Bullard v. Citizens' Nat, Bank
| Decision Date | 25 March 1935 |
| Docket Number | 31626 |
| Parties | Bullard v. Citizens' Nat, Bank. |
| Court | Mississippi Supreme Court |
(Division B.)
1 BONDS.
Representations by seller that bonds were gilt-edged and as good as gold held assertion of opinion so as not to impose liability on seller for misrepresentation where statements were not true.
2 BONDS.
Statement by seller of bonds that bonds were guaranteed by surety company held an assertion of fact so as to make seller liable for misrepresentation, where statement was false notwithstanding seller acted in good faith believing statement to be true.
3 SALES.
Seller's misstatement of facts to be material, so as to furnish ground for rescission, need not be in any particular words so long as impression created by statement relied on by buyer was one which reasonably could be derived from statement made, and which seller could reasonably have anticipated buyer would derive from words used.
4. ELECTION OF REMEDIES.
Buyer who has been defranded in purchase may elect to retain property and sue for damages for breach of contract any time within period allowed by statute of limitations in which to institute his action.
5 SALES.
Defrauded buyer, who has right to rescind, must offer to do so within a reasonable time ater discovery of those facts which justify rescission, or within a reasonable time after discovery of facts reasonably sufficient to put buyer on inquiry, which inquiry, if reasonably pursued, would have led to discovery of facts sufficient to justify rescission.
6. SALES.
Generally, burden is on seller to show that buyer, who had right to rescind sale because of fraud, did not act within a reasonable time after discovery of facts which justified rescission.
7. BONDS.
Buyer who purchased bonds in 1929, on seller's representation that payment of bonds was guaranteed by surety companies, who learned for first time in 1932 that representations were untrue and brought suit for rescission within a reasonable time thereafter, held entitled to rescind purchase, notwithstanding buyer learned that company which issued bonds was in financial difficulties in 1931.
8. BONDS.
Buyer, who purchased bonds on seller's representations that bonds were gilt-edged, good as gold, and payment thereof guaranteed by a surety company held not entitled to rescission for material misrepresentation, where undisputed evidence disclosed that payment of bonds was guaranteed by reputable surety company, notwithstanding company which issued bonds was insolvent.
9. CORPORATIONS.
Buyer, who purchased bonds issued by four companies, on seller's representation that payment of bonds was guaranteed by surety companies, who sued to rescind purchase of two issues within reasonable time after learning seller's representations were untrue, could not file supplemental bill or rescission of purchase of other two issues nine months later, since notice that seller's representations were untrue as to first two issues was sufficient to put buyer on inquiry as rest of bonds.
10. SALES.
Where several things contracted for in one transaction have no such relation to each other so that value or price of one thing is increased or diminished or otherwise materially affected by its association with other things, transaction is "divisible contract" so as to permit buyer to rescind part of transaction and affirm remainder.
11. CORPORATIONS.
Buyer, who, in one transaction, purchased bones issued by four different companies, held entitled to rescind purchase of bonds issued by one company because of seller's misrepresentations, notwithstanding buyer could not rescind rest of contract since purchase agreement was a "divisible contract."
12. APPEAL AND ERROR.
In suit for rescission, where chancellor failed to make findings of fact on issue whether misrepresentations of seller's agent were those of seller and erroneously dismissed suit on another ground, case was remanded so that chancellor could make finding of fact on disputed issue as required by statute (Laws 1931, chapter 252).
ON SUGGESTION OF ERROR. (Division B.) June 10, 1935. No. 31626.
BANKS AND BANKING. National bank is liable for fraud and deceit, or fraudulent representations, by which a customer is led to make an investment on the faith of such fraudulent representations.
HON. A. B. AMIS. SR., Chancellor.
Suit by Sylvia G. Bullard against the Citizens' National Bank. From a judgment of dismissal, plaintiff appeals. Affirmed in part and in part reversed and remanded.
On suggeston of error. Suggestion of error overruled.
Graham & Graham, of Meridian, for appellant.
There was by express terms absolute trust and confidence placed in appellee by appellant, with actual notice to appellee of an utter lack of knowledge, or means of knowledge, on the part of appellant; and of her absolute trust and confidence being then reposed in appellee.
Appellant was then charged with a duty, not imposed in a case of dealing at arm's length, but one charging it with the exercise of utmost good faith, and placing upon it the burden of proof to show such good faith.
Ham et al. v. Ham et al., 110 So. 583, 146 Miss. 161; Watkins et al. v. Martin et al., 167 Miss. 343; Bourn v. Bourn, 163 Miss. 71; Griffith's Chancery Practice, par. 47; 26 C. J. 1158, par. 72 (6); 2 Black on Rescission and Cancellation (2 Ed.), page 714, par. 253.
It is wholly immaterial whether the representations were made ignorantly and innocently or intentionally, under the circumstances in this case, as the result to appellant is the same and her remedy the same.
Vinson v. Corbitt, 94 Miss. 46; 14 Am. & Eng. Encyc. of Law (2 Ed.); Davis v. Heard, 43 Miss. 50; McNeil v. Bank of Bay Springs, 100 Miss. 271; Alexandria v. Meeks, 132 Miss. 289; Allen v. Luckett, 94 Miss. 868; Canadian Agency, Ltd., v. Assets Realization Corp., et al., 165 App. Div. (N. Y.) 96, 150 N.Y.S. ---; 9 C. J. 1169; Smith v. Richards, 10 L.Ed. 42; 3 Williston on Contracts, page 2650, par. 1490, and page 2668, par. 1500; Roberts v. French, 153 Mass. 60; Restatement of the Law of Contracts, par. 476 (b).
Statement by agent, detailed to investigate a security, that it is gilt-edge, is not a hazard of an opinion, but the declaration of a fact.
26 C. J. 1102(a), 1103, 1217; Scribner v. Palmer, 81 Wash. 474, 142 Pae. 1166; Palmer v. Bratager, 41 S.D. 649, 172 N.W. 507; 3 Williston on Contracts, page 2657, par. 1494; 26 C. J. 1219, footnote 13(b), 1098 (28) C., 1091, 1085, par. 22 (c); Olston v. Oregon Water Power Co., 52 Ore. 343; Rogers v. Rosenfield, 158 Wis. 285; Coulter v. Clark, 66 N.E. 739; Restatement of the Law of Contracts, par. 474 (a).
Every case is to be determined by its own particular circumstances, and it is eminently proper, and necessary to a right decision, to take into account the relative situation of the parties with reference to mental capacity, experience, shrewdness, and native cunning.
1 Black, Rescission of Contracts and Cancellation of Written Instruments, page 386, par. 125; Chamberlain v. Fuller, 59 Vt. 247; Whorton on Contracts (1 Ed.), par. 245; Prescott v. Brown, 30 Okla. 428; Robinson v. Rhinehart, 137 Ind. 674; Wilcox v. Schisler, 55 Mont. 246; Quinly v. Clock, 60 N.Y. 253; Banaghan v. Maloney, 200 Mass. 46; 19 L. R. A. (N. S.) 871, 128 Am. St. Rep. 378; Carter et al. v. Eastman Gardner & Co., 95 Miss. 651; Nash Mississippi Valley Motor Co. v. Childress, 125 So. 708; King v. Livingston Mfg. Co., 60 So. 143; Restatement of Law of Contracts, par. 499 (2).
Acquiescence and waiver are always questions of fact, and, where set up to defeat rescission, the burden is upon the defendant to make it out.
Josly v. Cadillac Automobile Co., 101 U.S. 77; Pence v. Langdon, 99 U.S. 578; Mudsill v. Watrous, 22 U.S. App. 12; Griffith's Chancery Practice, par. 47; 3 Black on Rescission and Cancellation, page 1481, par. 615; 87 So. 585; Galliher v. Cadwell, 145 U.S. 368; Lake v. Perry, 95 Miss. 550; Booner v. Bynum, 72 Miss. 442; 9 C. J. 1201; 2 Black on Rescission and Cancellation (2 Ed.), page 1348, par. 546; 3 Williston on Contracts, page 2816, par. 1595.
There can be no denial of the doctrine of "election," as an established rule of law, but, like its theological namesake it is held and applied with many variations, by the hundreds of cases in which it has been invoked.
Murphy v. Hutchison, 93 Miss. 643.
Whether or not a person has acquiesced in the continuance of a contract which he had legal ground to rescind, or has ratified a voidable contract, or elected to affirm it rather than rescind it, depends primarily upon his intention, and this is to be shown by his declaration, his acts, or his conduct, which are matters of fact. The question is therefore a question of fact for the determination of a jury, in any case at law where it arises, and if a prima facie right to rescind is made out, then the burden of proving acquiescence, waiver, or election to affirm is on the party alleging it.
53 A. 314, 52 S.E. 247; 20 C. J., page 6, par. 6, pages 26, 36, and 37, (29) B.; 26 C. J. 35 (28) A. & 1142; 3 Black on Rescission and Cancellation (2 Ed.), page 1481, par. 615; 91 Va. 183.
It will be noted that each of the four sets of bonds were recorded on separate invoices signed by appellee and the additional one thousand dollars in bonds purchased January 16, 1930 involving five hundred dollars Central Securities and five hundred dollars National Union Mortgage Co., were scrupulously separated so that each is covered by a separate invoice, the invoices dated November 15, 1929, aggregated eight thousand, fifty-two dollars and sixty-seven cents, with accrued interest, making total purchase of eight thousand, one hundred forty-nine dollars and seventy-six cents, on which eight...
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