Tarkington v. Purvis
| Decision Date | 30 October 1890 |
| Docket Number | 14,530 |
| Citation | 25 N.E. 879,128 Ind. 182 |
| Parties | Tarkington et al. v. Purvis |
| Court | Indiana Supreme Court |
Petition for a Rehearing Overruled April 30, 1891.
From the Howard Circuit Court.
Judgment affirmed, with costs.
J. W Cooper, B. F. Harness, J. F. Elliott, L. J. Kirkpatrick, W E. Niblack and C. E. Cox, for appellants.
C. N. Pollard, M. Bell, W. C. Purdum, J. C. Blacklidge, W. E. Blacklidge, B. C. Moon, J. E. Moore and A. N. Grant, for appellee.
The material facts in the present case, as found by the court, are that in the month of August, 1887, Joseph S. Tarkington exchanged his interest in the firm of T. H. Ellis & Co., dealers in hardware, of which firm he was a member, for certain real estate and $ 600 in cash, with Sanford B. Purvis, the latter assuming and agreeing to pay Tarkington's share of the indebtedness of the firm. It is found that Tarkington, in order to induce Purvis to make the trade, made certain false representations concerning the value of the stock and assets of the firm and the amount of the partnership debts, to the effect that the assets of the firm were largely in excess of its liabilities. It appears, from the finding, that the firm was, in fact, in debt, in an amount largely in excess of the value of the partnership assets, so that the interest of Tarkington, at the time the exchange was made, was of no value whatever.
It is found that the exchange was made on the 15th day of August. On the 27th day of the same month Purvis discovered the fraud practiced upon him, and immediately offered to rescind by tendering back all that he had received from Tarkington, and demanding the reconveyance of the real estate which he and his wife had previously conveyed to the latter. He repeated the tender and demand on the 29th day of August, and again on the 1st day of September. It is found that Purvis had received $ 341 in cash out of the assets of the firm on the 30th day of August, 1887, and that he offered or tendered the money so received to Tarkington on the 1st day of September following. It is also found that on the same day on which the first demand was made for a rescission of the contract, Tarkington conveyed the real estate which he received in exchange for his interest in the stock of hardware to John Tarkington, his father, the consideration for the conveyance being an antecedent debt of $ 4,000, alleged to be due from the son to his father. The latter is a party to this suit.
At the time the elder Tarkington received the conveyance he knew that his son was insolvent, and that he made the conveyance to put it out of the power of Purvis to recover the property back.
Upon the facts found the court stated conclusions of law upon which a judgment for $ 600 against Joseph S. Tarkington, and a decree ordering a rescission of the contract as prayed in the complaint, were entered.
On the appellant's behalf it is insisted that the facts found show that the appellee, after discovering the fraud, converted part of the property to his own use, and otherwise dealt with it in such a manner that his right to rescind was thereby destroyed.
The facts specially found do not afford a basis for the assumption upon which this argument is predicated.
It appears from the facts found that the fraud was discovered on the 27th day of August, 1887, and that immediately upon discovering the deception practiced upon him the appellee took the proper steps to rescind the contract. Subsequently, on the 30th day of August, after another unsuccessful attempt to rescind, he received from the firm assets $ 341, and on the next day he again tendered the appellant all that he had received, including the sum above mentioned.
The doctrine is fully established that a contract induced by fraud is only voidable, and if one who has been defrauded, after discovering the deceit, acquiesces in the sale, either by express words or by any unequivocal act, such as treating the property as his own, with an intent to condone the fraud, he will be deemed to have elected to affirm the contract, and he can not afterwards rescind. One who, uninfluenced by the fraud, deals with the property as his own, after having fully discovered that fraud has been practiced upon him in the contract or transaction by or through which he acquired the property, thereby waives his right to rescind. St. John v. Hendrickson, 81 Ind. 350; Higham v. Harris, 108 Ind. 246, 8 N.E. 255; Worley v. Moore, 97 Ind. 15; Doherty v. Bell, 55 Ind. 205; Gatling v. Newell, 9 Ind. 572; Comparet v. Hedges, 6 Blackf. 416; Shaeffer v. Sleade, 7 Blackf. 178; Benjamin Sales, section 675.
Equivocal acts, however, which do not clearly evince a purpose, with complete knowledge of the fraud, to retain the property as his own, will not defeat the right of the person defrauded to rescind. The act must be unequivocal, and must show an election to retain the property after discovering the deceit before the right to rescind is gone.
In the present case the right to claim a rescission had been fully perfected by the appellee by tendering back everything that had been received, and by offering to place the fraudulent vendor in statu quo; that the plaintiff below afterwards received money arising from the sale of some of the assets of the firm, in no way militates against his right to compel the rescission, since it does not appear but that the property was sold in the course of the business of the firm, and the money received was fully accounted for without loss to the appellant. One who has perfected his right to rescind a fraudulent contract can not lose it by merely taking care of the property received, or by preserving it in case it is of a perishable nature, unless what he does is done with the intent to confirm the contract. He is not bound to preserve perishable property; but if he acts in good faith in preventing reasonably apprehended loss, or destruction and waste of the property, his...
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