Belanger v. Howard

• Decision Date: 29 April 1941
• Citation: 166 Or. 408,112 P.2d 1022
• Parties: BELANGER ET UX. <I>v.</I> HOWARD ET AL.
• Court: Oregon Supreme Court

166 Or. 408

112 P.2d 1022

BELANGER ET UX.

v. HOWARD ET AL.

Supreme Court of Oregon.

Argued March 12, 1941.

Affirmed April 29, 1941.

Fraud — Burden of proof

1. A party alleging fraud has burden of proof, and nothing short of a high degree of cogency will suffice.

Vendor and purchaser — Rescission — Evidence

2. Evidence was insufficient to warrant rescission of contract for purchase of mink and nut farm on ground of "fraud" consisting of vendor's misrepresentations as to number of nut trees and yield therefrom and the number and health of the mink, in view of fact that purchaser had discredited himself by his testimony and his actions prior to instituting suit.

Animals — Permit to raise

3. Statutes requiring breeders of fur-bearing animals to obtain permit from state game commission, and seizure and forfeiture by state game commission of fur-bearing animals in possession of any persons in violation of law, were not applicable to title of seller of mink sold on April 3, 1939, where statutes did not contain emergency clauses and did not become effective until June 14, 1939.

Animals — Wild life

4. In absence of proof that mink had ever constituted a part of wild life of Oregon, statute prohibiting acquisition of property in wild game animals or fur-bearing animals of state of Oregon, was not applicable in determining whether seller of mink had title to mink at time of sale.

Licenses — Fur-bearing animals

5. The purpose of statutes requiring breeders of fur-bearing animals to obtain permits from state game commission and seizure and forfeiture by commission of fur-bearing animals in possession of any person in violation of law, was to obtain information for commission to aid in enforcement of state game laws, and was not to limit the raising of fur-bearing animals to those specially qualified nor to afford the public protection directly against fraud and deception.

Animals — Licenses

6. The statutes requiring breeders of fur-bearing animals to obtain permit from state game commission and seizure and forfeiture by commission of fur-bearing animals in possession of any person in violation of law, do not deprive unlicensed breeders of title to their animals, or require forfeiture to state of animals of unlicensed breeders, or invalidate contracts of unlicensed breeders.

Vendor and purchaser — Rescission

7. The failure of owner of mink and nut farm to obtain permit from state game commission to raise fur-bearing animals did not deprive owner of title to mink on farm, and hence contract for purchase of farm and mink thereon could not be rescinded by purchaser on ground that owner falsely represented to purchaser that owner had title to mink.

Fraud — Election of remedies

8. A party who has been induced to enter into contract by fraud has, upon discovery, an "election of remedies" to affirm contract and sue for damages, or to disaffirm contract and be reinstated in the position in which he was before consummation of contract, and such remedies are inconsistent and the adoption of one is the exclusion of the other.

Contracts — Fraud — Rescission

9. A party desiring to rescind contract for fraud must act promptly and return or offer to return what he has received under contract, and he cannot retain fruits of contract awaiting future developments to determine whether it will be more profitable for him to affirm or disaffirm contract, and any delay on his part, and especially his remaining in possession of property received by him under contract and dealing with it as his own will be evidence of his intention to abide by contract.

Vendor and purchaser — Rescission — Waiver

10. Evidence was sufficient to show that purchaser of mink and nut farm elected to affirm contract after discovering falsity of vendor's alleged representations as to number of nut trees in orchard and yield therefrom, and the number and health of the mink, and "waived" any rights he may have had to rescind contract, by not filing suit until three months after such discovery, during which time all prospective buyers for resale of property were exhaused, and by retaining possession and use of property and by keeping proceeds of nut crop and crop of pelts.

                  See 12 Am. Jur. 1029
                  2 C.J.S., Animals, § 6
                

Before KELLY, Chief Justice, and RAND, BAILEY, LUSK and ROSSMAN, Associate Justices

Appeal from Circuit Court, Yamhill County.

ARLIE G. WALKER, Judge.

Action by Emery Belanger and Minnie Belanger, husband and wife, against I.L. Howard and Edith A Howard, husband and wife, and another, for rescission of an agreement to purchase real and personal property. The named defendants filed a cross-complaint. From the decree, the plaintiffs appeal.

AFFIRMED.

Lawrence B. Osterman and Elliott B. Cummins, both of McMinnville, for appellants.

Bernard B. Kliks, of Portland (Dorothy L. Kliks, of Portland, on the brief), for respondent B.F. Baker.

B.A. Kliks, of Portland, and Walter P. Gerber, of McMinnville, for respondents I.L. and Edith A. Howard.

ROSSMAN, J.

This is an appeal by the plaintiffs, husband and wife, from a decree of the circuit court which dismissed their suit instituted for the purpose of securing a rescission of an agreement formed April 3, 1939, by virtue of which they agreed to purchase from the defendants, I.L. and Edith A. Howard, husband and wife, some real and some personal property for a consideration of $5,000. The complaint charged fraud. A third defendant, B.F. Baker, according to the complaint, was the agent of the Howards in effecting the sale. The decree, in compliance with the prayer of the answer of defendants Howard, after dismissing the plaintiffs' suit, ordered strict foreclosure of a contract signed by the plaintiffs upon the day above mentioned wherein they undertook to purchase the aforementioned real property for the sum of $4,000, $1,000 of which was paid concurrently with the execution of the agreement and the balance of which — payable in annual installments — has not been paid. Simultaneously with the execution of the contract, the plaintiffs signed a promissory note in the amount of $1,000 payable to the Howards in annual sums of not less than $75. The note was the consideration for the personal property. At the same time the plaintiffs signed a chattel mortgage which transferred the aforementioned personal property to the Howards to secure payment of the note. The chattel mortgage stipulated that in the event more than $1,000 was realized out of the personal property, the excess should be applied upon the purchase price of the real property. The decree found: "It is not necessary to foreclose by actual sale said personal property," and states that the contract and chattel mortgage "are in fact one instrument." We shall have no further occasion to refer to the chattel mortgage. As did the circuit court judge who tried this cause, we shall give effect to realities and deem the sale of the real and personal property as one transaction.

The real property above mentioned is 9.11 acres situated in the city of Newberg. It is improved with a seven-room dwelling house, some outbuildings useful for agricultural purposes, an orchard consisting of seven acres, and some pens devoted to the raising of minks. In the orchard there stand 326 bearing filbert trees, 52 small filbert trees, 12 walnut trees, 78 prune trees, and 30 other fruit trees. At the time of the sale the Howards owned 24 minks, 22 of which were in their pens. The minks and some farming implements constituted the personal property transferred by the sale.

To avoid being misunderstood, we state that the purchase price of the real and personal property was $5,000, $1,000 of which was paid to the Howards at the time of the sale. The total annual payment required by the contract was $300.

The complaint alleges that the defendants falsely represented to the plaintiffs that (1) the orchard was composed exclusively of filbert trees; (2) in 1938 and in the years prior thereto the orchard produced 5,000 to 6,000 pounds of filberts; (3) the Howards were the owners of the minks and could lawfully sell them; and (4) the minks were "healthy fur-bearing mink of good breeding quality."

The complaint avers that the above representations were false in the following particulars: (1) the orchard was not composed entirely of filbert trees, but "contained 75 worthless prune trees"; (2) the orchard did not produce 5,000 pounds of filberts in 1938 or in any other year, but its 1938 production was 2,200 pounds; (3) upon the property there were not 24 minks but only 22 "and said minks were not all healthy, but a large number of said mink were sick, unhealthy, sterile and barren"; and (4) the Howards were not licensed by the state to possess the minks, and, therefore, had no title to them.

The complaint, without mentioning when the plaintiffs discovered that deceit had been practiced upon them, states:

"Upon the discovery by plaintiffs of the falsity of said fraudulent representations, plaintiffs communicated with defendants and offered to rescind the hereinabove-mentioned contract in whole and restore to defendants everything * * * and plaintiffs do hereby offer to rescind said contract and hereby elect to disaffirm the same and tender herewith to the clerk of the above-entitled court a quitclaim deed to said real property * * * and herewith offer and tender to the defendants possession of said real property and personal property."

The prayer, besides asking for a rescission of the transaction of April 3, 1939, asked for judgment against the defendants in the sum of $2,140.67. The basis for that part of the prayer was the aforementioned payment to the defendants of $1,000 and an averment that the plaintiffs were entitled to $1,140.67 as compensation for their care of the property and for the value of some materials employed in the improvement of the property.

The answer denied all allegations charging fraud and averred that the plaintiffs had breached...