Hollingsworth v. Ruckman
232 P. 180
Mont.
1924
Check Treatment
MR. CHIEF JUSTICE CALLAWAY

delivered the opinion of the court.

1. The court did not err in refusing to strike from defendant’s answer the allegations respecting his service in the army. The defense set up was predicated upon the proposition that the contract between plaintiff and defendant had been rescinded by mutual consent, including the note which was a part of the transaction, the impelling cause for which was defendant’s retention in the army. His offer to rescind the contract was based upon that fact. No one could tell how long he would be compelled to serve as a soldier. This condition of his affairs made it impossible for him to comply with his contract; therefore he offered to rescind the contract. And for the same reason, it seems, plaintiff accepted the offer. The reason which induced the parties to act as they did was an element of importance in arriving at a correct solution of the controversy before the court. The matter alleged was not only *156proper by way of inducement, but also as going to the underlying cause which served to explain to the court the intentions of the parties upon the vital issue in litigation. It is true that the defense might have been stated more succinctly; nevertheless relevant facts only were pleaded.

2. Counsel for plaintiff contends that the court erred in submitting the case to the jury after both parties had moved for a directed verdict. In moving as they did the parties agreed that the evidence offered presented only a question of law to be determined by the court (Barkemeyer Grain & Seed Co. v. Hannant, 66 Mont. 120, 213 Pac. 208; Fifty Associates Co. v. Quigley, 56 Mont. 348, 185 Pac. 155), but the power of the court cannot be limited by such an agreement. The court may not agree with counsel. The court may deem the evidence in substantial conflict and if it does its power to require the jury to make a special finding or to return a general verdict, or both, is unquestioned. (See White v. Kenny, 146 App. Div. 803, 131 N. Y. Supp. 416; Bank of State of New York v. Southern National Bank, 170 N. Y. 1, 62 N. E. 677; Virginia-Tennessee Hardware Co. v. Hodges, 126 Tenn. 370, 149 S. W. 1056; McClure v. Wilson, 109 Wash. 166, 18 A. L. R. 1421, 186 Pac. 302.) Here the court was in doubt upon conflicting evidence. It desired the jury’s judgment upon the question whether the parties intended to include the note in their contract of rescission and so submitted special findings touching that issue. This was commendable practice. Disputed points deemed material by the court often might be resolved to the court’s satisfaction if special findings were required. All the facts and circumstances considered we think the jury was warranted in making the findings it did.

3. That the contract of sale between the parties was rescinded by their mutual consent is beyond doubt. The promissory note in suit was an integrant part of that contract. A contract is extinguished by its rescission. (Sec. 7564, Rev. Codes 1921.) The offer to rescind and the acceptance thereof were unequivocal. The effect of the agreement of rescission was *157to undo the contract, to treat it as if it had never been. “Now rescission has a well-defined meaning in law, and includes the idea of restoration of both parties to their status quo and the return by each to the other of the consideration given and received.” (Reiger v. Turley, 151 Iowa, 491, 131 N. W. 866.) Properly, when plaintiff received from defendant’s brother defendant’s copy of the contract he should have delivered up the note This he did not do but by the court’s order might well have been compelled to do.

The note was a promise to pay the initial payment required by the terms of the contract. Plaintiff failed to show that defendant was in default when he offered to rescind the contract. In any event, forfeiture of the contract had not been declared — the subject had not even been suggested.

Under the conditions shown by the evidence, when upon a mutual rescission of the contract the plaintiff received from the defendant restoration of the land which was the subject, of the contract, the defendant was entitled to a return of what he had paid plaintiff upon the contract. This would have been the case had he paid the $500 in cash. It was so held in Dietz v. Rabe, 65 Mont. 500, 211 Pac. 343. (And see Black on Rescission and Cancellation, see. 535; Reiger v. Turley, supra; Glock v. Howard & Wilson Colony Co., 123 Cal. 1, 69 Am. St. Rep. 17, 43 L. R. A. 199, 55 Pac. 713; Maffet v. Oregon & C. R. Co., 46 Or. 443, 80 Pac. 489.)

Section 8529, Revised Codes of 1921, cited, has no application to a situation like this. (Hornburg v. Larson, 93 Wash. 74, 160 Pac. 11.)

The court did not require the note to be delivered up for cancellation, but no complaint is made on that score.

The judgment is affirmed.

'Affirmed.

Associate Justices Rankin, Holloway and Stark, concur. Mr. Justice Galen, being absent on account of illness, did not hear the argument and takes no part in the foregoing decision.