Nealon v. Henry

• Decision Date: 08 April 1881
• Citation: 131 Mass. 153
• Parties: Mary Nealon v. Walter Henry
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

131 Mass. 153

Mary Nealon v. Walter Henry

Supreme Court of Massachusetts

April 8, 1881

Suffolk.

Exceptions overruled.

J. A Maxwell, for the plaintiff.

W. S B. Hopkins, for the defendant.

Morton, J. Colt & Field, JJ., absent.

OPINION

Morton, J.

The note upon which the plaintiff declares in her first count was transferred to her, through a third person, by her husband James Nealon, who is the payee, without any consideration and after its maturity. It is therefore open to the same defences as if the suit had been brought by the payee.

The defence relied upon at the trial was tat it was obtained by the fraud of James Nealon. The sole consideration of the note was a conveyance by him to the defendant, with full covenants of seisin and warranty, of a parcel of land in Worcester, on May 13, 1873. At the time of the conveyance, James Nealon was in fact the owner of only three undivided fifths of the land, one fifth being owned by his brother, John Nealon, and one fifth by the children of a deceased sister.

James Nealon's title was under a deed from his mother, Mary Nealon, dated February 25, 1873. Her title in fact was under a deed dated April 29, 1872, purporting to be signed by James Nealon, Ellen Nealon, John Nealon and Mary, his wife, in release of her dower. It appeared at the trial that the signatures of John Nealon and Mary, his wife, to this deed were forged by James Nealon.

The defence was that the defendant was induced to enter into the contract by the fraudulent representations of James Nealon as to his title and his fraudulent concealment of the forgery, and therefore that the defendant had the right to rescind the contract.

The principal question raised in the case is whether the defendant, by his laches or otherwise, has lost or waived his right to rescind.

A party to a contract, who has been induced by the fraud of the other party to enter into it, may upon discovery of the fraud, if he so elect, rescind the contract. The contract is not void, but voidable at his election, and he must return or offer to return the consideration received by him, so as to put the other party as nearly as practicable in statu quo, and must exercise his election to rescind within a reasonable time after the discovery of the fraud. Holbrook v. Burt, 22 Pick. 546. Bassett v. Brown, 105 Mass. 551. The plaintiff contends that the defendant did not exercise his election to rescind within a reasonable time.

It appears that the defendant first knew of the fraud after the death of James Nealon, which occurred in June 1877. Soon after this, John Nealon notified him that his signature was forged, and in August following he and the children of the deceased sister brought a writ of entry to recover two fifths of the land. The defendant notified the plaintiff of this suit, and she undertook the defence of it, and made some efforts to settle the claims of the demandants. The case was tried in September 1880, and resulted in a judgment for the demandants.

In the mean time, the plaintiff brought this action upon the note, by writ dated December 13, 1877, and the action was entered in court in January 1878, and was continued from term to term to await the result of the real action. The defendant filed an answer on January 25, 1878, setting up as a defence a partial failure of consideration, and making no allegations of fraud. In February 1879, he filed an amended answer, setting up that the note was obtained by fraud, and offering to reconvey the estate.

Under the circumstances of this case, we are of opinion that the Superior Court properly refused to rule,...