rescission of the contract, he must return or offer to return the amount of the purchase money received with interest thereon,287 even though the ground of his rescission is that the conveyance was obtained by fraud practised upon him. by the purchaser. 288 So, one who seeks the cancellation of a mortgage given by him must offer to repay, not only the actual amount of the loan for which the mortgage was given, but also interest thereon at the legal rate.2 Failure to include interest in a tender or offer of restoration is perhaps not fatal to the right to maintain a bill in equity for rescission, at least if the amount of such interest is trifling in comparison with the total amount of the tender,240 but in that event, an allowance will be made for it in the final accounting before the entry of a decree.241 239 § 633. Liability for Waste or Deterioration of Property. On the rescission of a contract for the sale of land, the purchaser will be held to account for all waste committed by him on the premises while in his possession,242 such as the cutting and removal of timber,243 the destruction of vines or fruit trees, to the cultivation of which the land was chiefly devoted,2** or the removal of buildings which were upon the land at the time he came into possession.245 And generally, the purchaser, on such rescission, will be chargeable with any deterioration in the value of the land caused by his 237 Hamill v. Thompson, 3 Colo. 518; Davis v. Smith, 5 Ga. 274, 48 Am. Dec. 279; Fleming v. Irion, 132 La. 163, 61 South. 151. 238 Leslie v. Carter, 240 Mo. 552, 144 S. W. 797. 239 Grider v. American Freehold 12 South. 775, 42 Am. St. Rep. 58; ing Ass'n, 236 Ill. 232, 86 N. E. 236; Ass'n, 101 Tenn. 490, 48 S. W. 226; Palmer v. Bosley (Tenn. Ch. App.) 62 S. W. 195. Land Mortgage Co., 99 Ala. 281, 240 Lombard v. Speer, 37 Miss. 170. 241 Potter v. Taggart, 59 Wis. 1, 16 N. W. 553, 632. 242 Ewing's Heirs v. Handley's Ex'rs, 4 Litt. (Ky.) 346, 14 Am. Dec. 140; Griffith v. Depew, 3 A. K. Marsh. (Ky.) 177, 13 Am. Dec. 141; Daniel v. Cook, 7 Ky. Law Rep. 103. 243 Burch v. Jones, 9 Ky. Law Rep. 458, 5 S. W. 408; Kay v. Curd, 6 B. Mon. (Ky.) 100. See Carey v. Starr, 93 Tex. 508, 56 S. W. 324; Loxley v. Douglas, 121 Ala. 575, 25 South. 998; Beatty v. Brown, 76 Ala. 267. 244 Lurch v. Holder (N. J.) 27 Atl. 81. 245 Wickliffe v. Clay, 1 Dana (Ky.) 585. mismanagement, improvidence, injudicious cultivation of it, or culpable negligence.240 But it is not an invariable rule that he must restore the land in the same condition in which he received it, and the fact that it may have depreciated in value will be no obstacle to his rescission of the purchase, good cause therefor existing, when that circumstance is not in any way attributable to his own act or fault.24 247 The same principle applies to contracts for the sale of personal property. The purchaser, who claims to rescind the contract and recover back the price paid, is charged with reasonable care of the property while in his possession, and must restore it in as good condition as it could have been kept in by the exercise of such care.248 And conversely, if it is the vendor who seeks to rescind the sale for fraud, he need not offer to return the price if the property has been damaged by the purchaser to an amount equal to the price.249 Rescission will not be granted at the instance of the purchaser if he has so abused the article in question, or suffered it to be injured by careless handling or exposure, that it has materially deteriorated in value.250 But on the other hand, where the property suffers injury or damage while in the hands of the purchaser, but not through any neglect or fault of his, this will not prevent him from rescinding, nor is he obliged to repair the damage before tendering it back.251 Thus, where the vendor of a wagon warrants it to carry a certain weight, and it breaks down under a less weight, this fact will not prevent a rescission of the purchase and a return of the wagon to the seller.252 And 246 Foster v. Gressett, 29 Ala. 393; Buchanan v. Lorman, 3 Gill (Md.) 51; Sipola v. Winship, 74 N. H. 240, 66 Atl. 962; Burk v. Stewig, 21 Tex. 418. 247 Felt v. Bell, 205 Ill. 213, 68 N. E. 794; Goodrich v. Lathrop, 94 Cal. 56, 29 Pac. 329, 28 Am. St. Rep. 91. 248 Pearsoll v. Chapin, 44 Pa. 9; Thompson v. Chambers, 13 Pa. Super. Ct. 213. 249 Phenix Iron Works Co. v. McEvony, 47 Neb. 228, 66 N. W. 290, 53 Am. St. Rep. 527. 250 State v. Fields, 131 Ala. 201, 31 South. 6; C. Aultman & Co. v. Wirth, 54 Ill. App. 17; Hoover v. Doetsch, 54 Ill. App. 65. 251 Pitcher v. Webber, 103 Me. 101, 68 Atl. 593; Bigger v. Bovard, 20 Kan. 204. 252 Smith v. Hale, 158 Mass. 178, 33 N. E. 493, 35 Am. St. Rep. supposing the purchaser to be free from all fault in the matter, a rescission of the contract will not be denied because of a decline in the market value of the thing purchased, as, for instance, in the case of corporate stocks or bonds.253 And so, where one was fraudulently induced to purchase a promissory note made by a third person, and rescinds the contract, he is only required to return the note, and it makes no difference that, between the time of the contract and the discovery of the fraud, the maker of the note has become insolvent or of doubtful solvency.254 § 634. Accounting for Rents or Rental Value. Upon the rescission of a contract for the sale of land, at the instance of either party, where an accounting is had between the parties or under the direction of the court preparatory to the entry of a decree, the vendee, having been in possession of the land under the contract, should be charged with a proper sum for the rent or rental value of the premises, or rather, for the value of his use and occupation of them.255 It 258 Barron v. Myers, 146 Mich. 510, 109 N. W. 862; Cohen v. Ellis, 16 Abb. N. C. (N. Y.) 320; Commonwealth S. S. Co. v. American Shipbuilding Co. (D. C.) 197 Fed. 780. 254 Whitcomb v. Denio, 52 Vt. 382. 255 Bryant's Ex'r v. Boothe, 30 Ala. 311, 68 Am. Dec. 117; Thompson v. Lee, 31 Ala. 292; Foster v. Gressett, 29 Ala. 393; Fratt v. Fiske, 17 Cal. 380; Hannah v. Steinman, 159 Cal. 142, 112 Pac. 1091; Abbott v. Kellogg, 18 Cal. App. 429, 123 Pac. 227; McDonald v. Beall, 55 Ga. 288; Kronmeyer v. Buck, 258 Ill. 586, 101 N. E. 935, 45 L. R. A. (N. S.) 1182; Underwood v. West, 52 Ill. 397; Hanna v. Shields, 34 Ind. 84; Nolan v. Foley, 141 Iowa, 671, 120 N. W. 310; Fagan v. Hook, 134 Iowa, 381, 105 N. W. 155, 111 N. W. 981; Campbell v. Spears, 120 Iowa, 670, 94 N. W. 1126; Gayle v. Troutman, 31 Ky. Law Rep. 718, 103 S. W. 342; Glass v. Hampton (Ky.) 122 S. W. 803; Mosley v. Miller, 13 Bush (Ky.) 408; Griffith v. Depew, 3 A. K. Marsh. (Ky.) 177, 13 Am. Dec. 141; Ellis' Adm'rs v. Graves, 5 Dana (Ky.). 119; McKenzie v. Bacon, 41 La. Ann. 6, 5 South. 640; Nash v. Parker, 6 Rob. (La.) 324; Buchanan v. Lorman, 3 Gill (Md.) 51; Allen v. Talbot, 170 Mich. €64, 137 N. W. 97; Hack v. Norris, 46 Mich. 587, 10 N. W. 104; Ayer v. Hawkes, 11 N. H. 148; Newton v. Tolles, 66 N. H. 136, 19 Atl. 1092, 9 L. R. A. 50, 49 Am. St. Rep. 593; Cox v. Boyden, 153 N. C. 522, 69 S. E. 504; Bond v. Wilson, 129 N. C. 325, 40 S. E. 179; Smith v. Stewart, 83 N. C. 406; Moline Plow Co. v. Bostwick, 15 N. D. 658, 109 N. W. 923; Keck v. Jenney, 4 Ohio Dec. 173; Zufall v. Peyton, 26 Okl. 808, 110 Pac. 773, 29 L. R. A. (N. S.) 740; Huson v. Anderson, Rich. Eq. Cas. (S. C.) 164; Outlaw v. Morris, 7 Humph. (Tenn.) 262; Mason v. Lawing, 10 Lea (Tenn.) should be observed that the dissolution of such a contract does not make the vendee technically a tenant of the vendor, nor put him in the position of having occupied as a tenant, and consequently he is not chargeable with "rent," properly so called, but only to the extent of the benefit actually derived from the use of the land during his occupation of it.256 This amount, however, as it appears from the cases, is usually reckoned as being equivalent to the fair or reasonable rental value of the land,257 though the vendee cannot be required to pay rent in excess of his profits actually received,258 or, according to some of the authorities, not in excess of the annual value of the improvements and the interest on the purchase money.259 If, however, the property was already improved, and capable of being rented, or actually rented, to third persons as tenants, it is said that the vendee should account for all the rents collected or which he might have collected.200 But if the improvements were made by the vendee after taking possession, and the land had no rental value outside of such improvements, the vendor will not be entitled to claim the value of the use of the premises as so improved, unless perhaps from the date of bringing his suit to rescind.201 When the vendee de 264; Winters v. Elliott, 1 Lea (Tenn.) 676; Jones v. Hutchinson, 21 Tex. 370; Terrill v. Dewitt, 20 Tex. 256; McComas v. Easley, 21 Grat. (Va.) 23; Worthington v. Collins' Adm'r, 39 W. Va. 406, 19 S. E. 527. But see Ankeny v. Clark, 148 U. S. 345, 13 Sup. Ct. 617, 37 L. Ed. 475. 256 Ankeny v. Clark, 148 U. S. 345, 13 Sup. Ct. 617, 37 L. Ed. 475; Kirkpatrick v. Downing, 58 Mo. 32, 17 Am. Rep. 678; Coffman v. Huck, 19 Mo. 435. 257 Lytle v. Scottish American Mortg. Co., 122 Ga. 458, 50 S. E. 402; Allen v. Talbot, 170 Mich. 664, 137 N. W. 97; Frink v. Thomas, 20 Or. 265, 25 Pac. 717, 12 L. R. A. 239. 258 Richardson v. McKinson, Litt. Sel. Cas. (Ky.) 320, 12 Am. Dec. 308. 259 Morrow v. Mason, 4 J. J. Marsh. (Ky.) 326. 260 Rhodes v. Stone, 25 Ky. Law Rep. 921, 76 S. W. 533; Worthington v. Campbell (Ky.) 1 S. W. 714. In Kentucky, where the infant heirs of a deceased vendee of land are permitted to rescind the contract and recover the purchase money, with interest from the time of payment, the vendor should be allowed interest on each gale of rent from the time it became due until paid. Halcomb v. Ison, 140 Ky. 189, 130 S. W. 1070. 261 Pass v. Brooks, 125 N. C. 129, 34 S. E. 228; Van Zandt v. Brantley, 16 Tex. Civ. App. 420, 42 S. W. 617. mands or offers to rescind, he should tender a proper sum as rent, but if the vendor does not demand such sum as rent, he waives a tender of it so far as that is a condition precedent to the rescission,262 and if the equity of the case so requires, the court may in this case limit the recovery to rents and profits accruing from the filing of the bill.263 Where the contract provided that the vendor might forfeit it for nonperformance by the vendee, and that thereupon all money paid under the contract should be retained by him as compensation for the use of the premises, he cannot recover anything for rents prior to his declaration of such forfeiture.264 But in the absence of such a provision, while the vendee is ordinarily entitled to a return of all payments made by him, on rescission of the sale, he is not so entitled where the value of the use of the premises exceeds the amount so paid, and in this case it is not necessary for the vendor to tender or offer to return the consideration received by him.265 When the vendee has made ineffectual efforts to obtain a title from his vendor, who has removed from the state, he may abandon the possession without giving notice, and he will not be chargeable with rent after such abandonment.266 But on the other hand, the rule limiting liability for mesne profits to the period of the statute of limitations, does not apply to an accounting for rent in an equitable proceeding for rescission.267 With regard to personal property, where the purchaser rescinds the contract for fraud or other cause, he should tender a reasonable payment for any beneficial use to which he may have put the property while in his possession, beyond such use as was necessary to test and try it.268 And the purchaser of a business, deceived by false representa 262 Winkler v. Jerrue, 20 Cal. App. 555, 129 Pac. 804. 263 Irick v. Fulton, 3 Grat. (Va.) 193. 264 Kerns v. Dean, 77 Cal. 555, 19 Pac. 817. 265 Walling v. Thomas, 133 Ala. 426, 31 South. 982; Wilson v. Moriarty, 77 Cal. 596, 20 Pac. 134; Barrows v. Harter, 165 Cal. 45, 130 Pac. 1050; Call v. Shewmaker, 24 Ky. Law Rep. 686, 69 S. W. 749; Weitzel v. Leyson, 23 S. D. 367, 121 N. W. 868. 266 Taylor v. Porter, 1 Dana (Ky.) 421, 25 Am. Dec. 155. 267 Hack v. Norris, 46 Mich. 587, 10 N. W. 104. 268 Ford v. Oliphant (Tex. Civ. App.) 32 S. W. 437; A. D. Baker Co. v. Smedley, 55 Ind. App. 79, 100 N. E. 307. |