Weber v. Myhre , 191 Wis. 263 ( 1926 )

Crownhart, J.

The plaintiff brings this action for rescission of the contract, by which the plaintiff purchased of the defendant a stock of, drugs, which contract was entered into in reliance upon certain false and fraudulent representations of the defendant. It appears that the plaintiff paid the purchase price and entered into the premises and conducted the business for a couple of months before he discovered the false representations. Upon such discovery he notified the defendant of his intent to rescind the contract, and demanded the return of the purchase price. The defendant refused to return the purchase price or accept rescission of the contract. Plaintiff’s lease expired, and, the landlord refusing to renew the same, he was obliged to store the goods, which 'he did. Thereafter he. sought a new location and removed "the goods to the new .location, and proceeded to carry- on business and make sales from the stock of goods, replenishing the same by new goods from time to time. Upon the commencement of this action plaintiff offered to return the stock of goods then on 'hand and make full account for any deficiency.

This court has held in substance that in an action for rescission the complaining party must be in position to make restoration and put the other party in statu quo. Manifestly, the plaintiff in this case was not in position to make restoration at the time he offered to rescind the contract, and certainly he was not in position to restore the stock of goods when he brought this action. Therefore, we are of the opinion that the action for rescission will not lie. However, under our liberal system of pleading it has often been held that a complaint will not be demurrable if 'it states facts sufficient to make a cause of action, simply because the plaintiff has demanded relief to which he is not entitled. McLennan v. Church, 163 Wis. 411, 158 N. W. 73; Lipman v. Manger, 185 Wis. 63, 71, 200 N. W. 663.

The complaint in this case states a cause of action in fraud or deceit. In the first place, facts are alleged from which it clearly appears' that the defendant made false representations and held out false inducements, whereby the plaintiff was induced to enter into the contract' to his hurt, arid that the defendant had no intention at the time to carry out his part of the contract or attempt to do so. See German Nat. Bank v. Princeton State Bank, 128 Wis. 60, 107 N. W. 454, where the court, by Mr. Justice Wins-low said:

“It is well settled that a sale of property may be set asicje as fraudulent either (1) because it was induced by false and fraudulent representations which were relied upon by the seller, or (2) because of the existence of an undisclosed intention not to pay on the part of the buyer. These are two separate and distinct wrongs: the first is complete without intent not to pay, the second is complete without false representations. Both may be present in a given case, but either is complete and actionable without the other. Hart v. Moulton, 104 Wis. 349, 80 N. W. 599."

The same rule must hold where the seller instead of the buyer is the guilty party.

Furthermore, it is plain from the complaint that the defendant made false representations of facts which he claimed tq then exist, which were an inducement to the contract. This sufficiently stated a cause of action in deceit.

The defendant contends that these false representations were as to a future promise and that they are not sufficient to sustain a cause of action. We think the defendant is in error in this. The defendant represented that he could and would obtain a renewal of the lease which he then had, in favor of the plaintiff, for a five-year term with an option to renew for another period of five years. This, standing in and of itself alone, might be considered a promise in the future, but he did more, — he represented that'he had seen the'landlord and that the landlord had agreed to such renewal of the lease. Then, when notified that the plaintiff would not purchase without such renewal of the lease, he stated that he had talked with the landlord and that the landlord had promised to renew the lease, and then advised the plaintiff not to confer with the landlord for the reason that the landlord might wish to increase the rental if he knew the plaintiff was buying the business. Thereafter he informed the plaintiff, that he had seen the landlord and a written lease had been duly prepared ready for execution, and that the owner was ready and willing to execute such lease. These statements of fact are alleged to be false and fraudulent, and made for the sole purpose of inducing the plaintiff to purchase the stock of goods, and that the plaintiff relied thereon in making such purchase, to his damage.

The defendant relies upon Legler v. Tyler, 184 Wis. 238, 199 N. W. 149. That case was quite different from the one before us. There the only false representation of a present fact was the representation that the defendant had a letter from a prospective purchaser offering to buy the premises at a stated price. The court held in substance that the statement with reference to. the letter was of an immaterial fact, and therefore not a sufficient allegation of fact to constitute a cause of action in fraud.

We shall not attempt to review the authorities cited from other states, for the reason that we feel the complaint clearly states a cause of action. The demtirrer to the complaint was properly overruled.

By the Court. — The order of the trial court is affirmed.