Kelley v. Owens

Citations

• 120 Cal. 502
• 52 P. 797
• 1898 Cal. LEXIS 797

Syllabus

<p>Rescission of Contract—Restitution of Stock — Offer before Suit— Pleabinq.—In an action to rescind a contract under which plaintiff’s-land was exchanged for shares of stock held by the defendant, which, were transferred to the name of the plaintiff, for alleged fraudulent representations of the defendant as to the stock, if the stock has-any value, it must be averred in the complaint that before the commencement of the action plaintiff gave notice of the rescission andi offered to restore the shares of stock to the defendant, unless sufficient excuse is shown for the failure to do so; and it is not sufficient merely to offer in the complaint to restore the stock, and to leave the unindorsed shares with the clerk, to be indorsed under the order of the court, and to aver a mere readiness and willingness to return and deliver the stock.</p> <p>In.—Action for Rescission.—An action for a rescission in equity, in which restoration or an offer to restore before suit brought is unnecessary, as distinguished from an action upon a rescission, will lie only in sucli exceptional cases as where the thing received is of no value to either of the parties, or is merely the individual note of the defendant, or where the defendant could not have been injuriously affected by a failure to restore, or where the contract is absolutely void, or where, without fault of the plaintiff, the circumstances are such that plaintiff could not offer full restoration, and the court may, by final decree, adjust the equities between the parties.</p> <p>In.—Distinction not Baseb upon Form of Action.—The distinction between, an action for a rescission and an action upon a rescission is not based upon the form of the action, but upon the difference between-the cases which are within the rule that restitution must be offered before suit, and those which, owing to peculiar facts, are exceptions-to the rule; and the real facts, and rights arising thereon, cannot be kept out of sight by the device of a pa