Morse v. Kogle

• Decision Date: 08 March 1947
• Docket Number: 36774.
• Citation: 162 Kan. 558,178 P.2d 275
• Parties: MORSE et al. v. KOGLE et al.
• Court: Kansas Supreme Court

178 P.2d 275

162 Kan. 558

MORSE et al. v. KOGLE et al.

No. 36774.

Supreme Court of Kansas

March 8, 1947

Appeal from District Court, Sedgwick County; Division No. 2; Rebert L. Nesmith, Judge.

Action by Roscoe Morse and Edna G. Morse against Kenneth E. Kogle and others for rescission for fraud of a contract for the purchase of a house and for other relief. Judgment for defendants, and plaintiffs appeal.

Syllabus by the Court.

1. One who seeks to rescind a contract on the grounds of fraud must do so with reasonable promptness after discovery of the fraud.

2. If after discovery or knowledge of facts which would entitle a party to a contract to rescind the contract, he treats the contract as binding and leads the other party to believe that the contract is still in effect, he will have waived his right to rescind.

3. In order to constitute such a waiver, it is not necessary that there be an express ratification of the contract after discovery of the fraud which might make the equitable remedy of rescission available. Acts or conduct inconsistent with an intention to rescind it, or in recognition of the contract may have the effect of affirming it.

4. In an action by the purchasers to rescind a contract to purchase real estate on the grounds of fraudulent representations, the record discloses that after discovery of the alleged fraud the purchasers left the property in the hands of a real estate agent for re-sale, and that for a period of several weeks following the sale did not inform the sellers of any dissatisfaction with the deal or as to the alleged false representations. Held: By acts and conduct the purchasers waived any right they might have had to rescind the contract.

William Keith, of Wichita, for appellants.

Robert R. Hasty, of Wichita, for appellees.

HOCH Justice.

This case arose out of the sale of a residence property. The plaintiffs, who had bought the property and made a down payment, sought to rescind the contract on the ground of fraud and to recover the amount paid. The defendants prevailed and the plaintiffs appealed. The principal question presented is whether by their acts subsequent to knowledge of the alleged fraud, the appellants affirmed the contract and thereby lost any right to rescind which they might have asserted.

Kenneth E. Kogle and Eula I. Kogle, his wife, owned a residence property in Wichita which they agreed to sell to Roscoe Morse and Edna G. Morse, his wife, for $3900. The deal was agreed upon at the home of the Kogles on the evening of March 20, 1946, at which time the Morses paid $50 to bind the bargain. The following evening the parties met, together with J. E. Dorst--a real estate agent representing the Kogles--at which time a written contract was signed and $450 was paid, completing the initial payment of $500 provided for in the contract. On March 25th, Morse called upon Dorst and placed the property in his hands for re-sale at $4200, at which time he told Dorst that in making the sale the Kogles had made certain misrepresentations--to which reference will presently be made. About two weeks thereafter, Dorst advised the Morses that he had a prospective purchaser, but the terms of payment offered were not satisfactory to them. In the meantime, the Morses had visited the place and had taken room measurements for wall-papering they contemplated having done. On April 18th, this action was filed against the Kogles and Dorst. In the petition it was alleged that the Kogles had represented that the place was not more than six blocks from the bus line, that arrangements had been completed for regrading and putting 'black-top' on the street and for a rerouting of the bus line to run directly in front of the place; that these representations were controlling factors which induced them to buy the place, and that they were not true and were known by the Kogles to be untrue.

All three defendants demurred to the petition. The demurrer of Dorst was sustained and that of the Kogles overruled. The order sustaining the demurrer of Dorst, the real estate agent, requires no discussion. It was clearly correct. Nowhere in the petition was there any allegation that Dorst had made or been a party to any misrepresentation.

There is no need to review the evidence at any length. It developed from plaintiffs' testimony that on the evening after they had made the deal, they had stopped at the home of their son and that their daughter-in-law then told them that she thought the place was farther than six blocks from the bus line; that this statement made them think that the statements about the blacktop and the prospective change in the bus route might also be untrue; that several days thereafter Morse called at the office of Dorst and made arrangements for him to offer the place for sale for them for $4200; that about two weeks later Morse called Dorst to see if he had any prospect of securing a purchaser, and was told...