Court Opinion

ID: 9719989
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:12:04.142616+00
Date Added: 2024-06-11T18:24:12.054335
License: Public Domain

BIEGEEMEIER,
J. (dissenting).
The complaint is an action in deceit and asks actual and punitive damages for false and fraudulent representations; the trial court’s findings followed that theory allowing only’ actual damages; neither the word rescission nor hint of it appears in either. Plaintiff stated the evidence would show he rescinded the contract and “This is an action for fraud and deceit”. No order was made at the pretrial hearing to change or limit this theory, as permitted by SDC I9601 Supp. 33.1003.
This court has said in Northwestern Mutual Hail Ins. Co. v. Fleming, 12 S.D. 36, 41, 80 N.W. 147, 148, where
“fraud has been practiced (upon a person) * * * two courses are open to him: (1) He may rescind the contract in the manner provided in the statute; or (2) he may, upon discovering the fraud, bring an action for the deceit * * *”
and in The First National Bank of Webster v. First National Bank of Mobridge, 45 S. D. 335, 338, 187 N.W. 623, 624, (1922):
*633“The right to sue for damages for fraud and deceit without rescission and without an offer to return the property purchased * * * is well established * *
Accord: Kordis v. Auto Owners Ins. Co., 311 Mich. 247, 18 N.W.2d 811, 813. The measure of damages for fraud is “the cash paid by her upon the policy,, with interest”. Rohrschneider v. Knickerbocker Life Ins. Co., 76 N.Y. 216, 32 Am.Rep. 290, cited in 136 A.L.R. 10, 21 and 59. The same result was reached in a similar suit against the defendant in the present action in Stegman v. Professional & Business Men’s Life Ins. Co., 173 Kan. 744, 252 P.2d 1074 (1953) which affirmed recovery of the whole premium paid, though the opinion uses the words “rescind” and “rescission.”
Even in the cases speaking of rescission, return of the policy is sufficient, not return of any part of the premium. The reasoning for this appears in the cases in 136 A.L.R. 8 and 56. Otherwise the company would profit by its own fraud, and, as the Vermont court puts it, require payment for the use of a horse before the rescission. See also McCarty v. New York Life Ins. Co., 74 Minn. 530, 77 N.W. 426; Appleman, Insurance Law and Practice, § 8352 and § 11276 (Vols. 15 and 20). Prompt action by the plaintiff is implicit in the trial court’s findings and judgment for 'him. Defendant offered no proof in .mitigation of the damages. If defendant has sustained, any loss it may have recourse against its own agent. I would affirm.