Winters v. Coward

• Decision Date: 17 March 1915
• Docket Number: (No. 5432.)
• Parties: WINTERS v. COWARD et al.
• Court: Texas Court of Appeals

174 S.W. 940

WINTERS v. COWARD et al.

(No. 5432.)

Court of Civil Appeals of Texas. San Antonio.

March 17, 1915.

Appeal from District Court, Frio County; J. F. Mullally, Judge.

Action by D. T. Winters against John R. Coward and others, in which C. A. Crouch intervened. Judgment in part for plaintiff and in part for defendants, and judgment for intervener against plaintiff and defendants, and defendants appeal. Reversed and remanded.

Mason Maney, of Pearsall, John T. Briscoe and Kercheville & Dewald, all of Devine, and Hertzberg, Barrett & Kercheville, of San Antonio, for appellants. John T. Bivens, of Pearsall, Jas. D. Crenshaw, of San Antonio, and Magus Smith, of Jourdanton, for appellee.

FLY, C. J.

This is a suit instituted by appellant against John R. Coward and E. Howard, appellees, to recover the amount of six promissory notes, and to foreclose a lien on 600 acres of land in Frio county. C. A. Crouch intervened in the suit, claiming to own one of the promissory notes for $2,227, for which he prayed judgment and for foreclosure of the vendor's lien. Appellees set up fraud upon the part of appellant in his representations as to the quality of the land and as to the capacity of a certain well thereon, and prayed for a rescission of the sale of the land and in the alternative for $5,000 damages arising from the false and fraudulent representations of appellant. The court submitted the cause to the jury on the issue of rescission alone. The jury returned a verdict in favor of appellees, rescinding the sale and canceling the notes and for $150 for improvements, for $4,000 principal and $925 interest paid by them to appellant, in favor of the intervener against appellant and appellees for $2,227, and in favor of appellant against appellees for $900 for rents and $810 for personal property acquired by appellees. The judgment followed the verdict, and in addition foreclosed a lien on the land in favor of intervener. The appeal is perfected only in so far as appellees are concerned; all parties seemingly being satisfied with the judgment in favor of intervener.

The equitable remedy of rescission or cancellation is sought in this case to set aside a sale of land made by appellant to appellees and to cancel certain promissory notes given for part of the purchase money of the land. The remedy is sought on the ground of fraud and misrepresentation on the part of appellant as to the quality of the land and the capacity of a certain well thereon.

If appellees were led into the purchase of the land through the fraud and misrepresentation of appellant, they could undoubtedly obtain relief through the remedy of rescission, unless they lost their right through laches or waiver on their part.

The remedy of rescission and cancellation is no prime favorite of courts, and slight circumstances, tending to show a purpose or intent upon the part of the person seeking a rescission to waive such right, will prevent the granting of the relief. The right of rescission is one that can be waived, and, when waived, the rights of the parties are placed upon a new basis. Scarborough v. Arrant, 25 Tex. 129; Moore v. Giesecke, 76 Tex. 543, 13 S. W. 290; Kallison v. Poland, 167 S. W. 1104; Kempner v. Thresher Co., 118 S. W. 714; Trauzettel v. Kjellman, 163 S. W. 689.

The mere lapse of time goes far to establish a waiver of the right of rescission, and when taken with other circumstances, tending to show that the purchaser had, after the fraud was discovered, treated the property as his own, and had negotiations with the vendor in connection with other circumstances, would be conclusive. Crutchfield v. Stanfield, 2 Tex. Unrep. Cas. 480.

In the case of Shappirio v. Goldberg, 192 U. S. 232, 24 Sup. Ct. 259, 48 L. Ed. 419, a rescission was sought by the appellant on the ground of fraud and misrepresentation in regard to the quantity of land, and the Supreme Court of the United States held:

"It is well settled by repeated decisions of this court that, where a party desires to rescind upon the ground of misrepresentation or fraud, he must, upon the discovery of the fraud, announce his purpose and adhere to it. If he continues to treat the property as his own, the right of rescission is gone, and the party will be held bound by the contract. * * * In other words, when a party discovers that he has been deceived in a transaction of this character, he may resort to an action at law to recover damages, or he may have the transaction set aside in which he has been wronged by the rescission of the contract. If he choose the latter remedy, he must act promptly, `announce his purpose and adhere to it,' and not by acts of ownership continue to assert right and title over the property as though it belonged to him."

See, to the same effect, Wells v. Houston, 23 Tex. Civ. App. 653, 57 S. W. 584; Hallwood Cash Register Co. v. Berry, 35 Tex. Civ. App. 554, 80 S. W. 857; Luckenbach v. James, 166 S. W. 99.

This court, in Register Co. v. Berry, cited case, held:

"The rule is that a defrauded party must disaffirm the contract at the earliest practical time after the fraud is discovered, and that he must return or offer to return whatever he has received from the other party; and if he retains the article purchased, and continues to use it after discovery of the fraud that induced the purchase, he will be held to have waived the right to rescind the contract and to have acquiesced in it."

The right of rescission can be lost merely by unreasonable delay in instituting suit,...