The opinion of the court was delivered by
Thе plaintiffs sued to recover $1000 that had been deposited by the defendants in the Commercial National Bank of Independence, to be paid over to the plaintiffs as liquidated damages in the event that the defendants failed to commence drilling for oil and gаs on- certain real property within the time specified in the contract therefor. The defendants say that the deposit and contract had been procured by the fraudulent false representations of the plaintiffs. Judgment was rendered for the plaintiffs on a demurrer to the evidence of the defendants, who appeal.
The contract contained the following provisions:
“Second, parties [the Brinks] agree that within sixty (60) days from the date of the acceptance of this agreement by first parties, to commence drilling for oil and gas on above described lease and to continue same in a workmanlike manner until the depth of 1400 feet, provided they do not find a paying well in the Bartlesville sand at a shallower depth, it being understood and agreed that second parties are not to stop at the sand that is found at about 850 feet on above described lease, but to make a test well to what is known as the Bartlesville sand which is being found at betwеen 1340 and 1400 feet. Second parties are to pay the expense of drilling, casing, equipping, shooting and cleaning said Well and сompleting same.............
“It is further understood and agreed that second parties have the privilege of taking this contract to Minnesotа and there inspect same and consult with the other member of second party, if they desire to go ahead with this contract they agree to send a signed copy of this contract to the Commercial National Bank of Independence, Kansas, togethеr with certified check for $500.00, which check shall be left on deposit for thirty (30) days from the date of its reception, if at the end of that time they have commenced a well on said above described premises they shall have the privilege of taking down the cheсk; if they have not commenced drilling and want to continue this contract for another [forty] (40) days they shall have that privilege by depositing another $500.00. At the end of the forty (40) day period if they have not commenced drilling, the bank is hereby instructed to turn over the $1000.00 to Morton & Dabney and this contract shall be considered at an end.”
The contract was dated July 25, 1918, and was accepted August 15, 1918. A deposit of $500 was then made and afterward a second deposit of $500 was made. On October 15, 1918, defendant James Brinks from Minneapolis, Minn., wrote to the plaintiffs at Independence, Kan., as follows:
*321 “Saw my brother Luke. Hе told me of the condition on the lease for which we hold contract. As no pipeline has been laid, which I was told by you men that it was being laid, to which I can and will make a sworn statement. I think you men will be on the ‘square’ with us, as I have always taken you to be men of your word, and think you will if we get the right understanding. Since no pipe line has been laid or is in sight, you should meet us half way on our contract.”
The following letter written by L. H. Brinks was introduced in evidence:
“Pease, Minn., Oct. 15, 1918.
“Messrs. Dabney & Morton,
Independence, Kansas.
“Dear Sirs:
“My brother-in-law who was at Camp Grant has passed away. He was to me like my own brother. Arrangements arе being made for the funeral. I do not know when I can leave here, and kindly ask you for a ten days’ extension on our drilling contract. Please send me reply by return mail.”
Before these letters were written, L. H. Brinks had been to Montgomery county and had learned that the reprеsentations made by the plaintiffs to the defendants to obtain the contract and deposits were false. The extension of time requested in the letter of L. H. Brinks was not granted. That letter showed an intention to perform the contract. L. H. Brinks knew, when he wrote that letter, thаt the false representations had been made. The letter written by James Brinks shows that he knew, when he wrote, that the representations which had been made were false. The letters do not show an -intention not to be bound by the contract. On discovering the fraud, the defеndants should have acted promptly if they desired to rescind the contract and recover the money that had been depоsited by them. (Bell v. Keepers,
In 2 Black on Rescission and Cancellаtion, § 604, this language is found:
“Where the vendor waives a forfeiture by extending the time of payment after maturity, this does not vest the title to the property in the purchaser, nor authorize a decree of specific performance requiring its conveyance to him without payment being first made in full, but the contract remains executory and binding on both parties.”
“A purchaser could not rescind becаuse of a fraudulent representation that a creek ran through the land, where, although he learned long before the attemрted rescission that this was not so, he failed to make known to the vendor that he had been defrauded, but, instead, sought an extension of time for payment of the first vendor’s lien note, since a purchaser desiring to rescind for fraud, accident, or mistake must proceed promptly, or he will lose such right.”
This is the second time this cause has been in this court. (Morton v. Brinks,
“If a party to a contract whose consent thereto has been fraudulently procured recognizes it as a binding agreement after learning of the fraud, or even of the substance of the fraud (6 R. C. L. 934), he thereby loses his right to demand its resсission. (13 C. J. 624.) A request for an extension of time, at least where it is granted or is accompanied by a promise in that event to perfоrm, has been held to constitute such a recognition.” (p. 745.)
Under the evidence, the defendants could not prevail, and the plaintiffs were entitled to recover. The demurrer to the evidence of the defendants was properly sustained. There was no error in rendering judgment for the plaintiffs.
The judgment is affirmed.