was attempted to show that Davis, by a subsequent contract with Henry, had ratified the first, which was fraudulent, the court quotes with approval Lord Erskine in Morse v. Royal, 12 Ves. 371, who says: "As to the doctrine of confirmation, it stands upon several authorities that when a man, having been defrauded, with complete knowledge chooses to come again in contact with the person who defrauded him, he abandons his right to abrogate the contract, and enters into a plain, distinct transaction of confirmation. But, when the original fraud is clearly established by circumstances not liable to doubt, a confirmation of such a transaction is so inconsistent with justice, so unnatural, so likely to be connected with fraud, that it ought to be watched with the utmost strictness. and to stand only upon the clearest evidence, as an act done with all the deliberation that ought to attend a transaction, the effect of which is to ratify that which in justice ought never to have taken place." And the court cites Sugd. Vend. pp. 287, 288, as affirming the same doctrine.

W.

J. S. Taylor states that about April 18, 1894, he and Engeman were in a stagecoach together, and Engeman told him that the leather would lose about $12,000, and they talked about how business was, and everything, but Engeman did not ask him to make any of it up; that he told Engeman that he was very sorry that it would not bring the amount that he and J. E. Taylor had listed it at. This conversation Engeman denies, and says, "If J. S. Taylor had remarked that he was sorry the leather had not brought the amount that J. E. Taylor and I had listed it at, it certainly would have made a very strong impression on my mind," and says he did not know at that time of any overvaluation. C. Smith says he was in the stage with them, and heard Engeman, in the course of conversation with witness or some one else in the stage, refer to overvaluations. Does not remember the amount, but it was several thousand dollars. Whatever fears Engeman may have had about the leather falling short, they were allayed by his partner, J. E. Taylor, who wrote him February 12, 1894, that: "You will find that we are not hurt by the inventory of the stock. What backs are coming out will average fifteen pounds." "You can say to them with safety that the stock that is to follow is better in every way than this lot." And on the 31st of May, 1894, he wrote Engeman: "We have all the old stock out and in the dry loft. I think it will run over the old inventory some." In April, 1894, Engeman got J. S. Taylor to extend the first large deferred payment on the sale from one year to two years, and on the 1st day of May wrote J. E. Taylor to "please explain to Summer [J. S.] why I can't send him any money," which acts and letters are claimed to be ratifications of the sale; but the assurances of his partner that they were not hurt by the inventory, and that the stock that

was to follow was better in every way than that shipped, tended to allay his fears, and cause him to delay investigation, even if he suspected fraud, but there is no evidence that he did suspect it. It appears all through the

transaction that he had the utmost confidence in J. E. Taylor up to the time that they entered upon their settlement, the 1st of July, 1894, when he was arranging to buy out the interest of J. E. Taylor. Then is when it first occurred to his mind that the Taylors had been acting in concert to overreach him in the deal with J. S. Taylor, and that J. E. Taylor was continuing the same course of conduct in selling to him his own interest. It appears very clearly that there was a studied effort upon the part of J. E. Taylor to keep back the principal part of the stock that was in the vats at the time of the sale, which was greatly damaged, and kept it several months off the market, when the financial interest of the firm was suffering for the proceeds of the stock which J. E. Taylor himself said was already tanned and lying there, ready to be finished and placed upon the market; and J. P. Hopple testifies that: "In July, 1894, J. E. Taylor came to the tannery, and said everything had depreciated since Summer sold out. Leather that was worth $60,000 when Summer sold out had depreciated $12,000. I said I did not believe it. 'If that is so, you have lost all you put in.' He said: 'No, no; Summer and I will come out all right.'' I am unable to find that J. E. Taylor denies that statement, although he was on the witness stand twice after Hopple's testimony. In Wilson v. Carpenter's Adm'r, 91 Va. 183, 21 S. E. 243, it is held: "Where the original contract is tainted with fraud, its subsequent confirmation must be a solemn and deliberate act. If a waiver is relied on, it must appear that such waiver was distinctly made, with full knowledge of the rights intended to be waived, and the fact that the rights are known and intended to be waived must plainly appear." And in the same case it is held that: "When the seller has made a false representation, which from its nature might induce the buyer to enter into the contract on the faith of it, it will be inferred that the buyer was thereby induced to contract; and, to remove this inference, the seller must prove either that the buyer had knowledge of the facts which showed the representations to be untrue, or that he expressly stated in terms, or showed by his conduct, that he did not rely upon the representation, but acted upon his own judgment. Nor is the buyer deprived of his right to relief because he had the means of discovering that the representation was false"

See, also, Iron Co. v. Sherman, 20 Md. 117; Montague's Adm'r v. Massey, 76 Va. 307; Linhart v. Foreman's Adm'r, 77 Va. 540. "The injured party must assert his remedial rights with diligence, and without delay, upon becoming aware of the fraud. After he has obtained knowledge of the fraud,

or has been informed of facts and circumstances from which such knowledge would be imputed to him, a delay in instituting judicial proceedings for relief, although for a less period than that prescribed by the statute of limitations, may be, and generally will be, regarded as an acquiescence; and this may be, and generally will be, a bar to any equitable remedy. To this rule there is one limitation. It applies only when the fraud is known or ought to have been known. No lapse of time, no delay in bringing a suit, however long, will defeat the remedy, provided the injured party was during all this interval ignorant of the fraud. The duty to commence proceedings can arise only upon his discovery of the fraud, and the possible effect of his laches will begin to operate only from that time." 2 Pom. Eq. Jur. § 917. "Any contract, the making of which is induced by fraud of either party, practiced upon the other at the time the contract is made, or while negotiations in regard to it are being carried on, is voidable, and may be rescinded at the election of the party defrauded. This is the most frequent ground for rescission, and may consist either of false representations or fraudulent concealment in respect to the subject-matter of the contract." 21 Am. & Eng. Enc. Law (1st Ed.) 27, and cases therein cited. In Wilson v. Carpenter's Adm'r, supra: "The court does not inquire with any care into the extent of the prejudice. It is sufficient if the party misled has been slightly prejudiced, if the amount is at all appreciable." 2 Pom. Eq. Jur. § 890. In Reynell v. Sprye, 8 Hare, 222, it is held that, where the plaintiff had been induced to make a conveyance of property by a false misrepresentation, it was not an objection to setting aside the conveyance that the plaintiff had, throughout, the means, equally with the defendant, of knowing what his rights were, and of obtaining competent advice respecting them.

Appellees claim that there should be no rescission, because the status quo cannot be restored. In Brown v. Norman, 65 Miss. 369, 4 South. 293, Norman, in October, 1885, was induced by false and fraudulent misrepresentations of Brown and Mangum, two members of the firm, to buy Brown's interest in the partnership, which was insolvent, giving in exchange therefor his farm and the personal property thereon, made a deed conveying the property, and paid the residue in cash, and assumed in addition thereto liability for the existing debts of the firm. In March, 1886, Mangum, at the instance of the creditors of the old firm, filed his bill for the dissolution of the firm and administration of the assets, on the ground of the insolvency of said old firm. On his petition a receiver was appointed. August, more than five months after the appointment of the receiver, Norman filed his bill to rescind the sale and recover back his land. Relief was granted him, and Brown appealed. In rendering the opinion affirming

In

the decree, the court says: "It will be noticed that the objections to the relief asked resolve themselves into two classes: (1) That there can be no rescission because the status quo cannot be restored; and (2) that the conduct of the complainant after he knew or should have known of the fraud is, in law, a ratification of the contract. In decisions in actions at law arising from attempted rescissions of contracts for the sale or exchange of personal property, the language of the court is almost uniform in declaring that the defrauded party, in order to maintain his suit, must have restored or tendered in restoration whatever was received by him under the contract, because of the principle that the contract must be rescinded in toto, if at all; the plaintiff not being permitted to retain a benefit under an indivisible contract, which he repudiates. But even in actions at law there are exceptions to the rule. If the thing received by the defrauded party be of no value (Fitz v. Bynum, 55 Cal. 459), or if by reason of the act of the fraudulent party a return be rendered impossible (Masson v. Bovet, 1 Denio, 69, 43 Am. Dec. 651, and notes; Hammond v. Pennock, 61 N. Y. 155), a return or tender is unnecessary. So, also, where by natural causes or reasonable use the value of the property is diminished, and perhaps where it is necessarily destroyed in discovering the fraud, the fraudulent party must receive it in its depreciated condition. Baker v. Lever, 67 N. Y. 304; Gatling v. Newell, 9 Ind. 574. And if the bona fide buyer has expended work, money, or material in the improvement of the property before discovering the fraud, he may restore the property, and recover for the work and labor, money or material, put upon it. Farris v. Ware, 60 Me. 482. In the two latter classes of cases there is a restitution of the thing itself to the fraudulent seller, but the status quo is not restored; for in one case he receives the property back less valuable than it was, and in the other he takes it improved in value, but possibly improved in a manner or to an extent he could not have desired, but he is nevertheless chargeable with the value of improvement."

But in equity the complainant does not necessarily rescind and sue; he may sue for rescission. He is required to restore the consideration, not, however, as a condition of acquiring the right to sue, but because of the equitable maxim that he who seeks equity must do equity. Mr. Pomeroy thus states the rule: "In administering these remedies, pecuniary as well as equitable, the fundamental theory upon which equity acts is that of restoration, of restoring the defrauded party primarily, and the fraudulent party as a necessary incident, to the positions they occupied before the fraud was committed. Assuming that the transaction ought not to have taken place, the court proceeds as though it had not taken place, and returns the parties to that situation. Even in such cases the court ap plies the maxim, 'He who seeks equity must

do equity,' and will thus secure to the wrongdoer, in awarding its relief, whatever is justly and equitably due." 2 Pom. Eq. Jur. § 910. In Neblett v. MacFarland, 92 U. S. 101, it is said: "The court proceeds on the principle that, as the transaction ought never to have taken place, the parties are to be placed, as far as possible, in the situation in which they would have stood if there had never been any such transaction." Other writers upon equity jurisprudence deduced the right of the defendant to have restoration of his property from the maxim of equity that imposes doing equity upon the complainant as a condition upon which he secures relief. Adams, Eq. 191; Story, Eq. Jur. § 693.

Let us now refer to cases in which the specific question has been raised and passed on by courts of equity. In Barker v. Walters, 8 Beav. 92, and Jervis v. Berridge, 8 Ch. App. 351, demurrers had been interposed to bills seeking rescission, on the ground that no offer was made to restore the status quo. It was held that it was unnecessary to do so, since the court on final hearing could require the complainant to do equity. In the latter case Lord Shelburne said: "Upon principle there appears to be no good reason why a plaintiff in equity, suing upon equitable grounds, should be required on the face of his bill to submit to those terms which the court, after hearing, may think it right to impose as the price of any relief to which he may be entitled." In Myrick v. Jacks, 33 Ark. 425, the court said: "It is no objection that complainant cannot put Jacks entirely in statu quo on rescission. The change in condition of the property was brought about by persuasion to accomplish a transaction in which Jacks was a party, and before the fraud was discovered, and by the action of complainant in a matter she did not understand. When courts cannot place parties wholly in statu quo, they are not thereby precluded from granting relief against fraud. They may proceed to do so as nearly as possible, and make compensation." See, also, Gatling v. Newell, 9 Ind. 574; Crosland v. Hall, 33 N. J. Eq. 111. Upon principle and authority, we think it immaterial that the status quo cannot be literally restored.

Adm'r v. Smith, 30 Vt. 139, which was an action at law successfully defended by the party defrauded, founded on facts strikingly similar to those involved here. It is held both at law and in equity that delay alone before the discovery of the fraud will not bar the right to rescind. Note to Bryant v. Isburgh, 74 Am. Dec. 655, 13 Gray, 607. In Pence v. Langdon, 99 U. S. 578, it is said: "Acquiescence and waiver are always questions of fact. There can be neither without knowledge. The terms impart this foundation for such action. One cannot waive or acquiesce in a wrong while ignorant that it has been committed. Current suspicion and rumor are not enough. There must be knowledge of the facts which will enable the party to take effectual action. Nothing short of this will do. But he may not willfully shut his eyes to what he might readily and ought to have known. * The burden

of proving knowledge of the fraud and the time of its discovery rests upon the defendant." See, also, Baker v. Lever, 67 N. Y. 304; Brown v. Post, 1 Hun, 303; Baker v. Spencer, 47 N. Y. 562; 2 Pom. Eq. Jur. § 917, note 2; Thurston v. Blanchard, 33 Am. Dec. 705, note.

The principles of the cross assignments of error have been considered in the treatment of the question arising in the case, and, if my view of the evidence and circumstances of the case is correct, the said assignments are not sustained. The circuit court did not pass upon the evidence touching the valuation of the buildings and bark, and does not intimate how the court regarded the evidence relating to the items of leather and liquors as to which it ascertained there were overvaluations, but that there were overvaluations in those items, especially that of the leather, to an unconscionable extent, and concealment of the true condition of the leather and hides in the vats at the time of the sale, for fraudulent purposes, there can be no doubt; and I fail to see in what aspect of the case the court could hold that the overvaluations were the result of mutual mistake of the parties, which is the only ground upon which the court could properly restrict plaintiff's relief to abatement for overvaluations. The court erred in not setting aside the sale. The decision should be reversed, and the cause remanded for further proceedings to be had therein according to the principles of equity.

TATUM v. MORGAN.

(108 Ga 336)

RELEASE OF SURETY-FORBEARANCE-CON

SIDERATION-FRIVOLOUS APPEAL.

1. An agreement by a creditor with the principal debtor, made after the debt has become due, without the surety's consent, to forbear the collection of the debt for a definite period if without consideration, does not discharge the surety. (a) A promise by the principal debtor

to pay interest upon the debt during the time of forbearance forms no consideration for such forbearance, when the debtor is already bound to pay such interest.

2. The defendant in error in the present case is entitled to damages against the plaintiff in error for bringing the case here for delay.

(Syllabus by the Court.)

Error from superior court, Dade county; A. W. Fite, Judge.

Action by J. C. Morgan against G. W. M. Tatum and one Jacoway. Judgment for plaintiff, and defendant Tatum brings error. firmed.

Af

W. U. & J. P. Jacoway and R. J. & J. McCamy, for plaintiff in error. John G. Hale and Payne & Payne, for defendant in error.

Upon

FISH, J. Morgan sued Jacoway and Tatum upon a promissory note, which was signed by each of them. Tatum filed a plea, in which he alleged that he was simply surety on the note for Jacoway; that after the note became due, the plaintiff, for a valuable consideration, had, without his knowledge or consent, extended the time of its payment, and that he was thereby discharged. the trial of the case, Jacoway testified as follows: "Am principal in this note; Tatum is security, and the note is given for a horse bought by me from the plaintiff. In February after the note fell due, I met plaintiff at La Fayette. Told him I was not ready to pay the note, and that I would like until September court to pay him the note. That if he would wait, I would pay him the principal and interest up to that time. He agreed to do this, and did wait. Never paid the note, or any part of it. Did not pay Mr. Morgan anything for his promise to wait, but agreed to pay him interest up to the time mentioned if he would wait,-the interest that would be due on the note when paid." Tatum testified that he "never heard of this agreement to wait, nor made any assent to it; thought the note had been settled till this suit was commenced.". Plaintiff, introduced as a witness in his own behalf, denied in every particular the testimony of Jacoway upon the subject of indulgence, "and said, to the contrary, that just before the note was due he met Jacoway, who told him he would be ready to pay the note when due, and to come, or send over the note when due, and he would get the money.

That he sent his son after the money, but did not get it." On this evidence the court directed the jury to find a verdict against the principal and surety for the amount of the note, which was done, and judgment entered accordingly. Tatum excepted to the ruling of the court directing a verdict, and assigns the same as error.

In our opinion there was no error in directing a verdict. Taking the evidence of Jacoway to be true, the agreement of the plaintiff, in February after the note fell due,

to wait until September court, was without consideration, and therefore not binding upon him. "A promise to forbear for a definite time will not discharge the surety, unless it be a promise binding in law upon the creditor, 'such as will tie his hands." " Crawford v. Gaulden, 33 Ga. 173. "No such promise is binding, unless supported by a consideration." Id. In the case from which the above quotations are made, the court held that payment of a part of the debt is not a consideration for a promise of forbearance, and in the opinion cited the ruling in Reynolds v. Ward, 5 Wend. 502, that "a promise to pay interest during the time of forbearance forms no consideration for the agreement to forbear, when the debtor is already bound to pay interest." In the present case there was no consideration whatever for Morgan's alleged promise to forbear for a definite period, unless Jacoway's promise to pay the interest which would accrue upon the note during this time was a consideration. The note bore interest from date, and, of course, the interest would continue to run until the note was paid. So, by the terms of the existing contract, Jacoway was bound to pay interest for the time that the plaintiff might indulge him, whether he made any new promise to do so or not. As was well said by the court, arguendo, in Reynolds v. Ward, supra, in reference to a similar promise by the principal debtor in that case: "The promise [by such debtor] to pay interest so long as the plaintiff should delay * * • was a promise to do precisely what he was bound to do without a promise." "If the debtor's promise to pay interest creates no additional obligation, it is no consideration for a contract to de

lay." Id. The principle is thus stated by Stephens, J., in Goodwyn v. Hightower, 30 Ga. 252: "It is well settled that no discharge results to the surety from such indulgence of the principal as is granted to mere entreaty, and not on account of a valuable consideration; for such indulgence, being voluntary, is determinable at the will of the creditor, and can be no legal obstruction to the collection of the debt." A surety is not released by a promise of indulgence made by the creditor to the principal debtor, unless the effect of the promise is to tie the creditor's hands. A promise of indulgence based upon no valid consideration does not prevent the creditor from enforcing his demand. Bonner v. Nelson, 57 Ga. 433. The judge did not err in directing a verdict against the surety, because, even under the evidence introduced by the surety, no other verdict could have been legally rendered. This writ of error being manifestly without merit, the defendant in error is entitled to damages against the plaintiff in error for bringing the case here for delay. Judgment affirmed, with damages. All the justices concurring.

(108 Ga. 331)

BROWN ▼. MOONEY et al. (Supreme Court of Georgia. July 22, 1899.) PARTITION-OBJECTION BY CO-TENANTRIGHT TO JURY.

Where, upon an application of all but one of several tenants in common of certain mining property for a sale of the property for the purposes of partition, the tenant not joining in the application files certain objections to the same, which do not, "by way of defense, show any good and probable matter in bar of the partition asked for," or question the right or title of the applicants as set up in the petition, it is not error for the judge, without the intervention of a jury, to pass upon the application and order a sale of the property.

(Syllabus by the Court.)

Error from superior court, Hall county; J. J. Kimsey, Judge.

Action by Sampson Mooney and others against William A. Brown. Judgment for plaintiffs. Defendant brings error. Affirmed.

The following is the official report:

Mooney, Wood, and Boone filed a petition setting forth that they and Brown were the common owners of the mineral interest in certain described land, known as the "McClusky Mine" (Mooney owning two-fifths, and Wood, Boone, and Brown one-fifth each); that the property was valuable for mining purposes only; "that no provision is made as to how said property should be divided, except as provided by law and equity;" that a fair and equitable division of said mineral interest could not be made by metes and bounds. They prayed for partition, and that said mineral interest and rights should be sold, and the proceeds divided as provided by law. Brown filed objections to the petition, in which he set up that the petitioners had leased their four-fifths interest in the property for the term of two years from January 1, 1898, to certain named parties, "with the right to said lessees to mine or work said property as to said four-fifths," and that, if a sale of the property were ordered, it would be sold subject to the rights of the lessees, and therefore sold under a cloud; that the lessees had been in the exclusive possession of the mine since the date of the lease, without the consent of respondent, mining the same for gold, and were still in possession, and could prevent would-be purchasers from examining the mine before the sale; that one of the lessees had stated to him that they would allow him "to examine said mine with purchasers, but would not permit certain persons to examine said mine, although said persons might desire to be, and [would] likely be, bidders at the sale." He alleged that a sale under such circumstances would be injurious to his interests, and prayed that "no order of sale be granted, without some order or action be taken which would cause the mine to be open to the free examination of [himself] or those to whom he [might] wish to show it." He further alleged that the les

He

sees had taken out a large amount of gold and gold ore, and were liable to account to him for one-fifth of the same, which they had not done; that petitioners had, through the lessees, taken exclusive possession of the mine, and had received certain rents for the same from the lessees, no part of which had been paid to him; and that he had a lien on the shares of the petitioners in the proceeds of the sale for the amounts so due him. claimed that he was unable to state the amount of gold and gold ore taken from the mine, without a discovery from the petitioners. He further averred that the lessees had sunk a shaft into the mine, which showed the same to contain valuable veins of gold ore, which could not be examined, or the value of the mine ascertained, without entering the shaft, and that, since the pendency of these proceedings, they had allowed the shaft and tunnel into the shaft to fill up with water, so that it was impossible to make any proper examination of the mine, and that he had reason to believe that if the mine was left, pending the sale, in the hands of the lessees, who desired and intended to bid on the property, they would allow the shaft to become filled with water, and thus prevent any other would-be purchasers from knowing the value of the mine. Without waiving his objections to any order of sale, he prayed that, if a sale should be ordered, the court should appoint a receiver to take possession of the mine, and that the receiver be instructed to have the water pumped out of the shafts and tunnels, and that free examination of the mine be allowed all persons, that he be allowed to take small samples of the ore for assay, and that the receiver be instructed to hold all the proceeds of the sale for distribution by the court after adjudicating the rights of the defendant. He prayed that the lessees be made parties, and be required to produce in court their lease, and for discovery from the petitioners and lessees "as to the amount of gold ore taken from the mine, and all rents, issues, and profits received by them since January 1, 1898, and that [he] be decreed to have a lien for his amount of the same upon the shares of applicants from the proceeds of said sale." When the case came on for trial, Brown insisted that the determination of the issues thus made should be tried by a jury. The judge held that it was a matter for the court, and, after hearing evidence, directed a sale of the property, and appointed commissioners for that purpose. Brown excepted, and assigned as error "the passing upon the objections to the application for sale by the court without a jury."

H. H. Perry, for plaintiff in error. M. L. Smith and H. H. Dean, for defendants in error.

FISH, J. As will be seen from the of ficial report, Mooney, Wood, and Boone filed their petition for a partition of certain min