Bescission

2 Cutting off; abrogating, canceling, annulling, nullifying, vacating, avoiding. Bescind. To annul a thing done; to vacate, set aside. Eescissory.3 Designed to abrogate, annul, av.oid. Used, in particular, of the refusal of a party to a contract to be bound by it, because of alleged disability, mistake, or fraud operating at the time of the formal mak,ing; also, of the decree of a court of equity canceling a contract for cause shown. The right to rescind a contract of sale proceeds upon the ground that a party has been fraudulently betrayed into making the contract, and, having thus been induced to part with his own property, he may resume possession of it on returning that which he has himself received, thus placing the other party in the position he was in before the contract was made.< Equity will rescind a purchase induced by a material misrepresentation of the vendor, though innocently made.'' The cancellation of an executed contract is an exertion of the most extraordinary power of a court of equity. The power ought not to be exercised in a clear case, and never for an alleged fraud, unless the fraud be made clearly to appear; never for alleged false representations, unless their falsity is certainly proved,, and unless the complainant has been deceived and injured by them.* The rule that he who seeks to rescind a contract of sale must first offer to return the property received,, and place the other party in the position he formerly occupied, as far as practicable, prevails equally at the civil and the common law. It is a rule founded in natural justice, and requires that the olfer shall be' made by the purchaser to his vendor upon the discovery of the defect for which the rescission is asked. ' See 1 Bl. Com. 89; 2 id. 380; 95 U. S. 713; 106 id. 137; 108 id. 401; 109 id. 368; 59 Iowa, 3J5; 100 Mass. 113; 108 id. 303; 50 Miss. 96, 103; 89 N. C. 462; 92 N. Y. 315; Broom, Max. 505. "F. rescinder, to cancel: L. re-scindere, to cut off,, annul, ' Ee-siz'-o-ry. ■> Snow V. Alley, 144 Mass. 551-57 (1887), cases, Devens, J. « Curtiss V. Hurd, 30 F. E. 733 (1887), cases. The vendor may then receive back the property, and be able by proper care and attention to preserve it, or he may have recourse upon other parties, the remedies against whom mi§;ht be lost by delay. He must be permitted to judge for himself what measures are necessary for his interest and protection, and if the purchaser by delay deprives him of the opportunity of thus protecting himself, he cannot demand a rescission of the contract. 1 Where a party desires to rescind upon the ground of mistake or fraud, he must, upon discovery of the facte, at once announce his purpose, and adhere to it. If he be silent, and continue to treat the property as his dwn, he will be held to have waived the objection, and will be conclusively bound by the contract, as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsisted. These remarks are peculiarly applicable to speculative property which is liable to fluctuations in value. A court of equity is always reluctant to rescind, unless the parties can be put back in statu quo. If this cannot be done, it will give such relief only where the clearest and strongest equity imperatively demands it. ^ In order to rescind a contract for the purchase of realty on the ground of fraudulent representation by the seller, it must be established by clear and decisive proof that the representation regarded a material fact; that it was false; that the maker knew that it was false; that he made it in order to have it acted upon; and that it was so acted upon by the other party to his damage, in ignorance of its falsity and with a reasonable belief that it was true.^ There must be knowledge of facte which will enable the party to take effectual action. But he may not willfully shut his eyes to what he might readily and ought to have known. When fully advised, he must decide and act with reasonable dispatch. He cannot rest until the rights of third persons are involved and the situation of the wrong-doer is materially changed. Under such circumstances, he loses the right to rescind, and must seek compensation in damages. But the wrong-doer cannot make extreme vigilance and promptitude conditions of rescission. It does not lie in his mouth to complain of delay unaccompanied by acts of ownership, and by which he has not been affected. The election to rescind, or not to rescind, •once made, is final and conclusive.* The principle of many cases is, that, where the contract has been induced by fraud, it is not necessary that the party seeking to rescind should absolutely tender what he has received on account of the contract. » Andrews v. Hensler, 6 Wall. 258 C18G7), Field, J. See also PearsoU v. Chapm, 44 Pa. 12 (1862), cases,.Lowrie, C. J. = Grymes v. Sanders, 93 U. S. 62 (1876), cases, Swayne, Justice. 3 Southern Development Co. v. Silva, 125 U. S, 250 (1888), Lamar, J. 4 Pence v. Langdon, 99 U. S. 581 (1878), Swayne, J. See also Indianapolis Boiling Mill Co. u. St. Louis, &c. It is necessary, however, that he should give notice of his intention to rescind, and that at trial he should be in a situation to put the other party in the condition in which he was at the time he discovered the fraud. That the subject-matter has been partially disposed of win not of itself prevent a rescission, unless the greater part has so disappeared.' An application to rescind, like that for specific execution, is addressed to the sound judicial discretion of the coul-t. The maxim that he who seeks equity must do equity emphatically applies. A mistake in law, where there is neither fraud, concealment, nor material mistake in fact, constitutes no ground for I'escinding a contract. The complain&nt must ' not have done any act which will prevent the respondent from being placed in statu quo.^ The cases generally hold that where a vendor undertakes to rescind the sale for fraud, he must, before suing for either the goods or their value in money, return or tender to the vendee whatever valuable consideration he has received for them. But the cases which so hold are cases where goods were given for goods, or where the action was' replevin to recover the goods sold, in specie, and not trover for their value in money. If this rule were not applied, the fraudulent vendee may lose what the vendor has received, and the vendor get justice without doing it. There is no case in which the rule has been applied in an action of trover against the fraudulent vendee, where the vendor has received nothing but money. ^ See Cancel; Knowledge, 1; Perfohmance, Specific,