Court Opinion

ID: 8806084
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:48:11.737349+00
Date Added: 2024-06-11T17:04:06.359667
License: Public Domain

SANBORN, Circuit Judge
(dissenting). By the 14th of June, 1915, Payne and his wife had received the $2,200, which was the consideration for their sale of their land, had been informed by the purchaser, Mr. Beard, that he had bought the land, and by their friend, Mrs. Ayers, that a large oil well, reported to be producing 600 barrels per day, had just been brought in on a section adjoining the section upon which their land was situated. Nevertheless they kept the $2,200, made no tender or offer to return it, made no demand for a rescission of the contract until after they subsequently learned, some time in September, 1915, that a gusher oil well producing about 600 barrels a day had been brought in on September 12, 1915, on the section upon which the land in controversy is situated, and that a lease of 80 acres adjoining their land had been sold for $16,000. Then for the, first time they moved to rescind their sale, and on October 17, 1915, they brought this suit. ’In my opinion they were estopped from maintaining the suit by their silence and acquiescence for more than three months after they knew that their agent was their purchaser, and they were not excused for their inaction by their ignorance of their right to rescind, because ignorance of the law ordinarily excuses no man, and reasonable diligence, the mere asking the question of any lawyer, would have informed them of their right. “Whatever is notice enough to excite attention, and put the party on his guard, and call for inquiry, is notice of everything to which such inquiry might have led. When a person has sufficient information to lead him to a fact, he shall be deemed conversant with it.” Kennedy v. Green, 3 Myl. & K. 722; Wood v. Carpenter, 101 U. S. 135, 141. 25 L. Ed. 807; Parker v. Kuhn, 21 Neb. 413, 421-426, 32 N. W. 74, 59 Am. Rep. 838; Wright v. Davis, 28 Neb. 479, 483, 44 N. W. 490, 26 Am. St. Rep. 347. If Payne, by merely refusing to inquire whether or not he had the right to rescind, could preserve his option to do so three months, he could by the same inaction preserve it indefinitely.
When Beard, by his letter of June 11, 1915, informed Payne that he was the purchaser of the land, Mr. Payne had the option to return the purchase price and rescind the sale, or to remain silent and thereby to affirm it. But he had not the right to speculate upon his option, tie could not lawfully wait until developments, discoveries, and changes in value occurred, and then rescind if the property had increased in value, and affirm the sale if it had not. Delay, vacillation, acquiescence, even for a short period of time, is in itself an irrevocable election to affirm, especially in the case of the side of such speculative property as that here involved. The Supreme Court early tersely expressed the established rule upon this subject, which seems to me controlling in the case at bar, in these words:
“Where a party desires to rescind upon the ground of mistake or fraud, he must, upon the discovery of the facts, at once announce his purpose, and *252adhere to it. If he he silent, and continue to treat the property as his own, he will be held to have waived the objection, and will be conclusively bound by the contract, as if the mistake or fraud had not occurred. ■ He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsisted. These remarks are peculiarly applicable to speculative property like that here in question, which is liable to large and constant fluctuations in value.” Grymes v. Sanders, 93 U. S. 55, 62, 23 L. Ed. 798; Twin-Lick Oil Co. v. Marbury, 91 U. S. 587, 591, 593, 23 L. Ed. 328; Hayward v. National Bank, 96 U. S. 611, 618, 24 L. Ed. 855; Ward v. Sherman, 192 U. S. 168, 175, 176, 24 Sup. Ct. 227, 48 L. Ed. 391; McLean v. Clapp, 141 U. S. 429, 432, 12 Sup. Ct. 29, 35 L. Ed. 804.
And this court has stated this rule in the following words and has repeatedly enforced it:
“Upon the discovery of the fraud they could not if they would, avoid an immediate choice of an affirmance or a repudiation of the trade. If one who is induced to make a trade or sale by fraud would rescind it, he must immediately, upon his discovery of the fraud, announce his intention so to do, and return all the consideration he has received, to the end that the parties may be put in statu quo before subsequent transactions have made such action impossible. Silence, delay, vacillation, acquiescence, or the retention and use of any of the fruits of the sale or trade that are capable of restoration, for any considerable length of time after the discovery of the fraud, constitute a complete and irrevocable ratification of the transaction.” Stuart v. Hayden, 72 Fed. 402, 411, 412, 18 C. C. A. 618; Kinne v. Webb, 54 Fed. 34, 38, 4 C. C. A. 170, 174; Rugan v. Sabin, 53 Fed. 415, 418, 3 C. C. A., 578, 580; Scheftel v. Hays, 58 Fed. 457, 461, 7 C. C. A. 308, 312; Wheeler v. McNeil, 101 Fed. 685, 688, 41 C. C. A. 604, 607; Burk v. Johnson, 146 Fed. 209, 217, 218, 76 C. C. A. 567, 575, 576; Richardson v. Lowe, 149 Fed. 625, 627, 628, 79 C. C. A. 317, 319, 320; Roseboom v. Corbitt, 196 Fed. 627, 634-635, 116 C. C. A. 301; International Harvester Co. v. Oliver (C. C.) 192 Fed. 59, 61; Chicago, St. P. & K. C. Ry. Co. v. Pierce, 64 Fed. 293, 296, 12 C. C. A. 110; Sagadahoc Land Co. v. Ewing, 65 Fed. 702, 705, 13 C. C. A. 83; E. Bement & Sons v. La Dow (C. C.) 66 Fed. 185, 194; Kingman & Co. v. Stoddard, 85 Fed. 740, 746, 29 C. C. A. 413, 419; Hein v. Westinghouse Air Brake Co. (C. C.) 172 Fed. 524, 526; Browning v. Boswell, 215 Fed. 826, 836, 132 C. C. A. 168.
The property sold was of the most speculative character. Payne had drilled for oil upon it and failed to find it. Drilling for oil was proceeding on the lands in the vicinity with varying success. After Payne learned that Beard was his purchaser, and before he demanded rescission, a period of more than three months, very profitable oil wells were sunk in the vicinity of this land, and its market value was vastly increased. Then it was that the plaintiffs for the first time demanded rescission. I think they ought not to be permitted thus to speculate upon their option, to refuse to exercise it, if the property failed to rise in value, and to exercise it after three months, when its value was so greatly increased. By their retention of the $2,200, their delay and acquiescence in the sale for three months after they knew that Beard was their purchaser, and until the relative value of the land and the $2,200 had entirely changed, it seems to me that they had, under the rule of law which has been quoted, irrevocably elected to affirm their sale, and had estopped themselves from revoking that election or rescinding their conveyance.