for litigation is a strong argument to prove that no such action can be sustained.” That case was decided in 1781, and dealt with litigation which could arise only out of the exceptional condition of war. How much stronger, therefore, is the authority of more than another hundred years of “ silence” in the courts of both England and America, upon a subject which, both in *379peace and war, “ so frequently gives occasion for litigation.” But, in addition to this negative authority, it is clear upon principle that this present action should not be maintained, because to maintain it would be to violate the wholesome and fundamental doctrine that in such a case the party claiming to be aggrieved must promptly rescind, or offer to rescind, so as to put the other party in statu quo. He cannot wait to speculate on future contingencies. The sale from appellant to respondent was not void; it was only voidable upon restoration of the consideration paid. It has been held, it is true, that an action to recover damages for a deceit or fraud will lie; but that is on the ground that the party defrauded had no knowledge of the facts constituting the fraud. Even in that case great wrong is sometimes done when rescission is not required; but the rule should not be extended to other cases to which it has not been applied. The provisions of our Civil Code, all construed together, do not change the law on the subject. If it be said that a case could be imagined where the facts constituting the alleged undue influence were not known to the complaining party, and that there rescission should not be required, it is sufficient to reply that the case at bar is not such case.
The judgment is affirmed.