Hart v. Handlin

Currier, Judge,

delivered the opinion of the court.

The plaintiff sues to recover the sum due on a promissory note executed by the defendant. The answer admits the execution of the note, but for defense avers in substance that it ivas given in part payment of certain real estate in the town of California, which, as the answer alleges, the defendant was induced to buy 'upon the representation of the plaintiff that his title to the property was perfect and unencumbered; that the defendant, in ignorance of the facts, and relying upon the plaintiff’s representations, made the purchase February 15, 1866, taking the plaintiff’s title bond therefor, by which the plaintiff covenanted to give to the defendant a deed of general warranty on the payment of the purchase money in full; that $1,000 of the purchase money ivas paid down, and two notes of $1,000 each, payable in one and two years, were given for the balance, the note in suit being one of them; that the plaintiff’s title was in fact at the time defective, and that it has since continued to be so defective, in this, that a' third party had and still holds a right of way over the premises to a certain stairway, and over the stairway through a building on the premises; that the exclusive use of this stairway was the principal inducement to the purchase; that the consideration of the note in suit has therefore failed, and that he cannot be compensated in damages for the alleged injury. The answer concludes with a prayer for a decree rescinding the contract of purchase and canceling'the notes, and for a reimbursement of the cash payment of $1,000.

It appears from the counter claim forming a part of the answer that the defendant entered into the possession and enjoyment of the premises March 10, 1866. When he first came to a knowledge of the existence of the alleged right of way does not appear, but it is alleged that the defendant has not been able to enjoy the exclusive control of the property because of it, which points to an interruption from the beginning. It is not stated that the defendant took any action whatever looking to a rescission of the contract till he came to file his answer in this cause.

That part of the defendant’s answer relating to this defense *175 was stricken out by the Circuit Court upon the plaintiff’s motion, and final judgment rendered in his favor for the amount of the note sued on. The defendant took the case to the District Court, where this' judgment was reversed. The plaintiff brings it here by writ of error. We think the District Court was wrong in reversing the judgment of the Circuit Court. That part pf the answer stricken out states no sufficient defense. The facts presented do not, in our view, make a case for a rescission of the contract of sale, as askdd by the defendant. They do not show any inability on the part of the plaintiff to make good his 'contract, with the exception of this alleged right of way; and as to this there is nothing in the case which indicates, to our minds, that it is out of the range of adequate compensation. The rule on this subject is, that where the defect or diminution or incapacity is large, ahd substantial compensation cannot be made, as where there was a want of title to two hundred and nine acres in a purchase of six hundred and ninety-eight acres (7 Beav. 546), in such a case the purchaser may, in proper time and way, insist on a rescission'bf the entire contract. But where the substance of the contract can be executed, as in the case before us, it will stand, and the remedy of the purchaser is in the way of compensation. (See 3 Pars, on Cont. 400 ; Luckett v. Williamson, 31 Mo. 54 .)

Tjie answer, in its conclusion, alleges that the defendant can not be compensated in damages. But this is a conclusion to be drawn from the facts of the case, and the facts alleged do not sustain any such conclusion. But if the case was one in which the purchaser had undoubted right of rescission on discovery of the defect, he was not bound to exercise that right. He could do as he pleased about it. If he considered it for his interest to affirm the contract and look to the vendor for compensation, it was his right to do so. He had his election either to affirm or rescind the contract; but he was bound to make that election at once, on discovering the existence of the alleged right of way. He should then, on discovery of the encumbrance, have disaffirmed the contract. That was the time for him to have acted and taken his position. Ho was not at liberty to hesitate and delay, and wait for a future view of his own convenience or the market value of *176 the property, before determining the question of the affirmance or rescission of the contract. (2 Pars, on Cont. 780 ; 1 Den. 69 ; 4 Cond. Eng. Ch. 482; 5 id. 504.) According to the allegations of the defendant’s answer, he did not have at any time the exclusive use and control of the stairs, because of the alleged right of way. He must therefore have known of the existence of such outstanding right. He nevertheless continued to hold and enjoy the property, from March 10, 1866, forward, till this suit was brought against him, without taking any action whatever, so far as appears, looking to a disaffirmance of the contract of purchase.

The judgment of the District Court reversing the judgment of the Circuit Court is reversed, and the judgment of the Circuit Court is affirmed.

The other judges concur.