Court Opinion

ID: 3830600
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:01:54.988069+00
Date Added: 2024-06-11T07:40:06.217930
License: Public Domain

I dissent with all possible emphasis from that portion of the decision and opinion of the court which affirms the decree of the trial court in the name of equity relieving W.O. Mitchell of his contractual obligation to D.M. Phillips to discharge certain mortgage liens to the amount of $9,600, upon the lands traded to Phillips and to pay direct to the latter the additional sum of $1,000, making in all $10,600, as, in my opinion, there is not only no equitable ground but not so much as a trace of equitable atmosphere to support this part of the decree affirmed, and such affirmance strikes down an adjudicated contractual right after it has become absolute.
In my opinion, the verdict and judgment recovered by W.O. and Helen E. Mitchell in this case for $12,000 as a difference between the case for $12,000 as difference between of the 310 shares of the stock acquired by W.O. Mitchell in the Oklahoma Bus   Baggage Company in exchange for the aforesaid lands was full measure of their damages recoverable in this case, and such damages were recovered upon the theory that the Mitchells affirmed in its entirety the trade contract under the terms of which W.O. Mitchells obligated himself to pay said $10,600 and gave D.M. Phillips the right to continue to hold 170 of the said 310 shares of stock as "indemnity" against the failure of W.O. Mitchell to perform his obligations in this regard.
In my opinion, the verdict and judgment for $12,000 not only gave the Mitchells the full measure of compensation recoverable by them in this case but fixed as firmly and as absolutely as any adjudication could fix W.O. Mitchell's legal obligation to D.M. Phillips to pay said $10,600, and as firmly and as absolutely as any adjudication could fix the latter's legal right to retain said 170 shares of stock as "indemnity" against the former's failure to perform his obligation by the payment of the same.
In my opinion, when the trial court approved this verdict and gave this judgment for $12,000, the Mitchells were entitled to no further relief under any known principle of law or of equity, or of common justice, unless, as decided in the cases of Bradley v. Bosley 1 Barb. Ch. (N.Y.) 125, and Montgomery v. McLaury, 143 Cal. 83, 76 P. 964, the Mitchells were, or would have been if they had demanded it, entitled in equity to an enforcement of an equitable lien upon the lands traded Phillips as a means of satisfying their judgment for the $12,000, or, if they preferred, to an equitable offset of $10,600 of said $12,000 against Mitchell's obligation to pay said $10,600, and to an enforcement of an equitable lien upon the lands traded Phillips for $1,400 as the balance of said judgment for $12,000.
This judgment for $12,000 left no issue of fact, or of law, or of equity to be determined between the Mitchells and D.M. Phillips; it left nothing but the duty of performance of the contract affirmed, which included a reformation of the deed to R.I. Phillips and a payment of said $10,600 by W.O. Mitchell. It appears from a statement of the trial judge in making the said decree, if not from one or more of the briefs of the parties, although not from any evidence in the case, that at the time of that decree, which was more than a month after the court had rendered judgment upon the verdict for $12,000, the 170 shares of stock held by Phillips as "indemnity" had been Sold at a trustee's sale; but it does not appear whether as the property of Mitchell or the property of Phillips, or whether the trustee's sale was for the benefit of Mitchell or Phillips or both of them, or for what cause or causes it was made; and that sale is irrelevant and wholly foreign to any question involved in this case.
After the verdict and judgment for $12,000, the contractural situation of the parties was simply this: D.M. Phillips was entitled to a decree reforming the deed to R.I. Phillips as a matter of course and to hold said 170 shares of stock as "indemnity" until W.O. Mitchell performed his obligation to pay said $10,600.
The cases of Bradley v. Bosly, supra, and Montgomery v. McLaury, supra, to which reference is above made, are cases of affirmance of the contracts, and are the authorities and *Page 135 
the only authorities upon which the court bases the proposition from which I dissent; but those cases are quicksands to the tread of that proposition when properly analyzed and understood. The Bradley Case merely holds that, when one elects to affirm his contract, notwithstanding a fraud upon him in respect to the value of the property he acquired, he may sue in a court of equity to establish an equitable lien upon the property he traded for the same to the extent of the difference between the actual and the falsely represented value of the property he acquired, and that such court of equity, having acquired jurisdiction for the purpose of enforcing such lien, may also determine the difference between the actual and the falsely represented value of the property he acquired as the measure of his damages. The Montgomery Case merely holds that, upon the principle announced in the Bradley Case, the plaintiff may invoke the jurisdiction of equity to subject his own obligations to pay money, by canceling the same, to the satisfaction of his damages measured by the difference between the actual and the falsely represented value of the property he acquired, and that a court of equity, having acquired jurisdiction for this purpose, may determine the amount of such damages and give personal judgment for that amount by which it exceeds the plaintiff's indebtedness that is canceled. There is some loose and inaccurate language used in this Montgomery Case; but an examination of the case will show that it holds nothing more nor less than I have stated. Both the Bradley and the Montgomery Cases incidentally announce the rule for which I contend in the instant case in terms entirely satisfactory to me. For instance, in the third and fourth paragraphs of the syllabus in the Bradley Case, it is said
"Where a party has been defrauded by another, in the purchase or sale of property, he may rescind the contract, so as to restore the parties to the same situation they were in when the contract was made; or he may affirm the contract, so far as it has been executed, and claim a compensation for the fraud.
"But it must be a very special case which will authorize the injured party to come into a court of equity to have a contract partially rescinded; and it must be one in which the court can see that no possible injustice will be done by such a course."
And in the second and third paragraphs of the syllabus in the Montgomery Case it is said:
"An election to disaffirm a contract induced by fraud, and an effort to obtain a rescission, will not, if resisted, and especially if rendered impossible or of doubtful advantage by the act of the guilty party, bar an action on a subsequent affirmance.
"Where a party has been induced to enter into a contract by fraud, the commencement by him of an action against the other party based on the theory of an affirmance constitutes in itself an affirmance of the contract."
However, it is immaterial what courts of other jurisdictions have held in this regard, as our own court has repeatedly (as for instance in the case of Wesley v. Diamond, 26 Okla. 170,109 P. 524) announced in unequivocal language the familiar rule that a party who has been defrauded in such cases as this may affirm the contract and sue for damages or, if he prefers, may rescind the contract and recover back what he gave the adverse party; but he cannot do both. It is true that under exceptional circumstances a party may affirm in part and rescind in part a contract of this character; but no such question is here involved as the contract in the instant case is affirmed in whole by a recovery of the full amount of the difference between the actual and the falsely represented value of the property traded.
The Mitchells received in the verdict and judgment for $12,000 full compensation for the fraud practiced upon them without regard to the value of the property traded D.M. Phillips, so that no issue justiciable thereafter existed or could thereafter arise in this case without repudiating that verdict and judgment. This verdict and judgment for this amount placed the Mitchells in the same position, in the eyes of the law, as they would have been in if the 310 shares of stock had been worth precisely what it was represented to them to be worth. It left nothing to be done except a performance of the contract according to its terms; but the decree from which I dissent relieves W.O. Mitchell from his legal obligation to perform.
In their petition the Mitchells alleged the difference between the actual value and the represented value of these 310 shares of stock to be $21,000; but, after the jury and she judge had solemnly determined that this difference was only $12,000 by giving the verdict and judgment for that amount upon the theory that the parties were bound to perform this contract, the judge by the decree from which I dissent strikes down a part of the contract and gives W.O. Mitchell an additional $10,600, which makes a total recovery of 22,600, or $1,600 more than the Mitchells claimed in their petition to be the *Page 136 
difference between the actual and the falsely represented value of the 310 shares of stock in question.
It is true that the Mitchells' petition apparently attempts the impossible feat of combining an action for the full amount of damages sustained by them, as if they desired to affirm and stand upon the entire contract with a suit in equity for a rescission of that part of the contract which obligated W.O. Mitchell to pay said $10,600, without any reduction from their damages on account of such rescission; but, until after the verdict for $12,000 and the judgment of the trial court approving the same, the parties and that court treated this as an ordinary action at law for compensatory damages based upon an affirmance of the entire contract. This is shown by the instructions of the court, without objection by either party, to the effect that the measure of the Mitchells' damages was the difference between the actual and the falsely represented value of the said 310 shares of stock, and by the verdict of the jury, in accord with this instruction, for $12,000 as representing such difference in value.
It is also shown by what was said upon the examination of W.O. Mitchell as a witness in behalf of the plaintiffs during which examination he and his counsel, and the trial judge, referring to his obligation under the contract to pay said $10,600, indicated that they understood that, whether the Mitchells lost or won their action at law for damages, W.O. Mitchell would be bound to pay said $10,600. Counsel for the Mitchells questioned W.O. Mitchell as follows: "And no matter what this law suit results in you are to pay those off as between you and him" (evidently referring to the mortgages for $10,600 as "those" and to D.M. Phillips as "him")  — to which question adverse counsel objected, whereupon the judge stated, "What the contract is you have that in writing," to which Mitchell's counsel responded by the following question: "There is no other contract?" and W.O. Mitchell answered: "No, sir; no other contract."
The foregoing statement of my dissent from that portion of the opinion of the court which I have discussed is made with all possible deference to and respect for the adverse view of the majority of my Associates.
I think the decree from which I dissent should be reversed, and that the judgment for $12,000 less the offset of $1,000 allowed without objection should be affirmed; and I concur in the opinion of the court except in the respect shown by the above dissent.
SHARP, C. J., concurs in the dissent.