Court Opinion

ID: 6241099
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:44:58.002415+00
Date Added: 2024-06-11T08:58:12.036398
License: Public Domain

Opinion by
Mr. Justice Sterrett,
It having been conceded, that the mortgage in suit formed with the lease part of the original contract, the use plaintiff, E. E. Scott, must be conclusively presumed to have taken with knowledge of the facts, and consequently of the reserved right to rescind and of the legal effect of its exercise. When his assignor, in the exercise of this right, recovered possession of the printing press, etc., the contract was by its terms at an end, and the mortgage, being part thereof, fell with it. The defence is not, as plaintiff suggests, based on an equity which has arisen since the assignment of the mortgage was made, but on an equity which sprang out of the exercise of rescission as an essential part of the same contract of which the mortgage was a part. The assignee of the mortgage was given no control over that right; it was not embraced in the assignment, but he took subject to its exercise as part of the contract. It has been suggested that the defendant should not be permitted to take advantage of the result of his own default as a defence ; but the answer to this is, that his defence is the logic of the election to rescind. Had suit been brought for the consideration, in enforcement of the contract, the result would have been different. But the contract being at an end by the act of the use plaintiff’s assignor, the consideration fell with it. The contract having been terminated no action lies.
It follows that the learned court erred in finding that the agreement was collateral to and independent of the mortgage; and in not directing judgment to be entered for the defendant.
Judgment reversed, and judgment for defendant.