Cushman v. Avis, Docket No. 9581

• Decision Date: 02 December 1970
• Docket Number: Docket No. 9581,No. 2,2
• Citation: 184 N.W.2d 294,28 Mich.App. 370
• Parties: Seward R. CUSHMAN, Jr., Plaintiff-Appellant, v. Warren E. AVIS, Defendant-Appellee
• Court: Court of Appeal of Michigan — District of US

Page 294

184 N.W.2d 294

28 Mich.App. 370

Seward R. CUSHMAN, Jr., Plaintiff-Appellant, v. Warren E. AVIS, Defendant-Appellee.

Docket No. 9581.

Court of Appeals of Michigan, Division No. 2.

Dec. 2, 1970.

Leave to Appeal Denied Feb. 9, 1971.

Released for Publication March 5, 1971.

Lee G. Sheffer, Lansing, for plaintiff-appellant.

William P. Thorpe, McClintock, Fulton, Donovan & Waterman, Detroit, Lloyd D. Parr, Glassen, Parr, McLean & Rhead, Lansing for defendant-appellee.

Before QUINN, P.J., and DANHOF and CARROLL, ^* JJ.

QUINN, Presiding Judge.

This action involves a contract, rescission, statute of limitations and accelerated judgment.

On June 20, 1960, plaintiff and defendant entered into a written agreement by which defendant purchased 50 per cent of plaintiff's advertising business. Plaintiff agreed to promote defendant's interests and plaintiff was to receive a salary and 20 per cent of the profits after taxes. In the development of this case, the following contractual subsection becomes important:

'6. If it becomes necessary and advisable to terminate this agreement Warren E. Avis agrees to give Seward R. Cushman Twelve (12) months advance notification of the termination thereof.'

On April 13, 1962, defendant sent plaintiff a letter which reads as follows:

'This is to confirm our discussion with regard to the agreement between us dated June 10, 1960, providing for the acquisition by me of an interest in the Cushman Advertising Company.'

'It is understood that this agreement was never in existence. Please confirm this and that the agreement was rescinded and void from its inception, by returning a signed copy of this letter for our files.'

Under the words 'confirmed and agreed', plaintiff signed his name. The agreement is dated April 14, 1962.

Plaintiff commenced an action for various damages including interest, equipment loss, and salary on November 4, 1968. The trial court held:

'Without some showing factually, supported by affidavit or testimony, as to why the action of April 13 and 14, 1962, did not act to rescind or breach the June 10, 1960 contract or without some showing as to how the statute of limitations was tolled for a sufficient period of time between April 13, 1962, and November 4, 1968, his cause of action is barred.'

On appeal, plaintiff contends paragraph six of the original contract is binding and any attempt to terminate the contract by the letter of April 13, 1962, would merely amount to a twelve-month notice, an extension which prevents the running of the statute and therefore his action is timely. Plaintiff claims the parties continued to operate under the original contract until after June 1, 1963, and, therefore, the contract cannot be called a nullity and that rescission requires financial restoration and an accounting.

Plaintiff signed, confirmed, and agreed that the original agreement was to be 'rescinded and void from its inception.' No other construction is possible. Canvasser Custom Builders, Inc. v. Seskin (1969), 18 Mich.App. 606, 171 N.W.2d 654. Breach of contract and rescission were complete April 14, 1962.

Rescission abrogates the contract completely. After a binding election to rescind, a party cannot insist on former contract rights. It is as if no such contract had been made. 17A C.J.S. Contracts § 440, pp. 551, 552: 1 Black on Rescission and Cancellation (2d Ed.), § 1; Wall v. Zynda (1938), 283 Mich. 260, 264, 278 N.W. 66; Travelers Insurance Company v. Carey (1970), 24 Mich.App. 207, 180 N.W.2d 68.

The twelve-month termination...