Teter v. Hinders

Action by the appellees against the appellants to rescind a contract for the sale of real estate, on the ground of fraud. Trial by the Court; finding and judgment for the plaintiffs. A demurrer to the complaint was overruled, and exception taken. This ruling presents the first question for decision. One Barnhizer was made a defendant, who acted as the agent of the defendant, Teter, in making the contract; and it is objected that there is no cause of action against Barnhizer, and that he should not have been made a defendant. We express no opinion on this point, as Barnhizer and Teter jointly demurred, and the demurrer, not being well taken as to Teter, was correctly overruled as to both.

The consideration for the sale of the real estate was certain promissory notes, and this is sufficiently set forth in the complaint. The alleged fraud consists in false representations in reference to the character of the notes as to the solvency of the makers, etc. It is objected that the complaint is bad, because it does not allege that Teter was cognizant of the worthless character of the notes. It is alleged that Barnhizer, who was acting as Teter’s agent, and who is charged with having made the fraudulent representations, had full knowledge, etc. This was sufficient. The representations of the agent bind the principal. Bateman on Civil law, sec. 575. The objections made to the complaint, we think, ai’e not well taken. But there is a fatal defect in the evidence. In order to justify a recision, the plaintiff' should have tendered back the claims received, so as to have placed the defendant in statu quo. Wiley v. Howard, 15 Ind. *95169, and authorities there cited. Here a small part of the money had been collected by a justice, and receipted for by Hinders, and this was not tendered back to Teter. The claims traded for the land seem to have been evidenced by receipts of parties > with whom they had been left for collection. A person acting for the plaintiffs took the papers to one Wallace, of Montieello, who picked out about four hundred dollars of the claims, stating that they were his receipts, and that he was entitled to them, and that he had collected the money and paid it over to JBarnhizer. These receipts were retained by Wallace, and were not tendered back to Teter. Perhaps, had there been proof, on the trial, that these claims had been collected and paid, as stated by Wallace, that would have been a good reason for not tendering them back, but there was no such proof.

The judgment is reversed, with costs, and the cause remanded.