Donovan v. Curts

This suit was brought to recover money invested by the plaintiff in a partnership business which she claims she was induced to enter by fraudulent representations of the defendant. The defendant was engaged in a wholesale candy business in the city of Detroit, Michigan. On July 1, 1920, he entered into a partnership agreement with the plaintiff whereby she was to have a half interest in the business for $15,000. The partnership continued until May 25, 1921, when, by mutual consent, it was dissolved and a bill of sale was executed transferring the business to the Curts Candy Corporation. For their respective partnership interests, each partner was to receive 9,500 shares of common stock and 2,000 shares which were to be held jointly. The corporation went into bankruptcy in May, 1922. The plaintiff says that in December, 1921, she first learned that she had been fraudulently induced to enter into the partnership agreement. She demanded a return of her money, but did not get it. On March 17, 1922, she began suit against the defendant by capias ad respondendum to recover damages for fraud and deceit. On March 29, 1922, by stipulation an order was entered quashing the capias. The case stood without further action until May 19, 1923, when the present counsel for the plaintiff appeared and filed a motion to amend the declaration. Over the objection of defendant's counsel, the court permitted an amendment setting forth a cause of action based on a rescission of the contract. On this theory the cause was tried. 'At the conclusion of the case, the defendant moved for a directed verdict, and, in addition to other grounds, urged that the plaintiff could not recover on her amended declaration, the theory of which was rescission, after having filed the original declaration on the theory of affirmance. The court reserved a ruling on the motion under the statute and submitted the case to the jury. Plaintiff received a verdict of $11,802.03. On motion, the court entered a judgment for the defendant non obstante veredicto. The plaintiff has brought error.

As we are of the opinion that the plaintiff cannot recover on her amended declaration, it will not be necessary to discuss other questions presented by the record. When the plaintiff discovered the fraud, she had a choice of two inconsistent and independent remedies. First, she could affirm the contract and sue for damages occasioned by the fraud; or second, she could rescind it and bring an action to recover the money which she had paid. She chose the first. She began suit bycapias, and in both her affidavit and declaration alleged that she had an action for damages for fraud and deceit. Subsequently the writ was quashed by stipulation. Nothing further was done with the suit until more than a year later, when the amended declaration was filed on the theory of rescission. There was no mistake in the remedy first chosen. There was nothing to prevent a prosecution of her suit for damages on the theory of affirmance. She chose that remedy with full knowledge of the facts, and in so doing irrevocably fixed the status of her rights. She could not thereafter rescind the contract. It was no longer voidable. Thomas v. Watt, 104 Mich. 201; Cooper v. Smith, 109 Mich. 458; Mintz v.Jacob, 163 Mich. 280; Weiss v. Stein, 209 Mich. 482; 35 A.L.R. 1153-1163, notes.

The judgment of the circuit court is affirmed, with costs to the defendant.

NORTH, C.J., and FEAD, FELLOWS, WIEST, CLARK, POTTER, and SHARPE, JJ., concurred.