DESHA V. ROBINSON. VOL. 17 will of defendant, whereby the consideration of the note sued on had failed—in all which the plaintiff, as agent of the bank, participated. Held, 1st. That as the plea did not negative the the fact, that the money made on the execution was paid to the defendant, the rule that all pleadings will be construed most strongly against the party pleading, will so intend. 2. That the facts set up in the plea did not show a total failure, nor a total want of consideration ; nor do they constitute a bar to the action, upon the principle of rescission of contracts ; but as the as-ignee was entitled to a cross action for damages for the breach of the contract on the part of the bank, in taking control of the execution and causing it to be returned, the defendant might recoup such damages. A party to a contract will not be allowed to repudiate or rescind it, where the failure of performance by the opposite party was but partial, and without fraud, leaving in his hands a subsisting and executed part performance ; nor where it is impossible for both parties to be restored to the condition in which they were before the contract was made. And even in cases of fraud, the party seeking to rescind a contract, must, within a reasonable time after the fraud comes to light, make his election and proceed to rescind by a return or offer to return whatever he may have received under the con ract of any value whatever to either party. In all that class of cases, commonly called failure of consideration, whether involving bad faith or not, or where fraud has in-tervened, or there has been a breach of war-*ranty, fraudulent or not, or of any other [*229 stipulation of the contract sued upon, entitling the 228] *DESHA I S Exits. defendant to a cross action against the plaintiff to V. recover damages for such failure, fraud or breach, he may, instead of resorting to such cross actim, ROBINSON ADME. recoup the damages sustained by him. The case of Wheat et al. v. Dotson, 12 Ark. 699; Each party's pleading is to be taken most strongly Smith v. Capers. 13 Ark. 9 : and Robinson v. Mace, against hitur. elf ; but pleas in bar are not to be con- 16 Id. 97, as to recoupment, approved ; also the strued with the severity which is applied whea case of Clark v. Moss et al., 11 Ark. 736, and Wale testing dilatory pleas, and will be deemed sufficient, & Miller v. Pennington et al., Id. 745,as the assign-if by rational intendment they meet the cause of ment of judgment by parol. action in mat ter of substance. Where a part of the plaintiff's d eclaration is un-To an action upon a note payable to the real es- answered by the plea, he may take judgment theretate bank and assigned to the plaintiff, the defend- for, but if he fails to do so, it is his own laches, and ant pleade 1 that the consideration of the note was this court will not reverse the judgment for that the transfer and assignment of the control and cause. management of an execution, then in the hands of the sheriff, and of all executions to be issued there- Appeal from the Circuit Court of Inde-after on a judgment in favor of the bank against S. pendence County. and R. ; that the execution was returned unsatisfied, except as to a partial payment made out of the HON. WILLIAM C. BEVENS, property of one of the defendants ; that another ex- Special Circuit Judge. ecution was issued upon the judgment, of which the bank, subsequently, while it was in the hands of Fowler, for the appellant. the sheriff; toek the control and direction, and Win. Byers, for the appellee. caused it to be returned, while it was unsatisfied and the money still due aud unpaid, without the SCOTT, J. For the understanding ol
JAN. TERM, 1856. DESHA V. ROBINSON. all the questions arising in this case, it Estate Bank, the control,of said execuwill be sufficient to state, that this was tion could be purchased, and obtained an action of debt : That the plaintiffs from said bank by this defendant's below declared as assighee ot the Real testator and one Nathan Haggard, and Estate Bank, upon a promissory note such proceedings and negotiations were for $800, dated the 8th day of July, had, by and between said Real Estate 1841, at six monthe. 1V11 debet was Bank, and said Waddell, Alexander pleaded ; to which issue was taken, Robinson, Samuel Robinson and this and also & special plea, o f which the defendant's testator, by their agent following is a copy, to-wit : duly authorized to act for them in that tett° non, because, he says that, at behalf, that on or about said day, to-or some time prior to 8th of July,1841, wit : 8th July, 1841, it was agreed be— the Real Estate Bank of the State of tween the said parties, that said blank Arkansas had issued an execution note should be filled up with the sum against John Robinson and Rufus of $800, and should be delivered to Stone, on a judgment obtained by said said Real Estate Bank, and that the bank against them, in the circuit court said Waddell, Alexander Robinson, of Pulaski county, on the 14th of Samuel Robinson and William Robin-November, 1840 ; the said John and son should, in addition, pay to said Rufus had been liable to said bank for bank, certain sums that were due on having before then become. bound to said judgment and execution, as in-said bank, as securities for one Robert terest due, costs of protest, and costs T. Dunbar, by a note for $800 given to on said execution, and advance inter— the bank, which execution was in the est, all of such sums amounting to a bands of the sheriff of Jackson large sum of money, to-wit : the sum county, on the 8th of July, 1841, the of $148.47, and for said note and money said John and Rufus then residing it was agreed by and between the said 230*] *in said county, and said execu- Real Estate Bank, and the said Wadtion was so in the hands of the sheriff dell, Alexander Robinson, 'Samuel of Jackson county, for the purpose of Robinson and this defendant's testator, being made out of the said John and that said William Robinson and Na-Rufus. than Haggard should have control of " And this defendant further says, said execution, and have a right to dithat this defendant's testator, William rect what should be done therewith,and Robinson, deceased, James J. Wad- thereupon, and the right, upon the dell, Alexander Robinson and Samuel return of .said execution unsatisfied, Robinson, had prior to said 8th July, to direct and control the further is-1841, signed a note in blank, to the Nuance and use of any execution P*231 said Real Estate Bank, which was and executions upon said judgment, afterwards tilled up with the sum of till the same should be satisfied accord-$800, which note was by them signed ing to law.
in blank, on or about the 21st of June, And pursuant to such agreement, the 1841, and is the note now sued on, said William Robinson and the de-which note in blank of said Waddell, fendant's testator, Alexander Robin— Alexander Robinson, Samuel Robin— son, Samuel Robinson and James J. son and this defendant's testator, was Waddell, had the said blank filled up by them sent to Little Rock ; that by in the sum of $800, and then, to-wit: the delivery of it to said Real Estate on 8th July, 1841, which is the note Bank, after being filled up in such sum here sued on, aud delivered the same as should be demanded by said Real to said Real Estate Bank, and also ix'
DESHA V. ROBINSON, VOL. 17 other respects, complied with their another execution was issued to make said agreement by paying the said sum the same money that was represented of money, and the Real Estate Bank, by the execution that was out on the for said note and money, then gave the 8th of July, 1841, issued from the office control and direction of the said exe- of clerk of the circuit court of Pulaski cution that was then in the hands of county, which last execution was re-the sheriff of Jackson county to said turnable to the -March term, 1843, of Nathan Haggard, and this defendant's said court. testator, for the use and benefit afore- And before the return of paid execu-said, and also promised to, and con- tion, which had come to hands of tracted with the said Waddell, Alex- James Robinson, sheriff of Jackson ander Robinson and William Robin- county, and before any portion of the son, this defendant's testator, that said consideration for which said note had Haggard and William Robinson should been given was paid the said Real Es-have the control, direction and use of tate Bank, notwithstanding its said all further executions issued on said agreements and contracts with said judgment, and the right to direct the Waddell, Alexander Robinson, Samuel issuance and return of executions on Robinson and William Robinson, took said judgments according to law, till the control and direction of said exethe same was satisfied, and that the cution, issued for the purpose of makrights and interest of the Real Estate ing the sum expressed to be due in Bank in and to said execution, and all the execution issued, and in hand of further execution that might be issued the sheriff on the 8th July, 1841, away thereon, should be transferred to the from said Nathan Haggard and Wilsaid Nathan Haggard aud liam Robinson, and through William Robinson, which said agreement of the F. Deuton, their agent in that behalf, said Real Estate Bank was the only directed the said sheriff to return said consideration of the note sued upon. execution, which was done on the 14th And this defendant says, that on the ot November, 1842, and while the said making and consummating of this execution was unsatisfied, and while agreement, contract and purchase of the money in it was still due and un-the control and direction of said exe- paid, which order was obeyed by the cution, and the right to issue and con- sheriff, which direction of the Real trol further executions in the collec- Estate Bank and act of the sheriff of tion of said judgment, John Robinson Jackson county, in obedience thereto, acted as agent for, and on behalf of was made without and against the will said Waddell, Alexander Robinson, and consent of Nathan Haggard and Samuel Robinson and his defendant's William Robinson. Wherefore, this testator, William Robinson. defendant says, that the whole consid-And this defendant further says, that eration for the giving and delivery and the said execution, which was then, existence of said note, which is the to-wit : 8th July, 1841, in the hands of note sued, has wholly failed by the the sheriff ofJaekson county, was not said wrongful and illegal act of the satisfied so that the sum of—expressed Real Estate Bank in relation thereto, in it, still remained due and unpaid, in which the said William F. Denton, till the time hereafter meetioned (ex- who is the plaintiff's testator, partici-232*] cept the sum of two hundred and pated, and all of which he knew and all twenty-six dollars that were collected this said defendant is ready to verify. out of the property of John Robinson), Wherefore, he prays judgment, if the to-wit : on the 8th July, 1842, when plaintiffs ought to have or maintain
JAN. TERM, 1856. DESHA V. ROBINSON. their said action against him as afore- tendment, they meet the cause of ac-said. tion in matter of substance, they will This plea was verified by affidavit, be deemed sufficient. and filed the 19th day of March, 1855. This, however, in no way displaces 2331 %The opposite party interposed the rule, that each party's pleading is a demurrer, assigning for cause, that to be taken most strongly against hitnthe facts detailed did not show any self, and most favorably to his adverfailure of consideration, otherwise than sary. A rule founded not only upon by a mere deduction of law, and that, the presumption, that each party's after the transfer of the judgment and statement is the most favorable to him-execution, as set up in the plea, the self of which his case will admit; hut, bank could take no such control over also, upon the obviously reeson- V234 the process of execution, or of the sher- able principle, that it is incumbent iff in regard thereto, as could oust the on each pleader, in stating his ground control of appellee, or deprive him of of action or defense, to explain himself the proceeds of the execution and judg- fully and clearly. Any ambiguity, un-ment. But the court overruled the de- certainty, or omission in the plead i ngs, murrer, and the plaintiff below saying must, therefore, be at the peril of nothing further, and electing to stand the party in whose allegations it oc-on his demurrer, the court rendered fi- curs.' Gould's Plead., chap. 3, sec. 169. nal judgment, and the plaintiffs below Among the examples given by the appealed to this court. author, for the application of this ru!e, The ruling of the court below upon is that of a defendant in trespass plead-the demurrer is the only matter insisted ing a general release, without stating upon in this dourt as e'rror by the coun- the time of the execution, which he sel for the appellants. says, in such ease, shall be intended to Proceeding, then, to determine this have been made before the trespass was point, we must necessarily scrutinize committed. So, also, the case of a de-the plea, and ascertain, if we can, the fendant's pleading, to debt on bond legal effect of the matters therein set payable on a given day, payment or up upon the appellants' alleged right tender, without alleging the time, the of recovery upon tne contract on which legal intendment must be that it was their suit is founded. If they be not made after the day appointed for pay-an al-solute bar to any right of recovery ment t. upon this contract, they may, by pos- This would seem to be sufficient au-sibility, be of sufficiency to mitigate or thority for intendment, as to the plea diminish the amount which would before us, against the pleader, that the otherwise be recoverable. two hundred and twenty-six dollars, Doubtless, pleas in bar are never con- alleged to have been made on the exe
strued with the severity which is ap- cution out of John Robinson, was made plied in testing pleas which are merely out of him at some point of time be-dilatory; and are always to be taken ac- tween the day when the control of that cording to their entire subject matter, process was yielded to appellee's intesand will be sustained accordingly, as tate and Haggard, and the day when taken altogether; and are not to be de- the bank wrongfully resumed control termined by a disjointing of their of the alias process, as alleged in the members, or by laying stress on what plea.' may be immaterial, or upon the prayer When this is done, then a rational for Judgment, or conclusion of such 1. See Richardson v. Williams, 37-542 and eases pleas. If, therefore, by rational in- cRed. 9 Rep.
DESHA V. ROBINSON VOL. 17 construction of the plea presents sub- wholly unsatisfied, to-wi t: in Novemstantially this case—that is to say: That ber 1842, the bank, in disregard of her in July, 1841, the bank having a judg- aforesaid contract, took the control and ment against John Robinson and Ru- direction of this alias execution, and fus Stone, recovered in 1840, on a note by her agent in that behalf, directed for 00, and having sued out process of the sherifi to return it, which direction execution thereon, which was then in he obeyed. And that the said control the hands of the sheriff of Jackson and said direction, and the said act of county, to be levied, in consideration the sheriff in obedience thereto, were of the execution of the note here sued all without the consent, and against on, and its delivery to the bank, and the will, of both the said Haggard and the additional consideration of $148.47, William Robinson, the appellant's tes-which was paid to the bank in cash, in tator participating in these wrongfnl pursuance of an agreement to that ef- and illegal interferences on the part of fect, "then gave the control and direc- the bank. tion of said execution, which was then If the matters set up in the plea be in the hands of the sheriff of Jackson considered as matters to show either a county, to the said Nathan Haggard want, or a failure of the consideration and this defendant's tastator, for for which the contract sued upon was the use and benefit aforesaid; and based, it would seem clear enough,that also, promised to, .aud contracted they would neither show a total want, with the said Waddell, Alex- nor a total failure of that consideraexander Robinson, Samuel Robinson tion ; because, without any special re-2351 and William Robinson, this de- gard to the ambiguous allegation as to fendant's testator, that said Haggard the $226, it is distinctly stated in the and William Robinson should have the plea that the "control and direction" control, direction and use of all further of the execution, that was in the sherexecutions issued on said judgment ac- iff's hands at the time the contract cording to law, till the same was satis- was made, was "then" in pursuance of fied ; aud that the rights and interest that contract for said note and money, of the Real Estate Bank, in and to said given to Haggard and Robinson And execution, and all further executions in the absence of any alqega- [*236 that might be issued thereon, should tions of interference, on the part of the be transferred to the said Nathan Hag- bank, prior to November, 1842, it must gard and William Robinson." be intended that Robinson and Hag-That while Robinson and Haggard, gard, also, enjoyed under the contract, for the use aforesaid, were in the en- the like control and direction of the joyment of the control of this particu- alias execution, from the time of its lar execution, which the bank gave issuance in July, 1842, up to the time them in part performance of her. side of the bank's wrongful interference in of the agreement, 5226 were collected the following November. Hence, if (by means of the execution) out of the these parties purchased with their property of John Robinson. That, aft- note and money, the control and direc-erwards, ou the 8th of July, 1842, au tion of these executions simply for idle alias execution was issued upon the grandeur, from their own showing, same judgment, returnable to March they enjoyed it from July, 1841, until term 1843, -which came to the hands of November, 1842 ; if for the more sensithe sheriff of Jackson county to be ble purpose of securing the means of levied. That, before the return day, realizing the amount due upon the and while said alias execution was j udgment, upon which they were issued,
JAN. TERM, 1856. DRSHA V. ROBINSON. then, also, upon their own showing, can be rescinded by one of the parties, they enjoyed this means and opportu- unless both can be restored to the connity for a like period of time; and in dition in which they were bafore the the third place, they seem actually to contract was made. If; therefore, one have realized the sutil of $226, by means of the parties has derived an advanof the control and direction of the tage from a partial performance, he executions so purchased by them. cannot hold this, and consider the con-It would seem equally clear, that these tract as rescinded, because of the non-
matters do not constitute any bar to a performance of the other : but must do recovery upon this contract, as predi- all that the contract obliges him to do, cated upon any supposed repudiation and seek his remedy in damages." or rescission of it, on the part of the In the next place, supposing the fail-defendant below, for several reasons.2 ure on the part of the bank, to have First. They could not treat it as re- been a mere failure, without any in-scinded, upon the failure of the bank gredient ot fraud; not only is the case as set up in the plea, because that fail- made by the plea, one where the opure of performance, for which an ac- posite party could not treat the contion would lay, was but partial and tract as rescinded, but it is also a case not entire, necessarily leaving in the where the law does not allow of a re-hands of the defendant below a sub- scission at all, even by an act of-the insisting and executed part consideration jured party, without the consent of the for the note in suit, and : "It is a clearly other party, either express or implied ; recognized principle, that, if there is not merely for the lack of entire fail-only a partial failure of performance ure of consideration received, and of by one party to a contract, for which fraud, but also, because,. from the na-there may be a compensation in dam- ture of the transaction detailed in the ages, the contract is not put an end to." plea, it is not possible that both parties (Per Littledale, Judge, iu v. could be restored to the condition in Franklin, 4 Add. & Ell. 599.) And to which they were before the contract the like effect is the law, on this point, was made. The cases of Hunt v. Silk, stated by judge Parsons, in his work 5 East 449, and Beed v. Blandford, 2 Y. on contracts (2 Pars. Contract, page & Jet. 278, are the leading ones on this 191), in the remark that : "Generally, point, and in some of their main where one fails to perform his part of tures, they are not unlike the case mad e the contract, or disables himself from by the plea, in the aspect in which we performing it, the other party may are now considering it. Both were treat the contract as rescinded. But cases of part occupation under the con-
not if he has been guilty of a default tract—one of a house, and the other of in his engagements, for he cannot a ship. In the latter case, the imster take advantage of his own wrong and part owner of the vessel agreed to 2371 'to defeat the contract. Nor, if purchase the moiety of his partner, the failure of the other party be par and having paid the purchase money, tial, leaving a distinct part as a sub- and received the title deeds, which he sisting and exeothed consideration, deposited as security with a third peraud leaving also to the other party his son, had the entire possession of the action for damages for the part not vessel given up to hint, hut his partner performed." And in the further re- afterwards refused to execute a bill of mark, that : " Gt nerally, no contract sale or refund ihe money. It was held, 2. hit rescission of contracts see Sumner v. Gray, that an action for motley had and 4472, note 1 ; Plant V. Condit, 22-154, received, would not lie to recover
DESHA V. ROBINSON. VOL. 17 238 .9 '.'the purchase money, as the And Judge Co-ven remarks, of these parties could not. be restored to their cases, in Voorhees v.- Young, 2 Hiles original situation. Vaughan, B., re- Rep. 298; "they certainly prove the marked: " Tile decision in Hunt v. Silk, general rule very clearly, that, where lays down a very clear and just rule in one party is desirous of rescinding a these cases ; if the circumstances be contract by reason of the other's de-such, that, by rescinding the contract, fault, he must do so in toto, acd cannot
the rights of neither party are injured, hold on to part. He must put the other in that case, if one contracting party in statu quo by an entire surrender of will not fulfil his part of tne engage- possession, and of everything he has ment, the other may rescind the con- "obtained under the contract, [*239 tract and maintain his action for or he cannot recover the consideration money had and received, to recover in any action for money had and re-back what he may have paid upon the ceived." faith of it." And Alexander, C. B., The remark of the chief Baron, said : "In order to sustain an action in above quoted, in reference to the in-this form, it is necessary that the par- termediate occupancy and control of ties should, by the plaintiff recovering the ship, is pointedly applicable to the the verdict, be placed in the same sit- control and direction of the execution§ uation in which they originally were which , the defendant below enjoyed. before the contract was entered into. They, by this intermediate occupation, The plaintiff has by his in termed late oc- derived the profits of the writs ; if they cupation, derived the profits of the ves- did not, they might have done so; and sel ; if ht: has not, he might have done it is impossible to say what the bank so; and it is impossible to say what might have made had she, during the the defendant might have miole, had time, had the control and direction of he, during the time, had any control them. Under these circumstances it over it. Under these circumstances cannot be said, that the situation of it cannot be said, that the situation of the parties has not been altered, and the parties has not been altered and that, by the defendant's barring a re-that, by the plaintiff's recovery in this covery in this action, their original action, their original position may be position may be restored. Nor could this restored." And after remarking upon have been said, if a judgment had been the situation of the title deeds, as in- rendered for the plaintiff§ below, for terpsing a further obstacle to the plac- the difference between $226, and $148.47, ing of the parties in statu quo, he con- with interest ; because, besides this becludes by saying : "I think the ob- ing but damages for a wrong, and not jection is unanswerable, and that the the restoration of a right, the difficulty rule f or a non-suit must be made abso- as to the intermediate control and lute." direction of the executions, would have Upon the authority of these cases, remained as invincible as the recall of
the supreme court of Alabama lay time gone by. down the rule, in Barnett v. Staunton . This rule, making the placing of the & Pollard, 2 Ala. Rep: 189: " That a parties in statu quo a prerequisite of re-contract cannot be rescinded without. scission, is not applied with so much mutual consent, when circuni- stringency in cases, where, from the stances have been so altered, by part ingredient of fraud entering into con-execution, that the parties cannot be tracts, they are made vicious. Indeed, put in statu quo, for if it be rescin ded to a certain extent, they are excepted at all, it must be rescinded in toto." out of the rule. That is to say, the
JAN. TERM, 1856. DESHA V. ROBINSON. party in default, having a legal right to void by the fraud, but voidable merely; rescind, springing out of the fraud, and of the duty incumbent upon the "does not lose this right, because the injured party to restore whatever he contract has been partly executed and may have received. "A sale made the parties cannot be fully restored to under a false representation, isnot ipso their, former position." 2 Parsons on facto, void, but is voidable merely, at Cont., page 277. In such cases, where the election of the party defrauded," the party, who has practiced the fraud, says Chief Justice Shaw, in Thayer V. has entangled and complicated the sub- Turner, ject of the contract in such a manner The contract although fraudulent was as to render it impossible that he not ipso facto void ; it was only voidable should be restored to his former con- by a prompt return of whatever had dition, the party injured, upon restor— been received upon it," said Beardsley,. ing, or offering to restore what he had Judge, in Baker v. Robins. received, and doing whatever is in his But when the party elects to rescind power, to undo what 13.s been done in and proceeds to do so, he can keep the execution of the contract, may re- back nothing that he received under scind it, and recover what be has ad- the contract, whether it be money, vanced. Masson v. Bovet, 1 Denio Rep. goods or securities. "But if he elects 69. to rescind the sale, he must return and 2401 ',This right to rescind, how- restore to the other party, the whole ever, arising from the ingredient of of the consideration, whether money, fraud in the contract, is not an un- goods, or securities, received by way of qualified one, but "a conditional consideration for the sale, which may right," as was said by Chief Justice be of any value to either party," said Shaw, in the ease of Thayer v. Turner, Shaw, Chief Justice, in Thayer v lurner 8 Mctc. Rep. 554. And these conditions "If, in the exchange, he received mo-are, that within a reasonable time after ney in boot, he ought to return, not only the fraud comes .to light, he must the unsound house, but also, the money make his election to rescind (if he de- *he received," said Parsons, ti'241 signs to (10 so), and proceed to rescind Chief Justice, iu Kimball v.. Cunning-by return or an offer to return what- ham. ever he may have received under the As all action for money had and re-contract of any value whatever to either ceived will not lie for the considera-party. Masson v. Bovet, 1 Denio Rep. tion, until the contract has neen re-09 ; Barnett v. Staunton St Pollard, 2 scinded, so where fraud has entered Ala. Rep. 181; Garter _Harding v. into a sale. the purchaser cannot plead Mary Walker, 2 Richardson Rep. 40; it as in disaliirmance of the contract, Kimball v. Cunningham, 4 Mass. Rep. in bar of an action for the considera-502 ; Baker v. Robbins, 2 Denio Rep. tion, unless there has been rescission 136; IVOrton v. Young, 3 Mass. Rep. 29; by a tender, or its equivalent„ of the Connor V. Henderson, 15 Mass. Rep. thing purchased, within a reasonable 320; Perley v. Balch, 23 Pick. Rep. 283; time. Bain v. Wilson, I J. J. Marsh. Minor v. Kelly, 5 Monroe Rep. 272; 202. Sictoirt v. Daugherty, 3 Dana Rep. If the thini.c purchased, is of no value 479. to either party, no tender is necessary. The necessity for this overt action, And if hy the sickness, or the death, or on the part of the injured party, arises the destruction of the eh:ate], a tender from the double consideration, that is rendered inipossihle, the actual ten-the contract i g not, ip.3o Palo, rendered der will I.s. excused. Mor,gi geal V.
DESHA V. ROBINSON. VOL. 17 Gayle, 2 Stew. & Port. 224. And to had fraudulently concealed at the sale, the same effect are other cases ; among so that the consideration had utterly them, those of South Carolina, of failed." Upon which, the court, by which, Evans, Judge, says, in Carter Willis, Judge, say : "The second plea & Hardin v. Walker, 2 Richardson was equally bad. If the slaves were Rep. 46. "In all of them it is recog- unsound at the sale, and that unsoundnized as settled law, that assumpsit for ness was not disclosed, it was necessary money had and received will not lie to aver that the plaintiff knew of it. until the contract has been rescinded. Besides, it was indespinsable that the This cannot be done without the con- defendant, on discovering that unsent of the seller, unless in those cases soundness, if he was defrauded by the where the purchaser has the legal right concealment thereof, should have dis-to rescind, in which he may rescind by affirmed the contract, and tendered a tender back : or, in case this is ren- back the slaves, and to have shown dered impossible by the death or de- that matter in his plea, or have set up struction of the chattels, he may re- some good excuse for not having done scind by notice, without tender. Fow- so, by showing that they were too ill ler v. Williams, 2 Brev. 304; Seibles v. to be thus restored, or the like." Blackwell, 1 McMullen 56; Bryant v. To the same point is the case of Bostick, 2 Mills Rep. 75; Wilson v. Fer- Christy V. Cummins, 3 McLean Rep. guson, Chevis Rep. 193, as cited by 386, where the court say : "This is an Judge Evans. action on a note. The defendant "No defense can be made to an ac- pleaded, that the note was given for tion for the purchase money, when the merchandise, which was represented facts relied upon to make it, would not, to be sound, but was unsound and if the parties were changed, and the damaged." To this plea, the defend-money had been paid, enable the ven- ant demurred, on the ground that dee to recover it back." Per Hopkins, there was no offer to return the goods. Judge, in Ogburn v. Ogburn, 3 Porter "A vendee of a chattel cannot re-Rep. 130. scind the sale without offering to re-When, therefore, a party defendant turn it, unless it is worthless to both undertakes to make such facts availa- parties." Perley v. Balch, 23 Pick. ble to him by a special plea instead of 283. To render .a rescission of a con-relying upon them under the general tract valid the rescinding party must issue, he must set them out by proper place the other party in statu quo. averments in his plea; otherwise it will Holbrook v. Burt, 22 Pick. 546; Conner 2421 be bad ou demurrer, as *"Any v. Henderson, 15 Mass. 319. other plea would be, when the facts "The plea avers: 'that the goods were of the plea may all be admitted, and unsound and damaged so as to be of no yet it does not fellow, that the plaintiff' value to defendant.' But there is no has no right to recover. Per McLean, averment that they were of no value. Judge, in W hite v. Bow«rd et al., 3 For the purposes of the defendants, McLean Rep. 294. they may have been to them of no In the case of Minor v. Kelly, 5 Mon- value; but it does not appear that, roe Rep. 273, the defendant plead returned to the plaintifn, [*243 "That the slaves, at the time of the they would have been of no value to sale, were unsound, and affected with them. The demurrer to the plea is consumption, with which (since tile sustained." last continuance of the cause) they had Thus, it would seem that, whether died ; which iinsouudness, the plaintiff the fai!ure of further performance on
JAN. TERM, 1856. DESHA V. ROBINSON. the part of the lank should be regarded common sense of more modern times, as a mere failure to perform her con- with an idea, german to that kind of tract, or, as a failure superinduced by sense, *that it would be as ab- P244 fraud, the plea in question is equally surd to yield to "straight jacket" plead-bad, when taken as seeking to inter- ing, the power to "crush out" common pose-a peremptory bar, to the action, justice and common convenience, for predicated either upon a total failure the mere sake of the preservation of of consideration, or any supposed re- the beauty and harmony of that sciscission of the contract. ence, as it would be to yield to the And it would seem to be unnecessary commander of thP outworks of a cita-to scrutinize it further in this aspect, del, the power to turn in upon it the -as there could seem to be no plausible guns fixed upon those works to guard pretense, from the facts detailed in the its approaches. plea, that any right of rescission was The same general proposition, which secured to the defendant below by any we co: sid,r that we have now laid stipulation of Ole contract; and if any down and sustained upon this rather -such might. he i magi ned, it would seem extended examination of the plea be-that it could not he available, for the fore us, is far more briefly expressed by reason, that a right, ot rescission, thus Mr. Chitty, in the following extract 'derived, like that which springs to the from his work on contracts, page 703. party not in default, ont of fraud, is— "A contract cannot, in general, be like that right — au a right at election rescinded in tow, by one of the par-and upon conditi,m, to lie made avail- ties, where both lit. them cannot be able by diligence, or lost by Inches, placed in the identical situation which like that right, unless otherwise ex- they occupied, and cannot stand upon pressly provided by the stipulations the same tennis as those which existed which create it. when the contract was Made. The The consequence is, that according most obvious instance of this rule is, to what may be called the old "hard where one party, by having had posshell law," if we ,consider that this coi l - session, &c., has received a partial tract was not tainted with fraud, it benefit from the contract. It would would have to stand, and the defend- be unjust to destroy a contract in toto, ants 1. eloW would have to fulfil it, and where one party hasderived some ad-seek their remedy in a cross action vantage by the other having, to some against the bank, for the recovery of extent, performed the agreement; in oompensation in damages for the fail- such eases the agreement shall stand; ure of further performance on the part the defendant must perform his part of that party to the contract, If, how- thereof, and seek in a cross action a ever, we should consider that the con- compensation in damages for the tract was, in fact, tainted with f aud, plaintiff's default. Of late, however, then it could not be- made the founda- the courts, to prevent unnecessary litition of a recovery to any extent what- gation, have, in many instances, al-ever, but must be disregarded in toto. lowed a defendant, in case of a partial Both of these doctrines of the old law, failure of consideration, * hewever, have been long since explo- instead of bringing a cross aetion, ded, as we have abundantly Seen, as to reduce the damages by setting up such the latter, by the authorities already partial failure of consideration." -cited (see also, remark on this partic- And this, we think, was precisely ular point in Wheat v. Dotson, p. 7f34), what the learned pleaders designed to and as to the former, by the practical set up by their plea iu the case before
DESHA V. ROBINSON. VOL. 17 us; and which they had a clear right to tract was made by the plaintiff, which do, and insist upon as in mitigation, or he has violated, then the defendant reduction of the amount of the recov- may, if he choose, instead of bringing ery sought upon the contract, on which a cross action, recoup his damages the action is based; not only in accord- arising from the breach committed by ance with what is now a great current the plaintiff, whether these damages of decisions in the English, the Fed- be liquidated or not. The idea being eral, and in several of the State that all cross claims arising out of the courts—daily increasing in vol- same contract, shall compensate each ume and force, and covering other, and the balance only be recovdeeper and deeper below the sur- erable by tho plaintiffs. 245*] 'f'ace, the now absolute doc- This is a material modification of the trines of the old law, to which we have original common law idea of recoup-alluded—but, also, with like doctrines ment, if that is to be inferred solely distinctly declared in this court here- from the few ancient traces of it retofore administered in the cases of maining in the old books. It is by no W heat et al. v. Dotson, 12 Ark. 699; means certain, however, that these Smith v. Capers,13 Ark. Rep. 9, and traces of it present fairly its true char-Robinson v. Mace, 16 Ark. Rep. 97•3 acter ; but they at least vindicate it, as In these cases, this court, recognizing a genuine common doctrine. the doctrines of the law thus admin- ''4 11Varred against, by Lord p246 istered under the name of recoupment, Coke, doubtless, because of its equitareceived that term and -the doctrine it ble texture, in his common warfare expresses, in the modern signification against equity law, so ably vindicated and acceptance of both : wherein it by Bacon, his great rival, to the con-is understood, that the matter which tinued annoyance of the former, and a is to be the foundation of the mitiga- stumbling block to the special pleadtion or diminution of the plaintiff's ers ; it is not at all remarkable that it recovery, to be within the doctrine, should have been driven away, for a must arise out of the transaction, only, time, from the common law courts, or in which the suit is founded; and can- that the lineaments of its features not come out of a different contract. should be found imperfectly traced, But when this is the ease, it is imma- when the practical good sense of mod-. terial whether this cross demand (in ern times, in recovering its equilibrium the nature of a cross action), is liqui- on this subject, had gotten the better dated, or is unliquidated. Nor is the of both. • defendant necessarily bound .to recoup; Mr. Sedgwick, in his work on Dam-if he thinks proper, he. may not do so, ages, after entering upon this subject, but-may bring his cross action. But, evidently with a wry face and a dispoof course, if he should elect to recoup, sition to cavil, concludes, at last, alter it would bar the cross action. Mc- examining most of the cases then ac-Lane v. Miller, 12 Ala. Rep. 643. The cessible to him (July IS:52) : "I can-general principle, then, under which not here omit to say, that the doctrine recoupment in this sense is allowed, is of recoupment, as generally adopted that, where one brings au action for a in the United States, appears to me breach of contract between him and settled on just and philosophical printhe defendant, and the latter can show ciples, while at the same time, there is that some stipulation in- the same con- no doubt, it works a serious innovation 3. On recoupment see Wheat v. Dotson, 12-714, in the ancient rules which seek to pro-note 1. duce singleness of issues. Those rules
JAN. TERM, 1856. DESHA V. ROBINSON. are, however, so far modified by the Alabama court (collecting the cases up. practice of double pleading, set-off; to that time), was delivered by the-and lastly of recoupment, that it be- late Chief Justice Collier, who, eight-comes a grave question, whether they een years before, delivered the opinion are now of any very considerable prac- of that court, in the case of Pedan v. tical value ; and it is, a t least, quite Moore (1 Stew. & Port, 71), which has doubtful, whether the forms of action ever since been a leading one, and has are of any great utility, so far as they been cited with approbation, both in are supposed, or were originally in- the supreme court at Washingtork, and tended to produee singleness of issue." in several of the State courts. In this Sedgwiek on Dam., 2d ed., p. 452. latter case (of Hatchett & Bro. v. Gib-According to these doctrines, there son), that the court adopt the doctrine can be no doubt but that, in all that of recoupment by that name and apclass of cases commonly called partial ply it to the case, which was, that failure of consideration, whether in- "Pursuant to a contract between the volving bad faith or not, or where plaintiff and the defendant, the latter fraud has intervened, whether in the deposited his cotton in the warehouse obtaining, or in the performance of of the former, where it was destroyed contracts, or there has been a breach by fire. The former having brought of warranty, fraudulent or not, or of an action against the latter, to recovet any other stipulation of the contract for advances made on the deposit 01 sued upon, entitling the defendant to the cotton—held that, "if the defend-a cross action against the plaintiff to ant could recover damages from the recover damages for such failure, fraud plaintiff for the loss sustained in the or breach, he may, if he elects to do so, destruction of the cotton, he could re-instead of resorting to such cross ac- coup such damages in this action." tion, plead the matter by special sworn In the case of Wheat et al. v. Dotson, plea, under the provisions of our in this court, we applied the doctrine statute, or if, upon a verbal con- to a partial failure in quantity, where tract, plead the general issue, and the subject of the sale was real- estate, 2479 -*give notice of the matter re- and held that it would also apply lied upon, and claim a reduction of the if the failure was in the quality of the amount the plaintiff would otherwise estate, but would not apply if the fail-recover, corresponding with the injury ure related to the title of the estate. he has sustained. Besides the cases The case of Smith v. Capers, 13 Ark. cited in the case of IVheat et al. v. Dot- Rep. 9, which was, that to an action son, there are a number of other cases to on a note, defendant pleaded that the the same elect, collected by Mr. Sedg- consideration for the note was certain wick, in his chapter On recoupment; lots and the improvements thereon, and a number of others are to be and that the *payee would add [ *248 found in the current reports, out since certain other improvements, which he the publication of the seeond edition failed to do, was also held by this of that work, which we deem it un- court to be within the doctrine. necessary to collect and cite, in order And so, also, in the case of Robinson to decide upon the sufficiency of the v. Mace, 16 Ark. Rep. 97, which was, plea in this case, as a plea of recoup- that "where a party enters into a con-men t. The case of Hatehett & Brother tract to make and burn brick, he will v. G ibson, 13 Ala. Rep. 587, may be be held to skill and diligence in the mentioned, however, where a very execution of his undertaking, and learned and elaborate opinion of the upon failure to make and burn the
DESNA v. ROBINSON. VOL. 17 brick in a workmanlike manner, the found for the plaintiff beloW, then Iledamages may be recouped in an action duetthe one amount from the other, by him for the value of the work aud and find their verdict in favor of the labor." plaintiff oelow, for the balance thus As to the matter set up in the plea ascertained. If, however, these dam-before us, it was held by the court, in ages should be found of equal amount the case of Clark adx. v. Moss, 11 Ark. to what the plaintiff would have been 736, that a judgment may be transfer- otherwise entitled to recover, then they red by parol, so as to confer upon the would find their verdict for the defendtransferee the equitable right to con- ant below. trol its collection, to use the name of It but remains for us to say, that in the plaintiff in the judgment for that the light of these views, we hold the purpose, and to receive the money plea good, as one sett ing#up matter for when collected : and to the same effect recoupment; and it was, therefore, is the case of Weir & Miller v. Penning- such a one as required a reply from the ton et al., Id. 745, with the addition plaintiffs below. that, "no greater right can be confer- Although the plaintiffs below could red by a written assignment, because have taken default for so much of the judgments are not within the provis- declaration as was imt answered by the ions of the statute of assignments." plea, to-wit: for time sum of the differ-It would seem to be clear, therefore, ence between the $148.47 paid out, and that upon the interference of the bank, that of $226 received, subject to the set up in the plea, the defendant be- final judgment upon the whole case; low might have had redress by a spe- that is not au error for which this case cific performance upon a proper appli- should be reversed, because it was his cation to the courts ; or could have own ladies that he did not do so. The brought an action against the bank for judgment of the court will, therefore, damages, for the breach of the con- be affirmed with costs. tract on her part ; but they were not HANLY, J : In 1848, the executors compelled to take either remedy. But, of Denton impleaded William: Robin-
having the right to a cross action upon son in debt, ou a note made by him-this bleach, on the part of the bank, self and others, to the late Real Estate of the contract sued upon, they there- Bank of the state of Arkansas, which by acquired the right, under the in- had been regularly transferred to the fluence of the doctrines we have been testator by assignment. The defend-
considering, to set up that matter in ant, William Robinson, died, and the their plea, as they have done, and in- cause was revived against his execusist upon it, as iu the nature of a cross tors, who filed several pleas in bar, on action for damages, when ascertained, part of which, issues were taken, and in diminution of what the plaintiffs the remaining oues stricken out. The below would have been otherwise executors of William Robinson also authorized to recover. The amount died, and the suit was revived against of such damages, the jury, of the appellee as administrator de bonis course, would have to ascer— non The appellee, on leave of the tain from the proofs, precisely court, filed an ameuded or;substituted as if a cross action, in form, had been plear of failure of consideration, after brbught to recover damages for he was made party thereto, alleging 2491 *this breach of the contract; and substantially therein, that at, or before if fouud by them to be lessin amount the 8th July, 1841, the Real Estate than what they would have otherwise Bank, the original payee in the note
JAN. TERM, 1856. DESNA V. ROBINSON. sued on, caused an execution to be is- return said execution without further 2509 sued on a judement, which she proceeding thereunder, which he did had before that time obtained against on the 14th November, 1842, wholly John Robinson and Rufus Stone, ren- unsatisfied as for said balance, as dered in the Pulaski circuit court, on against the will, express or implied, of the 14th November, 1840, on a note for the said Haggard, and the testator of -$800, in which tbey were bound as appcdlee, to whom the control thereof sureties for one Dunbar, which execu- had been so transferred, &c.; averring tion was in the hands of the sheriff of that, in consideration of the premises, Jackson county, to-wit: on the 8th the whole of the consideration had .July, 1841 where Stone and John Rob- failed. inson, the defendants therein, were aTo this plea the appellants [*251 residing, for the purpose of collection demurred, upon the ground, that it did from them, and that the appellee's tes- not detail such a state of facts as to tator, prior to said 8th July, signed a show a failure of consideration, but note in blank, to the said Real Estate merely an illegal act of the sheriff, and Bank, which is the same sued on, which of the bank, temporarily delaying the said note was filled up with the sum of collection, and that the alleged failure $800, and delivered to the bank, and at was a mere deduction of law as alleged, the same time the sum of $148.47 in without facts for its foundation, cash, by way of interest on said execu- &c. And because, after such transfer tion debt, was likewise paid, and in con- of the judgment and execution, the sideration thereof, the said bank trans- control of the bank over the same ferred to the appellee's testator, and ceased, and the control thereof was one Nathan Haggard, in parol, the con- absolutely vested in Haggard and aptrol and direction of the said execution, pellee's testator, &c., &c. and to control and direct such further But the court overruled the demur-executions, and the issuance and use rer to the said plea, and the appellants thereof upon such judgment, until the resting thereon, final judgment was -same should be fully paid off and satis- rendered against them, from which he fied according to law: that said execu- appellants appealed to this court, and tion, then in the hands of the sheriff; have filed herein their assignment set-was returned unsatisfied, except as to ting up the above causes, ainong ot hers, the sum of $226 made out of John Rob- why such judgment should be reversed inson, and that, on the 8th July, 1842, by this court. another execution was issued to the It is insisted by the appellants, that same sheriff, returnable to the March the arrangement made by the bank and term, 1843, of the same court, and after Haggard and the testator of the apit had been in, and come to the hands pellee, in respect to the control of the of the said sheriff, but before any execution and judgment in favor of the money had been made on the same, bank against John Robinson and Ru-the bank, disregarding her said con- fus Stone, was, in law and equity, an tract, so transferring the control of assignment of both judgment and exesuch execution, took control of said last cution, so as to divest the bank or her mentioned execution, and withdrew agent of all power or authority to con-the same away from the testator of the trol them further, and various authorisaid appellee, and the said Haggard, ties and adjudications are cited in sup-and through the said appellant's Les- port of this position. We have given tator, their ageut in that behalf, di- the authorities and adjudications rerected the sheriff of Jackson county, to ferred to by the counsel for the appell-
DESHA V. ROBINSON. VOL. 17 ants, the most careful and patient ex- equity, their rights would have been amination, and do not think they will protected and enforced, both as to the be found to sustain their position fur- execution debtor and the bank, under ther than this : that such negotiations, which they claim. But we know of no as the ,me set out in the plea, are so far principle of law which would require protected and respected by courts of them to take this course. As soon as law, after notice to the judgment or the terms of' the contract were violated execution debtor, as not to allow or by the bank, they had a perfect right permit him to suffer the equitable as- to treat it as dissolved, and if the consignor to deal with him, in respect to sideration inducing it had been absothe debt or chose in action, thus equi- lutely paid, to have brought debt or astably assigned or transferred, so as to sumpsit for its recovery, and if not prejudice or molest the interests of the paid, but remaining, as in this instance, assignee thereunder; and we think to set up a failure of consideration, as is this is the correct doctrine, and that it done by the plea now being considered. will not be found that the authorities See Walworth v. Pool, 9 Ark. 395; to which this court has been referred, Prf.nce, Chase & Co. v. Thomas, 15 Ark. will go beyond this. Let us examine Rep. 380; Lafferty v. Day, Williams & the plea of the appellee, and see what Co., 7 Ark. 258; Comyn on Cont. 38, is the purport of the matter relied on in 322; Dutch v. Warren, cited by Lord 2521 this cause. The bar set *up in Mansfield, in-2 Burr. 1010. the plea, is, that the bank, the original As we have said, in case of the breach
payee of the note, was the owner of the of the contract made by appellee's tes-execution and judgment against John tator and Haggard, with the bank, in Robinson and Rufus Stone for $800, and respect to the execution and judgment the interest and costs due thereon, and against John Robinson and Rufus agreed with the testator of appellant Stone, they had the alternative, and Haggard, for the note in suit, and to treat the contract at au end, as the sum of $148.47 in cash, that they *it seems they did, or to appeal P253 might have, use and control both exe- to a court of law or equity, to have
cution and judgment, until the full their rights protected thereunder. A amount thereof should be made and re- court of chancery would have, doubt-
covered to them : but, that after the lessly, given them relief by compelling execution of the note in question, and a specific performance of the contract, the payment in cash, the bank, in and enjoining and restraining the bank utter disregard of her contract so made, from further intermeddling with their took from Haggard and the testator of rights, touching the subject matter o appellee, all control of the execution, the contract ; for, as far as Haggard and had it returned unsatisfied by the and appellee's testator were concerned. sheriff of Jackson county, in whose the contract was executed ; but, in re-hands it had been caused to be placed spect to the bank, it was in fieri, or in by those whom we have holden to have process of execution, both as to its con-been the equitable assignees thereof. sideration and its substance. There can no doubt, if the testator of The appellants might have noted the the appellee and Haggard had elected default of the appellee for so much of to enforce their contract with the the demand claimed by the declara-bank, especially, instead of considering tion, as was not answered by the plea, it at an end, as they seem to have done and taken judgment final for that by their pleading in this cause, that by amount, when he refused to answer appealing to a court of law or a court of over upon the overruling his demurrer
JAN. TERM, 1856. But not having done so, it was his own laches, and judgment will not be reversed on that account. We are, therefore, clearly of the opinion, that the circuit court of Independence did not err in overruling the demurrer of the appellants to the plea of the appellee ; and, we, there-fore, affirm the final judgment of that court rendered for the appellee, on the refusal of the appellants to answer over, on the overruling said demurrer. Cited:--19-120; 20-433; 21-472: 22-243-260-458; 26- 314; 27-491; 30-538; 37-544; 47-167-243.