Raymond v. Edelbrock , 15 N.D. 231 ( 1906 )

I concur in the foregoing opinion, but not in all that is said on the question of rescission. The point urged by appellant's counsel is that the third paragraph of the answer, which alleges that the contract is void because of fraud in its procurement, and sets forth the particular fraud relied upon for declaring it void, i. e., that the plaintiff falsely and corruptly misstated its contents and thus secured the defendants' signature, does not state a defense, because it does not alleged a rescission of the contract prior to the commencement of the action. It is said that the first and only notice the plaintiff has received that the defendants claim that the contract is void for fraud was given by their answer, and it is urged that they cannot disaffirm by their answer, but on the contrary, that the answer must, to be sufficient, allege a precedent rescission. The contract in question was executory and defendants have received nothing to return as a condition for disaffirmance. It is not contended that the answer is not sufficient in form or substance to constitute a disaffirmance. Their sole contention is that the disaffirmance must have occurred before the action was brought, and must be so alleged. As applied to an executory contract upon which nothing has been received, such as in the case at bar, the contention, in by opinion, is not sound. The answer alleges that the defendants' consent to the contract was procured by fraud. This made the contract voidable and gave them the right to render it void by proceeding in the manner prescribed by the chapter on rescission. There is nothing contained in that chapter which forbids a disaffirmance by answer. The right to disaffirm, existing, the election to do so is manifested and effected (1) by a repudiation of the contract; and (2) by a. return of anything of value received, where a return is necessary. In this case nothing of value having been received, the only act required was the declaration of these defendants that they refused to be bound by the contract and this was sufficiently done in their answer. The answer in this case contains an express disaffirmance and is notice to the plaintiff that the defendants refuse to be bound. There is then no absence of notice and the case does not therefore present the question as to whether a rescission can in any case be effected without notice of some kind of the election to rescind. The rule of the cases as stated in 24 Am. Eng. Enc. Law (2d Ed.) 645, is that "a party who intends to rescind a contract must within a reasonable time give to the other party notice of disaffirmance or must in some way communicate to him his intention to rescind." And this court approved the rule in the recent case of Sonnesyn v. Akin, 14 N.D. 248, 104 N. W. 1026, 1030.

The requirement that property or value received be returned is merely an incident of the rescission, and I do not understand that the fact that there is no return required in a particular case excuses the party having the right to rescind from actually repudiating by notice of some kind or by some act which will communicate his election. Such contracts are not void until disaffirmed. The first requirement of a rescission is that "he must rescind promptly" (Subdivision 1, section 3934, Rev. Codes 1899), and. it is apparent that this cannot be done by silence and nonaction.

MORGAN, C. J., concurs in this view.

(107 N. W. 194.)