Yaw v. Roberts , 9 Kan. App. 135 ( 1899 )

The opinion of the court was delivered by

Mahan, P. J. :

This is an action brought by the defendants in error to rescind a contract for the .sale of real estate upon which the defendants had paid $290 of the purchase-money and' $13.33 taxes. The vendors remained in possession of the land. The facts upon which the rescission was sought are, first,' that the contract or bond, not being signed by the defendants, could not be enforced against them, as held. by the supreme court in the case of Guthrie v. Anderson, 47 Kan. 383, 28 Pac. 164, and that the defendants had refused performance; that the bond or contract had been recorded and was a cloud upon the plaintiffs’ title. The principal facts were not denied by the defendants, but they alleged, as an excuse for their failure to perform, misfortunes which rendered them financially unable to do so. They did not see'k tó take advantage of the fact that the plaintiffs had not tendered restitution of the purchase-money and taxes by way of bar to the suit, as they might, but, alleging such payment, asked that the plaintiffs might do equity by refunding the money before rescission and cancelation were decreed, and that the decree might be made conditional thereon. The district court decreed rescission and cancelation but denied to the defendants the restitution of the purchase-money and taxes paid by them. Necessarily, the facts alleged, in order to disclose the right of rescission, are practically the same as would have been required for a specific performance, and there was a»n alternative prayer in the petition that the plaintiffs. have a decree for specific performance for the sale of the land to pay the remainder of the purchase-money; but it was not, nor could it be, seriously contended for against the objections of the defendants. Hilliard, in his work on Vendors (paragraph 6617), says :

“One party who would rescind the contract on account of the other’s failure to comply with the conditions, must be in no default himself ; and both must be placed as they were when the contract was made.”

This position is sustained by our supreme court in Jeffers v. Forbes, 28 Kan. 174, 182; Bainter v. Fults, 15 id. 323; Bell v. Keepers, 39 id. 105, 17 Pac. 785; The State, ex rel., v. Williams, 39 id. 517, 18 Pac. 727. See, also, Armstrong v. Pierson, 5 Iowa, 328; Nason v. Woodward, 16 id. 216; Higby v. Whittaker and Burchard, 8 Ohio, 198. If the parties by voluntary agreement had rescinded the contract, the defendants would. have been entitled to recover the consideration paid by them. Defendants in error contend in opposition to this rule and in support of the judgment that this action was merely to quiet title. We cannot agree with this view of counsel. It is true that it was upon the ground that’the bond, being recorded, created a cloud upon their title from which the court had jurisdiction to grant relief, but it nevertheless is true that the action is to rescind the contract and to relieve the plaintiff from all obligation thereunder. There is no question made, as we understand it, that the relief obtained by the plaintiffs was not proper relief. It is further true that the defendants were not bound to purchase the land ; that the contract which plaintiffs signed could not be enforced against them. It is said again that the defendants did not show themselves to be entitled to any affirmative relief.

As we have heretofore stated, the law is that a rescission can only be decreed upon the terms that the parties are placed in the position they formerly occupied. It is further contended that the defendants, not having performed, nor offered to perform, the conditions of the bond or contract, are not entitled to recover back the money paid by them unless the plaintiffs are unable to perform the conditions of the bond on their part. And in support of this they cite us to Browne on the Statute of Frauds, sections 122, 122b, 486; Barickman v. Kuykendall, 6 Blackf. (Ind.) 21; Kirby v. Harrison et al., 2 Ohio St. 327; Morris v. Derr, 55 Kan. 569, 40 Pac. 908; Gregg v. Von Phul, 1 Wall. (U. S.) 274. Without a rescission, or the existence of facts that would entitle the vendee to a rescission, this contention is sound. But, as we have said, had there been a recission by mutual agreement, the purchase-money paid could be recovered ; and where a rescission is sought even on the ground of fraud on the part of the defendant, he must be tendered a return of every consideration paid by him before it can be decreed.

In Morris v. Derr, supra, it is said, by Mr. Justice Allen, speaking for the court: “The pivqtal question is this case is, Did taking possession of the land which was the subject of the contract between the parties by the defendant operate as a rescission of the contract? ” He then proceeds to discuss the evidence as to what the defendant did and said upon taking possession of the land, and concludes: “We are satisfied that he did not intend to render himself liable to repay the money he had already received from the plaintiffs, nor to prevent the delivery of the deed on payment of the balance due.” It is evident that had the court believed the defendant by his act had rescinded the contract, it would have sustained the plaintiff’s action to recover the consideration paid. In the case of Gregg v. Von Phul, supra, the question presented in this case is not raised. In Kirby v. Harrison et al., supra, the question is not decided, nor is it discussed in the briefs of counsel nor in the opinion of the court. A return of the purchase-money was not sought. The rescission was resisted upon the grounds that no notice had been given before the suit and that a tender had been made on the part of the defendants. The substance of what is said by Mr. Browne, in his work on the Statute of Frauds, is to the effect that, before the vendee can recover the purchase-money paid upon contract for the purchase of land, facts must exist which would warrant him in claiming a rescission. Had the plaintiffs stood upon the contract the defendants could not have maintained an action to recover the money. They were in possession; they seek affirmative relief by a rescission, and the law seems to be well settled that to obtain this relief they must refund, or offer to refund, all that they received under the contract; that they cannot repudiate it in any case and retain any benefits thereunder. It is immaterial why they seek a rescission. It follows that the judgment of the trial court is not sustained by the evidence and is contrary to law, and the defendants’ motion for a new trial should have been allowed.

The judgment is reversed and the case remanded.