Court Opinion

ID: 8296970
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:08:25.251604+00
Date Added: 2024-06-11T16:44:07.180918
License: Public Domain

Upon petition to rehear,
Freeman, J., said:
We have examined the earnest petition for rehearing presented in this case. We proceed to notice the proposition urged on our consideration.
First, it is assumed gross injustice has been done the petitioner, by the judgment of this court, and that in favor of a fraudulent vendor.
In reply we need only say, this is not perceived. In the first place, if the other party had appealed, and objected to a rescission, on the ground that complainant could not restore what it had received, or place the vendor in statu quo, it would have been difficult to have met this defense. We have seen no authority holding a party can, as a general thing, rescind a contract, unless he is in a condition to do this,'especially after delay, with the means by ordinary diligence of ascertaining his rights.
*427If this, however, could be done in an exceptional case, it surely could never be done, without requiring the party seeking the rescission, to account for what he had received, and had disabled himself, or was in any way unable to restore. This would be obvious justice. This being so, the complainant, having enjoyed the good will, or advantages, included under these very inapt words to express the matter, would have to account at value at. which sold, and so the ten thousand dollars would still have to be accounted for precisely as • has been done, as to the result. It is impossible to restore these advantages. The vendor has gone out of business — one generally profitable — so desirable, that the purchaser was willing to pay ten thousand dollars for the chance of obtaining what it might of it, by getting the privilege of closing up the bank. This was the real value, as is evident, which was seen and paid for. The mere location was a small matter. If the bank had not gone into liquidation, but had removed to an adjoining building, or even one a block or more from it in the city, it can scarcely be doubted, it would have retained its business, as well as at the old stand. But the advantages we mention have all been enjoyed and can never be restored. The bank cannot now reorganize, call back its capital and customers — yet the complainant objects that it shall not be permitted to retain all this, and still have a rescission. We are unable to see the injustice of the decree made.
As to the iniquity of the respondent, the record shows nothing of it. It shows it paid to Exchange *428Bank, and supposed the incumbrance had been discharged, with good reason. The fraud was only in legal effect, but not the slightest evidence of want of perfect good faith. The rescission goes on the idea that the injury was the same to the purchaser, whether fraud was intended or not; and this is the only ground on which it can stand, from the facts of the record.
It is said, however, the measure of damages in case of an incumbrance when paid off by the purchaser, is the amount of said incumbrance with interest from the time paid, treating such payment as an eviction pro tanto. This is certainly true. But there has been no payment so as to give an eviction pro tanto, with its rights — only . an incumbrance shown to exist, how much at present we have no means of knowing from this record.
It happens unfortunately for complainant, as it says it has been unable to ascertain the amount of the in-cumbrance, so as to pay it off. If it had been done, however, it could only have recovered as on a breach of the covenant of warranty, and could not have gone beyond the amount of purchase money and interest, so that the limit of recovery on the covenant is thus fixed by the covenant.
We see no way to avoid the conclusion we have reached, on the pleadings and the case as presented. The incumbrancer is no party to this suit. We cannot direct a discharge by these parties so as to bind him. Complainant has filed its bill for a rescission, has got what it sought, but objects to the necessary incidentals of the decree sought by its bill. It is in *429a very doubtful position to sustain the claim sought, because unable to return part of the property purchased. Yet now it seeks to have a decree reversed which is precisely what its bill was filed to obtain.
If it had desired, or brought its suit for the relief now sought, it might have been done by making the incumbrancer a party, having an account with him to ascertain what it amounts to, and have had the privilege of discharging that amount, and compelling the vendor to reimburse, if it did not exceed the purchase money. It might in this suit have had the other property assumed to be liable for the debt appropriated in exoneration of the bank, as a purchaser of part of the property, or possibly been substituted to the lien on the same property, by paying off the amount of the debt. But we cannot see how all this is to be effected on a simple bill between vendor and vendee to rescind, and nothing more. In this case we cannot undertake to settle the claim of the incumbrancer, who is prosecuting that claim in another independent suit, or in any way delay him in that matter, by a decree made in this case to which he is no party, and where he cannot be heard. To give the relief sought by the petition, the incumbrancer would have to be a party to the proceeding, that the amount of his in-cumbrance be ascertained. This would require such additional proceedings to be instituted, as would amount in effect to a new suit for this purpose. We cannot direct this at the end of a tedious litigation, when the party has already decreed to him precisely what his bill was filed originally to obtain. The delay of liti*430gation has accumulated the rents, but this was a matter which was incident to such litigation, and the result must be borne.
It would be an extreme stretch of all rules of proceeding, in the face of complainant’s bill, to grant any relief, except rescission. The language is: “And complainant comes now into court, as soon as the defects in the title to the property purchased by it are discovered, and the incumbrances upon said property brought to its knowledge, and asks for a rescission of the contract, and tenders the property ■ and its possession back to respondent, and is willing to account with respondent for the fair and reasonable rents of the property out of the purchase money and interest while the same has been in possession.”- This is what has been granted — can this party now complain? But the trouble is, that then there was claimed, that the whole |25,000, expressed on the face of the deed, was to be repaid, and so complainant was very willing to rescind on these terms. It could well have afforded to do so. But from the proof in this record, no court could have made such a decree. The claim is in the face of all the proof, and one that would have been grossly unjust to allow. But this, as the basis of the above offer, shows that the earnest object of the bill was rescission, and no alternative relief different was desired.
The fact is evident from the whole case, that the complainant never desired to fall back on the alternative prayer, until after the chancellor’s decree, which gave them only the real price of the house and lot, and it was seen that the $25,000 claimed as the pur*431■chase money in the bill, could not be had. The purpose to seek relief under the alternative prayer, came only, we think, as the result of this fact. Had the complainant’s bill been sustained in full, no such claim as is now made would ever have been thought of. The real trouble with complainant is, that he has chosen to take no covenant for or against incum-brances, and desires to have the benefit now of such a covenant under one of warranty.
Dismiss the petition.