Crouch v. Huber

• Decision Date: 26 September 1922
• Docket Number: Case Number: 10606
• Citation: 209 P. 764,87 Okla. 83,1922 OK 284
• Parties: J. CROUCH & SON v. HUBER et al.
• Court: Oklahoma Supreme Court

1922 OK 284

209 P. 764

87 Okla. 83

J. CROUCH & SON v. HUBER et al.

Case Number: 10606

Supreme Court of Oklahoma

Decided: September 26, 1922

Syllabus

¶0 1. Contracts--Rescission for Fraud--Conditions.

A party will not be permitted to repudiate his contract and still retain the benefits which he has derived from it. And where a defrauded party desires to rescind a contract procured through the fraud of the opposing party, of which fraud he was ignorant at the time he entered into the contract, but thereafter discovered such fraud, and elects to rescind the contract on account thereof, he must rescind promptly upon discovering the facts which entitle him to rescind; and he must restore to the other party everything of value which he has received from him under the contract, or he must offer to restore the same upon condition that such party shall do likewise, unless the latter is unable or positively refuses to do so.

2. Fraud -- Remedies Enumerated -- Sales.

A person induced by fraud to purchase property has four remedies. He may, first, upon discovery of the fraud, rescind the contract absolutely and sue in an action at law, and recover the consideration parted with upon the fraudulent contract, and in such case he must restore, or offer to restore, to the parties sued whatever he has received by virtue of the contract; or, second, he may bring an action in equity to rescind the contract, and in such a case it is sufficient for him to restore, or make offer in his petition to restore, everything of value which he has received under the contract; or, third, he may affirm the contract, retain that which he has received, and bring an action at law to recover the damages sustained by reason of his reliance upon the fraudulent representations; or, fourth, he may, in an action against him to recover the purchase price, set up the damages sustained by reason of the fraud, as a defense or by way of counterclaim.

3. Trial -- Instructions -- Issues -- Pleading.

A defendant seeking affirmative relief is required to frame his pleading in accord with some definite certain theory, and the relief to which he claims to be entitled must be in accord therewith. Instructions which fail to submit to the jury both the plaintiff's and defendant's theories with reasonable fairness, are erroneous; and where it is apparent from the record that instructions probably resulted in a miscarriage of justice, the same constitute reversible error.

4. Same -- Reversal of Cause.

Record examined, judgment of the trial court reversed, and the cause remanded for a new trial.

Error from District Court, Jefferson County; Cham Jones, Judge.

Action by J. Crouch & Son against H. L. Huber and others on promissory notes. Judgment for defendants, and plaintiffs bring error. Reversed and remanded, with directions.

H. A. Ledbetter, for plaintiffs in error.

Bridges & Vertrees and E. B. Anderson, for defendants in error.

JOHNSON, J.

¶1 This is an appeal from the district court of Jefferson county; Hon. Cham Jones, Judge. The record discloses that J. Crouch & Son, who were plaintiffs below, filed their petition on December 7, 1917, against H. L. Huber, D. A. Cathey, J. A. Pealor, I. K. Anderson, T. W. Lennann, F. W. Ewing, J. J. Stewart, and A. R. Barber, seeking to recover on three promissory notes dated March 31, 1911, and asking for judgment in the sum of $ 1,800, with interest at 6 per cent. from March 31, 1911, and $ 180 as attorney's fees.

¶2 Thereafter, on December 24, 1917, the defendants below, who are defendants in error here, filed their answer, admitting the execution of the notes sued upon, and for defense thereto alleged, in substance, that the notes were void for the reason that the execution of the said notes was secured from all the defendants except Huber by fraud, in this, that plaintiffs, through their agent, induced the defendant Huber to persuade all the other defendants to execute said notes with the agreement and understanding that the plaintiffs were to furnish to all of the defendants, as equal owners, a certain horse, and that each and all of the defendants were to be bound on said notes for the payment thereof equally, and that neither nor any of said defendants were to have the advantage over any other of said defendants, and that all of said defendants were to pay on said notes their proportionate part, and were to be equal owners of the horse and the profit derived therefrom, if any; that, at the time plaintiffs entered into the said contract with the defendant Huber, they contracted and agreed with Huber that if he could secure the other defendants to execute their joint note for the purchase price of the horse, then and in that event plaintiffs contracted and agreed that they would receipt him for his proportionate part of said notes without requiring him to pay his part, all of which was kept from the other defendants by the said Huber and these plaintiffs, and at the time they signed said note they did not know that Huber was not to pay his part of said notes, and that the plaintiffs had given to the said Huber his part that was due upon said notes, and had credited the amount that was due from said Huber on said notes without the said Huber paying the said plaintiffs any sum, and said credit so made was the sole and only consideration; that Huber was to induce and persuade the other defendants to execute and deliver their notes--all of which was a fraud perpetrated by the plaintiffs, which fraud, as alleged in the answer, vitiated the notes sued upon and rendered the same null and void.

¶3 And thereafter, to wit, on February 12, 1918, these plaintiffs in error filed their reply, which is in form a general denial, and which was duly verified. This constituted the pleadings. The cause was tried to the court and jury, and resulted in a general verdict and judgment in favor of the defendants. Plaintiffs' assignments of error are argued in the brief of counsel as follows:

"Where several persons for the purpose of buying a horse mutually agree to pay a certain price for him, a secret agreement between the vendor and one of them whereby he receives his share in the horse for nothing for securing the others to join him in the purchase, is such a fraud as will entitle defendants to defeat recovery on the notes evidencing their promise to pay the purchase money, but where several persons for the purpose of buying a horse mutually agree to pay a certain price for him, a secret agreement between the vendor and one of them whereby he receives his share in the horse for nothing for securing the others to join with him in the purchase, such fraud may be waived by the failure of the defendants to make a timely tender back of the horse after the discovery of the fraud."

¶4 At the commencement of the trial the plaintiffs moved for judgment on the pleadings, which was overruled and exceptions saved. The plaintiffs objected to the introduction of testimony on the part of defendants, for the reason: "That the answer seeking to set up fraud is insufficient in law, for the reason that in the answer no tender of the property which is involved in this controversy, that is, the stallion, has ever been made to plaintiffs, either by word of mouth or by the answer on file in this case."

¶5 Whereupon the following proceedings were had:

"Mr. Vertrees: Comes now the defendants--

"Mr. Ledbetter: We object to him dictating anything into the record.

"Mr. Vertrees: Comes now the defendants in the above entitled action and tenders back to the plaintiffs in this case the stallion known as Prince 53093, and the defendants state that they are willing, ready, and able to deliver said stallion to the plaintiffs at any time they may desire to take possession of it.

"Mr. Ledbetter: Do you make that as an amendment to your answer on file herein?

"Mr. Vertrees: Yes, sir; as a tender and an amendment too.

"Mr. Ledbetter: Plaintiffs object to it because it is made after the case has gone to trial and comes too late.

"By the Court: The objection is overruled as to the introduction of the testimony, and as to the offer to amend I guess he has a right to amend and make the tender, but what effect that would have can be controlled in the court's instructions to the jury. I will permit him to make the amendment.

"Mr. Ledbetter: Plaintiffs except."

¶6 Concerning their proposition counsel for plaintiffs say in their brief:

"Now, in the case at bar the notes sued upon were dated in 1911, and were due December 15, 1912, December 15, 1913, and December 15, 1914, and from the testimony of Mr. Huber, Mr. Cathey, and Mr. Pealor, it is shown that they had learned of the fact that Hill, the agent of the plaintiffs in error, had agreed to give Mr. Huber credit to the extent of $ 200 for his services in working up the sale, and that these three persons had known of this fact for approximately three years prior to the institution of this suit. The testimony of all three of these witnesses also shows that the defendants kept the horse, and at the time of the trial of the case had the horse in their possession. The testimony shows, however, that on the day of the trial that the defendants tendered the horse back, which tender was objected to for the reason that it was too late. Now, admitting this testimony to be true, it constituted no defense to the notes sued upon; the defendants having admitted the execution of the notes, it became and was the duty of the trial court to sustain our demurrer to the evidence at the close of the testimony on the part of the defendants."

¶7 In answer to this proposition of the plaintiffs, counsel for defendants say in their brief as follows:

"The proposition on which the defendants in error stand is that, where several persons for the purpose of buying a horse mutually agree to pay a certain price for him, a secret agreement between the vendor and one of the vendees whereby such vendee receives his share in the horse for nothing for securing the others to join

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