Bullard v. Citizens' Nat. Bank
| Decision Date | 10 June 1935 |
| Docket Number | 31626 |
| Citation | 162 So. 169,160 So. 280,173 Miss. 450 |
| Parties | BULLARD v. CITIZENS' NAT. BANK |
| Court | Mississippi Supreme Court |
March 25, 1935
APPEAL from chancery court of Lauderdale county 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 suggestion of error. Suggestion of error overruled.
Affirmed in part and in part reversed and remanded. 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 A.D. (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 P. 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 thousand dollars was paid before invoices were issued. And on these facts appearing from the record of appellee, we have in jocular parlance a "Grey Horse Case" in the Bank of Antigo v. Union Trust Co., 149 Ill. 343, 23 L.R.A. 611, 36 N.E. 1029.
The rule of Mississippi in equity favors divisibility of contracts as against the entirety thereof.
Dunlap v. Petrie's, 35 Miss. 590; Ganang & Chenoweth v. Brown, 88 Miss. 53; Wooten v. Walters, 110 N.C. 251; Camp v. Dill, 27 Ala. 553; Ledoux v. Armour, 4 Rob. La. 381; Freeman v. Skinner, 31 N. C. 32; Edward Thompson Co. v. Schroeder, 131 Minn. 125; Lampson v. Cummings, 52 Mich. 491; Miner v. Bradley, 22 Pick. (Mass.) 457; Weil v. Stone, 33 Ind.App. 112, 104 Am. St. Rep. 243; Ruben v. Sturtevant, 51 U. S. App. 286; Young & C. Manufacturing Co. v. Wakefield, 121 Mass. 91.
Where the contract is divisible or separate and in distinct parts, the injured party may maintain a suit in equity to rescind part on equitable terms, while adhering to another independent part.
9 C. J. 1261, par. 209; 13 C. J. 561, sec. 525 (C) Southwell v. Beezley, 5 Or. 458.
A test of severability which has frequently been applied is to the effect that if the consideration is single, the contract is entire, but if the consideration is either expressly or by necessary implication apportioned, the contract will be regarded as severable.
13 C. J. 563, sec. 528; Sturbent v. Gas Co., 188 Iowa 594; 55 C. J. 270, par. 249, and page 1080, par. 1063 (2); McKnight v. Delvin, 11 Am. Rep. 715; Costigan v. Hawkins, 11 Am. Dec. 583; Restatement of the Law of Contracts, par. 480, sec. 2, ex. "D," and sec. 487, illustration No. 3, page 931; 49 C. J. 560-561, pars. 777 and 509; Bowen v. Needles National Bank, 79 F. 49; 26 C. J. 35 (26)-1.
The learned Chancellor says that appellant elected to keep the town of Decatur and the National Union Mortgage Company bonds and was thereby estopped because the contract was entire and indivisible, defeating her right to rescind on the bonds originally included in the suit; but we submit that the learned Chancellor is in error on this point, under the Mississippi cases of Murphy v. Hutchinson, 93 Miss. 643; Archibald v. General Motors Acceptance Corp., 157 So. 709; Commons v. Tapley, 101 Miss. 203, 573, Ann. Cas. 1914B, 307; Plant Flour Mills Co. v. Sanders & Ellis, 157 So. 713; Restatement of the Law of Contracts, pars. 381-384; 3 Black on Rescission (2 Ed.), page 1481, par. 615.
Where a party prosecutes an action at law based on a misapprehension as to the legal effect of a written instrument, and dismisses the action, or where, in such case, on prosecution to judgment, is defeated because of such error, such acts do not constitute an election of remedies so as to preclude a subsequent action to reform the instrument.
20 C. J., page 26, page 6, par. 6, page 35, (28) A, and 37 (29) B.
Wilbourn, Miller & Wilbourn, of Meridian, for appellee.
There can be no doubt about the reasonableness of the investigation made by the bank before it purchased and held these bonds and its entire and sincere faith in the validity and soundness of the bonds. Any opinion expressed with reference to such bonds, was honestly entertained and based upon reliable information, and nothing appears to have been said by Mr. Blanks to Dr. Cooper which could form a predicate for any actionable fraud.
Deshtreaux v. Batson, 131 So. 346, 159 Miss. 236; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Springfield Fire & Marine Ins. Co. v. Nix, 138. So. 518, 162 Miss. 669; Home Mutual Fire Ins. Co. v. Pittman, 111 Miss. 420, 71 So. 739; New York Life Ins. Co. v. O'Dom, 100 Miss. 660, 59 So. 609; Maryland Casualty Co. v. Adams, 159 Miss. 88, 131 So. 544; National Union Fire Ins. Co. v. Provine, 148 Miss. 659, 114 So. 750; 20 Cyc. 49; Corley v. Reed, 164 Miss. 678, 145 So. 241; 2 Pomeroy's Equity Jurisprudence (4 Ed.), sec. 892, pages 1849-1851; Continental Jewelry Co. v. Joseph, 105 So. 639, 140 Miss. 582; Gunter v. Henderson-Molpus Co., 115 So. 720, 149 Miss. 603.
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