Luey v. Bundy

| Superior Court of New Hampshire | Jul 15, 1838

Wilcox, J.

It must be considered as established by the verdict in this case, that the notes, for the conversion of which this suit is brought, were delivered to the defendant on the condition that he should procure and deliver to the plaintiff, in exchange therefor, certain notes executed by one Gilkev, and should also execute to the plaintiff his own note for 0200, and secure the same by mortgage of real estate. A portion of the Gilkey notes and a sum of money were received by the plaintiff. But when the defendant was called upon to complete the contract, he refused altogether to give his own note for two hundred dollars, and to secure the same by mortgage.

The whole matter resting in parol, it is clear the promise of the defendant to execute a mortgage of real estate is within the statute of frauds, and void, and no action can be maintained thereon. The defendant thus having it in his power to avoid his contract, so that the plaintiff can have no remedy upon it, it seems just that he should be entitled to recover back whatever he has paid or delivered in part execution of the contract, and that the defendant should not be permitted to protect himself by setting up a contract, which he has rescinded. The right of the party to recover in such case is too well established to be drawn in cpiestion at this day. Lane vs. Shackford, 5 N. H. R. 133 ; Gillet vs. Maynard, 5 Johns. 85 ; Clough vs. Hosford, 6 N. H. R. 231.

A sale of property may be upon condition that the vendee shall give security, or do some other act; and a delivery of the property, if also conditional, does not vest the property in the vendee—but upon non-performance of the condition the vendor may reclaim it. Such condition may be waived by the parties ; but a delivery, without any thing being said as to the condition, is not necessarily absolute. It is evidence of a waiver; and, in connexion with other circumstances, may be sufficient to authorize a jury to find a waiver of the condition. But if, under all the circumstances, it is apparent that the parties did not intend to dispense with the condition, the property does not pass. Hussey vs. Thornton, 4 Mass. R. 405; Whitwell & al. vs. Vincent, 4 Pick. 449 ; Smith vs. Dennie, 6 Pick. 262 ; 2 Kent’s Com. 496, (2d ed.)

In the present case it is found, that the notes were delivered by the plaintiff on condition that the other notes should be returned in exchange. When a part of the Gilkey notes, and the defendant’s notes to Hanson, were received by the plaintiff, it was expressly declared that they were to remain as security till the whole contract should be performed. There is nothing stated in the case from which an intention to dispense with this condition can be properly inferred.

And we are inclined to the opinion, that the plaintiff is entitled to recover, on the ground that the contract has been rescinded by the acts of the parties. Where money is paid on a contract, which is executory on the part of him who receives the money, and he altogether fails to fulfil his part of the contract, the injured party has an election, either to bring an action on the contract to recover damages for the non-performance, or to consider the contract as rescinded, and recover back the money paid, as had and received to his use. 1 N. H. R. 18 ; 3 N. H. R. 79 ; 1 Pick. 57 ; 2 Burr. 1010 ; 7 T. R. 181 ; 12 Johns. 363.

It is well established, however, that after a partial execution of an entire contract, it is too late to rescind it; and all remedy for any subsequent neglect must be had on the contract, and on that only. Hunt vs. Silk, 5 East 449 ; Stevens vs. Cushing, 1 N. H. R. 17.

This exception would not seem applicable to a case, where,not withstanding the partial performance,the defendant might be put in the same situation as before. Such a case would demand the application of the ordinary rule, that if the defendant has failed altogether to perform an essential part of an entire contract, the plaintiff may restore what he has received ; and, for the sake of the remedy, treat the contract as rescinded. The defendant sustains no damage, nor does the plaintiff receive benefit, from the partial execution of the contract. Nor is the defendant injured by the rescinding of the contract. In that event he becomes liable to the injured party only for the value of the property which he has received of him : while in an action upon the contract he might not only be held for the value of the property, but mulcted in damages for the non-performance of his agreement.

Where the plaintiff, in purchasing an annuity, had several assurances, part of which were vacated, held he might recover back the money paid, as he contracted for the entirety. 6 East 241; 7 T. R. 181, Giles vs Edwards.

In the case before us, the notes and money received were tendered to the defendant. If the plaintiff has derived any benefit from the use of the money, the value of that is fixed by law ; and he might, under some circumstances, be bound to tender the interest.

It was unnecessary for the plaintiff to produce the notes and money in court. He Had offered them to the defendant, who refused to receive them. The plaintiff had rescinded the contract—the notes and money became the property of the defendant, and he has his action to recover them, if wrongfully withheld from him.

That the amount of the money and Gilkey notes was deducted from the value of the plaintiff ⅛ notes, is no cause oí complaint to the defendant. It is difficult to perceive how a set-off could be made in this suit of one claim against the other. But if such deduction was improperly made, without the assent of the defendant, it will constitute no bar to his f0 recover their value in a separate action. The plaintiff is the only person liable to be injured by such a procedure ; and for this cause the verdict on his motion might be set aside. But if he is content, we see not why the defendant should be heard to object.

That the plaintiff’s notes had been destroyed does not affect his right to rescind the contract. That act appears to have been wholly unauthorized by the plaintiff, nor is there any evidence that it was even known to him.

Judgment on the verdict.