RESCISSION OF CONTRACTS. The abrogation or annulling ot contracts.
2. It may take place by mutual consent ; and this consent may be inferred from acts. 4 Mann. & G. 898 ; 7 Bingh. 2,66 ; 1 Term, liS3 ; 1 Pick. Mass. 57 ; 4 id. 114 ; 5 Me. 277. It may take place as the act of one party, in consequence of a failure to perform by the other, 2 C. B. 905 ; 4 Wend. N. Y. 285; 2 Penn. St. 454 ; 3 id. 445 ; 28 N. H. 561 ; 9 La. Ann. 31 ; not so where the failure is but partial, 4 Ad. & E. 599 ; 1 Mees. & W. Exch. 231 ; on account of fraud, even though par tially executed, 5 Cush. Mass. 126 ; 15 Ohio, 200 ; 23 N. II. 519. See 1 Den. N. Y. 69 ; 10 Ala. N. s. 478 ; 7 Ired. No. C. 32.
3. A contract cannot, in general, be re scinded by one party unless both parties can be placed in the same situation and can stand upon the same terms as existed when the con tract was made. 5 East, 449 ; 2 Younge & J. Exch. 278 ; 4 Mania. & G. 903 ; 1 Mees.
& W. Exch. 231 ; 2 Exch. 783 ; 3 Me. 30; 14 id. 364 ; 1 Den. N. Y. 69; 1 Mete. Mass. 547; 22 Pick. Mass. 283; 4 Blackf. Ind. 515 ; 2 Watts, Penn. 433 ; 10 Ohio, 142 ; 27 Miss. 498 ; 3 Vt. 442 ; 1 N. H. 17 ; 9 id. 298. It must be done at the time specified, if there be such a time: otherwise, within a reasonable time, 2 Campb. 530 ; I Stark. 107 ; 1 J. B. Moore, 106 ; 6 Scott, 187; 14 Me. 57 ; 22 Pick. Mass. 546 ; in case of fraud, upon its discovery. I Den. N. Y. 69 ; 4 id. 554 ; 24 Wend. N. Y. 74; 5 Mees. & W. Exch. 83. The right may be waived by mere lapse of' time, 3 Stor. C. C. 612 ; see 6 Clark &F. Ho% L. 234; 3 Eng. L. & Eq. 17, or other circum stances. 9 Barnew. & C. 59; 4 Den. N. Y. 554 ; 4 Paige, Ch. N. Y. 537 ; 4 Mass. 502 ; 1 Baldw. C. C. 331. A peculiar right of re scission of contracts of sale of real estate where security has been taken for the pay ment of the purchase-money exists in Penn sylvania. 4-Watts, Penn. 196, 199.
4. The equity for the rescission and can. cellation of agreements, securities, deeds, and other instruments arises when a transaction is vitiated by illegality or fraud, or by reason of its having been carried on in ignorance or mistake of facts material to its operation. The jurisdiction of the court of equity is ex. ercised upon the principle of quia timet ; that is, for fear that such agreements, securities, deeds, and other instruments may be vexa. tiously or injuriously used against the party seeking relief, when the evidence to impeach them may be lost ; or that they may throw a cloud or suspicion over his interest or title ; or where he has a defence good in equity ,which.cannot be made available at law. The cases in which this relief will be granted on account of misrepresentation and fraud may be divided into four classes: first, where there is actual fraud in, the party defendant in which the party plaintiff has not partici pated, 13 Pet. 26 ; second/y, where there is constructive fraud against public policy and the party plaintiff has not participated therein, see 4 Muni'. Va. 316; thirdly, where there is
a fraud against public policy and the party plaintiff has participated therein, bnt public policy would be defeated by allowing it to stand ; fourthly, where there is a constructive fraud by both parties,—that is, where both parties are in delicto, but not in pari delicto.. See 2 Story, Eq. Jur. N 694, 695 ; 3 Jones, Eq. No. C. 494 ; 2 Mas. C. C. 378 ; 25 Ga. 89 ; 1 Pat. & H. Va. 307. The court will decree that a deed or other solemn instrument shall be de livered up and cancelled, not only when it is avoidable on account of fraud, but also when it is absolutely void, unless its invalidity ap pears upon the face of it, so that it may be 'defeated at any time by a defence at law. 2 Story, Eq. Jur. 698-701 ; 6 Du. N. Y.597.
5. The ignorance or mistake which will authorize relief in equity must be an igno rance or mistake of material facts, 1 Stor. C.C. 173; 4 Mas. C. C. 414; 11 Conn.134; 6 Wend N. Y. 77 ; 18 id. 407 ; 6 Harr. & J. Md. 500; 10 Leigh, Va. 37 ; and the mistake En ARt 1 e — mutual. 3 Green, Ch. N. J. 103 . 2 Sumn. C. C. 387 ; 11 Pet. 63 ; 24 Me. 82 ; 10 Vt. 570; 6 Mo. 16 ; 35 Penn. St. 287. If the facts are known but the law is mistaken, the same rule applies in equity as at law, that a mere mistake or ignorance of law, where there is no fraud or trust, is immaterial: ignorantia legis neminem excusat. Adams, Eq. 188. ' Instruments may also be rescinded and cancelled when they have been obtained from persons who were at the time under duress or incapacity, 2 Root, Conn. 216 ; 8 Ohio, 214; 3 Yerg. Tenn. 537; 36 Miss. 685 ; or by persons who stood in a confidential relation and took advantage of that relation. Adams, Eq. 182 et seq.; 5 Sneed, Tenn. 583 ; 31 Ala.
s. 292 ; 3 Cow. N. Y. 537 ; 2 Mas. C. C. 378; 2 A. K. Marsh. Ky. 175 ; 9 Md. 348; 3 jones, Eq. No. C. 152, 186 ; 4 id. 39, 245.; 30 Miss. 369 ; 14 Ves. Ch. 273 ; 4 Mylne & C. 269 ; 8 Beav. Rolls, 437.
6. Gross inadequacy of consideration, 17 Vt. 9; 2 Leigh, Va. 149 ; 2 Yerg. Tenn. 294; 22 Ga. 637 ; 19 How. 303 ; see 2 Ired. Eq. No. C. 365 ; 2 Ov. Tenn. 426 ; 2 Green, Ch. N. J. 429 33 Ala. N. s. 149 ; 2 Head, Tenn. 289 ; fraudulent misrepresentation and con cealment, 3 Pet. 210 ; 13 id. 26 ; 2 Ala. N. s. 251 ; 10 Yerg. Tenn. 206; 1 A. K. Marsh. Ky. 235 ; 2 Paige, Ch. N. Y. 390 1 Dev. & B. Eq. No. C. 318 ; Munf. Va. 210 ; 5 How. Miss. 253 ; 2 Mo. 126 ; 34 Ala. N. s. 596 ; 6 Wisc. 295 ; 3 Ind. 331 ; 9 id. 172, 526; hard ship and unfairness, 17 Vt. 542 ; 2 Root, Conn. 216 : 2 Green, Ch. N. J. 357 ; 2 Harr. & J. Md. 285 ; 3 Yerg. Tenn. 537 ; 8 Ohio, 214; 31 Vt. 101 ; undue influence, 2 Mas. C.C. 378 ; see 2 Head, Tenn. 285, are among the causes fur a rescission of contracts in equity.