Stone v. Superior Court

The petitioners apply for a writ of mandamus to compel the Superior Court in and for the County of Los Angeles, respondent herein, to make and enter its order granting the motion of the petitioners to discharge an attachment issued in an action pending in said court, entitled Grace Thorndike, Plaintiff, v. Wallace E. C. Stone and Joseph Wright, Defendants.

The complaint of the plaintiff in said action was in two counts, in the first count of which she alleged that she had been induced to purchase certain shares of stock from said defendants by certain alleged false and fraudulent misrepresentations, made by said defendants with intent to cheat, deceive and defraud said plaintiff; that said stock was of no value; that upon discovery of the fraud, she had given notice of rescission and had offered to return said stock, and had demanded back the consideration, which defendants refused to return.

The second count in plaintiff’s said complaint was in the form of an action for money had and received. It is conceded, however, that the cause of action set forth in each of said counts is the same.

Upon the filing of the complaint in said action, the plaintiff therein sought and obtained…

I dissent. The effect of the majority opinion is to disregard settled principles of law and to overrule many well-considered eases. It has been held on numerous occasions by this court, as well as by the District Court of Appeal, that rescission is complete upon the giving of notice and the offer to restore the consideration received. The decisions are reviewed in McNeese v. McNeese, 190 Cal. 402 [ 213 Pac. 36, 37 ], where Mr. Justice Lennon says (p. 404) : “The interposition of a court of equity to set the contract aside was not necessary to rescission. A contract may be rescinded by the act of the party entitled and desiring to rescind. It is well recognized that sections 1688, 1689 and 1691 of the Civil Code provide for rescission effected by the act of the parties.” To the same effect, see Ito v. Watanabe, 213 Cal. 487 [ 2 Pac. (2d) 799 ]; Hull v. Ray, 211 Cal. 164 [ 294 Pac. 700 ]; Hogberg v. Landfield, 99 Cal. App. 360 [ 278 Pac. 907 ]; House v. Piercy, 181 Cal. 247, 251 [ 283 Pac. 807 ]; Prewitt v. Sunnymead Orchard Co., 189 Cal. 723, 732 [ 209 Pac. 995 ]; Swanston v. Clark, 153 Cal. 300, 303 [ 95 Pac. 1117 ]; Lemle v. Barry, 181 Cal. 1, 5 [ 183 Pac. 150 ] ; American Type…