Southern Building & Loan Ass'n v. Argo

• Decision Date: 31 March 1932
• Docket Number: 6 Div. 99.
• Citation: 224 Ala. 611,141 So. 545
• Court: Alabama Supreme Court
• Parties: SOUTHERN BUILDING & LOAN ASS'N v. ARGO.

141 So. 545

224 Ala. 611

SOUTHERN BUILDING & LOAN ASS'N v. ARGO.

6 Div. 99.

Supreme Court of Alabama

March 31, 1932

Rehearing Denied May 19, 1932.

Appeal from Circuit Court, Walker County; Ernest Lacy, Judge.

Action by Monroe A. Argo against the Southern Building & Loan Association. From a judgment for plaintiff, defendant appeals. Transferred from Court of Appeals, under section 7326, Code 1923.

Affirmed.

Lange Simpson & Brantley, of Birmingham, for appellant.

Pennington & Tweedy and L. D. Gray, all of Jasper, for appellee.

ANDERSON C.J.

As we view this action, counts A and B, it is for a rescission and recovery of the sums heretofore paid upon the ground of fraud or deceit in inducing the plaintiff to enter into the contract. The counts not only set out the fraud and deceit but expressly charge that plaintiff demanded of the defendant a return of his money and tendered to the defendant the certificates of stock, and the defendant refused to refund said money to plaintiff and to accept the surrender of said stock. These counts are different from the one dealt with in the case of Sou. Bldg. & Loan Association v. Hughs, 222 Ala. 648, 133 So. 685.

It is a well-settled principle of law that where one is induced by fraud to enter into a contract he may rescind by restoring benefits and recover payments, or affirm, retain benefits and sue in deceit for damages.

Day v. Broyles, 222 Ala. 508, 133 So. 269. It is also well settled that an offer to rescind a contract for fraud and to return the consideration must be made promptly upon the discovery of the fraud. Berman Bros. Iron & Metal Co. v. State Savings & Loan Co., 222 Ala. 9, 130 So. 554; Comer v. Franklin, 169 Ala. 573, 53 So. 797; Young v. Arntze, 86 Ala. 116, 5 So. 253. And the right to rescind must be exercised not only promptly, but unreservedly. Gorman-Gammill Seed & Dairy Supply Co. v. Carlisle, 220 Ala. 116, 124 So. 288, Lowe & Armstrong v. Shinault, 201 Ala. 593, 79 So. 22.

It seems, however, that the rescinding party, on offering to restore what he has received under the contract, may couple his offer with a demand for the restoration to him of what was parted with. Black on Rescission, § 626, Mitchell v. Moore, 24 Iowa, 394, Stanford v. Smith, 163 Ark. 583, 260 S.W. 435. While the evidence of the plaintiff is not as full and clear as to a tender of the stock certificate as might be, we think it was sufficient to make a question for the jury as to whether there had been a sufficient offer to restore same. The plaintiff, when a witness, was asked: "'Did you take that stock over there? Just what was it that you said about having your stock with you and turning your stock over to them when they turned the money over?"' The witness answered: "'Yes sir, I told Mr. Strickland that."' The jury could infer from this answer that plaintiff told Strickland he had the stock with him and would turn it over to them when they turned the money over.

The appellant, in effect, concedes that the question of fraud and deceit was for the jury, but contends that it was due the general charge because the evidence failed to show a sufficient offer to restore or tender the stock certificate upon a...